The Arkansas Business Journal picks up on an Associated Press story that analyzes how we got to this point in Arkansas.  This paragraph gets to the heart of the matter:

“The 1999 law {the Check Cashers Act} declared that income earned by payday lenders was a fee and not interest, avoiding the 17 percent limit on interest set out in the Arkansas Constitution. The Supreme Court in 2001 ruled that the Legislature had no power to determine what is or isn’t interest, but the court didn’t rule on the constitutionality of the act.”   

The article goes on to say that the Arkansas State Board of Collection Agencies will continue to issue licenses to payday lenders.