Update Arkansas: Sen. Lincoln’s loan cap amendment killed in U.S. Senate
July 11, 2008 | Arkansas | Comments (0)Senator Blanche Lincoln’s attempt to raise a state-mandated cap on some loan interest rates in Arkansas was rejected by her senate colleagues last night. The Arkansas News Bureau reports that the issue will now be debated in the U.S. House, and Arkansas legislators are optimistic about their chances of adopting the measure:
All four of the state’s congressmen have said they support the Lincoln bill to permit Arkansas lenders to charge higher interest than allowed by the state constitution.
The Payday Pundit will be following this story closely.
Interesting development in Arkansas
July 10, 2008 | Arkansas | Comments (0)Actually, the development is taking place in Washingon, but would affect Arkansas’ usary laws. According to the Northwest (Arkansas) Morning News:
{Senator Blanche} Lincoln wants to change a federal banking law to allow non-bank lenders to charge higher interest. The new interest rate cap would be 17 percent.
She said Wednesday that the Arkansas Student Loan Authority would have difficulty finding banks to buy bonds because of the state’s usury law.
Without lifting the interest rate cap, the authority “will be in dire straits in September,” when it provides loans to college students in the state, she said.
Lincoln has introduced similar legislation in three previous congressional sessions.
Because anti-payday lending forces in Arkansas are opposing this, the Payday Pundit obviously supports it.
Arkansas update:
June 27, 2008 | Arkansas | Comments (0)This newspaper requires a subscription, so we just posted the lead to the article here:
101 payday lenders close since March
More than 100 payday-lending stores in Arkansas have closed since they were ordered by Attorney General Dustin McDaniel in March to cease operations, the chairman of a group opposed to the practice said Thursday.
Meanwhile, back in Arkansas…
May 2, 2008 | Arkansas, Associated Press, industry, media coverage, regulation, states | Comments (1)The Associated Press is reporting that Arkansas Attorney General Dustin McDaniel has filed four lawsuits against payday lenders that he says are violating the state’s constitution by charging high-interest loans.
Arkansas pawnshop owner: “We expect business to double.”
April 28, 2008 | Arkansas, alternatives, industry, states | Comments (1)Car repo men and pawnshops booming in Arkansas and expected to grow in the wake of payday lending stores closing. From the piece:
People pawn golf clubs, CDs, tools, and a big trader is gold jewelry. At nearly $1,000 an ounce, it’s hitting record levels.You know you can’t go to a bank and get a $25 loan to pay your gas bill,” says Pakis. “We are here for people that don’t necessarily have a credit card. We can always help out people.”
Pakis says with the slow economy and Arkansas payday lenders forced to shut down, that he expects business to double by the end of summer.
Center for Consumer Freedom weighs in on Arkansas Attorney General
April 14, 2008 | Arkansas, industry, positive media coverage, regulation, states | Comments (0)A consumer group has weighed in on the Arkansas payday loan debate saying this:
With the apparent success of his intimidation tactics, McDaniel joins the list of meddling elitists who couldn’t care less about soaring food prices. And the 500-plus employees of payday loan companies in Arkansas will join 80,000 other Americans at the back of the unemployment line.
Analysis of Ark. payday lending situation
April 14, 2008 | Arkansas, Associated Press, industry, media coverage, regulation, states | Comments (0)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.
“Public need more, not less options”
April 14, 2008 | Arkansas, Baxter Bulletin, industry, media coverage, positive media coverage, regulation, states | Comments (0)So says Tim Miller of Center for Consumer Freedom in today’s Baxter Bulletin out of Arkansas. Money quote:
“Borrowers are best served when they have more choices to pick from, not when politicians eliminate what is for many their only option.”
The Payday Pundit has been making this point over and over. Payday loans are an option for consumers facing unexpected expenses. The payday lending industry has always said that competition is the best way to keep costs down.
Consumer Freedom discusses Ark. situation
April 11, 2008 | Arkansas, industry, positive media coverage, regulation, states | Comments (0)The free market consumer group–Consumer Freedom–has this to say about the situation in Arkansas:
{The} announcement on Tuesday that most payday lending companies have caved is bad news for consumers who can’t get a loan but would prefer not to pawn their television or bounce a check.
You can read the rest here.
Some Arkansas payday lenders stay open
April 10, 2008 | Arkansas, Morning News (AR), industry, media coverage, regulation, states | Comments (0)This article says some Arkansas payday lenders have tweaked their business model to operate under different regualtions. From the article:
“One model involves cashing checks and charging membership fees,” Allen said. “It’s only limited by a person’s creativity.
“The idea is for them to separate as much as possible the interest from the loan,” Allen said.
The entire article can be read here.
