Arkansas – 101 Payday Lenders Closed

The Attorney General, Dustin McDaniel, is playing hard ball with payday lenders in Arkansas. Arkansas payday lenders were operating under the Arkansas Checkcashers Act, which passed in 1999. This act allowed a payday lender to cash a check and hold it for for a period of time, typically 14 days.

It is alleged that 101 out of 156 payday lenders have closed since March 18th.

This action by the Attorney General was spurred by a Supreme Court Ruling that companies are liable for paying bonds to partly cover judgments against payday lenders. The bonds are currently set at $50,000. The Attorney General is trying to force the hand of the bond companies, making it too risky to post a bond.

Critics are accusing the Attorney General and his office of “defending the constitutionality of the Arkansas Check-cashers Act before the Arkansas Supreme Court.”

The Arkansas Supreme Court must still rule on the Arkansas Check-cashing Act in the summer of 2008.

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