Will Attorney General Leslie Rutledge
do anything about reports that payday lending
with usurious interest rates cloaked as fees has re-emerged in North Little Rock?
I put this question to the office yesterday.
Does the Arkansas attorney general intend to do anything about the illegal payday lending operation in North Little Rock? I understand the office has received a formal complaint. The North Little Rock city attorney defers to the attorney general, which has in recent years been a dedicated foe of using fees as a cloak for usurious interest. Has that position changed?
Response today from Judd Deere:
I’m not in a position to offer comment on the operation in NLR at this time.
Attorney General Rutledge is committed to making sure that Arkansans are not harmed by illegal payday lending, including storefront operations and loans that are still available online.
PS: Spokesman Deere objects to the use of "mute" in the headline in that he responded to the question. My view is that, as yet, the attorney general herself has made no utterance about the North Little Rock operation. But it is true that Deere himself did issue a no-comment sentence.
There have been several reports about new payday lending in North Little Rock, including last week in the Arkansas Democrat-Gazette
. North Little Rock City Attorney Jason Carter
believes the CashMax operation is operating in violation of the state Constitutions' 17 percent cap on interest as well as without a proper business permit. The owner disputes this. He doesn't count as interest fees that appear similar to those routinely held by Arkansas courts over the years to be a pretext for charging higher interest and contends he's not lending, merely putting consumers together with other credit suppliers. CashMax's own website describes an interest rate on a typical loan as being 259 percent, as required by the federal truth in lending act. Hank Klein, a long-time crusader against payday lending, has complained to the attorney general's office. North Little Rock's Carter has sent the company a warning letter, but he said official action on such lending has normally come from the attorney general's office. Payday lenders left the state under pressure of legal action brought by former Attorney General Dustin McDaniel.
Earlier this year, Attorney General Rutledge criticized a proposal for tough new rules on payday lending at the federal level. She said regulation was better handled by the states.
Relevant in this lack of action on an Arkansas matter of long and high interest is, as I mentioned yesterday,
Rutledge's penchant for joining conservative agenda lawsuits and regulatory actions all over the country. One example is voicing objections to new pro-consumer federal regulation of payday lenders while doing nothing about such a lender in Arkansas.
CashMax owner Cheney Pruett is also a major financial backer of one of the efforts to legalize medical marijuana. He backs the proposal, not yet certified for the ballot, that would likely concentrate sale of the product in a relatively small number of high-profit dispensaries. Another proposal is more grassroots oriented, you might say. It includes a grow-your-own provision and has qualified for the ballot.