On the Outs in Arkansas

It looks like the pressure is continuing to rise on payday lenders across the country.

Back in March, the attorney general of Arkansas Dustin McDaniel ruled that all payday lenders must shut down immediately or face lawsuits. The demand was made based on two recent legal rulings by the state Supreme court which found that the high interest rates that payday lenders charge were “unconscionable” and there were widespread deceptive trade practices.

Well, a few months later, reporter Jason Wiest highlights the work of the Arkansans Against Abusive Payday Lending which documents that the total number of payday lenders operating in the state has fallen from 237 in March to 136 in July. That’s a pretty big drop.

However, they also report that about one-third of the payday lending operations still up and running were operating illegally. Others have tried to adopted new business models. It will be the job of the attorney general’s office to figure out which lenders are conforming to the law and which are not, but it sure looks like pressure is being brought to bare. I’m all for making sure people have access to credit and loans but lenders have to ensure that borrowers know what they are getting into. Seems like Dustin McDaniel agrees.