Payday Loan in Arkansas
Legal Status: Legal (Applies to check cashers only)
Citation:
Ark. Code. Ann. § 23-52-101 et seq.; Ark. Const. art. 19, § 13
Loan Terms:
Maximum Loan Amount: $400
Loan Term: 6-31 days
Maximum Finance Rate and Fees: 10% of check + $10; $5 ID card
Finance Charge for 14-day $100 loan: $22.22
APR for 14-day $100 loan: 579%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: One per location
Rollovers Permitted: None (cannot renew or consolidate)
Cooling-off Period:
Repayment Plan:
Collection Limits:
Collection Fees: NSF fee; Court Costs; Reasonable Attorney’s Fees
Criminal Action: Prohibited (Unless check returned due to closed account or stop-payment by maker)
Where to Complain, Get Information:
Regulator: Arkansas State Board of Collection Agencies
Address: Division of Check-Cashing Companies, 523 Louisiana Street, Suite 460 Little Rock AR 72201
Phone: (501) 371-1434
Fax: (501) 371-1440
Applicability: To a person that for compensation engages in the check-cashing business and who, pursuant to a written agreement, accepts personal checks on the date it was written, pays the customer an amount less than the face value of the check and grants the customer the option to repurchase the check for an agreed period of time prior to presentment of the check.
Exemptions: The United States or state governments, any federally or state chartered bank, savings and loan association, credit union; any retail seller engaged in the retail sale of goods or services who from time to time cashes checks, drafts, or money orders provided that the revenue from such fees does not exceed 3% of gross revenues.
Permit requirements: State Board of Collection Agencies enforces. Must submit application and financial statement, pay a permit fee of $500. Must be renewed annually (renewal fee is $400). Must show liquid assets of at least $20,000 for the operation of each location. Must post a bond payable to the State of Arkansas of $50,000. Must show financial responsibility and business experience. A permit may be denied if the registrant has a felony conviction involving dishonesty, fraud, or deceit and the crime is substantially related to the qualifications, function, duties of a person engaged in this business.
Permitted charges: A reasonable administrative fee not to exceed $10 plus 10% of the face amount of the check and no more than $5 to set up the account and issue an identification card (which are not deemed interest for any purpose and the transaction is not a loan).
Loan terms: The agreement must contain a clear and understandable explanation of the fees and the date on which the check will be cashed, the total amount of any fees charged expressed in a dollar amount and as an annual percentage rate. If the check casher accepts partial payment, the check may not be deposited nor may another fee be imposed. Loan term can be no less than 6 calendar days nor more than 31 days. Check amount cannot exceed $400. If a check is returned, the check casher has the right to all civil remedies allowed by law to collect the check and be entitled to recover any returned check fee authorized by state law and reasonable attorney’s fees paid to a non-employee and costs. Must pay proceeds of check in cash to consumer.
Prohibited acts: Cannot pursue criminal charges for bad checks, unless the check casher would otherwise to entitled to file such charges under state law AND the check is returned to the check casher because the account was closed or payment was stopped. Cannot accept security for the transaction. Cannot alter or delete the date on any check. Cannot accept an undated check or a check dated on a date other than the date of the transaction. Cannot have more than one deferred presentment check outstanding at any time from any one customer. Cannot renew or consolidate one deferred presentment check with the proceeds of another. Cannot conduct any other business at same location without first obtaining prior permission of the department.
Required disclosures: Must post a schedule of all fees. Must provide a written agreement which is signed by the check maker (consumer). The agreement must contain a clear and understandable explanation of the fees and the date on which the check will be cashed, the total amount of any fees charged expressed in a dollar amount and as an annual percentage rate. A copy must be given to the consumer. Must post permit conspicuously in the office.
Enforcement actions: The department can suspend or revoke the permit if the check casher has knowingly or through lack of due care failed to pay the annual fee, violated any provision of the act, made a false statement in the application, etc. Can also issue a cease or desist order and require the check casher to refund any fees collected in violation of the act. Can inspect books and records at any reasonable time. The Attorney General also has the specific authority to investigate any complaints of any deceptive trade practices. The department has authority to issue subpoenas, administer oaths, conducts hearings and compel the production of documents.
Penalties: The department can impose a fine of up to $1,000 per transaction. Willfully engaging in the checkcashing business in violation of the act is a misdemeanor.
Private right of action: Any action for a civil remedy by the department or by any other person must be commenced within 5 years of the act complained of.
