Today's the Day for AR Lenders

[cashlenders]

The proverbial bells tolled on cash advance lending in Arkansas today, but its unclear how many merchants would heed the death knell. State Attorney General Dustin McDaniel had warned all remaining fast cash loan merchants across the state that today would be the absolute deadline for closing shop and clearing out. On March 17th, he sent letters to the one hundred fifty-six payday loan outlets remaining in business following last year�s total legal prohibition of the industry. Heeding critics� complaints that the controversial short-term, high-interest personal loan business victimized financially-vulnerable consumers, the Legislature agreed to shut it down completely.

But the new law�s original effective date came and went with many cash advance lenders still in business. Some chose to ignore the payday loan ban entirely (perhaps hoping that it would go away?) and flouted their disobedience of the law with open storefronts and defiant continuance of advertising campaigns; many tried to skirt the prohibition by changing the basic structure of their high-cost personal loan products. Experts noticed that the pattern exhibited by the noncompliant fast cash loan venders matched that of what happened in Pennsylvania, which went through a similar struggle to kick out the stragglers remaining after it enforced an identical ban on those businesses last year.

As of Wednesday, twenty-two cash advance lenders had indicated to McDaniel that they would close as ordered. That leaves a vast majority of question marks on the remaining payday loan providers. Only time will tell whether these hold-outs will go quietly, or if further legal action will be necessary to make Arkansans entirely free of fast cash loans.