State Supreme Court Upholds Payday Lender Loan Shark's $1.4 million Fine

The Arkansas Supreme Court on Thursday upheld a $1.4 million fine levied against the owner of 14 payday lending businesses in Arkansas. The defendant, Dennis Bailey, had appealed the fine on technical grounds.

The decision also affirms the illegal triple-digit interest payday loans made by Fast Cash and Cash Advance have no legal standing and cannot be enforced.

The court's ruling follows state Attorney General Dustin McDaniel's crackdown on payday lenders issuing high-interest loans barred by the state's constitution.

McDaniel last month sent a cease-and-desist letter to 156 payday lenders in Arkansas notifying them that the state constitution caps interest that may be charged at five percent per annum above the Federal Reserve Discount Rate at the time of the contract, or 17 percent currently.

"In addition, I hereby demand that you void any and all current and past-due obligations of your borrowers, and refrain from any collection activities related to these payday loans," he added.