The Consumer Law & Policy blog reports that the Arkansas Supreme Court struck down a state law that allowed payday lenders to charge usurious rates.
“The state’s constitution prohibits any loan with an interest rate above 17%. Various payday loan contracts authorized by the statute, however, had rates between 168% and 559%, which the Court held to be ‘clearly and unmistakably usurious’ in violation of the state constitution.”
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How does this affect banks and credit unions when they offer overdraft protection charges. If annualized, the fees associated with those products are the same or greater than payday loans.