According to the state attorney general of Arkansas, fast loan companies in the state are quickly closing up shop after being warned that they were violating the state’s constitution. The state prohibits overcharging interest, and the companies have been accused of using rates as high as 371% on their average loan products. Many feel that these fast loan fees are obscene and the loan companies that offer them are quickly finding that the climate is changing.Attorney General Dustin McDaniel stated, “I think the vast majority of them are just shut down because the vast majority are one owner, one store small-time operations. As badly as I’m concerned about people who need $50, $100 or $250, I’m more concerned about them paying $1,000 or more to try and repay it.”The fast loan companies are countering that their services are necessary and provide home owners and other customers with a vital resource when they need a little extra cash. However, the main issue is the interest cap in the state which is at 37%, an amount still considered to be quite high. The fast loan companies maintain that they cannot charge that low of an interest rate and stay in business.
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