Pryor, Huckabee Neutral on Payday Lending

Two bills have been filed to amend the Check Cashers Act of 1999, part of which has been found unconstitutional, but neither Gov. Mike Huckabee nor Attorney General Mark Pryor will take positions on them, aides said recently.

The state Supreme Court ruled March 22 that the act’s declaration that fees charged by payday lenders are not interest was “an invalid attempt to evade the usury provisions of the Arkansas Constitution.”

Huckabee signed the bill into law in 1999. Pryor ignored warnings from staff members that the bill was unconstitutional, neither endorsing nor opposing the bill as the General Assembly considered it.

Huckabee is too busy with other bills to get involved with the payday-lending issue, spokesman Rex Nelson recently said.

“We are so singularly focused on budget bills right now,” Nelson said.

Pryor is not taking a position on amending the act and does not regret his decision not to oppose the bill in 1999, his chief of staff, Darin Williams, recently said.

“In Arkansas, the attorney general, much like the governor, has always had a legislative package,” Williams said. Pryor has pushed for hate crimes legislation, as well as bills promoting child product safety, domestic abuse prohibition and fair business competition this year.

Amendments to the Act

Sen. Cliff Hoofman, D-North Little Rock, has resurrected his attempt to repeal the act, which failed in the Senate in February. The Senate voted March 22 to expunge the original negative vote.

“As is oftentimes the case in Arkansas, our legislature has [chosen] the greatest abuse of our poorest people. And the adoption of the Check Cashers Act in 1999 is an example of that,” said Hoofman, who originally voted for the bill.

Hoofman is critical of the loans, which carry fees equivalent to annual rates of 300-700 percent or more. Check cashers typically charge a fee of about $10, plus another $10 for each $100 borrowed, which would result in a cost of $40 for a $300 loan due in two weeks.

Hoofman’s bill, as amended, would restrict the fee for deferred presentment of a personal check to 10 percent, or $30 for a $300 loan. That is still more than 200 percent when calculated as an annual percentage yield.

In the House, Rep. Jim Bob Duggar, R-Springdale, has introduced House Bill 2440, which would cut allowable fees even more. Charges for deferred presentment of personal checks could not exceed 5 percent, or $15 for a $300 loan.

Lobbyists

The check cashing industry has lobbied effectively for the passage and preservation of the act and is working “very diligently,” said Hoofman, to preserve the act “as if we didn’t read the [Supreme Court] decision.”

Veteran lobbyist Don Tilton, who represents the Arkansas Check Cashers Association, hedged when asked about efforts to preserve the law.

“It’s a day-to-day thing in here,” he said. “We’re respectful of that process. We’ll continue to try to work with people to see what’s possible.”

Williams vigorously denied that Pryor’s neutrality on the act in 1999 was influenced by the industry’s political power and a series of campaign contributions.

“[The 1999 session] started the day Mark took office,” he said. “Mark took office straight off a campaign with ideas and direction for this office.

“He had a focus. That focus was Do Not Call [a law to protect consumers from telemarketers]. We were only one of two states without a do not call law. Check cashing was not one of Mark’s priorities.”

Pryor, through Williams, did confirm the involvement of Jim Blair, general counsel to Springdale poultry giant Tyson Foods Inc., in the drafting and promotion of the 1999 act. Blair, a long-time associate of former President Bill Clinton and his wife, Sen. Hillary Clinton, D-N.Y., called once and mailed a draft copy of the legislation, asking Pryor’s help with the bill, Williams said.

Blair said recently that he believed that he contacted Pryor on behalf of Tom Hardin of the Rose Law Firm in Little Rock, and not in connection with his Tyson duties.

Hardin, the author of the legislation and attorney for the Check Cashers Association, did not return a recent call for comment.