TEXARKANA -- A Texarkana pawnshop owner and the Arkansas attorney general have reached a settlement concerning predatory car-title loans.
The Dec. 22 consent decree requires William Duffer, owner of Tri-State Pawn of Texarkana, to stop the practice of issuing title loans with interest rates as high as 240 percent and permanently voids all outstanding title loans held by Tri-State. Duffer must pay $8,697 into a fund that the attorney general's office will distribute to affected consumers, as well as $108,000, which will be deposited in the office's Consumer Education and Enforcement Fund.
The attorney general's office sued Duffer and Tri-State in Pulaski County Circuit Court in 2013. The complaint alleged violations of the state's Deceptive Trade Practices Act as well as state law prohibiting usury.
Documents concerning two auto-title loans made by Tri-State prior to the 2013 lawsuit show the company made big profits by calculating interest on loans at extremely high rates. On at least one occasion, Tri-State seized a borrower's car as collateral on a loan prior to the loan's due date, the complaint alleged.
"Defendants have engaged in at least 72 title pawn transactions with Arkansas consumers," the consent decree states.
In the "defendant's position" section of the consent decree, Tri-State denies the claims made by the attorney general's office in a one-sentence statement.
The decree warns Tri-State about using language like "sale/sale-back" or "sale/lease-back" to avoid the terms of an injunction issued in April 2014 prohibiting Tri-State from predatory lending.
If Duffer or Tri-State violates the terms of the consent decree, theycould be barred permanently from doing business in Arkansas and could be required to pay fines in the hundreds of thousands of dollars.
State Desk on 01/01/2016