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Supreme Court reinstates lawsuit against payday-advance companies
By ASSOCIATED PRESS
Published April 28, 2006
TALLAHASSEE - Payday advances made by check-cashing companies before a state law was passed to regulate them in 2001 were illegal loans, the Florida Supreme Court ruled while reinstating a consumer lawsuit Thursday.
The case involved businesses that, for a fee, advance cash in exchange for checks they do not take to the bank until later, which is known as a deferred presentment transaction.
The fees amounted to interest rates far in excess of the 18 percent legal limit and 45 percent level for criminal usury, said Christopher Casper, a Tampa lawyer who has filed several lawsuits on hold pending the Supreme Court ruling.
The advances are known as payday loans because they are designed to tide workers over until they get their paychecks, but many customers are retirees waiting for Social Security checks. For that reason, the AARP Foundation filed a friend-of-the-court brief.
[Last modified April 28, 2006, 01:15:08]
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