A unanimous court said the interest rates charged on small loans targeted to the working poor by two companies, Cash Loans Now and American
The court applied an interest rate of 15 percent to the loans, and ordered the companies to refund money to borrowers in excess of that.
It was not immediately clear how many consumers would be entitled to reimbursement, nor how much the companies would have to pay out.
"We are in the process of determining the impact on similar lenders who offer similar loans and interest rates," spokesman
The AG scheduled a news conference for today to discuss the ruling.
The lawyer who represented the companies was out of the office on Thursday and not available for comment, according to a spokesman at his office.
The high court said the companies , which made the loans at offices in
The lenders, based in
"The reasonable inference is that Defendants' signature loan products were specifically designed to make an end run around the consumer protections" of
A major difference between the two types of loans is length: Payday loan terms are between 14 and 35 days, while signature loans are a year long, the court said.
The signature loans offered by the companies ranged from
One borrower who testified in the case earned
The attorney general told the court the borrowers, as a group, have less income and education than the population as a whole and are more likely to be people of color.
The businesses argued in documents filed with a lower court that the lawsuit was an attempt by the attorney general "to eliminate the small loan industry in
They said the unsecured signature loans were risky, and that sometimes they didn't even recover the cost of making them.
The case was originally filed in state District Court in
Her ruling was appealed to the state
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