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Payday Lenders Getting Stiff-Armed

Rich Duprey
March 25, 2008

Just what we need: another overreaching state attorney general trying to make a name for himself. Arkansas' attorney general wants to shut down payday lenders in his state, and he's sent letters to some 60 companies doing business there, telling them to pack up, ship out, and -- oh yeah! -- forgive all the debts of the people who borrowed money from them.

Unfortunately, payday lenders are used to feeling the strong arm of the law around their necks. North Carolina, Georgia, and about a dozen other states have outlawed payday lending. For individuals needing small bridge loans -- well, tough luck! You can't have one.

The move in Arkansas is a direct assault on the nation's largest payday lender,Advance America (NYSE: AEA  ) , which has 30 stores in the state. EZCORP (Nasdaq: EZPW  ) has only one. Others, like Cash America (NYSE: CSH  ) and QC Holdings (Nasdaq: