LITTLE ROCK, Ark. (Legal Newsline) - Arkansas Attorney General Dustin McDaniel announced on Tuesday that he has filed a lawsuit against an online payday lender and his companies for allegedly violating state usury laws.
The lawsuit charges Christopher Hodes and two companies he allegedly controls - Arrowhead Investments and Galaxy Marketing - with allegedly loaning money to Arkansas residents through payday loans offered on numerous Web sites, despite the attorney general calling for all payday lenders to cease operating in the state in 2008.
McDaniel alleges that these loans had an interest rate of 782 percent.
"With the closure of more than 250 payday lending locations in Arkansas, the state's consumers have saved millions of dollars in illegal interest payments," McDaniel said. "I will not retreat from my pledge to eliminate all payday lending, whether it occurs at a storefront in Arkansas or over the Internet."
McDaniel's lawsuit seeks to bar the companies from offering or collecting upon these high-interest loans and wants all high-interest loans made by the defendants cancelled, with money returned to the borrowers.