No More Loans at 644%

LITTLE ROCK (CN) - PDL Support and Platinum B Services agreed to stop offering illegal payday loans with interest rates as high as 644 percent, the Arkansas attorney general said.

Defendants Josh Mitchem, of Kansas City, Mo., and his companies agreed to the consent judgment in Pulaski County Court, Attorney General Dustin McDaniel said in a statement.

Arkansas sued Mitchem and his companies in January, claiming the payday loan websites, allegedly based on the Caribbean island of Nevis, charged illegal interest rates and fees.

"Arkansas law prohibits this kind of lending, whether it's from a storefront in the state or from a website supposedly based on an island," McDaniel said in the statement. "These types of loans only push consumers further into debt."

Mitchem and his companies denied any wrongdoing in the settlement, but agreed to stop offering "usurious" loans in the state and cancel any outstanding loans in Arkansas, the attorney general said. They also agreed to pay Arkansas $80,000, according to McDaniel.

Payday lenders controlled by Mitchem and his companies include Action Payday, Bottom Dollar Payday, Everest Cash, Paradise Cash Advance, The VIP Loan Shop and Red Leaf Lending, the attorney general said.

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