June 10, 2017 10:13:59 PM
JACKSON -- A new settlement says the state of Mississippi will revoke all the licenses of a company called All American Check Cashing Inc.
Regulators say the Madison-based company, which has 42 stores in Mississippi, broke state law by encouraging customers to pay only interest on loans.
After an extended regulatory fight, the Mississippi Department of Banking and Consumer Finance announced Friday that it had reached a settlement with All American. The plan was filed in Hinds County Chancery Court.
All American will have to refund a total of $134,609 to 703 customers.
It will have to pay $889,350 in civil penalties. That is $275 for each of the 3,234 violations found.
The settlement says any new transactions by the company after May 11 are invalid.
Hinds County Chancery Judge Dewayne Thomas last month temporarily blocked penalties against All American by the Department of Banking and Consumer Finance. He ruled Tuesday that he wouldn't reinstate All American's licenses to cash checks or make loans while the company was fighting the state agency.
The company appealed Wednesday to the Mississippi Supreme Court, arguing that even temporary enforcement of penalties from the state "is the equivalent of the death penalty" for the company. The settlement Friday appears to end the appeal to the Supreme Court.
An attorney for the company did not immediately return a call Friday.
Federal and state regulators in 2014 accused All American of a systematic scheme orchestrated by corporate leaders to evade Mississippi's prohibition against rolling over payday loans by pushing customers to pay only interest and continue the loan. Consumer advocates have long fought that practice, because borrowers continue paying sky-high interest rates.
The U.S. Consumer Financial Protection Bureau is suing All American in federal court in Jackson, seeking to force repayment to more customers. That lawsuit is still pending.
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