Dollar Loan Center appeals state ruling to South Dakota Supreme Court
The South Dakota Supreme Court is hearing its October term this week at the University of Sioux Falls.
Among the cases the high court heard today; was the state in the wrong when it shut down Chuck Brennan's 'Dollar Loan Center' business?
In September of last year, the South Dakota Division of Banking revoked the license of Dollar Loan Centers to do business in the state.
"When they're revoked they're not able to lend money whatsoever." Dollar Loan Center attorney Zachary Peterson says when they tried to go to court to remedy the situation, the court denied their case saying they had not exhausted administrative solutions....which would mean negotiating with the Division of Banking....the same entity which revoked their license in the first place.
Peterson says the banking division made a final decision without giving Dollar Loan a chance to state their case beforehand. "He made no attempt to conduct a pre-deprevation hearing rather he issued findings of fact and conclusions of law and revoked Dollar Loan's licenses and then made it incumbent on Dollar Loan to ask for a hearing."
But Special Assistant Attorney General Paul Bachand told the court there was a reason the banking division acted the way it did. "The fact that an entity is operating outside its license is something that can be utilized by the division for a revocation."
In November of 2016, voters approved Initiated Measure 21 which capped payday loan interest rates at 36%.
The state argued Dollar Loan re-designed its loan structure to offer loans at 36% but then imposed the addition of late fees....which would make the final cost for most loans more than 36%.
Bachand told the court; "When late fees are included, finances charges thus resulted with a range from slightly over 300% to about 487%." And with that in mind, according to Bachand, the Division of Banking acted in the interest of the public and pulled Dollar Loan Center's license .
The South Dakota Supreme Court is expected to issue a ruling on this case sometime in the next few months.