The Honorable Joe Molinaro State Representative 204 Amber Oaks Drive Sherwood, Arkansas 72120
Dear Representative Molinaro:
This is in response to your request for an opinion on whether out-of-state finance companies that provide financing for automobiles purchased in Arkansas must comply with Arkansas usury law. I assume that your question refers to Ark. Const. art. 19, § 13, which dictates maximum lawful rates of interest on contracts.
This issue was recently addressed in Opinion No. 95-331, a copy of which is enclosed. I concluded in that opinion that the determination of whether Arkansas usury law applies to such a contract involves the application of Ark. Const. art. 19, § 13, and the cases interpreting that provision, to all the particular facts and circumstances of each case. I am therefore unable to provide a definitive answer to your question; however, Opinion No. 95-331 and Opinion No. 93-192 (copies enclosed) set forth the general principles that would govern a court's determination of this issue and should provide some guidance in evaluating the particular contracts at issue.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Warren T. Readnour.
Sincerely,
WINSTON BRYANT Attorney General
WB:WTR/cyh