Page:State ex rel. Bryant v. R & A Investment Co.pdf/4

292   our interpretation of the usury provisions contained in Article 19, Section 13, of the Arkansas Constitution, and the Arkansas Deceptive Trade Practices Act (DTPA), as codified at Ark. Code Ann. §§ 4-88-101 to -115 (Repl. 1996 & Supp. 1997); hence, our jurisdiction is pursuant to Ark. Sup. Ct. R. 1-2(a)(1), (b)(1), and (b)(6). We reverse and remand.

Mid South is in the title-pawn business. Mark Riable is the registered agent for each of the three corporations, which runs newspaper ads targeting high-risk borrowers with "Bad Credit" and "No Credit." After receiving complaints from Mid South's borrowers, the State filed suit on April 23, 1997. In its complaint, the State alleged violations of Ark. Const. art. 19, § 13, the DTPA, and public-nuisance law. The State further alleged that Mid South's contracts require borrowers to surrender their car titles as security for repayment and pay monthly interest, or a "monthly pawn charge." The monthly interest is typically equal to 25% of the entire loan amount each month that the loan is not paid in full, and which constitutes an "Annual Percentage Rate" of 304.17%. Mid South's contracts further provide that upon the borrower's default, it "has the right to take whatever steps may be necessary to take possession thereof" at the borrower's risk and expense. Additionally, borrowers must sign a power of attorney, allowing Mid South to sell the vehicle upon repossession. Under the contract, Mid South cannot seek a deficiency judgment after repossession. The complaint alleged that Mid South's business practices constitute unconscionable, false, or deceptive trade practices under section 4-88-107. The complaint alleged further that Mid South's contracts constitute consumer loans and credit sales under art. 19, § 13(b). The trial court initially granted the State's motion for a preliminary injunction, finding that it had presented a prima facie case that Mid South's practices were unconscionable. On November 3, 1997, both parties moved for summary judgment. The trial court conducted a hearing, during which borrowers testified about the financial circumstances that had precipitated their transactions with Mid South, as well as their subsequent transactions with Mid South. The trial court denied the State's motion for summary judgment and granted Mid South's motion for