During the 2010 general election, Arkansas voters passed Arkansas Constitutional Amendment 89, which became effective on January 1, 2011. Amendment 89 simplified Arkansas usury law by dividing loans into three categories:
|photo credit: EJP Photo|
- Governmental bonds and loans now nave no maximum rate.
- Loans by or to federally insured depository institutions headquartered in Arkansas are capped by 12 U.S.C. § 1831u
- All other contracts subject to Arkansas law have a maximum allowable interest rate of 17%.
There are some pretty severe penalties for violating Arkansas usury law, which I'll cover in a future post, so you should always consult your attorney if you have concerns about an interest provision in a contract.