UPDATE: As reported Thursday by the Inquirer and Philly.com, Cash America has appealed to the Pennsylvania Supreme Court and asked to resume making payday loans to Pennsylvanians online. We'll update if they win.
EARLIER: Cash America International Inc., Fort Worth, has stopped lending money to Pennsylvanians at interest rates that top 1000% a year from its Web site, www.cashnetusa.com, after Commonwealth Court ruled 4-3 last week that the Pennsylvania Banking Department acted legally in ordering the company (and others like it) to get a lending license and respect the state's 24% annual interest limit, said department spokesman Dan Egan.
Cash America's online loan business, like its network of U.S. and Mexico offices, charge 25% fees on short-term loans, usually under $1,000, that come due in one to five weeks. That works out to as much as 1,141% interest on an annual basis, according to the court decision.
The company testified it earned $20 million from high-interest, short-term loans in Pennsylvania in 2007 and 2008, according to the court decision and lawyer Robert L. Byer, the Duane Morris LLP partner who represented Pennsylvania with his associates Robert Palumbos and Jennifer Diesing-Falcey.
If so, publicly-traded Cash America stands to lose a big chunk of its profits: The company earned $81 million last year, and $79 million the year before. But Cash America hasn't reported a material impact from the case, beyond a statement in its annual report, before the decision, calling the state's case "without merit". Spokeswoman Yolanda Walker said general counsel Curtis Linscott is weighing an appeal to the PA Supreme Court. Ballard Spahr represented the company.
Interesting: A different group of Duane Morris lawyers represents some of the payday-lender defendants in an unrelated federal class-action lawsuit, Yulon Clerk vs Cash America (2: 09-cv-02245-MAM)