SOUTH CAROLINA MAY JOIN LIST OF PREDATORY LENDING LAW STATES
On May 13, 2003, ACE Cash Express, Inc. announced that it had entered into a settlement agreement regarding Purdie v. ACE Cash Express, Inc., a nationwide class-action lawsuit filed in September 2001 in the U.S. District Court for the Northern District of Texas. The complaint alleged that ACE violated the Racketeer Influenced and Corrupt Organizations Act, the federal Truth in Lending Act, the Electronic Funds Transfer Act, the Fair Debt Collection Practices Act and state usury, small loan and deceptive trade practices laws in connection with its offering of Goleta National Bank (GNB) short-term loans at its stores. According to an ACE press release, the settlement, which is subject to court approval, addresses substantially all of the short-term loans made by GNB nationwide through its relationship with ACE. The press release states that under the settlement, all persons who obtained those loans and do not affirmatively act to exclude themselves from the settlement will release ACE and Goleta from all liability in connection with those loans. In exchange, ACE reportedly will (i) discontinue further collection efforts on all unpaid GNB loans, (ii) refund to any borrower who has paid all of his or her loans in full and who timely submits a claim a percentage of the finance charges paid by such borrower, but not less than $7.50 or more than $45 and (iii) abide by certain restrictions on its short-term lending activities for up to two years after final court approval of the settlement. In addition, ACE reportedly will pay up to $2.1 million to attorneys representing the plaintiffs in Purdie and certain other GNB-loan-related lawsuits and will bear all notice and administrative costs in connection with the settlement.