No. 1998-CA-000326-MR
COMMONWEALTH of Kentucky, ex rel. A.B. CHANDLER III, Attorney General, Appellant, v. KENTUCKY TITLE LOAN, INC. d/b/a Cash Loans of Louisville d/b/a Cash Loans of Bowling Green, Appellee.
Decided: June 11, 1999
The Commonwealth of Kentucky ex rel. A.B. Chandler III, Attorney General (the Attorney General), appeals from the judgment of the Fayette Circuit Court which held that Kentucky Title Loan, Inc. (KTL) fell within the scope of the definition of pawnbroker as set forth in KRS . Accordingly, the court dismissed the action brought by the Attorney General against KTL.
On July 16, 1996, the Attorney General filed a complaint against KTL, alleging that it was operating its business in violation of KRS and KRS . KRS requires a person engaged in making loans for $15, or less to obtain a license from the commissioner of financial institutions. KRS prohibits any person from receiving any interest, discount or consideration greater than six percent(6%) per annum on any loan of $15, or less.
The Attorney General also claimed that KTL engaged in a pattern of practice whereby it charged consumers interest rates that violated KRS , which set forth the legal rate of interest, and that this practice was unconscionable and unfair under KRS . In addition, the complaint asserted that the interest and fees charged by KTL did not bear any relationship to the actual costs of servicing the loan or storing property. The Attorney General sought to have the court declare void all the loans made by KTL; to order KTL to forfeit the principal, interest, and fees it had collected through these allegedly illegal transactions; and to impose civil penalties upon KTL.
In response to the Attorney General’s complaint, KTL maintained that it was a pawnbroker as defined by KRS and that it was operating its business in accordance with the statutes governing pawnbrokers set out at KRS Chapter 226. (more…)