The Honorable Jo Carson State Representative 3901 Rogers Avenue, Suite 1A Fort Smith, AR 72903-3077

Dear Representative Carson:

You have requested an Attorney General opinion in response to the following question:

Are companies doing business in the State of Arkansas subject to the usury laws pursuant to Article 9, § 12 of the Arkansas Constitutions when financing is secured by second mortgages on residential loans?

RESPONSE

I recently addressed this issue in Opinion No. 2001-044, a copy of which is attached. I opined therein that the answer to this question will depend upon the particular type of company and transaction involved. In some instances, certain types of in-state companies can charge rates at parity with out-of-state companies. For further details about this issue, please refer to Opinion No. 2001-044.

Sincerely,

MARK PRYOR Attorney General

MP:SA/cyh

Enclosure