The move in Arkansas is a direct assault on the nation’s largest payday lender,Advance America (NYSE: AEA), which has 30 stores in the state. EZCORP (Nasdaq: EZPW) has only one. Others, like Cash America (NYSE: CSH) and QC Holdings (Nasdaq: QCOO), don’t have any operations in the state, though First Cash Financial (Nasdaq: FCFS) operates nine buy here/pay here auto dealerships, which tend to cater to the same clientele.
From New York’s Eliot Spitzer to Mississippi’s Jim Hood and Mike Moore, we’ve seen attorneys general like Arkansas’ Dustin McDaniel get creative with laws on the books to further their own agenda. Spitzer used New York’s rarely used and little-known 1920s-era Martin Act to prosecute alleged white-collar crimes. Hood has been accused of colluding with trial lawyer Dickie Scruggs — who just pled guilty to bribery charges in an unrelated case — of trying to force State Farm Insurance to settle lawsuits over Hurricane Katrina by threatening to launch a criminal investigation. Before that, Moore sicced Scruggs on asbestos companies and the tobacco industry, reaping billions for the state as a result.