Iowa Supreme Court Rejects Payday Loan Law Challenge

Historical archive, first published 2007 — payday-lending laws and rates have changed since. Preserved for the record.

The Iowa Supreme Court rejected a challenge to a state law that allows payday loans with annual interest rates more than 300 percent.

In Monday’s ruling, a unanimous Supreme Court said the issue should be taken to the Legislature, not the court system. The court, ruling in a Polk County case, said state law governing cash advances meets constitutional muster, even though interest rates allowed under the law are high.

The ruling comes as the Legislature debates another controversial lending practice, seeking to put new restrictions on car title loans.