Higher Court looks at High Interest

Back in May, Senior Judge Fidel Salcedo talked about the his decisions to throw out cases involving high interest short term loan centers, and their efforts to get money from deliquent customers.

"In my opinion this is not justice. That is why I have taken the position I have taken. I am going to render justice whether the defendant is here or not."

With that Judge Salcedo and others in Reno Justice Court threw out cases filed by high interest loan companies against clients who had not paid their money in full. These companies were doing business under a law called six-oh-four-A--charging interest above 40-percent lasting less than a year. But for some judges these same companies were skirting the law and rewriting the contract for one year and a day. Which is why the contracts had interest rates ranging from more than five hundred to 73-hundred percent. Such interest was called unconscionable by the court and not operating within the spirit of the law.

Brad Johnston an Attorney for Dollar Loan Centers says this is what happened next in Justice Court.

"Have either modified the judgements or kicked out the claim all together. And we believe improperly so. Because they have affectively inserted themselves as the advocate on behalf of these non appearing defendants."

Johnston has appealed those justice court decisions to district court. Here roughly 25-cases have been filed and consolidated for one of the judges here to preside. Johnston says Reno Justice Court judges were acting as advocates for defendants who did not appear in court--that's not their role Johnston says and that's one reason for the appeal.

" For the justice court to make a finding of unconscionability without the defendant appearing is unreasonable. They can't make the required factual findings. For all we know these defendants at least some of them just decided not to repay the loan."