Mejia v. Comme Des Gar§ons, Ltd.

**What Happened** This case involved a dispute over a loan agreement that a court determined violated Arkansas state law. A lender had structured a loan with what they called "service charges" on top of the stated interest rate. The borrower challenged this arrangement, arguing that when combined, the total cost exceeded Arkansas's legal limit for interest rates. **What the Court Decided** The court sided with the borrower, finding that the loan was "usurious" - meaning it charged illegally high interest. Under Arkansas's constitution, lenders cannot charge more than 10% interest per year. The court rejected the lender's argument that their additional "service charges" were legitimate fees separate from interest. Instead, the judge determined these charges were actually disguised interest payments that, when added to the stated rate, pushed the total above the legal 10% limit. **Why This Matters for Workers** This ruling protects workers from predatory lending practices. It shows that courts will look beyond creative labeling to determine the true cost of loans. When lenders try to hide excessive interest rates by calling them "fees" or "service charges," workers can challenge these arrangements. This decision reinforces that state interest rate limits apply to the total cost of borrowing, regardless of how lenders structure or label their charges.