A Bismarck pawn shop owner has been ordered to pay $27,000 for giving out high interest payday loans before they were legalized in North Dakota.

Bob's Pawn was sued by the state in January 2001 for offering payday loans with usurious interest rates of 360 percent or more, with a two-week repayment period, according to the attorney general's office. In August 2000, the attorney general and Department of Financial Institutions ordered Bob's Pawn and other payday lenders in the state to stop offering the high-interest loans. Although other payday lenders complied, Bob's Pawn, which is owned by Robert Thompson, did not. So the state took the pawn shop to court.

The 2001 Legislature went on to legalize payday loans, which allow people to borrow money by using a post-dated check, which borrows against a future paycheck. State law allows payday loan lenders to charge no more than 20 percent of the loan amount, or a $20 fee for a $100 loan.

Parrell Grossman, director of the attorney general's Consumer Protection Division, said after District Judge Bob Wefald ruled that the loans were in violation of state law, Thompson agreed to pay back $27,000 in illegal interest charges and pay $1,000 in civil penalties and $500 in attorney's fees. The $27,000 will be used to give refunds of the interest to people who obtained loans from Bob's between October 2000 and July 2001.

Consumers with cancelled checks from the payday loans may be eligible for a refund, and should call the Consumer Protection Division at 328-3404 or 800-472-2600 for details.

Thompson did not respond to a request for comment Thursday.

(Reach Deena Winter at 250-8251 or deena.winter@bismarcktribune. com.)