The office of the Arkansas Attorney General is suing a Jonesboro, Ark., payday loan business and asking a judge to shut down the operation for charging interest rates as high as 520 percent.

The Arkansas News Bureau reports that lawsuit, filed Tuesday in Pulaski County Circuit Court, accuses Money In A Flash of charging “unconscionable and unlawful interest rates. It alleges that the owners of the business entered into contracts with consumers for loans with exorbitant and illegal interest rates.

The terms of the contracts allowed consumers to receive up-front payday advance loans disguised as “rebates” from the company, according to the lawsuit, and allegedly required them to make monthly or biweekly payments of up to $60 to the company — which translates to APRs of more than 500 percent.

Attorney General Mike Beebe called the practice “an especially egregious example of a company using deceptive practices to take advantage of consumers through illegal high-interest rates” in a written statement.

He added that the company “not only charged outlandish interest rates to customers who received these ‘rebates’, but withdrew money directly from bank accounts if they did not pay in cash on schedule.”

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It hasn't been the best week for Advance America.

Recent reports state that the company may have discontinue operations in Pennsylvania and Arkansas, but representatives - along with industry insiders - do not regard these as not signs of trouble elsewhere.

Advance America currently operates 2,604 centers in 36 states. In the two aforementioned states, the service operates under an "agency model," partnering with federally chartered banks to offer payday loans. There are a total of 131 stores in the two states.

In its fourth quarter earnings statements released earlier this week, Advance America disclosed that the Federal Deposit Insurance Corp. "has instructed certain banks to discontinue offering payday cash advances and alternative credit products if they cannot adequately address the FDIC's concerns regarding those products."

Jamie Fulmer, Advance America's director of investor relations told the Spartanburg Herald-Journal that it's too early to say how the FDIC news will play out.

"We're evaluating what options might be available to us should they (federally chartered banks) be forced to discontinue payday loans and installment loans in those states. … It's hard to say what those options might be."

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Due to a federal banking investigation, Advance America may be forced to alter its payday loan practices in Arkansas and Pennsylvania.

Company president Ken Compton said in a conference call last week with reporters and analysts that the Federal Deposit Insurance Corporation is looking at payday advance operations at banks it supervises.

Advance America and other similar lenders originate short-term, high-interest loans financed by regular banks. The companies also earn fees for collecting payments and dealing with late payers. Because the FDIC insures bank deposits, agency officials have said they think the business is too risky for their banks. The quick cash loan issue probably won't go away any time soon.