ST. PAUL - A Delaware payday loan company that charged Minnesota customers up to 1,369 percent annual interest must follow Minnesota law, the state Supreme Court ruled Wednesday.

The court opinion agreed with a local judge and the state Appeals Court that Minnesota law does not violate the U.S. Constitution's ban on states regulating interstate commerce. Justices decided that much of the loan transaction occurred in Minnesota, even though Integrity Advance is based in Delaware.

The high court ruling said it appears Integrity violated a variety of Minnesota laws, including interest rate limits, how long a payday loan can last and a requirement to register with the state Commerce Department. State law specifically says that if the borrower is a Minnesota resident and completes the loan transaction in the state, the law applies.

"It has never applied for, nor received, a license from the Minnesota commissioner of commerce to operate as a Minnesota lender," the ruling said. "Yet Integrity has made 1,269 payday loans to borrowers who indicated on their applications that they resided in Minnesota. In the process of extending those loans, Integrity called or sent e-mails to borrowers, employers and banks within Minnesota."

Integrity, which operates via a Website, conceded that its loans did not comply with many parts of state law, but argued that state law does not apply to the interstate transaction.

Payday loans generally last less than 30 days, often until the borrower's next paycheck. They feature high interest rates and usually are taken out by people who do not qualify for other forms of credit.

"The benefit of payday loans is that they allow borrowers to pay their basic living expenses in advance of their next paycheck," the Minnesota justices wrote. "However, many borrowers rely on payday loans as their main source of long-term credit and do not pay them back by their maturity date, which can result in extra fees and charges."

Attorney General Lori Swanson sued Integrity in 2011 after receiving complaints.

A district court judge awarded $7 million in damages in the case.

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