Request By:
Mr. Robert W. Foley, Vice President
United Bank and Trust Company
109 North Main Street
Versailles, Kentucky 40383
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Mark W. Dobbins, Assistant Attorney General
This is in response to your letter of November 17, in which you request an opinion as to whether your bank could use the small claims division of district court when suing customers with accounts delinquent in amounts of less than five hundred dollars ($500.00) plus accrued interest.
KRS 24A.230(1) allows that the small claims division has concurrent jurisdiction with the district court in the type of civil action which your bank is considering, providing the claim is not in excess of five hundred dollars ($500.00) exclusive of interest and costs. However, KRS 24A.240(3) prohibits the bringing of an action by your bank in the small claims division. That section states:
No person, firm, partnership, association, or corporation engaged, either primarily or secondarily, in the business of lending money at interest, nor any collection agency or collection agent, may bring an action in the division in the furtherance of their business.
As the United Bank and Trust Company must, clearly, be engaged in the business of lending money at interest, it is our opinion that it is precluded from having an action brought in its name to collect on delinquent accounts, such action being in the furtherance of that business.