Ark. Code Ann. » Title 16 Chapter 64
Arkansas Code Annotated

Ark. Code Ann. § 16-64-130 (2026)

Punitive damage — Contract involving financial institutions

✓ current as of May 2026
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  1. For the purposes of this section, the term “financial institutions” means banks, savings and loan associations, and credit unions located within the State of Arkansas and which are insured by an agency of the federal government.
  2. This section shall be applicable in civil actions in which a claim is asserted against a financial institution, whether by complaint, counterclaim, third party complaint, or other pleading. If a claim asserted against a financial institution is determined by the court to be a breach of contract claim arising out of a loan of money or other extension of credit by the financial institution to the person asserting the claim, then punitive damages shall not be awarded to the person asserting the claim unless it is found that the person asserting the claim suffered personal injury or physical damage to property as a result of the financial institution's alleged action or inaction.

History. Acts 1991, No. 532, § 1.

Case Notes

Punitive damages not allowed.

Where a bank had provided recourse financing to a car dealer for 20 years, during that time had executed contracts establishing the terms for such financing, and within months of executing one such contract notified the dealer that it would not honor the same, the claim involved the issuance of credit; therefore, under this section, the dealer was not entitled to punitive damages in his breach of contract action against the bank. Bank of Am., N.A. v. C.D. Smith Motor Co., 353 Ark. 228, 106 S.W.3d 425 (2003).

Notes of Decisions
Cited in 1 case, 2003–2003 · leading case: Bank of Am., N.A. v. C.D. Smith Motor Co., 106 S.W.3d 425 (Ark. 2003).
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Bank of Am., N.A. v. C.D. Smith Motor Co., 106 S.W.3d 425 (Ark. 2003). · cites it 5× “We also take jurisdiction of this appeal because it requires the court’s interpretation of Ark. Code Ann. § 16-64-130 (Supp. 2001), as to when punitive damages can be awarded in a contract case involving a financial institution.”
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