LITTLE ROCK—A third of the payday lenders that Attorney General Dustin McDaniel ordered to shut down or face the possibility of lawsuits have remained open and restructured their businesses to avoid state regulation, an advocacy group said in a report released Wednesday.

The report by Arkansans Against Abusive Payday Lending shows that 55 of the 156 payday lenders McDaniel targeted with cease-and-desist letters earlier this year are still open.

“Many of these stores call what they’re doing a restructuring. We call it a masquerade,” said Michael Rowett, chairman of Arkansans Against Abusive Payday Lending

The report says the lenders “have developed new business models in an attempt to avoid even the minimal regulations of the Check Cashers Act and, more significantly, the recent crackdown by the attorney general.”

McDaniel had told the payday lenders they would face lawsuits if they did not shut down by April 4, and 101 lenders closed in response to the cease-and-desist letters. The attorney general filed lawsuits in May against 20 payday lenders that he said were violating the state’s constitution by charging high-interest loans.

The group said the total number of payday lenders operating in Arkansas has dropped from 237 in March to 136 this month. McDaniel’s office has said he focused on companies that offer “deferred presentment loans” where the businesses not only exchange cash for a check but also agree to delay the depositing of the check for a specific time.

Deputy Attorney General Jim DePriest said all payday lenders in the state are under investigation, regardless of their classification, even though not all were sent cease-and-desist letters.

“Ultimately, we will get around to each and every one of them. ... It is our goal to stamp out payday lending in the state of Arkansas,” DePriest said.

In payday lending, typically someone wanting a loan goes to a check cashing company and writes a check for a certain amount. The company then agrees not to cash the check for a specific time—often waiting until the check-writer’s payday, when money can be deposited to cover the amount of the check.

Through a payday loan in Arkansas, a customer writing a check for $400, for example, typically would receive $350 in cash. The lender would keep the customer’s check for about two weeks without cashing it, thereby allowing the customer time to buy back the check.