Settlement in lawsuit over Arkansas bounced checks

A city in central Arkansas and a local judge have agreed to change the way they handle suspects charged with writing bad checks to address accusations they were effectively operating a debtors' prison that imposed hefty fines and jail time for thousands of poor residents.

The proposed settlement was filed in federal court Tuesday in a lawsuit that was filed against the city of Sherwood and District Court Judge Milas "Butch" Hale III.

The suit was filed by the American Civil Liberties Union of Arkansas and the Lawyers' Committee for Civil Rights Under Law on behalf of five residents. The lawsuit was dismissed in June.

The settlement calls for individualized evaluations of a defendant's ability to pay and the use of community service to pay fines.