Mississippi Group Wants to Restrict Payday Loans
By J.J. CameronPayday Loan Writer
Will payday loan firms expand in Mississippi? We asked that question in the spring. If it’s up to a series of state legislatures, the answer will be an emphatic “NO!”
In January, the Mississippi Center for Justice will ask lawmakers to require storefront, supposedly low cost payday loan lenders to provide information about the amounts of money they lend, along with demographic information about their customers.
The nonprofit group also will push legislation that would allow Mississippi communities to regulate the number of cash advance companies in their cities.
Purpose of payday loan legislation: Representatives of the center said the proposed legislation would provide a better picture of who the lenders are targeting and whether those customers are able to pay high-interest rates that accompany the payday loans no faxing.
“You shouldn’t allow predatory practices targeting people who don’t have any money to begin with,” center staff attorney David Miller told the Hattiesburg American editorial board Wednesday.
Based on the fees of $17 per $100 loaned over a two-week period, Miller said yearly interest would be between 400 and 500 percent.
“This is supposed to be an emergency loan, not one that you take out every two weeks and get caught in the debt cycle,” he said. “With a reporting system, we could tell if that was happening.”
Moreover, the location of the storefronts shows that there’s a target market that includes people unable to get loans from traditional banks. Providers of quick cash loans try to take advantage.
“These businesses are targeting lower-income communities, African-American communities, military bases, people near casinos - these businesses are predatory,” he said.
However, Dan Robinson, president of the Mississippi Financial Service Centers Association, said that Miller’s figures were misleading and that there is already legislation in place that monitors payday loans.
“What we charge is a fee for cashing checks, plain and simple … and whether they honor that check in a week, two weeks, six weeks, eight weeks, the flat fee is what we charge for,” he said.
He added that for most, the fees charged by check-cashing businesses are smaller than similar fees from a bank. Overall, bad credit payday loans get a bad rap.
“The bank charge is around $30 for a bounced check, and a merchant can charge up to $40, so one insufficient check can cost someone $70,” he said.
