David B. Miller is a staff attorney with the Mississippi Center for Justice. He sat down with The Meridian Star last week and talked about the group's concerns over cash loan lendings.
The Meridian Star: Tell us about the Mississippi Center for Justice and your mission.
David B. Miller: It’s a non-profit law firm. Our main office is in Jackson. We also have a Coast office that does Hurricane Katrina work, and I’m in Hattiesburg with the Consumer Law Resource Center. We’ve got a staff of 12, with six attorneys. We have been open for about three years and do - generally speaking - civil legal advocacy on behalf of poorer, minority communities in the state.
The Star: What are the consumer law initiatives your firm is working on?
Miller: We are looking at bills particularly in two areas — payday lending and predatory mortgage lending.
A little background on bad credit payday loan lending. They have been regulated by the state since the 1990s. As of December of last year, there were 1,139 licensees in the state. There are an average of 12 per county. If you take thet 18 percent fee and annualize it, it comes out to about 470 percent annual interest. That’s a problem.
The other problem we see is that the location of these businesses tend to be in low-income communities; they tend to be close to military bases and on the Coast and on the river. They tend to be close to casinos, so they are praying on some pretty vulnerable people.
The Star: What do you want done about this problem?
Miller: You will hear some people argue that this is a necessary emergency service and we have to have it. If people actually use it as an emergency service, that might be a legitimate argument - which I still take issue with the amount of interest they charge - but certainly you can appreciate that people have a medical emergency and they have got to have somewhere to borrow money.
Again though, the problem we are seeing is that people aren’t using it as an emergency service; unfortunately we don’t have hard data on that because that kind of data isn’t collected under the statute. The only public data you can get now is through the Department of Banking and Consumer Finance, and there are two lines in their annual report that will give a snapshot as of December of the year of the report. For instance, it will say as of December, there were x number of licensees with x numbers of loans outstanding for x dollars.
They don’t tell you how much was loaned through the course of the year, they don’t tell you how many fees were collected and, more importantly, you can’t tell from that whether or not people are using cash advance loans as an emergency service. That is the kind of data we need.
The Star: What are their regulations? What do they have to do to become a business? How much interest they can charge?
Miller: They have to put up a bond for $10,000 and pay a cash advance license fee and have a storefront with a certain amount of space and pass a background check and that’s it.
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