Home » NEWS » Banking & Finance » Lengthy probe, legal tussles end with All American Check Cashing shutdown, $1.5 million penalty
All American Check Cashing location in Ridgeland.

Lengthy probe, legal tussles end with All American Check Cashing shutdown, $1.5 million penalty

UPDATED WEDNESDAY: Payday lender pins hopes on Chancery Court to avoid store closings, $1.58 million fine

By TED CARTER

Mississippi officials are forcing Madison-based payday lender All American Check Cashing to close its 70 Mississippi locations and pay a more than $1.5 million fine.

The action ordered Thursday followed a multi-year investigation by the Mississippi Department of Banking and Consumer Finance, federal court challenges and 24 days of administrative hearings that stretched from November to this past April.

Sources say the stores were closed Friday but will reopen Monday to take payments on outstanding loans.

» THE VAULT — READ the MBJ’s investigation of All American Check Cashing 

The Department of Banking and Consumer Finance issued the order Thursday, revoking 75 licenses held by All American and ordering an immediate stop to new loans. The company must pay fines of $1.58 million and refunds to at least 700 customers.

Federal and state regulators announced in 2014 that All American Check Cashing was illegally encouraging customers to pay only interest on car title and payday loans. Such practices violated a Mississippi law against rolling over payday loans and car title loans, in effect using the proceeds of a new loan to pay off an old loan.

Regulators charged that owner Michael Gray had initiated the companywide policy of illegally rolling over the loans to build profit for the company while immersing customers into increasing debt on a single payday loan. The check casher and payday lender is the first low-dollar, short-term lender charged with running afoul of the state’s rollover law.

Regulators say their 19-month investigation found 1,600 rollover violations involving 6,500 customers. In addition, the investigation turned up 692 violations involving refusals to give customers refunds All American Check Cashing owed them, regulators say. All American, they say, took “overt” actions to keep customers from learning they had refunds coming.

The allegations over refusal to give refunds brought investigators from the U.S. Consumer Financial Protection Bureau to Mississippi. Their probe led the CFPB to sue All American in federal court, seeking to force repayment to more customers.

All American has strenuously disputed the enforcement actions, even filing a state ethics complaint against a banking regulator. However, by November All American and owner Gray decided to seek an appeal though an administrative hearing conducted by Banking Commissioner Charlotte Corley.

In their case against All American, state bank regulators presented a training document for, the company’s intranet detailing precisely how store employees were to handle the illegal rollovers.

About Ted Carter

4 comments

  1. Thank God. These people are crooks.

  2. Good riddance! This company knew what they were doing. I worked for them about 3 years ago. The banking commission showed up on my second day! I had no idea what was going on. The “manager” called me to back and told me not to say anything and when customers came in make sure they paid all of their loan. I had no idea what she was talking about. My first customer was a disabled man in a wheelchair. When he tried to pay just his interest I had to tell him no. That’s all the money he, the manager then told him to pay it or the the check would be run, then he would be taken to court for the money. That went on for a couple weeks. Then they started taking intrest payments again. In the midst of all this the owner help a company wide meeting at the Hilton, with full buffet, gifts, and a wooden car race. He informed us what to say and what to do. They are crooks and I’m glad to see them go. Crooks and liars who took advantage of low income people.

  3. So, my mom was a victim of this racquet and she received a check from them as a “refund”. Well, after reading about this, I advised her to deposit the check and get this: IT BOUNCED!! And she got charged $5 for the bounced check. Now what?

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