State House passes payday-lending bill despite objections
Published: January 25,2013
Tags: bank, banker, banking, bill, check cashing, finance, finasncial institution, legislation, legislative, legislator, Legislature, lend, lending, loan, money, Payday lending, Politics, state government
JACKSON — The Mississippi House has voted to let payday lending businesses keep operating in the state beyond 2015, despite objections by some lawmakers that the shops congregate in poor neighborhoods and take advantage of people who might not be financially savvy.
Supporters say the businesses provide easy access to cash for people who might not be able to get loans from traditional banks.
Legislators voted in 2011 to allow payday lenders to operate in the state until 2015. It’s not unusual for state laws to initially be enacted for a limited number of years. The bill now under consideration would erase the time limit, giving payday lenders an open-ended existence.
The bill passed 89-21. It goes to the Senate for more debate.
At a payday lender, a consumer can get a short-term loan by writing a check that covers the amount being borrowed, plus fees. State law gives consumers 30 days to repay loans, and it caps fees at $20 for every $100 borrowed.
Critics say the companies charge high fees that can trap poor people into a series of debts that are difficult to repay.
“This bill is just as bad as slavery ever was,” said Rep. Willie Bailey, D-Greenville.
He said 11 check-cashing businesses popped up in one part of Greenville in the past few years.
“This is an evil, evil system,” Bailey said. “It is hurting poor people who cannot afford it.”
Rep. Adrienne Wooten, D-Jackson, said the payday lending industry has bought steak dinners and given campaign contributions to other elected officials. She said she believes the businesses perpetuate a debt cycle that’s hard for people to escape, and she implored fellow House members to remember their constituents who might fall into that cycle.
“I wasn’t born with a silver spoon in my mouth,” Wooten told her colleagues. “And by the way many of you look to me, you weren’t, either.”
House Banking Committee Chairman Hank Zuber, R-Ocean Springs, said the payday lenders serve a purpose and should continue to operate under state regulation.
“I am tired of the sensationalism and the politicization of this subject,” Zuber said.
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