Mississippi Attorney General Jim Hood has joined at least 40 other states’ legal officers in opposing legislation in Congress that could pre-empt states’ authority in governing payday lending businesses.
Hood says in a news release that the bill in Congress would allow payday lenders, installment lenders, car title lenders, prepaid card issuers and check cashers to obtain a federal charter and sidestep these more stringent state laws.Mississippi lawmakers in 2011 allowed payday lenders to stay in business through 2015, while altering some of the practices, including repayment times and capped fees. The revised law granted borrowers 30 days to repay the loans, while allowing lenders to increase the amount of the loans from $300 to $500. The Legislature kept a provision that forbids loan roll-overs.
Hood says the federal proposal would allow lenders to extend credit if there is a reasonable basis for believing the consumers can repay the loans but without putting specific standards in place.