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State House passes payday-lending bill despite objections

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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About Megan Wright


  1. If you have bad credit, and no credit options, how can you ever hope to improve your financial outlook? The risk that comes with these loans may not be agreeable to everybody, but we shouldn’t deny people the opportunity to take a risk to get back on track and improve their lives.

  2. How many of these “payday loan” customers have deserted regular banks after having one or two experiences of accidental overdrafts costing them hundreds of dollars in fees, or realizing that an inadvertent overdraft here or there is costing them hundreds of dollars a year.

    It only takes one or two such events before your local bank is unwilling to lend you a nickel, even short term.

    The attraction of the payday loan folks may very well be that, at least with them, you know what the terms are up front (at least it seems simple as long as you pay it off each month).

    But regulation IS necessary, and the longer the legislature waits to enact it, the harder it will be since this “racket” is growing so profitable that larger banks are starting to move into it, too, and as we well know, THEY have the political connections and clout to prevent legislation from ever being enacted.

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