Mississippi’s payday lenders have had it too easy for far too long.
Their ad jingles are catchy and their signs are flashy. For a “small” fee, you can get cash today instead of waiting until your payday. It’s almost too easy.
No credit check. They hold your personal check until payday and you walk away with the cash you need.
But truth is rarely found in their catchy slogans. Spending a year paying off a two-week, $400 loan because of nearly 500 percent in annual percentage rate interest is closer to reality, according to the Mississippi Center for Justice. This is akin to legal loan-sharking.
The worst part: It’s the poor who rely on these types of businesses. And they’re the least likely to have the financial resources to withstand the deep levels of indebtedness caused by the harsh terms.
The Department of Defense lists payday loans as one of the top 10 threats to service members and their families, the Center for Justice said. Per capita, Mississippi ranks third in the nation in the number of payday lenders.
Other southern states have started regulating payday lenders; some have even done away with them altogether. The 1,139 payday businesses in Mississippi, however, continue to operate with little scrutiny.
When businesses take advantage of our most vulnerable citizens, we believe it is time for the state to investigate their practices. While over-regulating business is rarely a good thing, it is important that these businesses be required to report the number of loans they make each year and their true annual percentage rates.
Are the same people using these businesses over and over again? If so, is this really a necessary emergency option for consumers? What are the alternatives and solutions?
It is time the state takes an active approach to investigate payday loan businesses.
