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Payday lending legislation in Mississippi

Payday lending services are very popular among American citizens due to an easy application process and favorable repayment terms. Payday loans are identified as small cash advances offered to a customer for a short time period under a certain interest rate. They are a great alternative for those borrowers whose credit history is too poor for a bank approval.
Payday lending industry is widely discussed among financial experts and analysts. Some US States have banned payday lending activities. The Stat. 75-67-501 et seq. allows providing these operations in Mississippi, so payday loans are absolutely legal in the State. This law is also named Check Casher Act, because it monitors and controls activities of every lending company statewide.

A payday loan that isn’t more than $400 is considered to be legal in Mississippi. An interest rate for a loan shouldn’t exceed 18% of the nominal value of paycheck. As a result, the maximum annual percentage rate for a fortnight $100 loan amounts 572%. Loans are allowed to be given for the term of 30 days, after the due date they are required to be repaid. No extensions of the loan can be applied in Mississippi. If a borrower fails to pay off the loan, a lender is allowed to charge him 1 non-sufficient funds fee. Sometimes a lender can also require a payment of court charges.

In accordance with the Check Casher Act only those payday lenders who are able to cash checks and have a cashing license are allowed to offer their services in the State. All other lending firms that don’t have a license should correspond to the provisions of the Small Loan Regulation Act passed by the Consumer’s Union of Mississippi. Under this Act payday loans that are lower than $1,000 in amount can be charged with not more than 36% rate.

The Mississippi legislation also introduces requirements concerning the locations of payday lending companies. Firstly, according to the state zoning legislative acts such companies are to have a real physical address. Secondly, the area of a lending store should exceed 100 square feet. A lending firm is prohibited to be built near title pledge offices, pawnshops and other similar associations.

The law requires all payday lending transactions and operations to be identified in the loan contract. The amount of the percentage rate and all financial charges that a borrower should pay are to be denominated in American dollars. The dates of concluding the agreement and the bargain should correspond to each other.

What is also important in payday lending industry in Mississippi is getting identification from a borrower. A payday lender is forbidden to offer a loan to a borrower who hasn’t provided his ID. A lender isn’t either allowed to advertise his services to the customers without proper identification.

Not only payday lenders are responsible for their actions. Borrowers should also legitimately act when resorting to payday loans. A lender has a right to inform the State District Attorney and the Department of Judicial District in which a loan was given about criminal activities of a customer. On the other hand, any criminal actions due to the delayed payments and insufficient funds are prohibited in Mississippi.