Mississippi Governor Seeks Payday Lender Funding

By: Javi Calderon
Mississippi Governor Seeks Payday Lender Funding

Mississippi Governor Haley Barbour traveled last week to South Carolina where he met with community leaders, Republican Party members and representatives from the payday advance company Advance America, gauging the waters for a possible run for the presidency.

Barbour’s spokesman insisted that the meeting was in no way related to a bill currently being considered by the Mississippi State Legislature that aims to extend the length of payday loans and reduce loan interest rates.

Mississippi’s current payday lending laws expire in 2012.

Current state laws allow for lenders to charge up to $21.95, including fees, on each $100 lent up to $400. The new law would lower the maximum to a total of $20 for loans under $200 and would assure customers of at least 28 days to repay the payday loan.

The State Senate passed a version maintaining the $20 through the first $300 (instead of $200), prompting House Banking Committee Chairman George Flaggs to vow to oppose it, though he later agreed to compromise at $250.

If passed and signed by Governor Barbour most changes would take effect on January 1st, 2012. Two provisions that would be in effect immediately would be a requirement for every cash advance customer to receive an informative financial brochure, and all payday loan agreements between Mississippi citizens and unlicensed Internet lenders would be nullified.

One loophole that the new law would still leave open is the practice of “loan splitting” which would allow lenders to write consumers two different loans for the amount they desire.

The new law also still allows consumers to take out multiple loans with different loan lenders during the same window of time.

Until these flaws are corrected critics feel that the new law is barely an improvement over the last.

Barbour and his representatives feel that the South Carolina meetings went very well and he plans to decide whether or not he will run for President in the coming months.