Mississippi Laws for Payday Loans

Mississippi Mississippi state contour against blurred USA flag image by Stasys Eidiejus from Fotolia.com

Payday loans are short-term, high-interest loans made to borrowers with little access to other means of credit, such as a credit card. They are sometimes known as payday advances, but annual interest rates can exceed 500 percent. The law regulating payday loans in Mississippi is known as the Check Cashers Act.

Caps on Loan Amounts and Fees

The maximum payday loan in Mississippi is $400. Lenders cannot charge more than 18 percent of the face value of the check. On a 14-day loan, the maximum charge equals 572 percent annual interest. A loan cannot exceed 30 days.

No Rollovers

A borrower in need of $400 is unlikely to have the money to repay a loan in two weeks, but a payment is often required because the lender is holding a post-dated check. To avoid a bounced check fee, the borrower can ask the lender to delay depositing the check. The lender then charges an additional fee. This is known as a rollover, and it is prohibited in Mississippi.

Law Discrepancy

There is some dispute over whether the Check Cashers Act applies only to check cashing businesses. Ronnie Harrison, the Chief Examiner of the Consumer Finance Division of the state Department of Banking told the Mississippi Economic Policy Center in 2007 that anyone wishing to make a payday loan in Mississippi must have a check cashing license. The Consumers Union, National Consumer Federation and Consumers Union say that businesses without a check cashing license must follow the state's Small Loan Regulatory Act, which governs loans up to $1,000. The SLRA caps interest at 36 percent.

References

• Mississippi Economic Policy Center: Mississippi Payday Lending Fact Sheet (PDF)
• Payday Loan Consumer Information: Mississippi State Information
• Consumer Federation of America: Small Loan Dollar Products Scorecard (PDF)