Mississippi Payday Loan Laws

The Mississippi Economic Policy Center has set several regulations in place regarding payday loans. The regulations set in place are to protect both lenders and borrowers.

• The maximum APR is 572%
• The minimum loan term is 14 days
• The maximum loan term is 30 days
• An interest rate of 22% can be charged on $100 loans
• Multiple loans can be obtained at once
• Rollovers and extensions are not permitted
• Loans cannot exceed $400

Mississippi has put a policy in place regarding payday loans that the fees charged for a $100 loan cannot exceed 22% of said loan. There are no cooling off periods mentioned in the state law, thus allowing borrowers to pay back a loan and immediately get another.

If a borrower defaults on their loan, the lender can impose only one NSF fee and up to $20 in court filing costs. There aren’t any regulations set in place for repayment of a defaulted loan. The lender cannot come back on a borrower in a criminal way unless the check comes back as being drawn on a closed account, which itself is a crime.

The state of Mississippi has not yet set a number as to how many outstanding loans a borrower can have at one time. There are also no regulations set in place to ensure that the borrower can repay the loan. Few regulations protect the borrower in Mississippi. The laws in place are mainly set there to protect the lender.

Borrowers in Mississippi are more likely to end up in financial ruin than other states due to these lax laws and regulations. We must remember that one that starts this process is digging their own financial hole. It was their decision to get the loan, regardless of their ability to repay it. It is not the duty of the financial institution to determine if a borrower has the means to repay the loan. It is only their duty to determine if they make enough income to obtain the amount they are requesting. This is a case of buyer beware, in terms of a borrower not completely understanding the laws within the state of Mississippi.

Federal law does require that financial institutions provide a list of terms, finance charges and penalties to all borrowers. This refers to the TILA act. If a lender does not offer the borrower these terms, the borrower can file a complaint with the Mississippi Department of Banking and Consumer Finance.

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