Will Payday Loan Firms Expand in Mississippi?
By J.J. CameronPayday Loan Writer
While many other states - through editorials or legislative measures - are trying to ban the use of payday loans, a pending bill in Misssissippi would expand the reach of these cash advances.
Under the propsal, cash loan companies would be able to offer automobile club memberships on top of the loans. During debate over the proposal Thursday, some House members argued it would allow companies that already charge high interest rates to extract more money from Mississippians who can least afford it.
"Make no mistake about it: although it's considered an auto club membership, all it really is, is hidden interest," said Rep. David Norquist, D-Cleveland. "On a $700 loan, a $70 membership is 10 percent of the value of the loan. If it is never used, someone has just paid an additional 10 percent interest."
However, supporters of the bill rejected those arguments, saying people living paycheck to paycheck might need tire changes or other roadside services of an auto club if their vehicles break down.
"They don't drive BMWs, Mercedes, Bentleys. They drive older cars, cars that may break down, have problems," said Rep. Danny Guice, R-Ocean Springs, chairman of the House Banking and Financial Services Committee.
The bill had passed the Senate on Feb. 1. The House passed its own version after a vote of 76-39 on Thursday. Because the House made changes, though, the bill now moves back to the Senate for more work. This is at least the second year lawmakers have considered this proposal.
Bailey said authorizing the sale of auto club memberships will allow insurance companies "to come in and steal legally from our people."
Stay tuned to find out the future of payday advances in this state.
