Borrow Smart say payday lending a good thing - MSNewsNow.com - Jackson, MS

Borrow Smart say payday lending a good thing

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By Ashley Conroy - email

RIDGELAND, MS (WLBT) - As the 2011 legislative session nears, the Mississippi Center for Justice continues to advocate against payday lending in Mississippi.

Attorney Paheadra Robinson says they often work on cases of payday lending customers who have fallen into a financial bind because of these services.

"Because quite often we get calls from people who are being sued by pay day lenders and they're trying to figure out what they can do to avoid a judgment," Robinson said.

Customers are often required to pay back their loan in a two week time period, and the amount borrowed is capped at $400 dollars.

The Center for Justice is advocating to cap the interest rates of payday lenders at 36 percent. As of now, these interest rates are capped at 572 percent.

Borrow Smart Mississippi, an association that regulates payday lenders, say their practices are fair.  

Spokesperson, Dan Robinson says often the misconception is payday lenders over charge customers because of their 18 percent fee for every $100 dollar transaction.

He says they are not like banks and credit unions that operate on an annual percentage rate basis.

"I know that the rates are much cheaper than what the other services out there are," Robinson said.

He disagrees with the Center for Justice's approach to lawmakers and says payday lending in Mississippi would go out of business if this legislation passed.

"There's no possible way to do it for 36 percent, you can't pay the rent on this building for $1.38 cents on a hundred."

In addition, Robinson says the claims from the Center for Justice are false, and they will not pursue immediate legal action if a customer can't pay.

"You know they say if they don't pay your check they'll turn over to the district attorney and put you in jail for not paying the check, it's against the law in Mississippi. We can't use the district attorney's office."

However, Attorney Robinson says she's judging her argument off of what customers tell her.

"And people can't afford to pay the loan in two weeks the average loan in Mississippi is about $300 dollars. So that's $366 dollars that's due in two weeks."

Borrow Smart says since January they have had four formal complaints issued to the Mississippi Department of Banking and Finance out of 378,000 transactions.

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