Published: October 24, 2006 11:15 pm      

Attention needed on predatory lending measures

On October 17, President Bush signed the National Defense Authorization Act for 2007, the annual appropriations bill for the various branches of the United States military. This year’s version contained a very important amendment sponsored by Sens. Jim Talent (R-Mo.) and Bill Nelson (D-Fla.) which will limit the interest on unsecured loans to service members to an annual percentage rate (APR) of 36 percent beginning October 1, 2007. Congress took this action in response to a Department of Defense report which found that predatory lenders, including the payday loan/check cashing industry, are targeting service members and their dependents.

The Department’s findings should come as no surprise to Mississippians who live near the state’s numerous military bases. Indeed, during the 2005 legislative session, state Rep. Ray Rogers (R-Rankin) recognized the problem and introduced a bill to prohibit check cashers from locating within 400 feet of any military installation. Unfortunately, that bill failed to even get out of committee, as did two others introduced by Sen. Gray Tollison (D-Lafayette) which would have begun to reign in the state’s payday lenders.

The Department of Defense report and Congress’ response begs the question: if our men and women in uniform need protection from predatory lenders, what about the rest of us? Current Mississippi law allows check cashers to collect fees on payday loans equivalent to 468 percent APR, or 13 times the limit Congress found appropriate. And anyone with eyes to see knows that the 1,100 check cashers around Mississippi are targeting not only military bases but also low-income areas and communities of color. If 37 percent APR is more than the market can fairly ask of Sgt. Jones, what’s fair for Mrs. Jones?

During the upcoming 2007 regular session, your legislators will have another opportunity to take a look at this critically important issue. Bills introduced in both chambers will ask the state to gather information on how payday loans work for — and against — average Mississippians with an eye to the expiration of the Check Cashers Act in 2009. Another set of bills will seek to give local authorities some control over the growth of the industry in their communities. I urge your readers to take the time to share their thoughts on the subject with their state representatives and senators before the legislative session begins in January. You can be sure that the check cashers will.



Yumeka Rushing

Advocacy Director

Mississippi Center for Justice

Jackson