Religious leaders are asking legislators to crack down on payday lending companies. They say these loans can do more harm than good. MPB's Maura Moed reports.
Under the Mississippi Check Cashers Act, people can borrow up to $410 from payday lenders.
Jim Carstensen is with the Mississippi Religious Leadership Conference. He says there's nothing wrong with borrowing money, but when it puts people in even more debt, there's a problem. He says this is how it can happen.
"If you go ahead and get a loan of $500, your principal payment in one month will be $9.32, and your interest payment will be $126.25. If you hold on to that for 12 months, you'll have a $500 loan and a total payment of $1,626.79 and that's more than 3 times the value of the loan to begin with," says Carstensen.
Democratic Representative Kathy Sykes of Jackson is on the Business and Finance Committee. She says there are several bills aiming to do away with, or regulate payday lending. But, she says payday loans are sometimes the only access under-served communities have to the financial system.
"Alternative banking should be available and it should be regulated. Financially with the low wages that a lot of our worker are paid, some of these needs are recurring. That's why they go time and time again, and some are unexpected," Sykes says.
Senate Bill 2612 is one bill looking to get rid of the state's payday lending companies. If passed, it would declare the site or location of a place of business where payday lending takes place in the state of Mississippi as a public nuisance.