Mississippi Payday Loan Law and Legislation

Mississippi Payday Loan Regulations
Legal Status
Legal
Interest Rate (APR)
521% APR*
Minimum Loan Amount
Not Specified
Maximum Loan Amount
$500
Minimum Loan Term
Not Specified
Maximum Loan Term
30 days
Finance Charges
FInance charges:
<$250 = not more than $20 per $100
$250 - $500 = not more than $21.95 per $100

Payday lending is legal in Mississippi.

In the state of Mississippi, the maximum payday loan amount is $500. The maximum loan term is 30 days (for loans up to $250) and 28-30 days for $250-$500 loans. Rollovers are prohibited. Average APR for a $300 payday loan is 521%*. Finance charges: < $250 – not to exceed $20 for $100; $250-500 – not to exceed $21.95 for $100. Criminal actions are prohibited.

Mississippi is one of the most impoverished states in the country and, thus, there is hardly a surprise that short-term loans are in demand here. There have been many attempts by the Mississippi regulators to place more restrictions on the industry, however, with not much success. Payday loans are still offered in the state and they are still expensive, despite all the restrictions. The loophole that payday lenders use is related to the fact that multiple $250 2-week loans are allowed and legal, and they are more profitable to issue than the maximum $500 30-days ones.

Mississippi Payday Lending Statutes

Payday lending is considered legal in the state of Mississippi according to the Stat. 75-67-501 et seq.

It is also known as the Check Cashers Act as it regulates and monitors the activity of all lending businesses in the state. According to this document, payday loans are called “Deferred and delayed deposits” (§75-67-519) and their regulations are written in the act together with the ones for check cashers.

  • First of all, every such business should have a “valid license authorizing engagement in the business”.
  • Also, payday lenders should comply with certain requirements to their locations. Each lender should have a definite legal postal address in accordance with the zoning laws. The store should be not less than 100 square feet in terms of space. It is also forbidden to place a payday lending store near such institutions as a pawnshop, or a title pledge office, or the like.
  • It is also required by the law that all the operations and transactions were indicated in the agreement; an “interest” amount should be clearly expressed in dollars as a fee and the dates of the agreement and of the transaction should coincide.
  • One more compulsory thing in the payday lending process is identification. No lender is allowed to issue a loan to a borrower without getting a proper identification. Nor a lender is allowed to make any advertisements of the services provided without making it clear that identification will be required.

Loan Amount in Mississippi

  • A borrower is allowed to get a payday loan not exceeding $500 total in Mississippi.

Under the Mississippi Check Cashers Act, this means that to write a check for more than $500 is illegal. Thus, if the requested amount is around $500, the maximum amount a borrower can get is $410. Here, $500 is the total loan amount, $410 is the actual loan amount, and $90 is a fee.

  • More than one payday loan is allowed; however, the total amount may not exceed $500, including the fee.

Rates, fees and other charges in Mississippi

The maximum finance charges are as follows:

  • < $250 = $20 for $100;
  • $250-500 = $21.95 for $100.

Real APR for payday loans in Mississippi can reach 521 % (*According to the Center for Responsible Lending 2019: “Typical APR based on average rate for a $300 loan advertised by largest payday chains or as determined by state regulator, where applicable.”).

Maximum term for a payday in Mississippi

  • Loans are allowed to be granted for no longer than 30 days for loans less than $250 and for 28-30 days for loans up to $500 – after that, they should be repaid.
  • No rollovers, renewals or extensions of a payday loan are allowed in the state.

Consumer Information

  • In case a borrower is unable to repay a lender can collect one $30 NSF fee; rarely, also court fees in case of disclosure.
  • However, in Mississippi late payments and non-sufficient funds are not allowed to be criminally prosecuted.

Borrowers, as well as lenders, have got their share of responsibilities in correspondence to the loans they take out. All the fraudulent or criminal actions committed by borrowers will be reported to the Department and the District Attorney for the Judicial District where the loan was taken.

More information about payday loans in Mississippi can be found on the website of the Mississippi Department of Banking and Consumer Finance.

The History of Payday Loans in Mississippi

  • Before 1998 – All Mississippi lenders (and the ones that offered small loans as well) had to comply with the 36 % APR usury cap.
  • 1998 – Payday lenders were exempted from this 36 % APR usury cap by the law passed by Mississippi Legislature. In the result, they could charge as much as $21.95 per $100 (for loans of $400 and less).
  • 2003 – Also, 7, 14, and 30-day loan terms were permitted; which resulted in 1144% APR, 572% APR and 267% APR, respectively.
  • 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Mississippi is now allowed to offer loans to the military in excess of 36% APR.
  • 2012 – The sunset provision built into then existing legislation was meant to remove the exemption (of payday lenders from the usury cap) in 2012. It was supposed to be final: “Payday lenders will no longer be able to charge triple-digit interest rates when their exemption to Mississippi’s 36% APR cap expires in 2012 unless industry and special interests prevail in extending the sunset provision during the 2011 legislative session.”
  • However, they got the 2012 Check Cash Cashing Act fashioned instead. It made payday lending permanently legal in Mississippi. And it had a tricky loophole that allowed payday lenders to charge triple-digit interest rates. Instead of issuing loans of up to $400 for 30 days, they offered several loans of up to $250 for 14 days each, and by doing so they could get much more in fees. There were numerous attempts to close this loophole in the law, however, all of them failed.
  • 2016 – Besides, instead of restricting the high-cost loan industry, the Mississippi Senate approved installment-loan legislation.
  • June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (the federal rule is expected in November 2020).
  • However, it is unknown whether the rule will ever come into effect. And it is equally hard to say, provided that it will, whether it will effectively close the loophole for payday lenders in Mississippi, or not.

(As of April 2019)

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