Religious leaders are calling on lawmakers to crack down on payday loan companies. They say these loans can do more harm than good. Maura Moed from MPB reports.
Under the Mississippi Check Cashers Act, people can borrow up to $ 410 from payday lenders.
Jim Carstensen is a member of the Mississippi Religious Leadership Conference. He says there is nothing wrong with borrowing money, but when it gets even more debt, there is a problem. He says that’s 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 keep it for 12 months, you’ll have a loan of $ 500 and a total payment of $ 1,626.79 and that’s more than 3 times the value of the loan to begin with, ”Carstensen explains.
Jackson’s Democratic Rep. Kathy Sykes sits on the business and finance committee. She says there are several bills to suppress or regulate payday loans. But, she says, payday loans are sometimes the only access to the financial system of underserved communities.
“Alternative banking should be available and it should be regulated. Financially, with the low wages that many of our workers are paid, some of these needs are recurring. That’s why they keep coming back again and again, and some are unexpected,” Sykes said. .
Senate Bill 2612 is a bill to get rid of state payday loan companies. If passed, it would declare the site or location of a place of business where payday loans take place in the state of Mississippi as a public nuisance.