How much should consumers pay?
October 18, 2010 | Mississippi | Comments (0)A debate is raging in Mississippi. From the story:
Foes of the financial practice, such as Carol Penick, executive director of the Women’s Fund of Mississippi, and Roberta Avila, executive director of the Steps Coalition, argue that: “There is something terribly wrong when the needs of cash-strapped workers are exploited to support a billion-dollar poverty industry. It is also morally repugnant. No one in Mississippi needs to pay a 572 percent interest rate. We all deserve access to short-term, transparent and fair loans.”
To which Ryan H. Harris of Check Into Cash, Inc., would reply: “Efforts to regulate the payday lending industry are misguided and stand to kill an entire industry, taking with it hundreds of jobs and a source of credit for Mississippi residents. This push is focused on unfairly calculating the cost of a two-week loan on an annual percentage basis. … Mississippi residents are smart enough to make their own financial choices.”
So we asked John Allison, who has been commissioner of the Mississippi Department of Banking and Consumer Finance since 2000, what he thought.
Allison said the Mississippi Legislature should lower the margin of profit in a payday loan. Lenders can now charge a fee of $21.95 per $100 loaned for up to 30 days, one of the highest rates in the nation. He thinks that fee could and should be lowered to $17 or $18 per $100.
How about not setting a rate and letting the market decide?
Comments»
No comments yet.