Mississippi Payday Loan Laws and Legislation

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In the U.S. payday lending is a very popular service as such loans are very convenient is terms of application and repayment. Payday loans are cash advances given for a short term for a fee and under interest rate and represent a fairly convenient option for those customers who are not eligible for bank credits.

There is a lot of discussion around the topic of payday loans and in many states they are considered illegal. In Mississippi payday loan businesses operation is allowed 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.

A borrower is allowed to get a payday loan not exceeding $400 in Mississippi. Maximum interest rate is 18% of the face value of the check. APR for a $100 loan given for a period of two weeks cannot exceed 572%. Loans are allowed to be granted for no longer than 30 days - after that they should be rapid. No rollovers are allowed in the state. In case a borrower is unable to repay a lender can collect one insufficient funds fee; in some cases also court fees in case of disclosure.

In Mississippi there is also a law that all the check cashing institutions willing to operate in the state should have a check cashing license according to the Check Cashers Act. All the unlicensed businesses have to comply with the state's Small Loan Regulatory Act as stated by the Consumers Union. This Act presupposes that the interest cap on the loans smaller than $1,000 should not exceed 36% in any case.

Payday lenders should also comply with certain requirements to their locations. First of all, every such business 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.

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. However in Mississippi late payments and non-sufficient funds are not allowed to be criminally prosecuted.

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