Legislature Session 2011 To Limit Payday Loans

Have you ever borrowed money from lenders? Of cause you have! Nowadays there are few who don't use credit opportunities that our world offers. However, any loans are associated with certain risks.

Shopping around you can find a reliable home mortgage for 5% annual interest rate.

Although short term cash advances are very popular option nowadays, they have become an object of consumer advocates' concerns.  The reason for that is probably high APR, sometimes equal to 572%. People who use short term cash advances just have to pay such fees, because they are in financial crunch between paydays.

Speaking about Mississippi, some 130,000 residents resort to payday loans and cash-for-title businesses. Almost a thousand instant payday loan companies function throughout the state.

2011 legislative session is coming and payday loans as well as cash-for-title stores are definitely going to be the session's hot topic.

But what is in a payday lender?

Payday loans are short-term loans offered to individuals in urgent need of cash for a couple of week. Payday loans are associated with a very high interest rate. Here is an example of a payday loan that Stacy Whitten, an employee at City Check Advance, told us: 14 days long $300 payday loan requires $60 fee.

The 2011 legislature session is to re-examine the conditions of the 1998 Check Cashers Act, according to which such easy payday loans are possible.

Jamie Holcomb, program director for the Women's Fund of Mississippi, says that if you don't have $300 right now, you will not have it by your next pay payday.

But Dan Robinson, whose 28 payday stores are scattered around the state, says they fill a void for small loans.

A bill of the kind will have to go through two committees before it is eligible to go to chamber floor for debate. These committees are the House Banking and Financial Services Committee and the Senate Business and Financial Services Institutions Committee.