JACKSON, Miss., Feb. 13, 2011 /PRNewswire/ -- The Mississippi House of Representatives is set to vote Monday, February 14 on proposed regulations on short term loans that would make the state a leader nationally. If passed, House Bill 455 as amended by conference committee, will create a groundbreaking two-tier structure for short term loans that will protect customers without eliminating choice.
Of the 32 states that have laws regulating payday lending, Mississippi will be the first and only state to set a minimum term of 28 days for short term loans over $208*, giving customers more time to repay those small dollar loans. At the same time, customers will still be able to get a traditional two-week payday loan for amounts over the $208 threshold.
"We know that customers like to be able to borrow small amounts between pay days to pay bills and avoid overdraft charges, and we think it is important that they continue to have that option," said Dan Robinson, spokesperson for Borrow Smart Mississippi. "At the same time, our organization works hard to help ensure that customers don't borrow more than they are able to pay back, and we believe the 28 day minimum on larger loans will help customers avoid over borrowing."
The proposed legislation would also require lenders to provide financial education pamphlets to each customer. Robinson said Borrow Smart wholeheartedly supports financial education and in fact has sponsored financial education seminars in Jackson public schools in the past.
"We applaud our legislators for proposing innovative regulation that will benefit consumers without going too far, as some states have done, and forcing the short term lending industry to close up shop," Robinson said.
Borrow Smart Mississippi was established in 2009 by a group of Mississippi-based short term lenders who recognized a need to establish accountability within the industry and to better educate customers and the public about the smart use of their services. Member stores adhere to a Code of Fair Lending and support financial education in the community and in their stores. Member stores can be found at www.borrowsmartms.com.
*The proposed legislation sets a 28 day minimum for a delayed deposit check of $251 or more. Because the check includes the fee, the actual loan amount would be $208.
Borrow Smart Mississippi is a not-for-profit trade organization with more than 400 member stores in the state. Borrow Smart's mission is to educate our customers and the public about short term lending, to ensure fair treatment of customers and to honor them by protecting the future of our industry.
SOURCE Borrow Smart Mississippi