Mississippi Waits for Reply from Payday Loan Lenders
The Mississippi Department of Banking and Consumer Finance is waiting for the response of the All American Cheque Cashing- a leading Payday lender in the American state of Mississippi. The lenders had been found guilty of alleged illegal loan roll overs, as confirmed by its various borrowers. Stephen Schelver, attorney for the Banking Department says – “subjects of the Department’s investigation generally reply within 30 to 60 days of receiving the investigating letter. He also says that there is no hard deadline also for receiving the reply in such cases.
e was also unsure about when the department sent their query and asked for a reply from the lending facility. ‘The department is considering all the evidences before moving on to form any opinion about the payday lender’ – told Stephen.
However the attorney on the payday loans lender’s behalf Dale Danks Jr. of Jackson didn’t return over the various calls done for a comment on the news story. If any illegal business practice has been found in the payday lender’s accounts, then the government has powers to levy fines, order restitution to borrowers or cancel the company’s state license to cash checks for a fee and making payday loans. The payday lender might face direct penalties from the Consumer Financial Protection Bureau (CFPB).
According to the reform meant for ensuring fair payday loan collection practices by lenders, the CFPB is ensuring that these type of cases are handled urgently. CFPB takes special interest in cases that involve loan renewal to pay off existing loans by the debt trapped borrowers. In last of July, the CFPB did action on the second largest payday lender named ACE Cash Express. It was a Texas based payday lender and it paid $10 million in penalty including an amount of $5 million meant for compensating losses incurred by its borrowers. The CFPB’s Bureau Director Richard Cordray told that the payday lender was using unethical practices to misguide its borrowers for taking new loans to pay off existing ones.
Payday lenders provide small dollar loans to borrowers having a regular source of income. The borrower provides the lender with a postdated cheque through which they can deduct their loan amount from the borrower’s bank account. The lending laws in Mississippi allow short term loans of $250 to $500 payable within 30 days’ time period. However, payday loans below $250 must be repaid within fourteen days’ time period. According to a report, the American Check Cashing asked its stores and agents to do rollovers as often as possible.