Payday and Title Loans in

Mississippi

Payday Loans in Mississippi: Subprime Report

At a Glance
Mississippi, USA
  • Nickname: The Magnolia State
  • Population: 2.99 million
  • Capital: Jackson
  • Website: www.ms.gov
Download Fact Sheet

Mississippi is America’s poorest state with a median household income of $40,593, which is well below the national average of $55,775. Not only is the median household income the lowest in the nation, Mississippi has the highest rate of people living below the poverty line at 22 percent (the national average is 13.5%).1

As the poorest state in the nation, residents of Mississippi are looking for quick fixes for their money problems to make ends meet. However, when Mississippi consumers turn to payday loans or title loans, they end up getting stuck in an endless cycle of debt with APRs of up to 572 percent!2 While money is tight for the 22% living under the poverty level, there are better options for “quick cash” than predatory title and payday loans in Mississippi.1

Mississippi and the United States
Mississippi
United States
$40,593
$56,516
Median Household Income

An Analysis of Payday Loans in Mississippi

Mississippi actually has nearly 9 payday lenders per McDonald’s restaurant, the 3rd highest in the nation. Mississippi ranks 8th in the sheer number of payday lenders in the US, and 3rd in the number of payday lenders per residents (38.67 payday lenders per 100,000 residents, beating Texas (8.03/100,000), Ohio (12.1/100,000), and Utah (19.12/100,000). Only New Mexico (41.78/100,000) and South Dakota (40.01/100,000) have more payday lenders per capita than Mississippi.1

Even further, residents of Mississippi even have less access to traditional banks than in any other state—it’s no wonder why so many predatory lenders are popping up.4

The History of Payday Loans in Mississippi

Prior to 1998, Mississippi lenders were not permitted to offer small loans with more than a 36 percent APR.6 However, in 1998 the Mississippi Legislature passed a law that exempted payday lenders from this 36 percent APR cap.6 Under the new law, payday lenders in Mississippi were allowed to charge up to $21.95 per $100 borrowed for loans up to $400 that had a term of at least five days.6 For the typical two-week payday loan in Mississippi, this equated to an APR of 572 percent.6

Quick Fact

In 2013, payday lending in Mississippi generated $261 million.6

This legislation had sunset provision built into it, which meant in 2012 the special exemption to the 36 percent would be removed.7 So, in 2012, payday lenders were back to square one with an APR rate cap of 36 percent.7

Mississippi lawmakers have worked hard to close this loophole in the law, but the bills continue to die on the floor.7 While a ban on payday loans is unlikely, Mississippi lawmakers are fighting to improve payday lending in Mississippi to further protect consumers.

Mississippi Payday Loan Rules and Regulations
  • Maximum Loan Amount:$500 (including any fees)
  • Maximum Length of Loan:30 days for loans under $250, and 28-30 days for loans between $250 and $500.
  • Rollovers Permitted:None can be renewed or otherwise extended.
  • Fees and Finance Charges:Under $250, the charges will be $20 per $100 advanced. Loans $250-$500 will be charged $21.95 per $100 advanced.
  • Finance Charge on a 14-day $100 Loan:$20
  • APR on a 14-day $100 Loan:520%
  • Maximum Number of Outstanding Loans at a Time:Not specified, but there is a maximum of $500 in one or more checks.
  • Repayment Plan:Voluntary8

It is important to note that the renewal or extension of a payday loan in Mississippi is illegal. The payday loan must be paid in full before you can take out another loan transaction.9 If a payday lender suggests you pay only a fee to renew a loan, report them! This is against the law in Mississippi.9

Payday lenders are also required to comply with certain location requirements.9 For starters, every business must have a definite legal address in according with the zoning laws, and cannot be less than 100 square feet in terms of space.9 Payday lending stores in Mississippi are also forbidden from being located near other pawnshops, a title pledge office, or a similar store—this helps to further protect consumers from jumping from one predatory lender to another.10

No Mississippi payday lender can issue a loan without proper identification.10 Additionally, a lender is not allowed to advertise their services without making it clear that identification is required.10

Quick Fact

90% of payday lending businesses in Mississippi is generated by borrowers with five or more loans a year.6

Mississippi Payday Loans and Lenders vs Alabama and Ohio Payday Loans and Lenders

Mississippi

icon-mississippi

572% APR for Mississippi payday loans14
1,100 Mississippi payday lenders14

Alabama

icon-alabama

456.25% APR for Alabama payday loans14
1,177 Alabama payday lenders14

Ohio

icon-ohio

591% APR for Ohio payday loans14
1,300 Ohio payday lenders14

Final Notes on Payday Loans in Mississippi

There remains a constant battle between the consumer and predatory payday lenders in Mississippi. While Mississippi payday loan companies insist that their products help people with limited options out of jams for a small fee, the industry is making billions off fees from these predatory loans while trapping consumers in cycles of debt. Mississippi lawmakers continue to fight for the protection of those in need by pursuing stronger payday loan regulations.

An Analysis of Title Loans in Mississippi

What other options do you have besides a payday loan in Mississippi? Oh! What about a title loan? Think again. While you might think title loans in Mississippi are the better alternative option to payday loans, our guide will show that is not the case.

In fact, in just one year, the fees charged by title loan companies in Mississippi totaled $297,500,639 compared to payday loan fees at $230 million.11 While title loans exist in Mississippi, it seems they are the farthest thing from helpful for those in need—especially in the poorest state in the nation.

Title Loan Fees vs Payday Loan Fees
Title Loan Fees
Payday Loan Fees
$297 million
$230 million
Mississippi
$318 million
$184 million
Ohio
$239 million
$508 million
California
$233 million
$270 million
Illinois
$432 million
$1.2
Texas

The History of Title Loans in Mississippi

In 2016, Mississippi Senate passed a bill to expand car title lending.12 This bill for installment loan legislation was approved by the Governor and, according to its supporters, creates options for cash-strapped borrowers.12 However, the opponents to the bill continue to explain how this enables the predatory ways of title lending.12

Quick Fact

Almost half of the national fee total ($3.95 billion) comes from Texas, California, Mississippi, Illinois, and Ohio, with half a billion in fees drained from each state.11

Mississippi Title Lenders and Tile Loans vs Ohio Title Lenders and Tile Loans

Mississippi

icon-mississippi

355 Mississippi title loan stores14
6,230 Mississippians per title lender14

Alabama

icon-alabama

672 Alabama title loan stores14
5,427 Alabama per title lender14

One purpose of the bill is to make lending more convenient to Mississippi consumers by allowing check cashing and payday lenders to offer car title-pledge loans in the same locations.12 While the title lending fees can be lower than the fees of payday loans in Mississippi, most borrowers end up borrowing larger sums of money and longer repayment periods.12

Payday loan and title loan businesses are fighting to maintain a billion-dollar industry. With 73,867 title loans taken out in Mississippi that’s 208 per store.13

Quick Fact

A person who borrows $5,000 for 12 months would end up paying $4,870 in fees alone.12

Mississippi Title Loan Restrictions

Per the Title Pledge Act, the maximum amount for a title loan in Mississippi is $2,500 with a maximum cost of 25 percent a month. Consumers can take out title loans for a term of 30 days, but can renew if they pay 10 percent of the principal. On average, the interest charged for a $500 loan is $125—or a 300% APR.14
If your car is repossessed due to failure to repay, you have 30 days after the loan maturity date, or three days after repossession, to pay the outstanding amount owed.14 The vehicle can be repossessed without judicial process and, if salvageable, can be sold immediately.

Final Notes on Title Loans in Mississippi

Supporters of payday and title loans in Mississippi believe the availability of these loans help those in need—but in practice this is far from true. Payday loans in Mississippi cost residents more than $261 million in fees while title loans have reached $297,500,639 in fees alone.15 With such high interest on these predatory loans, how can anyone think payday and title loans are designed to help the consumer? They’re designed to trap those in the most need, in endless cycles of debt.

Regulating Payday and Title Lenders in Mississippi

Advocates and lawmakers in Mississippi are looking for ways to change the economics of the state to better protect consumers from the predatory ways of payday and title loans. But, if you’ve already fallen prey to payday or title loans in Mississippi, it is important to familiarize yourself with the current laws and where to turn to for help.

How to Report a Lender in Mississippi

If you have fallen prey to title loans or payday loans in Mississippi, don’t worry, there are steps you can take to further protect yourself. And, if the lender has not followed Mississippi law or has been harassing you, speak up—the Mississippi Department of Banking and Consumer Finance can help.

When you have a complaint against a payday or title lender in Mississippi, you should first contact the company to resolve it on your own. Often, you might find a resolution that way. Remember to remain courteous and calm, explain the problem and what remedy you are seeking, and state whether you are willing to negotiate. If you are unable to get a response or reach an agreement, contact the Department of banking and Consumer Finance to file a complaint.

The Mississippi Department of Banking and Consumer Finance:

Outside Help for Payday and Title Loans in Mississippi

Mississippi Department of Banking and Consumer Finance, residents can turn to the Mississippi Center for Justice. At Mississippi Center for Justice, advocates work to advance racial and economic justice, and that means predatory lending, too. While this organization understand the need for small-dollar loans, they oppose a business model that would institute the high interest rates payday and title lenders charge.

As the nation’s poorest state, Mississippi is already struggling, and the Mississippi Center for Justice wants to put an end to the predatory ways that keep residents stuck in this endless cycle of debt—they’re waging a war against predatory lending.

Consumer Protection in Mississippi

In 2014, the Mississippi Department of Banking and Consumer Finance ordered All American Checking to end a practice that was described as “tantamount to illegal rollovers of payday loans.”16 While lawmakers continue to fight for the residents of Mississippi, payday and title lenders are not going down without a fight.

An innovative partnership between the Mississippi Center for Justice, banks and employers has worked in helping provide residents with access to responsible small-dollar loans, as well as free financial education. This allows residents of Mississippi to learn how to start building savings and credit, rather than drowning in debt.

This new program is dubbed the New Roots Credit Partnership and pairs community banks willing to provide financial literacy education and small loans with employers willing to offer education to their employees. While it continues to grow slowly, it works to reach as many residents as possible.17

When looking for further information on payday loans and title loans in Mississippi, use this page as a resource for all your questions—it has everything you need to know, and then some.

Guides to Payday and Title Loans in Mississippi

You know payday and title loans in Mississippi are a problem. But what about at the city level?

Check out these payday and title loan guides for the following cities in Mississippi…

Jackson

Works Cited

  1. “Mississippi is America’s Poorest State” 24/7 Wall St. Accessed March 8, 2017. http://247wallst.com/economy/2016/09/17/mississippi-is-americas-poorest-state/
  2. “Just the Facts: Women and Payday Lending” Women’s Fund of Mississippi. Accessed March 8, 2017. http://www.womensfoundationms.org/documents/PaydayLendingFactSheet_001.pdf
  3. “State Debt” Ballotpedia. Accessed February 13, 2017. https://ballotpedia.org/State_debt
  4. “In America’s Payday Loan Capital, Innovative Microcredit Helps Break the Debt Cycle” Huffington Post. Accessed March 8, 2017. http://www.huffingtonpost.com/2015/06/20/mississippi-payday-loans_n_7587124.html
  5. “McDonald’s vs. Payday Lenders” California State University Northridge. Accessed March 6, 2017. http://www.csun.edu/~sg4002/research/mcdonalds_by_state.htm
  6. “High-Cost Payday Lending Traps Mississippi Borrowers” Center for Responsible Lending. Accessed March 8, 2017. http://www.responsiblelending.org/payday-lending/policy-legislation/states/2010-CRL-MS-Payday-Issue-Brief-FINAL-July.pdf
  7. “Many states have cracked down on payday loans. Here’s how lenders still get away with it.” The Washington Post. Accessed March 8, 2017. https://www.washingtonpost.com/blogs/govbeat/wp/2015/02/09/many-states-have-cracked-down-on-payday-loans-heres-how-lenders-still-get-away-with-it/?utm_term=.53d0e36dd45c
  8. “Payday Loan Consumer Information” CFA. Accessed February 13, 2017. http://www.paydayloaninfo.org/state-information/8
  9. “Payday Loans in Mississippi” Consumer Protection Division of the Office of the Attorney General. Accessed March 8, 2017. http://www.dbcf.state.ms.us/documents/cons_finance/paypamph.pdf
  10. “Mississippi Payday Loan Law and Legislation” UStatesLoans.org. Accessed March 8, 2017. http://www.ustatesloans.org/state-ms.html
  11. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year” Center for Responsible Lending. Accessed February 15, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  12. “Mississippi Senate Passes Bill to Expand Car Title-Lending” Mississippi Business Journal. Accessed March 8, 2017. http://msbusiness.com/2016/03/car-title-lending-bill-called-step-to-preserve-small-loans/
  13. “Driven to Disaster: Car-Title Lending and Its Impact on Consumers” CFA. Accessed February 15, 2017. http://www.responsiblelending.org/other-consumer-loans/car-title-loans/research-analysis/CRL-Car-Title-Report-FINAL.pdf
  14. “Car-Title Loan Regulation” Consumer Federation of America. Accessed March 8, 2017. http://www.consumerfed.org/pdfs/Resources.CTL.StateLawTermChart12.2.12.pdf
  15. “Payday and Car Title Lenders Drain $8 Billion in Fees Every Year” Center for Responsible Lending. Accessed February 15, 2017. http://responsiblelending.org/sites/default/files/nodes/files/research-publication/crl_statebystate_fee_drain_may2016_0.pdf
  16. “Is the Payday Soon Over for Payday Lenders?” Jackson Free Press. Accessed March 8, 2017. http://www.jacksonfreepress.com/news/2016/feb/17/payday-soon-over-payday-lenders/
  17. “In America’s Payday Loan Capital, Innovative Microcredit Helps Break the Debt Cycle” The Huffington Post. Accessed March 8, 2017. http://www.huffingtonpost.com/2015/06/20/mississippi-payday-loans_n_7587124.html