LAUREL —
The Laurel City Council is targeting what they call predatory payday lending practices in the city.
On Tuesday, the council adopted a resolution requesting the Mississippi legislature to take action to prevent exploitative payday lending practices in the state.
According to the resolution, the payday lending industry is allowed to charge an interest rate of up to 572 percent due to inadequate state laws.
The resolution states that “while short-term loans are important, it is equally important that consumers are not taken advantage of through inadequate state laws governing these practices.”
The resolution asks the legislature to enact laws preventing exploitative payday lending during its next regular session including:
• Allow the current repealer, which allows payday lenders to charge interest rates above and beyond the 36 percent imposed on all other financial institutions, to sunset as scheduled in 2012.
• Enact an annual percentage rate of 36 percent for any and all consumer loans made in the State of Mississippi.
• Prohibit the use of a personal check or electronic equivalent by a creditor to gain access to a consumer’s back account.
• Extend the current repayment period to a minimum term of 90 days.
• Allow repayment in installments with no prepayment penalty.
• Mandate the creation and use of a state-wide database to track the number of loans per consumer and repayment plans.
Ward 6 Councilman Johnny Magee, who was not in attendance Tuesday, introduced the resolution after seeing an article in Sunday’s edition of the Clarion-Ledger.
The article, entitled “High-interest loans billion-dollar industry in Mississippi,” details the success of the payday lending industry, which has more than 968 businesses statewide.
The article also notes that payday loans target those most vulnerable and the high interest attached have forced some from their homes.
Ward 7 Councilman Trey Chinn said the city cannot afford those lending practices.
“It is our viewpoint that the legislature needs to be involved in these payday lending institutions with more regulations on existence and operations, particularly here in the City of Laurel,” he said.
According to a quick online search, there are at least 10 payday lending institutions operating in the City of Laurel.
In other news, the council split their vote on a special exception to allow a non-conforming sign, and on an ordinance amending water connection rates and charges.
The Laurel City Council voted 3-3 (with council members Chinn, Willie Evans and Tony Wheat in dissent) on grant a one-year special exception to Jones P. Brogdon to allow the non-conforming sign located in the 1300 block of West 5th Street to remain on the site.
The council also voted 3-3 (with Chinn, Evans and Manuel Jones in dissent) on the second reading of the water ordinance.
Chinn said the ordinance would have required a “double minimum” bill to properties where a second structure received water. That includes any properties that have plumbing such as a toilet or sink in an outbuilding.
“From my standpoint, that’s a nickel and dime approach to the consumers,” he said. “All of the water goes through the meter regardless of whether a double minimum is charged or there’s an additional dwelling.
“All of the water still goes through the water meter,” Chinn added. “There’s no need to put a minimum on someone’s water bill.”
The ordinance stalled, however, when council members questioned whether a second garbage fee would also be charged.
During the meeting, Keveryn said that if additional funds aren’t raised through that particular ordinance, rates may have to be increased.
Local News
Related Photos
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The Laurel City Council discusses payday lenders during its meeting Tuesday night at Laurel City Hall. The council passed a resolution asking the Mississippi state legislature to address the issue. Photo/David Owens
Laurel going after exploitive payday lenders
Council passes resolution urging legislature to take action in toughening laws
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