Payday Loan Legislation Is Stalled By Mississippi Congress

Almost all the states have passed legislation concerning payday loan lenders, mostly to provide cap on interest rates. However, Mississippi Congress has stalled a new bill providing further regulation of payday loan industry. The necessity of a new bill occured due to the fact that legislators can't agree on some terms.

The new regulatory bill in Mississippi is aimed to extend the period of repaiment and to reduce the interest rates. Though, this law regarding payday loan lenders won't pass until both houses come to agreement. The state House of Representatives presented a variant according to that consumers will be allowed to repay cash advance less than $200 in 21 days and loans from $201 to $500 in 28 days. However, the Mississippi Senate provide a version stating that borrowers should pay back the taken loan of $300 or less in 21 days and cash advance loans of $301 to $500 in 28 days. Besides, the state current laws regarding payday loan lenders will expire in 2012.

In fact, the Consumer Financial Protection Bureau was expected for some time to stop going after cash advance lenders, however, it can be not the case. In spite of the fact that the agency was designed as a constituent part of Dodd-Frank Act and President Obama has appointed Elizabeth Warren as a head of this bureau, it has done almost nothing yet due to the fact that it's considered as inactive for the moment and, thus, it can do less with payday loan stores. The CFPB may not reduce interest rates, though, it can claim for the greater disclosure from lending companies.

Actually, disclosure greater amounts will act more in the payday loan lenders' interest rather than banks. Besides, according to the Truth in Lending Act most of lending firms have already disclosed all th upfront fees.