By Bobby Harrison/NEMS Daily Journal
JACKSON – Two key legislators who crafted the compromise revisions during the 2011 session to the state’s controversial payday lending law say the issue might need to be revisited in 2012 based on a ruling by the office of Attorney General Jim Hood.
The attorney general’s ruling – issued in October – says under the new law that payday lenders can provide multiple loans to customers instead of one aggregate, larger loan amount. By receiving the multiple, smaller loans, customers would not have as much time to repay the loan.
Sen. Gary Jackson, R-French Camp, who is the current chairman of Business and Financial Institutions Committee, said that was not the intent of the legislation that passed during the 2011 session.
“What we were going for was the shorter time for the smaller amount and the longer time for the larger amount so people would have more of an opportunity to pay back the larger amount,” Jackson said.
Asked if he would like to revisit the legislation in 2012 to ensure customers have the longer time period to repay the larger loan amount – whether issued in one amount or multiple loans – Jackson said he hopes the companies “do right by the customers.” He added whether the issue is revisited might depend on “what we hear from consumers.”
Both Jackson and his counterpart – Rep. George Flaggs, D-Vicksburg – stressed they do not know whether they will head their respective chamber’s Banking committees next year. A new speaker and lieutenant governor will make new committee assignments.
But Flaggs said, “Most definitely, based on the AG opinion … it is something I think the Legislature should review.”
The AG opinion does not carry the weight of law, but provides legal protection for governmental entities that follow the opinion. Theresa Brady, commissioner of the state Department of Banking, said her agency requested the AG opinion because of “different interpretations” of the new law, which takes effect Jan. 1. Brady said her agency, which regulates the payday lenders, will adhere to the AG’s opinion.
Under the new law, payday lenders can charge $20 on each $100 on loans of up to $250. For $250 to the maximum of $500, they can charge $21.95 per $100 loan.
Borrowers would have 14, 21 or 30 days to pay back loans of $250 and less, and 28 to 31 days to pay back loans of more than $250. Brady said the average time allowed to pay back the smaller loans is 14 days, meaning if multiple loans are made, the borrower would not have the 28 to 31days to pay off the loan.