According to the WTA, the council of legislators of West Point in the State Mississippi is considering the possibility of prohibiting operations of the payday lending companies in West Point. This issue was previously discussed at the beginning of June. The opposition members of payday loans state that these loans together with other types of loans with a high interest rate have lead to the growth of overdraft fees and caused the numerous bankruptcies in the State. But what is interesting is the fact that the opponents don’t have any obvious evidence to acknowledge their words.
A defendant of payday loans and an expert of AboutPaydayLoan.com declares that everything said by authorities about these loans is nonsense. He thinks that people who are asking for payday loans have already paid large overdraft fees to banks and now find themselves in tough financial situation. Payday lending companies are the only place which can help borrowers to overcome the difficulties by offering short-term credit.
The expert also states there are a lot of fair payday lending companies in Mississippi, which lend money at a low percentage rate and reveal all the fees, which a customer is charged. On the other hand, there are some dishonest lenders that have both high interest rates and fees. They are only dreaming for a customer’s financial problems. But it doesn’t mean that all the payday lenders should suffer and be fined with penalties because of these few bad companies.
Under the Mississippi law payday lenders are allowed to set high annual percentage rates and charge high fees on these types of loans. The rates and fees are considered to be the highest in the USA, the interest rate of some lenders can even reach 572% annually. It is also interesting that Mississippi is the State with the greatest number of payday lending companies per head in America. Only in West Point over 10 payday lenders offer their services to customers.
The supporters of payday loans are sure that the loans haven’t caused any financial difficulties of the West Point citizens. They have evidence for this. The Mississippi Economic Policy Center reveals that underemployment and unemployment in the State are the sources of economic problems in the State and tough living conditions of its citizens. Just because people are either unemployed or underemployed, they have to borrow payday loans in order to support themselves and their families.
The followers of payday lending companies declare that authorities turn payday loans into the main reason for the economic recession in the country. They want to pass a new financial reform on payday lending industry only to keep up appearances that they are trying to deal with the crisis. In fact the authorities are not able to do anything about big and reputable banks, which really have the attitude to this recession, so that they accuse payday lenders and other small credit organizations of all the financial problems taking place in the country.