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Experts expect change in Mississippi short term lending regulations

Jun 10, 2013 Philip Burgess

The short term lending industry in Mississippi is extremely lucrative. According to the Mississippi Business Journal, about 1,000 short term lenders operate within the state. Statistics from The Pew Charitable Trusts note that there are 20,000 such storefronts in all of the United States.

Although Mississippi's residents heavily rely on the financial services of these outlets, experts predict that restrictions will be placed on the industry across the state. Theresa Brady, a deputy bank commissioner with the Mississippi Department of Banking & Finance told the source that she expects legislators will place a limit on the number of short term loans consumers can take out in a given period.

She also noted that she believes elected officials may attempt to establish a "cooling off period". If enacted, borrowers would be unable to take out a second loan until a specified period of time has passed after they've paid off an initial loan.

Some states have similar laws on the books that are designed to limit short term borrowing. The Washington State Department of Financial Institutions currently allows residents to take out a maximum of eight short term loans in a 12-month span.

Legislation is likely to force Mississippi's lenders to adapt their operations. However, major restrictions on the industry could be detrimental to the state's economy. Brady told the Mississippi Business Journal that $1 billion in short term loans were provided in 2012 by the state's lenders.