Justice in Mississippi – Payday Lending (Part 1 of 3)

We just finished producing three short videos with the Mississippi Center for Justice, which profile several of the many problems that the Center is tirelessly working to fix.  I have been working with the Mississippi Center for Justice in some form for most of my legal career, so I can say first hand that they are some of the most committed and creative lawyers working today.  The Center’s primary goal is as ambitious as it is necessary: to end structural racism in Mississippi.  To support these efforts, we have made short videos on three key issues: payday lending, public housing, and Katrina recovery.  I will post the videos and brief discussions in this and two following posts.

Mississippi is certainly one of the most beleaguered states in the Union.  Even now it is facing new crises on multiple fronts, between tornadoes and massive oil plumes just hitting the barrier islands south of Gulfport.  Given these almost cataclysmic events, it can be hard to think of something as mundane as payday lending stores as devastating — but they are.

These establishments charge a 572% interest rate for very short-term loans to low income people to help them cover their basic expenses until their next paycheck.  This has the effect of sucking large amounts of income away from people and communities who are already desperately poor.

The video explains in more detail, but my perspective is simply that that this is a deeply dishonorable business.  It is taking advantage of the duress of the desperately poor to squeeze as much money as possible out of them. Obviously there are situations where high interests rates are necessary in the case of higher risk debt – but there can be no excuse for 578% interest rates to anyone, particularly when the majority of those people have had little to no financial education.

Here’s the video.  As always, we welcome feedback and discussion.

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