The other voice, which was probably one of many payday lenders in her area, said that they missed her. The voice says, “Do you require any additional money?” Williams drove to nine different stores every payday for $400 loans. Each time she took out a loan, Williams paid an $87 fee. Each fee made sure that Williams wouldn’t be able to deposit the check she wrote for $400, money she didn’t have until the next month. This was a violation of state law. Williams, a high-school teacher from Cleveland, Miss., stated that she took out payday loans to pay her bills. Williams paid off $4,000 of payday loan debt after she completed a financial course offered by Arkansas-based Southern Bancorp in 2014. The course had a lower interest rate and Williams was able to pay it off. She said that payday lenders were making her look foolish. “You know that we need it, and you know that we’re going take whatever interest rate it gives us, especially if we have to survive.” Mississippi is home to the largest number of payday lenders per capita in the country. Advocates for consumer protection saw some hope in the rules proposed by the Obama Administration’s Consumer Financial Protection Bureau. This federal agency, which protects customers’ interests in financial services, was criticized as being too stingy. The payday loan industry sued federal court to prevent those rules from going into effect next year. President Donald Trump is pushing for more time to rewrite and, most likely, weaken them. In the meantime, the Mississippi Legislature quietly approved a law creating a new small-dollar loan to be used in the event that the Obama-era rules were implemented. Draft regulations from the federal government would have lenders verify that borrowers are able to repay the loan. According to the CFPB’s website, writing loans without reasonably determining that consumers can repay the loans would be considered an “unfair or abusive practice.” “They’re going down with some regulations that basically if we don’t do anything, will make this industry obsolete,” Rep. Hank Zuber (R-Ocean Springs), told his House colleagues in 2016. Zuber made these remarks as he introduced Mississippi Credit Availability Act which created an innovative product called an “instalment loan”. Critics claim the loans target Mississippians with low incomes and poor credit, while the industry claims that the loans are available to people who cannot access traditional loans. Zuber did not respond to requests for interviews for this story, nor did the Community Financial Services Association of America (a trade association that advocates for payday loan companies in the state). A consumer installment loan is a mix of a title loan and a payday loan. It allows a person to swap the vehicle’s title for cash. An installment loan allows a lender to loan up to $2,500, six times the maximum state-permitted payday loan. It also has greater recourse against default than a title loan. Lenders may charge as much as 300 percent annually interest on consumer installment loans. These loans are usually offered at check cashing and payday lending stores. Following the 2016 law’s passage, 200 stores applied for and were granted a license to provide installment loans. In 2017, 160 stores received the license, and another 25 this year. Many of these license-holders own multiple businesses in Mississippi. Jennifer Williams is a financial counselor to her friends and families. She advised a friend about a $2,000 installment loan. This could add up to $4,507.42 in fees over the course of a year. Williams found out that her friend would repay more than $6,000 by the end the year, and advised her not to do it. Williams stated, “If I had $6,000, the $2,000 would not be necessary.” Mississippi is the poorest state in America, with almost one-in-five residents living below the poverty level. However, small-dollar loans have been created by other states, such as the neighboring Southern states. Payday lending fees are prohibited in 18 states, including North Carolina, Georgia, and Arkansas. There have been other attempts to reduce fees in many states. Alabama’s average payday loan interest rate is 300 percent. State senators in Alabama passed a bill to limit the rate at 36 percent. However, the bill was eventually defeated. In 2015, Tennessee allowed “flex loans”, which are open lines of credit that have a limit of $4,000 or less. However, they set a 24 percent annual interest rate cap. Payday loans were subject to a 60 percent annual interest limit in Ohio, which was enacted in July. Payday loans in Colorado have an average interest rate of 129 percent. This November, Colorado will be voting on a proposal to limit rates at 36%. Mississippi has not even considered lowering its annual interest cap. This has been opposed by the payday lending industry as well as its powerful lobbying group. Mississippi lawmakers deleted a clause in the law that required that the Legislature renew the statute that permits payday lending periodically. This was to allow payday lending to be authorized permanently. Credit Availability Act author Sen. Rita Parks (R-Corinth) received over $8,800 in 2016, nearly half of all contributions that she received that year from high-interest lending companies. Zuber was the recipient of more than $10,800 in 2016 from similar groups. 2016 Zuber received more than $10,800 from related groups. In the past 15 years, $84,375 has been donated by the Mississippi Title Pledge Association to candidates. Lender’s PAC is another political action committee that supports small loan companies. It gave $78,100 to state officials in 2017, $37.100 in 2016, and $145,000 in 2015. According to reports, Lender’s PAC is the most prolific of related donors. It represents other small lenders than payday lenders like Tower Loan and didn’t lobby for the Credit Availability Act. Tower Loan loans are limited to a maximum of 59 percent annually. The installment loan allows people to borrow up to $2,500 and has a monthly interest limit of 25 percent. This equates to 297 percent annual interest. The borrower can pay off any amount above $500 within a year. After that, interest will accrue month after month. Rep. Zuber repeatedly stressed that lenders don’t have to charge a monthly rate of 25 percent when he introduced the legislation 2 years ago. It is just the cap. He said that market competition would drive down these rates. Williams’ neighborhood has at least one store that charges the maximum. The lender has legal recourse to the lender, unlike title loans. Lenders can take the borrower to court to get a judgment on them for non-payment. Title loans only allow the lender to repossess the vehicle in the hope of recovering the money. The Mississippi Center for Justice’s Charles Lee stated that an installment loan is no different to a payday loan, or a title loan because it has a longer repayment period. Lee stated that teachers and other state employees are particularly vulnerable to payday lending due to the fact that they only get paid once per month. This makes budgeting more complicated. Lee stated that “there’s always more money than month, is what they claim.” Mississippi law forbids lenders from offering to pay a monthly fee to transfer the payday loan principal to the following month. This is exactly what Williams experienced. Lee stated that although it is not allowed, it can happen. It all happened years ago when Mississippi’s bank department discovered that All American Check Cashing was violating the law. The Madison-based payday lender was forced to close 70 of its stores and pay a $1.5million fine in 2017. Although the law in Mississippi prohibits payday lenders from lending more than $500 per customer (incl. fees), that doesn’t mean that borrowers can’t visit multiple locations to get their money. The lawmakers hope that lenders will inform consumers about the fees they may be charged over the life of the loan with the installment loan. Zuber stated that, in addition to making it easier to repay these loans, she also wanted more disclosure. “We want open and full disclosure. We want to ensure that the person applying for these loans understands what they are getting. Williams stated that she did not take into consideration the long-term fees and interest rates when she first began using them. Williams stated that her main focus when she went in was to get the extra money and not “Hey, once these papers are signed, you’re good for life.” According to the Federal Reserve Board’s most recent Report on the Economic Wellbeing of the U.S., 4 out of 10 Americans cannot afford $400 unexpected expenses. Households. Households. According to Mississippi Today, Sykes claimed she did not realize that the fees for a $2,000 loan could reach as high as $4500. Sykes stated that “until the majority institutions make credit accessible to those of us with low income… then these institutions will be important.” BankPlus and Hope Credit Union offer programs for people who are unbanked, or who have been excluded from mainstream banking. They aren’t against the convenience and access of an almost unlimited number of shops advertising “fast cash” for primarily low-income or minority communities. Williams stated today that she would “go without” before returning to one of these stores. However, it doesn’t necessarily mean that closing all payday loan stores is the best thing for her community. She said that she felt like if they took it away, it would affect many people’s ability to survive. “They could control interest rates, at least make them comparable to or a bit higher than banks, rather than this high interest rate people cannot pay back,” Gov. Phil Bryant stated that high-interest installment loans wouldn’t appeal to most Mississippians. He also said that he supported the legislation as he believes in greater consumer choice, personal responsibility and free market principles. Lee stated that this would be fine if everyone was on the same level playing field. He said, “We don’t have a financial education obligation in the state. So you can’t say everybody has the chance to learn about interest rate and compound interest.” Lee would agree to Gov. Lee would agree with Gov. Tower Loan and the MCFA did not lobby for the passage the Mississippi Credit Availability Act.