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PayDay Loans, Title Loans, and Other Such Businesses


The Jackson City Counsel has voted to put a temporary halt to Payday Loan Companies, Check Cashiers, Pawn Shops, and Titles for Cash businesses. I think this is a good decision. Jackson has the highest concentration of these businesses in Country. I wonder if it has something to do with the poverty and how hard people have to struggle from paycheck to paycheck to get by in Mississippi. At Coxwell & Associates we have handled hundreds of financial cases for people. I know the argument from the small loan companies. They say, “We have to charge more because we are dealing with people with bad credit and they default more.” There may be some truth to this statement. But we have seen how many of these companies operate and they prey upon the poor and educationally disadvantaged. The interest rate at the small finance companions is frightening. Then the poor borrowers’ are sold several types of insurance that is essentially worthless to a bad deal at best! The cost of the worthless insurance is financed with the loan. After the person has paid down 1/3 of the loan the company has made maximum profit and they then try to loan the consumers more money and sell more insurance. It is a never ending cycle.

In my opinion these Payday Loan companies and Check Cashing companies are even worse. The effective interest rate can be in multiples of 1000’s percent above what is borrowed. These companies prey upon the poorly educated and people with the least ability to understand the complexities of the financial markets. And these companies are popping up on every corner. The constitute a blight in my opinion. Cities around Jackson have already put a moratorium on these types of businesses. If we have to have them in our cities then they should be zoned into the light industrial areas like the strip clubs and adult book stores. There are just some things we do not need and these businesses are ones we can do without. If you own one of these businesses then I am sorry if this hurts you feelings. Any business that charges as much for credit as the businesses I have mentioned in this article do not get my goodwill. If you have to use one of these businesses then I encourage you to be very careful. My brother Frank represents people in consumer cases. He has unfortunately had to file bankruptcy for many people who got involved with loans from these companies. Frank has lectured across the nation on debtor creditor issues. If you have a question do not hesitate to call.

Disclaimer: This blog is intended as general information purposes only, and is not a substitute for legal advice. Anyone with a legal problem should consult a lawyer immediately.