Lawmakers Reject Higher Fees for Small Loans

By: The Associated Press
By: The Associated Press

Mississippi lawmakers are rejecting a plan to raise fees on loans between $500 and $4,000.

On a voice vote, House members rejected Senate Bill 2571, with opponents saying it was immoral to raise interest rates on hard-up borrowers.

House members technically sent the bill back for more negotiations, but senators didn't act, killing the bill.

Proponents said loan companies could lose profits from selling credit life insurance and other add-ons if the new federal Consumer Financial Protection Bureau restricts sales of such products. They argued loan companies need to replace that income, and said even those fees would be less expensive than interest rates charged by payday lenders.

The bill would have allowed fees equal to annual interest rates of up to 99 percent on loans, $500 to $4,000.

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