Mississippi regulators in June issued a cease-and-desist order for Madison-based All American Check Cashing to halt all activity under its “Monthly Lending Program.” According to the order, company employees were illegally directed to accept only the fee on a post-dated deposit check and were instructed “on how to illegally roll a check during the middle of each month.”
Examiners looked at 15 All American stores statewide after fielding complaints from former employees. Part of the unscrupulous practice involves keeping loan amounts at the state’s allowable first-tier level of $250 or below and setting a 14-day repayment on a borrower with a monthly source of income. First-tier loans allow fees of up to $20 per $100 and a 14-day repayment period. Under state law, lenders can issue a combination of the first-tier loans up to the state’s loan cap of $500, which includes both the loan amount and fees.
Lenders that lend more than $250 in a single loan must give the borrower 30 days to repay, which removes the company’s money from cash flow for a prolonged period. The training document in question shows All American's workers how to gain nearly $80 in fees while lending only $200 at one time. The training also recommends limiting the loan duration to 14 days but spreading the fee repayment over 30 days.
Under Mississippi law, an illegal rollover occurs when the customer is assessed new fees without paying off the original loan. The statute dictates, “No check cashed under the provisions of this section shall be repaid by the proceeds of another check cashed by the same licensee or any affiliate of the licensee. A licensee shall not renew or otherwise extend any delayed deposit check.”