Three Mississippi women share their challenges with payday lenders

Payday loans with interest rates as high as 521% are so common in Mississippi that they outperform McDonald’s restaurants by more than 5 to 1, USA TODAY found.

The Mississippi Center for Justice, a public interest law firm, is working with some cities and local banks across the state to teach residents about financial literacy and budgeting through a program called the New Roots Credit Partnership. One of the goals: Get residents to stop using payday loans, which the law firm claims are predatory, particularly in predominantly black communities.

But INFiN, a consumer credit alliance representing payday lenders, said its members offer low-dollar, unsecured loans to residents who need quick money. It states that many borrowers need the money for groceries, utilities, rent and prescriptions. The maximum payday loan in Mississippi is $500.

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Here are the experiences of three Mississippi residents who have looked into payday loans:

Brandy Davis, 44, has a PhD and a master’s degree in business administration and said her training came from experience with payday lenders.

Davis, who lives in Olive Branch, said in 2010 she was a high school teacher struggling to make ends meet.

Davis said she needs about $600 for a utility bill and received three separate payday loans from different lenders in one day.

However, when payday came, she was unable to pay off the debt in full.

She said she kept getting new payday loans to pay off the old loans, each time adding compound interest fees.

After a six-year cycle, Davis said she amassed more than $10,000 in payday loan fees and interest from her numerous short-term loans.

“I was in a whirlwind and I went into a state of depression,” she said.

Davis said she was considering filing for bankruptcy protection but said her mother’s insurance agent advised her on a plan for budgeting and paying off her payday loan debt.

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“Where we live in the Mississippi Delta and are surrounded by poverty, we are sometimes at the mercy of payday loans,” said Davis, who now works in academic affairs at LeMoyne-Owen College in Memphis, Tennessee. “If you are in poverty, it will bring you down.”

Tisha Willis, 50, said she has never taken out a loan from a payday lender after five years in the industry.

“I know better,” said Willis, who lives in Jackson, a suburb of Florence. “I wouldn’t advise anyone to do it…Once you go in, they’re going to make you need that money.”

Tisha Willis, wearing a jacket, celebrates with her family and real estate agent after buying a home.  Willis said she improved her credit through Mississippi's New Roots Credit Partnership program, which enabled her to buy the home.

Willis said she took the New Roots Credit Partnership’s financial literacy course and learned how to improve her credit score, which enabled her to buy her first home — a five-bedroom home for her large blended family.

“It’s open to all of them. It’s a family home,” said Willis, who works in constitutional service for the city of Jackson. “When my father grows old, he’ll have a room. It’s a multi-generational house.”

Willis said she encourages others who may be cash-strapped to consult with a financial professional and “not rush to payday loans.”

Vokeya Hughes, 39, said she needed some cash to pay for funeral expenses in 2018.

She said she was approved for a minimum $500 payday loan through an online company but could not repay the entire debt.

Hughes said she then lost her job and couldn’t pay at all.

Eventually, Hughes said she incurred more than $2,000 in late fees and interest.

Vokeya Hughes of Indianola said when she applied for a payday loan, she was asked for references.  She later found out that these references were loans offered by the payday loan company.

Hughes said she eventually paid off her debt, but her credit report showed she still owed the money, which has made buying a home difficult.

“It (payday loan) affects you in the long run even though I paid it off,” she said.

Hughes added that when she applied for her loan, she asked for three references and was offered incentives for those names.

She later found out that the payday loan company offered these reference loans, and there are payday loan offices “around every corner” in some Mississippi cities.

“They’re right next to each other,” Hughes said.

Do you have a business or investigative story tip? Reach the reporter at craig.harris@usatoday.com or 602-509-3613 or on Twitter @CraigHarrisUSAT or linkedin.com/in/craig-harris-70024030/

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