Judge lets state agency shut down Mississippi payday lender
JACKSON — One of Mississippi’s largest payday lenders was effectively forced out of business Wednesday after a judge ruled that state banking regulators could revoke the company’s licenses during its appeal of state penalties.
Hinds County Chancery Judge Dewayne Thomas last month had temporarily blocked penalties against All American Check Cashing by the state Department of Banking and Consumer Finance. But he ruled late Tuesday that he wouldn’t reinstate All American’s licenses to cash checks or make loans while the company fights the state agency.
The Madison-based company appealed Wednesday to the Mississippi Supreme Court, arguing that even temporary enforcement of penalties handed down by the state Department of Banking and Consumer Finance “is the equivalent of the death penalty” for the company.
“Without a stay of enforcement to preserve the status quo during All American’s appeal, All American will be financially devastated with absolutely no recourse or path to being made whole when the appeal is successful,” lawyer Michael Cory Jr. wrote.
Chief Justice William Waller Jr. ordered banking regulators to respond by Friday. For now, the company can’t cash checks or make new loans at its 42 Mississippi stores. All American can still collect payments on outstanding payday and title loans.
Federal and state regulators in 2014 accused All American of a systematic scheme orchestrated by corporate leaders to evade Mississippi’s prohibition against rolling over payday loans by pushing customers to pay only interest and continue the loan. Consumer advocates have long fought that practice, because borrowers continue paying skyhigh interest rates.
After a monthslong proceeding, the Banking Department revoked the licenses May 11. Banking Commissioner Charlotte Corley also ordered the company to pay civil fines of $1.62 million and pay refunds totaling almost $135,000 to more than 700 customers. All American says the largest penalty ever previously imposed by the department was about $50,000.