All American Check Cashing, Inc. in Ridgeland, Miss. / Google maps
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The state Department of Banking and Consumer Finance is examining possible illegal practices at a Madison-based payday lending company.
The department issued a cease-and-desist order on June 19 to All American Check Cashing Inc., which has 51 locations in Mississippi. The order alleges the company illegally charged customers extra fees and refused to hand over business records to department examiners as required by law.
According to the order, the department obtained a document detailing the company's "Monthly Lending Program."
"It (the program) specifically instructs employees to accept only the fee (interest) on a delayed deposit check and further instructs them on how to illegally 'roll' a check during the middle of each month," the order states.
Participants in government benefit programs like Social Security and Medicaid who receive one income payment per month were apparently the target of the program.
Mississippi law puts a limit on fees that can be charged for certain loan amounts. The company reportedly held the checks of customers who couldn't pay off the full amount of the loan (the loan itself plus the initial fee) by the deadline but accepted an additional fee, only later cashing the original check.
"All American has a policy against accepting a fee only, so if the investigation proves that this was occurring in some locations, All American will do whatever it needs to do to correct that issue," Dale Danks Jr., whose firm represents the company, said. "Right now that's just an allegation that has yet to be proven."
Danks said state examiners who visited several of the company's stores made unreasonable requests. "The amount of data and information in this very large company is massive. To say the department could not access the information right away is a little misleading," Danks said, noting the company has since provided and will continue to provide any documents the department requests.
Phone messages left for company owner Michael Gray were not returned Wednesday.
Danks also said the examiners intimidated and threatened store employees. "They used certain tactics I personally feel were in violation of due process."
Banking and Consumer Finance Commissioner Jerry Wilson defended his examiners' actions.
"Our examiners were very professional in a very difficult exam environment," Wilson said. Wilson explained the examiners were denied access to the documents, which were were locked in file cabinets employees refused to open.
"The point would be if you don't have anything to hide why do you lock your cabinets and not let examiners look at the files? That was red flag number one."
According to Wilson, the department is still working on getting and reviewing the documents it needs. The investigation is in its early stages.
"At some point a decision will be made as to how we will deal with this particular company," Wilson said when asked what penalties All American could face. "It will be based on the facts which we obtain from our examination."
The Check Cashers Act, which regulates payday lenders and cash-for-title businesses, states any company in violation of the law could face losing its license or paying a fine.
Contact Kate Royals at email@example.com or (601) 360-4619. Follow @KRRoyals on Twitter.