Small Loans Are Big Business

By Kathy Kenne

Lt. Gov. Tate Reeves spoke at the Consumer Credit Symposium, along with federal officials and leading academics. Photo by Beth Wynn

“I believe this group of experts was as good as any ever assembled at Mississippi State for a topic of state, regional and national interest.”

To say Tom Miller exudes enthusiasm about the symposium he and other leaders hosted is an understatement. Miller, the Jack R. Lee Chair in Financial Institutions and Consumer Finance, has a right to be proud. In December 2016, notables – such as Mark Calabria, Chief Economist for Vice President Mike Pence; Todd Zywicki, Director of the George Mason University Law and Economics Center and Professor at the Antonin Scalia School of Law, and Thomas Durkin, former Senior Economist of the Federal Reserve Board – led a stellar panel of speakers at the “Consumer Credit Symposium: A Century of Experience with the Uniform Small Loan Law” in Starkville.

Small loans are those generally ranging from $800 to $3,000, made by entities such as pawn shops, vehicle title lenders, pay day lenders and finance companies. These transactions are highly important to a rural state’s economy.

“Approximately $900 million in small loans are made annually to 485,000 Mississippi residents,” shares Miller. “Most lenders are genuinely interested in helping the people they serve, often counseling them on matters of financial literacy and basic budgeting.”

The Uniform Small Loan Law, passed in 1916 to protect consumers from illegal lenders, has stood the test of time. This centennial milestone seemed the perfect occasion to highlight the industry and bring leading financial minds to Mississippi, where the law has had such a positive impact. Audience members included industry lenders, academics, regulators, state legislators, students and trade association representatives.

Andrew Morrison, Executive Vice President for Brundage Management in San Antonio, TX, comments, “The symposium was useful and illuminating. I was drawn to it to hear and meet some of the panelists.”

He goes on to note that there was lively debate among the panelists about how much government intervention is proper, but that he was afforded an excellent opportunity to visit with the speakers about the balance needed in the day to day practice of lending.

The speakers enjoyed their time at MSU as well.

“I have been impressed on my visits with the attractiveness of the campus and…the friendliness of the people,” states Durkin. “Both groups [researchers and practitioners] enjoyed hearing from each other and realizing how their interests fit with those of the other group.”

Miller was so pleased with the outcome of the event that he intends for the Finance & Economics Department to host another such gathering in 2019. Judging from the success of the first, it looks like he might need to book twice as much conference space next time!

The 2016 symposium was made possible by the MSU Department of Finance & Economics, the Jack R. Lee Chair, the Institute for Market Studies at MSU and the Mercatus Center at George Mason University.