All American Check Cashing Inc., a Mississippi-based check cashing company, has closed stores in Alabama and Louisiana. This came about as the company was engaged in legal battle with state and federal regulators. The company says that it will forgive loans to customers affected by the closures. The approximate value of the loans being forgiven is $800,000, according to a statement from a company spokeswoman. The company said it is closing stores as it focuses on what it calls “unfair and unjustified allegations” made by the U.S. Consumer Finance Protection Bureau (CFPB) and the Mississippi State Department of Banking and Consumer Finance.
The federal agency filed suit in May, accusing the company of instructing its employees not to tell customers what fees they were being charged, and of overcharging some customers. In June 2014, the Mississippi Department of Banking and Consumer Finance ordered All American to stop some transactions such as using the proceeds from one delayed-deposit check to pay the principal or fee owed on any other delayed-deposit check. The department also ordered the company to turn over documents for regulators to investigate.
In January, All American filed a federal lawsuit seeking to block the Mississippi department from taking disciplinary action that could shut down the business. The lawsuit is still pending. The closure includes all four Alabama stores and five of six Louisiana stores. All American will still operate 42 Mississippi stores and one in Louisiana.
Source: Associated Press
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