City officials in Anniston, Ala., will take another three months to finalize regulations on short-term loan businesses before new lenders can open in the city.
The Anniston City Council renewed its moratorium on new short-term lenders, which officials say hurt the city's economy and low-income residents. The ban was originally for six months, starting in February. It prohibits the opening of any new payday lenders, check-cashing business, title lenders, or similar short-term loan businesses. About 15 such businesses are currently located in the city.
"We don't necessarily need the three months ... we just want to make sure we're having a deliberate and methodical look at this," City Manager Brian Johnson said of the decision to extend the moratorium. He believes an ordinance, with new regulations, can be ready for the council to approve in as soon as two weeks. The proposed regulations include limits on how many new short-term loan businesses can open in the city, based on population and location.
In Alabama, payday lenders can charge up to 400 percent annual interest rates on their loans, which equals about $17.50 per $100 loaned.