Payday Legislation Gets Second Wind

February 16, 2014
Times Daily (Alabama) 
payday lending news
A bill to regulate payday lending in Alabama recently stalled in a House committee, but two senators are now considering their own measures. Sen. Arthur Orr (R-Decatur) said he would analyze actions in other states and explore what strategies could be applied in Alabama. Payday lending critics have pointed out annual interest rates of more than 400 percent and say the loans trap those who can least afford them. Still, past legislative sessions have had little success in regulating the industry.

The bill that was recently derailed was introduced by Rep. Patricia Todd (D-Birmingham) and required payday lenders to be licensed by the state banking department. It also limited interest to 36 percent and prohibited consumers from taking out more than six loans in a 12-month period. Todd’s bill also obliged lenders to offer installment plans for repayment. Sen. Scott Beason (R-Gardendale) is drafting a plan that would combine portions of Todd’s proposal with another House bill that would restrict the interest on auto title loans.

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