Alabama House approves payday loan database

The Alabama House of Representatives has voted to create a state database to enforce existing limits on payday loans.{} Representatives approved the bill on a 93-1 vote Thursday morning.{} It now moves to the Alabama Senate.{} Birmingham Representative, Patricia Todd, called the creation of the database a good first step in the regulation of the payday loan industry.

Existing law says people cannot have more than $500 out in loans out at one time.{} Without a central database, customers could go from lender to lender taking out multiple loans exceeding the gap.{} Rep. Todd says that traps people in a cycle of high-interest debt.

The bill approved by the House does not include interest rate caps that Todd had sought to place on the loans.