A coalition of groups is pushing legislation to place tighter regulations on payday and title loans, including limiting interest to 36% annually.
The groups, including the Southern Poverty Law Center, Arise Citizens' Policy Council and AARP, say payday loans and title loans are a paradise for predatory lenders. At a news conference Thursday, they said interest rates can hit 456% annually for payday loans and 300% for title loans. In addition to limiting interest rates, they are proposing bills that limit the number of loans a borrower can get each year.
The president of the loan industry group, Max Wood of Birmingham, says 36% would close down businesses because that wouldn't cover costs. He says customers would be left to deal with unregulated Internet lenders.