Local legislators confident payday lending reform will happen this year
Mountain Brook, Ala. — Local legislators say they're confident payday lending reform will happen during this year's legislative session.
A panel discussion was held Wednesday night at Canterbury United Methodist Church in Mountain Brook. Representatives Danny Garrett and David Faulkner were part of the panel. Both said they don't know the details of any specific legislation that could be introduced regarding payday lending yet but they believe a bill will be introduced and passed this year.
Last year a bill passed the Senate but failed in the House. Faulkner said this year there is a lot being discussed including capping interest rates and the number of loans a person can take out.
At Wednesday night's panel it was shared the average borrower takes out eight payday loans a year. Faulkner says legislators don't want to take away people's access to credit and emergency loans but they have to balance that with doing something to stop the cycle of debt.
Joan Witherspoon-Norris with the YWCA Central Alabama was also on the panel. She talked about how many of the people they serve come to the YWCA because they reached their point of desperation of because of payday loans.
Witherspoon-Norris also shared statistics that last year in Alabama 2.1 million payday loans were taken out but only by 246,000 borrowers, which means there are a lot of repeat borrowers. And Alabamians paid $116 million in payday loan fees.
In the summer Governor Robert Bentley announced the creation of a Consumer Protection Task Force. Representative Faulkner is on that task force. He said they've had four meetings so far. They have another one Monday in Birmingham to talk about title loans and a meeting on the 31st to talk about payday lending.
