Payday Loans: Bad Bill, Good Bill
If you subscribe to the idea that payday loans are predatory and bad for consumers, there are two state Senate bills to watch.
FWIW, U.S. Congress recently passed legislation to cap rates of payday loans for military personnel at the urging of military leaders who said that military members who “accumulate heavy debts risk security clearances and can jeopardize their careers. In some cases, those with severe financial woes cannot be deployed to the world’s hot spots.”
And this week, Georgia’s House of Representatives narrowly “struck down a bill Tuesday which would have lifted a 2004 ban on payday lenders.” One observation made in the defeated effort to lift the Georgia ban was “the more liberal laws of [Georgia’s] bordering states.”
Lowell Barron, D-Fyffe, claimed to see the light last fall. The former President pro tem said then that he would get out of the payday loan business and propose reform for the industry this session.
Unfortunately, his bill SB 119 “clearly appears to be drafted by the payday loan industry” as it is almost identical to other “reforms” proposed by the industry around the nation. (A policy analyst confirmed for me comments that were left here at the Parlor.)
The real oversight would comes from SB 121 from Sen. Bradley Byrne, R - Fairhope. Byrne’s bill would repeal our statute regulating payday loans so that they would be regulated by the Small Loan Act.
Which bill will we get, Barron’s weaker SB119 or Byrne’s stronger SB121? Or will they both wither on the vine?
As I noted here before, Byrne’s bill has the support of Democratic Party Chair Joe Turnham and the Christian Coalition of Alabama.
A key question… if SB121 makes it out of Senate committee, will Lowell Barron as Rules Chair allow it on to the Senate floor? Or will he “pull a Preuitt” (in honor of last quadrennium’s Rules Chair Jim Preuitt, D-Talladega, who was known to keep bills off the Senate agenda for no expressed reason)?
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At the urging of military leaders? When I was in the military, predatory lending places were simply placed on a somewhat long, “Off limits” list. We weren’t allowed to go there. There were also establishments that we weren’t allowed to go to, even though they were obviously meant to financially punish businesses. For example, there was a barber that told a black sailor he didn’t cut [n-word] hair.
Comment by Dan — March 22, 2007 @ 7:40 pm
[…] The interest rate for most loans to Alabamians is capped at 36% APR by the Small Loan Act, but the legislature passed a law exempting payday loans from the statute after the banking industry sued payday loan businesses to bring them into compliance. Last fall, Sen. Lowell Barron (D - Fyffe) claimed to be committed to reforming the payday loan industry in the state, but the legislation he eventually proposed appeared to be written by the industry itself. Then-Senator Bradley Byrne (R - Fairhope) proposed the real change in the industry with a bill that would subject payday loans to regulation under the existing Small Loan Act. […]
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