Consumer Protection for Military, Not Other Alabamians
I wish someone was looking out for the best interests of consumers like me as well as the Defense Department looked out for the consumer interests of its service men and women on the issue of payday loans. The annual percentage rate for paydays loans, vehicle title loans and tax refund anticipation loans is now capped at 36% for those in the military and their dependents.
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.
Neither bill was passed. The state legislature has not shown interest in looking out for the best interests of consumers on this issue.
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Do you really need the government to look out for you? Surely you have the good sense to avoid payday loans without some bureaucrat forcing such a decision on you.
Comment by Brian — October 8, 2007 @ 4:12 pm
Brian, are you objecting to all usury laws? If not, why should payday loan companies be exempt from laws that other lenders must follow?
Comment by Kathy — October 8, 2007 @ 4:21 pm
Actually, yes. The government has no business interfering with a willing lendor and a willing borrow provided there is no fraud involved on either’s part. If you don’t understand the terms of a transaction then don’t sign up for it.
Comment by Brian — October 8, 2007 @ 4:38 pm
Brian, I have some respect and sympathy for your position, but I believe it to be a distinctly minority one. Many people are grateful for consumer protections afforded by law. While you may campaign for the repeal of the Small Loan Act, I don’t think you will find a majority to agree with you. And until it is repealed, I don’t agree with an argument for enacting a law that specifically exempts payday loans.
Do you think that the Defense Department made a mistake here?
Comment by Danny — October 8, 2007 @ 5:00 pm
Part of the reason we can’t get these reforms is because powerful people in the legislature own/owned these businesses and want to make as much profit as possible. I believe Barron owns or owned 26 of them.
Comment by Margaret — October 8, 2007 @ 5:18 pm
Heaven forbid that anyone suggest that our esteemed legislature doesn’t work for the people who pay their salaries! :-)
Comment by Don — October 9, 2007 @ 7:38 am
Don, Yes they do. Just not the ones that pay their “official” salary. :-)
And Brian, seems these fleecing businesses need the protection of the government to take advantage of folks often in desperate circumstances in spite of the fact they’re working 40 hours a week, so I guess they can’t take care of themselves either.
The funniest argument I heard in favor of these charlatans is the one guy who claimed he was running payday loan businesses in a “Christian” way. Guess my Bible is defective, looks like Byrne’s Bible was just as defective, so I consider myself in good company.
Too bad stuff that really could help the average citizen never finds the light of day in this august body of esteemed “public servants.”
Comment by political_observer — October 9, 2007 @ 11:39 am
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