Alabama has more payday and title lenders than hospitals, high schools, movie theaters and county courthouses combined. The industry churns a profit out of desperate, financially fragile borrowers. And unfortunately, Alabama’s weak consumer protections provide them with plenty.
We explore these problems in depth and offer policy solutions in “Broke: How Payday Lenders Crush Alabama Communities,” a comprehensive new report we co-released Thursday with Alabama Appleseed Center for Law and Justice. “Broke” covers the history of these loans, explains current practices and reviews alternative lending options. And the report looks at how the 30 Days to Pay bill and other reforms would ease financial strain for hundreds of thousands of Alabamians.
“Broke” introduces you to some of the faces behind the debate. It contains an interview with a payday borrower who ended up homeless. It recounts how another borrower was driven into destitution after taking out a payday loan to pay for a family member’s funeral. And it shares the stories of many other Alabamians who were squeezed mercilessly by lenders no matter what hardships they were experiencing.
Click here to read the report highlights and executive summary. Or click the image to the left to read a PDF of the full report.
30 Days to Pay: A step in the right direction
Arise is supporting a bill that would help the people harmed most by the short-term nature of these loans. SB 75 and HB 258 would give borrowers 30 days to repay a payday loan. That’s a similar term as for mortgages and electrical bills.
About one in every four Alabama payday borrowers take out more than 12 loans per year. But those borrowers pay nearly half of all payday loan fees, just because the loans are so short in duration. These borrowers would gain a little breathing room with 30 days to pay, as compared to the current limit, which can be as few as 10 days.
The lending industry has jammed up reform efforts in committee for years. Only a strong push from everyday Alabamians can turn the tide. Please share this report on social media and tell your legislators we must reform payday lending in Alabama.