An auto title loan reform bill finally got a public hearing before the Alabama House Financial Services Committee on Wednesday, nearly two months after its introduction. But as is customary, the committee did not vote on the bill on the same day as the hearing. A vote could come next week.
HB 400, sponsored by Rep. Rod Scott, D-Fairfield, would cap interest rates on title loans in Alabama at 36 percent a year. State law now allows title lenders to charge rates of up to 300 percent a year.
Several people testified about the bill, including a spokeswoman for TitleMax, one of the nation’s largest title lenders. She claimed a 36 percent rate cap would put title lenders out of business.
Supporters testifying in favor of the bill included Arise’s Stephen Stetson, Joe Godfrey of the Alabama Citizens’ Action Program (ALCAP) and Alabama Appleseed legal director Shay Farley. Farley explained the dollar cost of high-cost auto title transactions to committee members. “Anybody can look at the numbers and see that this isn’t right,” she said.
HB 400, this year’s only title loan reform bill, was introduced in early April and has 67 bipartisan co-sponsors, nearly two-thirds of the House’s membership. With just seven meeting days left in the 2015 regular session, time is running short for the bill to clear both the House and Senate. Check out the Montgomery Advertiser’s coverage to learn more.
By Stephen Stetson, policy analyst. Posted May 20, 2015.