Payday & Title Lending Reform
When low wages fail to cover the cost of living, many desperate borrowers turn to payday or auto title loans. But because Alabama law allows annual percentage rates of up to 456 percent for payday loans and 300 percent for title loans, these loans sap wealth from far too many families and communities.
Arise has worked for years to explain the dangers of high-cost lending for Alabama consumers, and our advocacy was a key force behind the 2015 creation of a statewide payday loan database, which allowed the state to enforce certain limits on payday loans. We continue to explore the burden that high-cost loans place on struggling Alabamians and to highlight policies that other states have enacted to protect consumers.
Featured Resources
Fact Sheet
Underregulated auto title loans are a bad deal for Alabamians
Alabama doesn’t know how many people lose their cars because of auto title loans every year. No agency collects data on title loans, which are treated as pawn transactions. But with annual percentage rates (APR) of 300% allowable under the state’s Pawn Shop Act, which governs title loans, the cost of these loans is far [...]
Fact Sheet
Payday lending harms families and communities across Alabama
Every year, underregulated payday lenders drain tens of millions of dollars from Alabama communities. These financial predators use some of that money to pay a fleet of lobbyists and fund legislative campaigns against reform. They have preserved the status quo even though nearly three in four Alabamians support abolishing predatory payday loans. There are more [...]
Resources
Protection from predatory lenders should be part of Alabama’s COVID-19 response
While COVID-19 forces Alabamians to deal with health concerns, job losses and drastic disruption of everyday life, predatory lenders stand ready to take advantage of their misfortune. Our state policymakers should act to protect borrowers before these harmful loans make the pandemic’s financial devastation even worse. The volume of high-cost payday loans, which can carry [...]
Fact Sheet
Federal ability-to-repay rule protects payday borrowers, Alabama Arise tells CFPB
Director Kathleen Kraninger: I read with disappointment your recent proposal to rescind the thoroughly considered, factually grounded Consumer Financial Protection Bureau (CFPB) rule provision mandating ability-to-repay determinations by lenders offering payday, title and balloon loans. As a policy organization working to advance the public good in a state with wholly insufficient consumer protections for borrowers, [...]
Report
Broke: How payday lenders crush Alabama communities
Alabama Arise and Alabama Appleseed Center for Law and Justice teamed up to produce this report on the history, financial effects and human impact of high-cost payday lending in our state. The report highlights and executive summary are below. Click here to read the full report, or click the "Download" button at the top of [...]
Fact Sheet
30 days to pay: A simple but important step forward on payday lending reform in Alabama
Alabama borrowers pay interest rates of 456 percent a year on payday loans. These high-cost loans trap thousands of struggling Alabamians in a debt cycle that deepens poverty and hurts the state’s economy. SB 75, sponsored by Sen. Arthur Orr, R-Decatur, along with a House version sponsored by Rep. Danny Garrett, R-Trussville, would extend the [...]
Fact Sheet
Payday lending reform: Ending a debt trap in Alabama
On busy highways and run-down streets across the state, you can’t miss them: big, bright signs promising easy money. From payday loans to auto title pawns to anticipation loans on tax refunds, Alabamians face a dizzying array of credit services designed to trap consumers in financial quicksand. This fact sheet highlights the pitfalls of payday [...]
Fact Sheet
SB 284 offers Alabama consumers protections from high-cost loans and moves lending reform forward
Most states have laws against usury, or excessive interest. Alabama’s Small Loan Act of 1959 caps the interest rate on traditional small, short-term loans at 3 percent a month, or an annual percentage rate (APR) of 36 percent. But more recent laws covering payday and auto title lenders allow APRs many times higher than that. For [...]
Fact Sheet
The high costs of payday and auto title lending in Alabama
How much should people have to pay to get financial help in a tight spot? Payday and auto title lending are two forms of high-cost credit marketed toward Alabamians who are desperate for short-term cash. These loans carry triple-digit interest rates that can threaten the economic well-being of borrowers who fall behind on payments.
Fact Sheet
Hard cash: Predatory lending in Alabama
On busy highways and run-down streets across the state, you can't miss them -- big, bright signs promising easy money. From payday loans to refund anticipation loans to title pawns, Alabamians face a dizzying array of credit services designed to trap consumers in financial quicksand. This updated fact sheet provides new information on predatory lending in Alabama.
