Resource: Fact Sheet

Payday lending harms families and communities across Alabama

By Dev Wakeley

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 payday and auto title lenders in Alabama than hospitals, high schools, movie theaters and county courthouses combined. Their business model depends on churning a profit out of desperate, financially fragile customers. And Alabama provides them with plenty. About 15% of Alabamians – nearly one in seven people in our state – live at or below the poverty line.

Payday lenders are on track to pull about $1 billion in fees out of Alabama communities over the next decade. Nearly all of their profits will flow to out-of-state companies. And these profits come out of the pockets of borrowers who already struggle to make ends meet. Until the Legislature acts, the scourge of predatory payday loans will continue to devastate thousands of family budgets and local economies.

Legalized usury

Many states have interest rate caps that prevent usury in lending generally. But in Alabama, payday loans aren’t governed by state laws that cover other loans. Instead, payday lenders are allowed to charge a $17.50 “loan origination” fee per $100 they lend. At the most common loan period of 14 days, this is an annual percentage rate (APR) of 456%.

Eighteen states and the District of Columbia have abolished predatory payday lending by setting interest rates far below Alabama’s rate. Many of those rate caps are 36% APR, which would match the allowable rate for other loans in Alabama. It also would match the rate cap that Congress set for military members and their families in 2006.

Other Southern states already have recognized the predatory nature of these businesses and stopped these abusive practices. Arkansas and Georgia both prohibit triple-digit interest rates, as the people of Alabama want the Legislature to do.

Straightforward solutions require political will

Alabama has a menu of policy options to protect borrowers and rein in high-cost payday lending. Those solutions include:

  • Cap the interest rates on all consumer loans in Alabama at 36% APR. This would broaden the protections that military borrowers already have to our entire population. This is Alabama Arise’s top legislative recommendation on this issue.
  • Allow borrowers to pay loans off in installments. This would help people reduce debt more gradually and sustainably instead of forcing them to pay a loan off all at once.
  • Cut the fee for originating a loan from the current $17.50 per $100. This change would lessen payday loans’ financial burden on borrowers.
  • Require payday lenders to ensure borrowers’ ability to repay before making a loan. This would reduce the risk that borrowers become trapped in cycles of deep debt.
  • Give borrowers 30 days to repay payday loans. This would cut the effective APR from 456% for a 14-day loan to about 220% for a 30-day loan.

Bottom line

Momentum for stronger consumer protections is building at the federal level, but a rate cap for payday loans is ultimately up to state lawmakers. Payday lending reform advocates must continue building public pressure and support to protect struggling families and strengthen communities across Alabama.

Criminal justice debt creates major barriers to economic health

By Dev Wakeley

It is unconstitutional to jail someone just because they owe money. But Alabama has no set process for courts to determine if a defendant can afford to pay fines and fees. And though debtors’ prisons are illegal, thousands of Alabamians are in danger of going to jail or are driven further into poverty because they can’t pay high costs attached to the criminal justice system.

Fines and fees are everywhere

Alabama relies heavily on fines and fees to fund its court system. Largely as a result, fees are attached to every phase of criminal justice proceedings in our state.

People pay bail bonds and related fees to avoid jail before trial. They pay fines and costs if convicted. They pay fees for drug testing, parole supervision and public defender representation. And they pay for diversion programs to keep convictions off their record and community corrections programs to maintain jobs and lives while serving sentences.

The financial damage continues beyond the courthouse and jail. People pay fees to reinstate driver’s licenses and higher costs for some mandatory types of insurance. They pay interest and surcharges because they can’t pay the full amount at once. And they even pay a fee for paying in installments.

Criminal justice debt adds up

A 2014 survey by TASC, Jefferson County’s community corrections program, found 90% of participants owed court debt averaging $7,885. Costs for possessing 1 ounce of marijuana in Shelby County could total $2,611, the Public Affairs Research Council of Alabama found. Probation could add $960, and driver’s license restoration would add another $300.

Legal financial obligations (LFOs) often lead to incarceration and debt. In much of Alabama, a person who falls behind on payments can be jailed. TASC’s survey found nearly one in five respondents (18%) had been jailed for failure to pay fees or fines.

Mounting debt also can prompt cynicism about a system that preys on people of color and people who live in poverty. Many of the worst abuses of criminal justice debt have occurred in places with large Black and Hispanic populations. Four out of five people charged with crimes are indigent. And 60% of people surveyed by TASC said they had to choose between paying LFOs or meeting basic needs like groceries, utilities and housing.

Fixing Alabama’s criminal justice debt problems

Lawmakers have numerous policy solutions available to help repair a court system that traps many Alabamians in debt. These options include:

  • Standardize determination of ability to pay.
  • Create an income-based sliding scale for fines, fees and other legal financial obligations.
  • Eliminate cash bail for misdemeanors.
  • Stop requiring payment of fines and fees before restoring the right to vote for Alabamians who are otherwise eligible.
  • Prohibit jailing people for unpaid debt.
  • Study and remedy racial disparities in criminal justice debt.
  • Encourage courts to use alternatives to monetary sanctions, such as community service or treatment programs.
  • End driver’s license revocations and suspensions for offenses unrelated to driving, such as a drug crime or missed court date.
  • Eliminate fees for reinstating driver’s licenses.

Bottom line

Alabamians deserve a justice system that helps people rejoin society and doesn’t squeeze every cent from people with limited resources. Funding courts through adequate general appropriations instead of fines and fees would be a major step toward a more just, inclusive Alabama for all.

Alabama’s death penalty practices remain unjust and unusually cruel

By Dev Wakeley

Americans increasingly oppose the death penalty. Gallup found that opposition to the death penalty more than doubled in the past 25 years. This may result from disturbingly high error rates in the system. For every 10 people executed since 1976, one innocent person on death row has been set free.

Alabama took an important step toward death penalty reform in 2017, but the state’s death penalty scheme remains broken. That year, the state finally outlawed judicial override in capital cases. That change means judges no longer can impose the death penalty when a jury recommends life without parole.

But the ban was not retroactive, and 35 people who were sentenced that way remain on death row. Fixing that failure is one of several key reforms that would bring Alabama’s capital punishment system in line with national standards and federal court rulings.

Alabama’s death penalty practices are behind the times

Alabama’s death penalty scheme has failed to keep up with reforms in the rest of the United States. Under state law, prosecutors do not have to prove a defendant was at least 18 years old when the crime occurred. State law also lacks protections against executing people with mental disabilities. U.S. Supreme Court precedent is the sole authority preventing executions of defendants with IQs below 70.

An increasing number of states are abandoning capital punishment. Most recently, Virginia became the first Southern state to do so when Gov. Ralph Northam signed an abolition bill in March 2021. In all, 26 states either have abolished the death penalty or have seen their governor impose a moratorium, according to the Death Penalty Information Center.

Racial disparities abound in our state’s capital punishment system. In Alabama, people convicted of killing a white person are more than four times more likely to get a death sentence than people convicted of killing someone who is not white, the Equal Justice Initiative found in 2011. And Alabama has more people on death row per capita than any other death penalty state.

How to reform Alabama’s capital punishment system

Ending judicial override in future cases was an important first step toward fixing Alabama’s broken death penalty system. But other recent changes have aimed to enshrine that system instead. In 2018, the Legislature authorized a backup execution method, nitrogen hypoxia, in case courts outlaw lethal injection. This new procedure would kill people through suffocation, and it has never been used on a human before.

Efforts to prop up the state’s broken death penalty system are misguided. Alabama can and should enact numerous reforms to reduce the unfairness of its death penalty practices. Those changes include:

  • Make the 2017 judicial override ban retroactive.
  • Require unanimous agreement from the jury to sentence people to death.
  • Amend state law to require prosecutors to prove a defendant was 18 or older at the time of the crime.
  • Amend state law to forbid executions of people who have serious cognitive impairments.
  • Impose a moratorium to study and end racially biased death penalty practices.
  • Provide state funding for appeals of death sentences, as all other states with capital punishment do.
  • Ultimately eliminate capital punishment.

Bottom line

Alabama should reduce and eliminate the unequal, unfair practices present in the state’s death penalty scheme – and ultimately should end capital punishment entirely. Alabamians deserve a fair, unbiased justice system, and these death penalty reforms would be steps toward a more just state.

Expand voting rights to move Alabama beyond its anti-democratic past

By Dev Wakeley

Voting rights are a flashpoint in Alabama’s history. The long denial of those rights to Black residents led to Bloody Sunday in Selma, the march to Montgomery and eventually passage of the Voting Rights Act of 1965. In the decades since, our state has taken a few steps that increase voting access for communities of color. Still, Alabama’s voting systems remain unnecessarily cumbersome, expensive and exclusionary.

Alabamians seeking to exercise their fundamental right to vote often face numerous administrative hurdles and physical and procedural barriers. Recent legislative sessions have included repeated attempts to make voting more inconvenient for Alabamians and more burdensome for election officials.

Recent policy changes have made voting harder

Efforts to restrict voting have gained traction since the U.S. Supreme Court overturned parts of the Voting Rights Act in its 2010 Shelby County v. Holder ruling. And some of those more recent efforts in Alabama unfortunately have succeeded.

For instance, the 2021 regular session saw lawmakers ban curbside voting, a practice that Mississippi expanded in 2020. Curbside voting would have increased polling place access for older and pregnant Alabamians, as well as people with disabilities. Echoing the state’s long past of racist voting policy, the curbside voting ban finally passed after a procedural vote to cut off debate and silence a filibuster by Black senators.

Legislative attempts to make it harder for Alabamians to have their voices heard haven’t stopped there. Some lawmakers also have sought to remove election officials’ ability to provide extended hours or accommodations during declared emergencies. This measure would be particularly shortsighted in Alabama, where tornado outbreaks are routine during the primary election season in the spring and hurricanes remain a persistent threat during the general election season in the fall.

Pro-democracy policies would build a better Alabama

Ensuring that everyone’s voice is heard is an essential part of building a better, more inclusive Alabama. Lawmakers can and should make numerous policy improvements to boost civic engagement and strengthen democracy in Alabama:

  • Register voters automatically through the Department of Motor Vehicles (DMV). Automatic voter registration (AVR) would increase turnout considerably. Twenty states (including Georgia) and the District of Columbia have approved AVR since 2015, according to the Brennan Center for Justice.
  • Remove the racist modern poll tax that requires repayment of fines and fees for people with a criminal conviction to regain voting rights. This disenfranchisement has its roots in post-Reconstruction efforts to sidestep the U.S. Constitution’s ban on explicitly race-based voting restrictions. And this practice continues to harm Black people at a far higher rate than the overall population.
  • Allow extended early voting for voters who can’t make it to the polls on Election Day.
  • Create a same-day voter registration process so voters who show up to the polls aren’t excluded from casting ballots.
  • Enable curbside voting to increase accessibility for voters who have mobility or health concerns.
  • Eliminate the burdensome photo ID requirement for voters to cast ballots.
  • Allow absentee voting without requiring voters to provide an excuse from a state-approved list.

Bottom line

Our democracy is strongest when everyone can participate. But Alabama has made that harder by erecting barriers that limit voting for many seniors, people with low incomes, people with disabilities and people who were formerly incarcerated. By enacting policies to protect and expand voting rights, lawmakers can move Alabama away from a shameful past and toward a brighter future where all voices are valued and included.

Jump-start public transit in Alabama

By Jilisa Milton

Alabama’s failure to invest in public transportation is hurting people, communities, the economy and the environment. Many seniors, people with disabilities and people with low incomes need public transit to get to work, medical care, the grocery store and more. Others prefer an energy-saving alternative to cars. The Legislature created the Public Transportation Trust Fund (PTTF) in 2018 but hasn’t provided state funds for it.

The November 2021 federal infrastructure law has changed the game. It targets hundreds of millions of federal dollars to Alabama for public transportation. It’s time to activate the PTTF to ensure transparent, equitable distribution of these historic resources. Here’s why:

  • Alabama is one of only three states (along with Hawaii and Nevada) that provide no state funding for public transportation. All other Southern states do.
  • Alabama leaves millions in federal matching funds on the table every year. The federal government can grant $4 for every $1 the state spends on buses. And federal funds can double state investment in operations.
  • Every $1 million spent on operations creates 50 jobs. These jobs provide good benefits and an average operator’s salary of more than $70,000.
  • Lack of funds has limited public transit options. No service in Alabama operates past 11 p.m., even on weekends. Rural van routes may be booked up weeks in advance. And some cities with more than 30,000 people have no general public transit option.
  • Eight rural hospitals have closed since 2011, and many others are at risk. These closures have increased the strain on rural public transportation by leaving many Alabamians farther away from health care facilities.
  • The Alabama Department of Economic and Community Affairs (ADECA) administers the fund. ADECA makes and audits project awards and does a needs assessment.

Bottom line

We have the vehicle. Let’s drive it. Alabama’s Public Transportation Trust Fund can match and distribute federal funds wisely and fairly. Expanding public transportation would create thousands of jobs, fuel economic growth and get people where they need to go. It would create a healthier environment and a healthier Alabama for all.

It’s time to expand Medicaid and close Alabama’s health coverage gap

By Jim Carnes

For years, Gov. Kay Ivey and legislators have said cost is the barrier to covering Alabamians with low incomes through Medicaid. Thanks to federal COVID-19 relief funding with incentives for Medicaid expansion, any concerns about that barrier are gone. Now more than ever before, we have the opportunity to ensure no Alabamian has to choose between going to the doctor and putting food on the table.

Nearly 70% of Alabamians support Medicaid expansion, including 64% of Republican voters, according to a January 2021 poll. As we continue to struggle with the COVID-19 pandemic, extending Medicaid coverage to adults with low incomes is the single biggest step Alabama can take to restore health, save our rural hospitals and boost our state’s economic recovery.

Who would gain coverage under Medicaid expansion?

Medicaid expansion would ensure coverage for more than 340,000 Alabamians, including:

  • People who work low-wage jobs and can’t afford private coverage
  • Workers who are between jobs
  • Adults who are caring for children or older family members at home
  • People who have disabilities and are awaiting SSI determinations
  • Adult college students
  • Uninsured veterans

How would Medicaid expansion keep people healthier?

Medicaid expansion would help Alabamians stay healthy by ensuring pathways to:

  • Regular primary care and preventive checkups
  • Earlier detection and treatment of serious health problems
  • Regular OB/GYN visits without referral
  • Less dependence on costly emergency care
  • Better health and greater financial peace of mind

How would Medicaid expansion reduce health disparities?

Medicaid expansion would promote health equity in Alabama by:

  • Reducing the racial/ethnic disparities in health coverage
  • Lowering the high rate of Black infant deaths
  • Lowering the high rate of Black maternal deaths
  • Covering chronic health conditions that disproportionately affect people of color and make them more vulnerable to COVID-19 complications

How would Medicaid expansion boost the economy?

Medicaid expansion would bring our federal tax dollars home to support:

  • Healthier families, workers and communities
  • Stronger rural hospitals and clinics
  • Stronger community mental health and substance use disorder services
  • A needed boost in jobs and revenue for state and local economies

Bottom line

Medicaid expansion would save lives, create jobs and strengthen Alabama’s health care system. Closing the health coverage gap is one of the biggest policy changes available to move our state forward. The governor and the Legislature should embrace this opportunity to build a brighter, healthier future for Alabama.

Join our Cover Alabama campaign!

An end to Alabama’s coverage gap is within reach. Through our Cover Alabama campaign, Alabama Arise is working to ensure that every Alabamian can afford to get the health care they need when they need it. Visit coveralabama.org to learn more and add your name to our ever-growing list of supporters.

Alabama Housing Trust Fund can help thousands find a place to call home

By Carol Gundlach

Alabama lacks more than 73,000 homes for households with incomes below the federal poverty line ($26,500 for a family of four). That means many seniors, students, veterans and people with low or fixed incomes in Alabama can’t afford a safe place to call home. And the pandemic only made the housing crisis worse. Between Sept. 29 and Oct. 11, more than 28,000 Alabama families told the U.S. Census Bureau that they expected to be evicted from their current home because they couldn’t pay the rent.

State support for the Alabama Housing Trust Fund (AHTF) would provide flexibility to meet a variety of housing needs across the state. These include development, rehabilitation, down payment assistance and disaster recovery. Multiple funding paths for the AHTF exist:

  • The best way to fund the AHTF would be to increase the state mortgage record fee from 15 cents to 20 cents per $100 of indebtedness. This one-time filing fee has not changed since it was enacted in 1935.
  • Another way to jumpstart the AHTF would be to allocate $20 million of Alabama’s federal recovery money to the trust fund.
  • The Legislature also could take advantage of an unprecedented budget surplus and simply appropriate $20 million in General Fund money to the trust fund.

A strong investment in the Alabama Housing Trust Fund would allow cities, developers and nonprofits like Habitat for Humanity to build or rehabilitate thousands of homes for people with extremely low incomes. It would reduce Alabama’s shortfall of more than 73,000 homes for working families, veterans and retirees with low or fixed incomes. And it would create and support thousands of good-paying jobs across Alabama over the next decade.

Bottom line

Every Alabamian should be able to afford a roof over their head and food on their table. Every child deserves a safe place to call home. And veterans who have defended our country deserve to return to a safe and affordable dwelling. State funding for the Housing Trust Fund would help Alabama achieve all three of those goals.

Funding surge is a path for Alabama to untax groceries, expand Medicaid

By Carol Gundlach

Alabama’s broken tax system usually starves our state of money to fund education, public health and other basic responsibilities adequately. But 2022 may be different. Record tax revenues and a surge of federal recovery dollars could allow lawmakers to address longstanding state needs and inequities – if they have the political courage:

  • Tax revenues for our schools and universities went up more than 16% in 2021.
  • Tax revenues for services not related to education grew more than 11% in 2021.
  • Alabama still has more than $1.6 billion in federal recovery funds that must be budgeted in 2022 and 2023, with more on the way.

Arise’s proposed uses for federal recovery dollars can be found at al-arise.local/rescueplan. Here are a few of our recommendations for budgeting state revenue increases:

  • Untax groceries. Alabamians with low and moderate incomes already pay a disproportionate share of their income in state taxes. Ending or rebating the state grocery tax while protecting education funding would help them make ends meet.
  • Raise the income tax threshold. Alabama should help people with low incomes by creating or increasing individual and child deductions or credits.
  • Expand Medicaid. Federal recovery dollars can’t be spent directly on expansion, but they can be spent on other needs. This will free up state money to expand Medicaid.
  • Make the criminal justice system more just. Lawmakers should increase funding for reentry services and for alternatives to incarceration like specialized courts and community correction programs.

Bottom line

This year’s budget landscape offers an opportunity to make Alabama better for generations to come. Thoughtful, transformative funding choices can bring that vision to life.

Rental assistance resources to prevent evictions in Alabama

By Alabama Arise
Affordable housing advocates rally outside the Alabama State House in Montgomery in 2015.

Are you facing eviction, or is a renter at your property unable to pay rent?

Evictions in Alabama are resuming now that the U.S. Supreme Court has overturned the federal eviction moratorium. If you are facing eviction because you cannot pay your rent, you may be able to receive emergency rental assistance. For a list of agencies serving various parts of the state, see below or visit the National Low Income Housing Coalition’s resource page at nlihc.org/rental-assistance.

Landlords can apply for these funds as well. Processing of claims has been slow, but more than 80% of applications processed so far have resulted in payments. If you need help completing the application, you can call the phone number(s) or visit the website listed for each location below. (Click here for a downloadable PDF of this resource list.)

Agency contact information

Baldwin County: Call 251-277-9969 or visit baldwinaltogether.org.

City of Birmingham: Call 205-778-2091 or visit birminghamal.gov/renthelp.

City of Huntsville: Call 256-535-2489 or 2-1-1, or visit huntsvilleal.gov/covid-19-emergency-rental-assistance.

Jefferson County outside Birmingham: Visit erap.jccal.org. To receive application assistance that is available through partner organizations, call 205-326-0162, 205-328-4292 or 205-930-0309.

Madison County outside Huntsville: Call 844-804-9454 or visit mcerap.com.

Mobile County: Call 855-209-4970 or visit mobilecountyal.gov/grants/rental-and-utility-assistance.

Montgomery County: Call 833-823-0007 or 334-261-6186, or visit mc-ala.org/services/emergency-rental-assistance-montgomery-county.

MoWa Choctaw Housing Authority: Call 251-829-9023 or visit mowachoctawhousingauthority.com.

Tuscaloosa County: Call 888-472-0027 or visit tuscco.com/erap.

Anywhere in Alabama not listed above: Call 833-620-2434 or visit eraalabama.com.

These assistance programs can allow renters to remain in the homes they are renting. The programs can allow landlords to be paid fully for all back rent and for rent in future months as well. Applicants should inform the court where the eviction case is filed that they have a rental assistance application in process.

Now is the time! Medicaid expansion talking points in Alabama

By Chris Sanders

Cover Alabama logo

Timing

On Thursday, March 11, 2021, President Biden signed the American Rescue Plan Act, which will bring back federal funding for states to newly expand Medicaid. Thanks to this law, if Alabama expanded Medicaid, the state would get an estimated $940 million boost in federal Medicaid funds over two years. This is enough money to fully fund Alabama’s share of the cost of Medicaid expansion for many years.

Messaging on cost

For years, Gov. Kay Ivey and legislative leaders have said the barrier to expanding Medicaid is the cost. Thanks to the enhanced federal funding, Alabama will have the money to cover the cost of expansion. Now more than ever before, we have the chance to ensure that no Alabamian has to choose between going to the doctor and putting food on the table.

Medicaid expansion is popular

A January 2021 poll from the Cygnal polling firm showed that nearly 70% of Alabamians support Medicaid expansion, including 64% of Republican voters. The poll also revealed that Alabamians support using a portion of funds from any gambling or medical marijuana legalization to expand Medicaid.

Medicaid is necessary for COVID-19 recovery

Recovering from the COVID-19 pandemic will require Alabama to reinvigorate our public health system. Medicaid is a health lifeline for one in four Alabamians and an economic engine for communities across our state. As we struggle with the COVID-19 pandemic, extending Medicaid coverage to adults with low incomes is the single biggest step Alabama can take to restore health, save our rural hospitals and boost economic recovery.

The vast majority who would gain coverage are working

More than 100,000 Alabamians in the coverage gap hold regular jobs that pay low wages. Thousands more are self-employed, serve as caregivers or attend school. Medicaid expansion has proved to incentivize work and create jobs.

Medicaid expansion would ensure coverage for 300,000 Alabamians, including:

  • People who work low-wage jobs and can’t afford private coverage
  • Workers who are between jobs
  • Adults who are caring for children or older family members at home
  • People who have disabilities and are awaiting SSI determinations
  • Adult college students
  • Uninsured veterans

Medicaid expansion would help more Alabamians have:

  • Regular primary care and preventive checkups
  • Earlier detection and treatment of serious health problems
  • Regular OB/GYN visits without referral
  • Less dependence on costly emergency care
  • Better health and greater financial peace of mind

Medicaid expansion would promote racial equity by:

  • Reducing racial disparities in coverage, which is more likely to leave out people of color with low incomes
  • Lowering the high rate of African American infant deaths
  • Lowering the high rate of African American maternal deaths
  • Covering chronic health conditions that disproportionately affect African Americans, making them more vulnerable to COVID-19 complications

Medicaid expansion would bring our federal tax dollars home to support:

  • Healthier families, workers and communities
  • Stronger rural hospitals and clinics
  • Stronger community mental health and substance use disorder services
  • A needed boost in jobs and revenue for state and local economies

Bottom line

Medicaid expansion is the single biggest step we can take to weather the pandemic and move Alabama forward. It’s time to invest in a healthier future for our state and our people.