The Alliance for Responsible Lending in Alabama (ARLA), a large coalition advocating fair lending policies, gathered on February 28 at the state house in Montgomery to urge legislators to cap payday loans at 36% and to curtail automobile title lending.
 
ARLA is advocating three bills:  SB 282 to cap payday APR; a limit on auto title loans (number pending); and SB 160 to make Alabama’s Banking Department enforce the 2007 Military Lending Act that caps annual interest rates (APR) for consumer credit to 36 percent, including all fees and charges, credit insurance premiums and other charges.  A full description of the MLA is available from the Center for Responsible Lending.
 
At the same time that ARLA was urging legislators to prohibit predatory lending practices, the Southern Poverty Law Center released a major report concerning predatory lending in Alabama.  See the report, "Easy Money, Impossible Debt: How Predatory Lending Traps Alabama’s Poor."
 
“Alabama has become a paradise for predatory lenders, thanks to lax regulations that have allowed payday and title loan lenders to trap the state’s most vulnerable citizens in a cycle of high interest debt, said Sara Zampierin, staff attorney for the SPLC and the report’s author. “We have more title lenders per capita than any other state, and there are four times as many payday lenders as McDonald’s restaurants in Alabama.  These lenders have made it as easy to get a loan as a Big Mac.” Unlike a Big Mac, of course, the study explains how predatory loans wreak havoc in people’s lives with “impossible debt” well after the initial purchase.
 
ARLA’s coalition members include Alabama Arise, AARP of Alabama, the Alabama Asset Building Coaltion, Greater Birmingham Ministries, Gateway Financial Freedom, Birmingham Faith in Action, Leading Edge Institute, Neighborhood Housing Services of Birmingham, and the Alabama State Conference of the NAACP.