An Alabama law firm launched a petition Wednesday calling on state lawmakers to pass a bill to put more stringent regulations on payday lenders.
Bond & Botes, which has offices statewide, says payday lenders “skillfully set” traps for borrowers that see them taking out loans with interest rates and fees far higher than traditional loans and that Alabamans are being disproportionately hurt by these lenders.
“We believe that payday loan reform would be a significant, positive step for the citizens of Alabama,” firm partner Bradford Botes said. “Our state does not have a good track record on this issue; interest rates for payday loans can be more than 450 percent, among the nation’s highest. By population, we also have a higher concentration of payday lenders than any other area of the United States.
The firm’s petition, found on Change.org, is directed at Senate President Pro Tempore Del Marsh, Sen. Slade Blackwell who chairs the Banking and Insurance Committee, Senate Majority Leader Greg Reed, and Senate Minority Leader Quinton Ross.
“These companies work hard to convince us that they provide a needed service in lending to people unable to participate in traditional options for loans,” the firm said in the petition. “But the truth is that payday lenders enrich themselves at the expense of those who can least afford it.”
The Alabama Legislature has taken up bills to regulate the payday loan industry in the past, though none have made it into law.
A bill that would have required reasonable payment terms and interest rates failed to make it through its committee references last year, and a 2017 version is currently waiting for a House vote after passing the full Senate.
The House version of the bill, HB 321, is sponsored by a bi-partisan group of 45 legislators and would add a cap to the interest rate on payday and other types loans at 36 percent.