The Alliance for Responsible Lending in Alabama (ARLA) held a public forum in Birmingham Tuesday to discuss high-cost consumer lending and the group’s plans to address such practices in the upcoming legislative session.
“We were pleased with the quantity and quality of the folks that turned out,” said Stephen Stetson, a Policy Analyst with Alabama ARISE, one of more than 20 groups affiliated with the umbrella organization connected to ARLA.
According to Stetson, ARLA has worked for the last three to four years to pass legislation that would be an interest rate cap of 36 percent on all payday and title loans in the state, which are currently at 456 percent and 300 percent respectively.
Stetson noted that roughly 18 other states have enacted such caps, including Arkansas (17 percent), Georgia (60 percent) and North Carolina (36 percent).
Several legislators have signed onto ARLA’s legislation in the past, including Rep. Danny Garrett (R-Trussville), Sen. Arthur Orr (R-Huntsville) and Sen. Larry Stutts (R-Marion). This year’s legislation is slated to be sponsored by Rep. Allen Treadaway (R-Birmingham).
Last year’s bill, which Stetson said got further than any previous legislation, died on the House floor due to “behind the scenes negotiations” from the consumer lending lobby, despite having more than 60 bipartisan co-sponsors.
ARLA is currently working on this year’s legislation, which will yet again seek to put a cap on interest rates.
“People do not think very highly of this industry,” Stetson said. “But they spare no expense lobbying in the statehouse.”
However, Stetson is confident that this year’s bill, due to grassroots activism, will fare better than previous bill’s have because of public sentiment.
“People understand that these (lenders) are stripping wealth out of communities,” Stetson said. “They have the money, but we have the numbers. People in Alabama know that change can be slow but, if we don’t get it through this year, we’ll be back next year.”