Senate Passes ’30 days to pay’ bill to reform payday lending


On Thursday, the Alabama Senate passed a bill that seeks to issue reforms to Alabama’s payday loan industry.

The bill passed with bipartisan support on a vote of 20-4, and now moves to the House.

Under current law, lenders are allowed to set the terms of their loans from 10 to 31 days, and can charge up to a 17.5 percent fee for the loan; giving a loan with payment due in 14 days an annualized interest rate of 456 percent.

SB138 seeks to drop this rate to 200 percent by requiring payday lenders to give borrowers 30 days to repay their loans.

Decatur-Republican Sen. Arthur Orr, the bill’s sponsorbelieves it is a simple, but necessary change, and will make repayment easier for Alabamians who pay their loans monthly, alongside their household bills.

“This simple reform enjoys bipartisan, overwhelming, statewide support, we are grateful for the responsive leadership that carried this bill through the Senate. Now, we look toward the House seeking the same level of commitment to the well-being of Alabama’s borrowers. Predatory lending reform is a priority for many Alabama voters who are tired of seeing this can kicked down the road year after year, and this bill is an opportunity for legislators to finally deliver on the change that their constituents have requested for so long.” Dana Sweeney with the Alabama Appleseed Center for Law & Justice, told Alabama News.

Madison-Republican Sen. Bill Holtzclaw, Rainbow City-Republican Sen. Phil Williams, and Birmingham-Democrat Sen. Rodger Smitherman are co-sponsors of the bill.


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