May 10, 2013 Philip Burgess
Alabama's short term lending industry may need be faced with new regulations after a bill was recently introduced in the state senate. According to the Alabama Media Group, the legislation was praised by advocates looking to regulate the industry further even though the proposed reforms fell short of what they requested.
If passed, the bill would prohibit consumers from taking out more than six short term loans per year. Also, it would enable the creation of a statewide database that would track all short term lending activity. The fees that lenders can asses would be reduced as well, with charges per $100 borrowed being limited to $12.50. Currently, lenders can charge up to $17.50 per $100.
The source indicated that many short term lending professionals expressed unhappiness with the proposal, despite the apparent compromise.
Whether or not the bill has a chance of passing is unknown. However, WVTM-TV noted that a similar bill that was introduced in 2007 failed to pass in the state legislature. It cited a robust lobbying effort from lenders as one of the main reasons for that bill's demise and speculated that the current proposal may suffer the same fate.