A Senate committee has approved payday loan legislation, but with changes that consumer advocates say gut the bill and that lenders say still won?t get them to support it.
The committee passed a bill Tuesday that would reduce the rates payday loan firms can charge customers and limit the number of loans customers can take out per year. But the changes increased the maximum the businesses could charge in interest and the number of loans borrowers could take out each year,Coach Outlet.
The legislation, sponsored by Senate President Pro Tem Del Marsh, R-Anniston,Chanel Outlet, initially would have capped the interest rates payday lenders can charge from 456 APR to 326 APR,oakley outlet. The bill also would have limited the number of loans an individual can take out to six per year and created a central database to keep track of consumer loans.
Marsh has said his bill was an attempt to stem abuses of payday lenders, who critics claim prey on low-income earners and trap them in a cycle of debt. Speaking before the Senate Banking and Insurance committee Tuesday, he repeated that theme,Gucci Outlet, saying he did not want to drive the industry out of the state,http://www.pilewu.com/tomsshoes.html.
?I?m a small business guy,? Marsh said. ?I believe in it, but I believe in protecting customers to a degree. ... We have to have some control over this industry.?
However, industry representatives were also out, saying that reducing the interest rates would force them to close their doors. Beverly Ward of Decatur, owner of Cash USA, said she would not be able to make a profit on that amount of money.
?People have the impression we make loads of money, but we don?t,douuo.com/gucci.html,? sha said. ?We provide employees with life insurance, we provide them with health insurance. ... We make a decent living,true religion outlet. When you cut the decent living, you?ll just have to see,pilewu.com/celine.html.?
Supporters of the legislation said the payday industry is engaging in usury.
?These things hurt low-income people,? said Stephen Stetson, a policy analyst with Alabama Arise. ?If they can?t do business at 300 percent interest, they?re doing something wrong.?
The changes to the legislation, introduced by Sen. Bill Holtzclaw, R-Madison, moved the maximum interest rate up to 391 percent APR and the number of loans an individual can carry to eight. The database would remain, although an assessment of $1 per use of the database was cut to 25 cents.
Stetson said after the meeting that the 391 percent APR was ?horrifyingly high.?
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