Payday financing has always been controversial. These high-interest loans can be a trap for consumersвЂ“typically, the consumers who can least afford it while payday loan providers bill themselves as an important safety net for people in need of quick cash to cover unexpected expenses.
Relating to data held during the Alabama Department of Banking, in 2019, Alabamians lent about $563.6 million from loan providers in Alabama and took away 1.6 million loans that are payday. These loans created $98.4 million in costs towards the pay day loan lenders. A bill sponsored by Sen. Arthur Orr, R-Decatur allowing borrowers as much as 30 times to repay an online payday loan rather than reduced durations of as low as 10 times had been killed because of the Alabama Senate Banking and Insurance Committee by an 8-6 vote in 2020 february.
This committee couldnвЂ™t have understood that within just 8 weeks as a result of its vote, many Alabama families could be dealing with a significant financial meltdown due into the effects of COVID-19.