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Alabama Payday Lending Tops $120M in Two Months

In a break from tradition, instead of a blog entry essay, I am reproducing the entire article from www.collectionscreditrisk.com  that can be found here: alabama-payday-lending-tops-in-two-months

I could not say it better myself.   Payday loans are the scourge of the working man.  Here is the article text:

“Payday lenders in Alabama have issued 386,641 payday loans in the last two months, according to a database that started tracking the lending on Aug. 10. Consumers borrowed a total of more than $123 million, $15 million a week on average, through payday loans. Lenders have profited $21.3 million in those eight weeks or more than $2.6 million a week, according to the database established by the Alabama Department of Banking.

The database, first proposed in 2013, launched in August after months of legal challenges from payday lenders. In Alabama, there are 899 payday lenders, more than the 890 combined total number of McDonald’s, Subways and Burger Kings in the state. The database indicates how much money is being exchanged even with newly established limitations.

Lenders are required to use the database, which enforces Alabama’s limit of one $5,000 payday loan at a time. That limit is designed to keep borrowers from getting a loan to pay for a loan.

John Harrison, superintendent of the state’s Department of Banking, said the numbers show there clearly is a need for the short-term loans.

“What our law says and what we need to do is make sure that it’s not abused and make sure that everybody is treated fairly,” Harrison said.

The database, which allows the state to more easily track exactly where the loans are coming from, will be used to create reports for Alabama lawmakers to decide how to adjust payday lending laws, if necessary.”