Editorial: Preying on the vulnerable — Alabama and Anniston are right to seek regulations on payday lenders
by The Anniston Star Editorial Board
Feb 05, 2014 | 2567 views |  0 comments | 29 29 recommendations | email to a friend | print
Ross Reddick, a Presbyterian minister from Sylacauga, Ala., holds a sign during a rally concerning predatory lending legislation Tuesday, Feb. 4, 2014, in Montgomery, Ala.  Two Birmingham-area legislators are again trying to cap the interest rates on payday and title loans, but they admit it will be hard to enact in an election year. Photo: AL.com, Julie Bennett/The Associated Press
Ross Reddick, a Presbyterian minister from Sylacauga, Ala., holds a sign during a rally concerning predatory lending legislation Tuesday, Feb. 4, 2014, in Montgomery, Ala. Two Birmingham-area legislators are again trying to cap the interest rates on payday and title loans, but they admit it will be hard to enact in an election year. Photo: AL.com, Julie Bennett/The Associated Press
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The opinion’s not unanimous, but it’s easy to find Alabamians who feel the seeming ubiquity of payday and title-loan lenders is good for neither the state nor its residents.

Some politicians are in that group. Bills that would regulate these lenders have had support in the state Legislature recently, including 2013 and this year. This week, state Rep. K.L. Brown, R-Jacksonville, told The Star, “We’ve got a lot of these payday stores. There’s a new one in Anniston every day.”

That’s not good.

Our opinion about these lenders — predatory lenders, in our view — has not changed. Their business is usury, which is indefensible. Through their practices and advertising, these lenders prey on Alabamians who are desperate for financial help and have few options. Regulating them, on both the state and local level, is a must.

We’re leery of putting too much trust in the state Legislature to handle this problem, but we’re nevertheless glad that two bills in the Alabama House would limit the percentage rates on these short-term loans to 36 percent. (Loans that aren’t paid and are rolled over for successive terms can be charged more than 300 percent interest.) The Star’s Tim Lockette reported Wednesday that Republican Sen. Scott Beason, of Gardendale, is working on his version of this bill, as well.

Beason and his fellow legislators should heed Brown’s statement and use Anniston as an example of why Alabama needs to clamp down on these predatory lenders. Quintard Avenue, the city’s main thoroughfare, is home to a veritable ghetto of payday and title-loan shops.

It is a case of supply and demand: The per-capita annual incomes for Calhoun County ($20,881) and Anniston ($21,338) fall below the state’s average. That high density of Alabamians living on the edge of poverty — one calamity away from real financial hardship — makes Anniston a prime location for predatory lenders wanting their business.

What’s missing for Alabamians who need short-term, affordable loans are an abundance of options — banking services in which getting a little cash to fix your car or pay a doctor’s bill doesn’t run the risk of financial ruin.

Anniston has at least 25 payday or title-loan lenders. That’s enough. We urge the City Council to follow through with its thoughts of issuing a moratorium on any new lenders opening in town.

What Anniston needs are businesses that grow the economy and emit an example of fiscal health. Predatory lenders do the opposite.
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