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Predatory Lending
How state government turned Alabama into ground zero for modern-day loan sharks.

In late 2007, local government in Anniston took an unusual and bold step.

Faced with a glut of predatory lenders in its commercial district, the city council voted to stop issuing business licenses to the high-interest lenders. Though the ordinance was presented as a short-term step, more than a year later the moratorium is still in place.

Unfortunately, the city's ruling was a case of closing the barn door after the troublesome livestock had escaped. Predatory lenders are seemingly everywhere in our part of east Alabama. A short drive through one of the city's main retail arteries reveals dozens of businesses whose mission includes separating the working poor from what little cash they have.

In 2008, The Anniston Star presented a special report examining the issue of predatory lending. The stories are featured below:

Prophets ignored, profits adored: Alabama neglects Old Testament ban on usury
Usury. The word strikes the ear unpleasantly. It sounds like a term for an abdominal condition, an exotic fungus, or a fetid and forgotten region of the upper reaches of the Amazon.
Jun 23, 2008 |  1 comments | 27 27 recommendations | email to a friend
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Hard times for Alabama's low-income residents; Easy terms for short-term lenders
Alabama payday lenders can charge an astonishing 456 percent in interest. Any rational observer would wonder, how is that legal?
Jun 24, 2008 |  0 comments | 27 27 recommendations | email to a friend
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On a fixed income and in a fix to lenders
The disability check didn't always carry her to the end of the month. There were bills to pay, and the price of gas kept going up. The woman, a Calhoun County resident, had to eat, and the few dollars in food stamps didn't go nearly far enough. Sometimes, especially toward the end of the month, she just ran out of money.
Jun 25, 2008 |  0 comments | 27 27 recommendations | email to a friend
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Lender: 'Gregory had a need and I filled it'
Gregory Rogers is a 45-year-old Anniston man with an easy smile and a friendly manner. He describes himself as mentally handicapped and illiterate. On a recent April afternoon on Noble Street, Rogers settled into the shadow of a blazing sun to chat about the poor state of his finances, something he and his attorneys blame on two Alabama statutes called the Small Loan Act and the Consumer Credit Act.
Jun 26, 2008 |  0 comments | 29 29 recommendations | email to a friend
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A city's moral obligation
Maudine Holloway listens to a visitor's simple claim, an assertion repeated often in Calhoun County boardrooms and bank offices, a declaration taken by many as truth.
Jun 27, 2008 |  0 comments | 27 27 recommendations | email to a friend
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North Carolina's example
The Center for Responsible Lending, a nonprofit organization that combats abusive financial practices, has a North Carolina mailing address for a reason. It was here that one of the most progressive predatory lending laws in the nation was passed in 1999.
Jun 28, 2008 |  0 comments | 26 26 recommendations | email to a friend
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Rescuing the prey: Local solutions for a local problem
Today's predatory lenders have two distinct advantages over their shadier forebears: skilled public relations defenders and laws legitimizing their work. But the toll exacted on the economically vulnerable by these modern-day loan sharks is as harsh as it ever was.
Jun 29, 2008 |  0 comments | 28 28 recommendations | email to a friend
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Reaction & Rebuttal

Reactions from lenders and industry observers.

Short-term loans can lead to financial freedom
For six days, the editorial board of The Anniston Star has preached social justice and reminded you of your moral commitment to help those who need it most. Amen. No matter your religious persuasion or your political position, all good men should agree that part of our duty as those who are blessed is to give back to those who need blessing.
Jun 29, 2008 |  0 comments | 27 27 recommendations | email to a friend
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In hard times, are payday loans a necessary evil?
For the last week, this paper has explored the impact of payday loans on working Alabamians. You've learned that Alabama law allows payday lenders to charge fees equivalent to an annual percentage rate of 456 percent for small short-term loans. You've learned how Alabama consumers, struggling with rising prices and flat earnings, turn to these legal loan sharks and find themselves trapped in debt for months or years. In hard times like these, are payday loans just a necessary evil?
Jun 29, 2008 |  1 comments | 27 27 recommendations | email to a friend
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Payday loans: They're not usury
An even more terrible practice than usury is when people misuse that word when referring to a legitimate lending practice: payday loans.
Jul 03, 2008 |  0 comments | 27 27 recommendations | email to a friend
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