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Local Churches and Civic Groups Hold Payday Lending Reform Discussion
February 19, 2019 @ 7:00 pm - 8:00 pm
Local Churches and Civic Groups Hold Payday Lending Reform Discussion on February 19
The average payday loan APR in Alabama is 300% plus,
but high-cost lenders are able to charge up to 456% APR interest.
BIRMINGHAM, AL- Area churches, including Canterbury United Methodist, St. Luke’s Episcopal Church, Southside Baptist Church and First Presbyterian Church will be hosting a roundtable forum regarding the abusive payday lending practices in Alabama this February. Local nonprofits are also supporting the event including the YWCA, Zonta Club of Birmingham and the Alabama Payday Lending Advisory Committee.
PARCA, a 501(c)3 nonprofit organization working to inform and improve state and local government in Alabama through independent, objective, nonpartisan research, recently conducted a statewide poll on attitudes toward payday lending in Alabama.
Polling was executed in January 2017 and again in July 2018. The results demonstrated that Alabama citizens are increasingly opposed to payday loans and believe reform is necessary to prevent abusive lending practices.
In 2017, about 60% of statewide voters had a negative opinion of payday loans, believing that they should be banned or restricted. In 2018, the PARCA study found that this number had increased to 84% of Alabamians. Also, 75% of the participants in the study said they believe in two simple fixes: 3 out of 4 believed the interest rate should be capped at 36% and 3 of 4 wanted borrowers to have a minimum of 30 days to repay loans.
Other states have banned payday loans, put limits on the interest rates lenders may charge, have required lenders to verify the borrowers’ ability to repay, and have extended the loans to 30 days.
Local churches, human services providers, cities and business groups are concerned about the usury associated with the payday loan industry and its impact in Alabama.
“It is important that our local community get involved in this effort to rein in abusive lending practices,” said Keith Thompson, Senior Pastor of Canterbury United Methodist Church. “Until 2003, Alabama did not have a problem with predatory lending. Today, the state has one of the most toxic lending laws in the country that takes money from vulnerable Alabama borrowers and their families and drives them into a downward spiral of poverty.”
According to the Alabama State Banking Department, over 214,000 people had payday loans last year, with the majority of them having taken out four or more loans. An effort is underway this legislative session to require all loans to last 30 days, which would bring APR on the loans down to 220 percent. The average payday loan APR in Alabama is 300% plus, but high-cost lenders are able to charge up to 456% APR interest.
Panelists for the event include: David Faulkner (Rep. District 46) and Danny Garrett (Rep. District 44), who have both been involved in the legislative effort to provide relief for borrowers; Dr. Neal Berte, President Emeritus Birmingham-Southern College; and Joan Witherspoon-Norris, Director of Social Justice for the YWCA. Jabo Waggoner (Sen. District 16), Representative Neil Rafferty (House District 54) and Representative Merika Coleman (House District 57) will be in attendance.
The event will be held in the John Wesley Room at Canterbury United Methodist Church on Tuesday, February 19 from 7pm to 8pm. This event is free and open to the public, with ample parking available. For more information please reach out to Eric Holsomback by email at email@example.com or by phone 205-874-6585.