Payday lending amendment would cap interest at 36%

In the fight for effective payday lending reform, 45 Alabama legislators are pushing to give the power to the people.

A bi-partisan group of legislators and payday reform advocacy groups gathered at the Alabama State House Tuesday to introduce a bill that would allow Alabamians to vote on a constitutional amendment that would cap payday loan interest rates at 36 percent. Currently, the average rate for so-called “predatory loans” is 300 percent, with a maximum possible rate of 456 percent.

Due to the high interest rates, many borrowers get trapped in cycles of repayment.

About $480 million in payday and car title loan interest fees is paid each year by Alabamians, the sixth highest annual figure in the nation, said Diane Standaert, director of state policy at the Center for Responsible Lending. Of that total, $116 million was from payday loans.

Read more: http://www.montgomeryadvertiser.com/story/news/2017/03/07/payday-lending-amendment-would-cap-interest-36-percent/98856894/