Alabama Deserves a Vote on Predatory Lending Reform

by Dana Sweeney, Organizer

For years, there has been widespread, bipartisan agreement that we must reel in predatory payday lenders in Alabama. According to data collected by the State Banking Department, about 215,000 Alabamians took out 1.8 million payday loans between October 2016 and September 2017, averaging more than eight loans per customer. Even though payday borrowers must be able to show that they have a source of income before being issued a loan, 87% of payday borrowers in Alabama still had to take out multiple, small-dollar loans during the year to get by — almost always to meet necessary living expenses like rent, utilities, and grocery bills, or to account for emergencies like unexpected medical costs or car repairs.

As too many Alabamians know, those small-dollar loans often balloon into large-dollar debts due to high interest rates. Alabama’s payday borrowers pay over $100 million every year on average in loan fees charged to initiate loans and to “roll them over” when full repayment is not possible. There is wide-ranging public agreement that the status quo for payday lending must change, especially when that status quo means that predatory lenders issue loans with interest rates as high as 456% APR and can demand full loan repayment within as few as 10 days.  

This year, Alabama Appleseed has been working with a broad coalition of churches, community foundations, local organizations, credit unions, direct social service providers, and individuals that spans the state and the political spectrum. We are supporting the 30 Days to Pay Bill (SB 138), a simple, modest reform that would set payday loans on the same 30 day repayment schedule as all other household bills. It would start to curb runaway interest rates and prevent many of the debt traps that currently ensnare thousands upon thousands of Alabamians every year. It enjoys bipartisan support in the legislature, and it is an opportunity for the legislature to finally take a step forward on predatory lending reform after years of failing to deliver. All we need now is the chance for senators to vote on it.

The bill has been slowly inching its way through the Senate, but it has not yet been put on the calendar to be debated and voted on. If this bill doesn’t start picking up steam soon, we may run out of time — again — to protect Alabama’s payday borrowers. Alabama deserves a vote. Alabama’s borrowers deserve a vote. We urge you to contact your senator and ask them to do everything in their power to propel this bill forward.

SAMPLE CALL SCRIPT

“Hello, my name is _________________, and I am one of Senator ____________’s constituents from ______[town]_______. I’m calling today because I would like to urge Senator ___________ to do everything in [his/her/their] power to ensure that SB 138, the 30 Days to Pay Bill, passes through the Senate. So many of us have been patient and persistent all session while waiting for this bill to advance through the Senate, just as we have been waiting for years for the legislature to deliver on predatory lending reform. We have waited long enough, and so have Alabama’s borrowers, who continue to suffer because of the legislature’s failure to address this issue. Please let Senator ________ know that SB 138 is a top priority for me as a voter, and that I want to see [him/her/them] doing everything in [his/her/their] power to support and advance this bill. It is bipartisan. It is simple. It is overwhelmingly supported by the public. We deserve a vote, and Alabama’s borrowers deserve relief. Thank you.”

SAMPLE EMAIL SCRIPT

“Dear Senator ____________,

I am writing you to urge you to do everything in your power to pass SB 138, the 30 Days to Pay Bill, through the Senate. As someone who lives in _____[town]______, I know how damaging predatory lending practices are to our community, and as a voter, one of my top priorities is seeing SB 138 passed. So many of us have been writing and calling during this legislative session, and there has been bipartisan agreement that we need predatory lending reform for years. It’s past time that something is done, and it’s past time for the Senate to vote on SB 138. Please work with your colleagues to pass this bill as soon as possible, as we are running out of time — again — to pass reform that protects Alabama’s borrowers from predatory lenders. This bill is simple and overwhelmingly supported by the public. We deserve a vote, and Alabama’s borrowers deserve relief. I will be looking for your leadership on this. Thank you.

Sincerely,

_______________”

Make your voice heard! It can make the difference.