Payday financing has always been controversial. While cash advance providers bill themselves as an essential back-up for individuals in need of fast money to pay for unanticipated costs, these high-interest loans could be a trap for consumersвЂ“typically, the customers whom can least manage it.
Relating to data held in the Alabama Department of Banking, in 2019, Alabamians lent about $563.6 million from loan providers in Alabama and took away 1.6 million loans that are payday. These loans produced $98.4 million in costs towards the pay day loan lenders. A bill sponsored by Sen. Arthur Orr, R-Decatur allowing borrowers as much as 30 times to settle an online payday loan as opposed to smaller durations of as low as 10 times had been killed by the Alabama Senate Banking and Insurance Committee by the 8-6 vote in February 2020.
This committee couldnвЂ™t have understood that within just 8 weeks following its vote, most Alabama families could be dealing with a significant financial meltdown due towards the effects of COVID-19.