3/12/2018 Group Watch: Senate Limits Payday Loan Terms
Last Thursday, The Alabama Senate voted 20-4 to approve a bill that increases the term of repayment for short-term loans to 30 days. Payday loans are short-term loans that extend from 10 to 31 days and can carry interest rates in Alabama that run up to 437 percent APR. Critics say people who take out a loan find themselves taking out a second loan to pay the first, trapping them in a cycle of debt. Senator Arthur Orr of Decatur sponsored the measure and acknowledges that it will be a challenge to get the bill through the House. Orr’s bill would require all loans to last 30 days, which would cut the APR in half.
