Decatur wants to tighten restrictions on payday lenders - WSFA.com: News Weather and Sports for Montgomery, AL.

Decatur wants to tighten restrictions on payday lenders

Posted: Updated:
The city wants lenders to be more transparent and consumer-friendly, staying away from potential predatory lending schemes. The city wants lenders to be more transparent and consumer-friendly, staying away from potential predatory lending schemes.
DECATUR, AL (WAFF) -

The city of Decatur is pushing to restrict the practices of payday loan lenders.

They'll need help from lawmakers to do it.

They want lenders to be more transparent and consumer-friendly; in other words, stay away from potential predatory lending schemes.

The City of Decatur currently has a moratorium on issuing new business licenses to any payday loan or cash advance business.

They've also required lenders to have not only a state license but a city license so they can keep track of them better.

If the council approves it, a zoning ordinance will regulate where lenders can open up shop.

However, city leaders want to take it further and the kind of restrictions they want will need lawmakers to step in. Decatur's city council has drafted a resolution in hopes of convincing lawmakers to get involved.

They want lawmakers to put a cap on the interest rate payday lenders can charge. The resolution said lenders often advertise rates of less than 17 percent, but on an annualized basis that includes fees, they have actual interest rates that exceed 200, and in many cases 400 percent.

City leaders also want to continue the push for a bill that was halted at the state level that would have required lenders to report loans to a database so the state could track if they're actually following the law of sticking to a $500 limit.

Along the main Decatur artery, 6th Avenue has more than 20 cash advance businesses for customers to choose from.

City councilman Chuck Ard said that is an issue. "From that standpoint we worry about the reputation that the city will get and also with that we are looking at the advantage that they are taking of the people," said Ard.

Lawmakers like State Senator, Arthur Orr said he would be open to the council's resolution.

"We don't want a predatory lending environment or one that takes advantage of the poor, that's something that we don't need. Right now in Alabama, it seems to be tilted more toward lenders and when you are talking about rates of 300 or 400 percent that grows some concern for legislators and we need to take a look at it," added Orr.

"They do serve a function and for many people this is the only place they can get a loan, we want to make sure they are being treated fairly and that they understand what they are getting," added Ard. 

City leaders will discuss the resolution and zoning at Tuesday's city council meeting and wants the public to weigh in on their issues or concerns.

Copyright 2013 WAFF. All rights reserved.

  • Decatur wants to tighten restrictions on payday lendersMore>>

  • Related story

    Related story

    Monday, December 2 2013 7:48 PM EST2013-12-03 00:48:21 GMT
    Huntsville councilman seeks restrictionsMore >>
    Huntsville councilman seeks restrictionsMore >>
Powered by WorldNow