Payday lending restriction bill fails in Senate committee

MONTGOMERY, Ala. (WSFA) - A Senate committee shot down a bill that would have required payday lending businesses give borrowers more time to pay back their loans.

It would give borrowers 30 days to repay the loan versus the current 10-to-14-day repayment schedule.

“There are too many people trapped in debt,” said Alabama Arise Executive Director Robyn Hyden.

The group supported the bill which aims to help those who fall into the debt cycle, forced to take out loan after loan to make the payments.

Alabama has been known to have high interest rates as high as 400 percent.

The Senate Banking and Insurance Committee Chairperson Sen. Shay Shelnut said he was concerned that people would move to online payday lending instead.

“So is this not creating an unlevel playing field for those who are playing by the rules?” Shelnut said.

Lawmakers in the committee voted 6 to 8 against the bill.

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