MONTGOMERY, AL (WSFA) - Payday Lending is Popular.
That's the conclusion the State Banking Department has come to just eight weeks after establishing the new payday loan database.
"There is a need for this type of product," said John Harrison, Superintendent of the Alabama Department of Banking. "What our law says and what we need to do is make sure that it's not abused and make sure that everybody is treated fairly."
The database, originally proposed in 2013, launched on Aug. 10 after months of legal challenges from payday lenders.
Lenders are required to use the system which enforces Alabama's limit of one $5,000 payday loan at a time. This keeps borrowers from getting a loan to pay for a loan, which could trap them in a cycle of debt.
Looking at the numbers, you can see why payday lenders would want as little regulation as possible. It's big business.
If you add up every Burger King, McDonald's and Subway in Alabama, you come up with about 890 restaurants.
That's still fewer locations than the 899 payday lender locations in the state.
But that's just real estate. The database shows how much money is being exchanged even with the limitations in place.
Between the day the database was established on Aug. 10 to Oct. 5, 386,641 payday loans were given. In total, more than $123 million was borrowed, $15 million a week on average. Lenders have profited $21.3 million in those eight weeks or more than $2.6 million a week.
The numbers will be used to create reports for the legislature to decide how to adjust the law, if necessary.
"We can start tracking where those loans are coming from," Harrison said. "Geographically, what part of the state is using it the most. And I just think it's going to open a lot of eyes to a lot of people and hopefully, it'll be good for everybody."