BIRMINGHAM, Ala.–Nearly a quarter-million Alabamans took out more than two-million payday loans during 2015, according to the Banking Department and a task force that included representatives of the Alabama CU Association.
According to the inaugural meeting of the Alabama Consumer Protection Task Force, the data show borrowers in the state have taken an average of eight loans each since the loan-tracking database was created in August of 2015. In all, there were 246,824 unique borrowers, with an average loan $326. Borrowers paid an average fee of $56 on those loans, which were paid back in approximately 20 days on average.
The Banking Department began tracking the loans after winning a court case over the creation of the database to enforce an existing law, which limits consumers to having no more than $500 in payday loans at any given time. The task force said it also found that about 400,000 additional loans were declined.
“We’ve got to make sure consumers are protected. I want our companies to make a reasonable profit. They have to. They can’t stay in business if they don’t, but we have to protect,” said Gov. Robert Bentley during the task force’s meeting.
Bentley created the Task Force through an executive order in June to evaluate and suggest changes to all of the state’s consumer credit laws, which apply to entities from mortgage brokers to pawn shops. Members of the Task Force are working to identify areas of Alabama’s consumer credit laws for possible revision or new legislation.