Alabama Payday Loans Database Showing Big Numbers In Short Time

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MONTGOMERY, AL (WSFA) – Payday loans are popular.

This is the conclusion the State Banking Department came to just eight weeks after the creation of the new payday loan database.

“There is a need for this type of product,” said John Harrison, superintendent of the Alabama banking department. “What our law says and what we need to do is make sure there is no abuse and that everyone is treated fairly.”

The database, originally offered in 2013, launched on August 10 after months of legal challenges from payday lenders.

Lenders are required to use the system that enforces Alabama’s limit of a payday loan of $ 5,000 at a time. This prevents borrowers from getting a loan to pay off a loan, which could trap them in a cycle of debt.

By looking at the numbers, you can see why payday lenders want as little regulation as possible. It’s a big deal.

If you add up all of Alabama’s Burger Kings, McDonald’s, and Subways, you get about 890 restaurants.

That’s even fewer locations than the 899 payday lender locations in the state.

But this is only real estate. The database shows how much money is exchanged even with the limitations in place.

Between the day the database was created, August 10 to October 5, 386,641 payday loans were issued. In total, over $ 123 million has been borrowed, an average of $ 15 million per week. Lenders took advantage of $ 21.3 million in those eight weeks, or more than $ 2.6 million per week.

The numbers will be used to create reports allowing the legislature to decide how to adjust the law, if necessary.

“We can start to track where these loans are coming from,” Harrison said. “Geographically, what part of the state uses it the most. And I just think it’s going to open a lot of eyes to a lot of people and I hope it’s good for everyone.”

Copyright 2015 WSFA 12 News. All rights reserved.

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