Alabama House Approves Payday Loan Database

By: The Associated Press
By: The Associated Press

Montgomery, Ala.

The Alabama House of Representatives has voted to create a state database to enforce existing limits on payday loans.

Representatives approved the bill on a 93-1 vote Thursday. It now moves to the Alabama Senate.

Birmingham Rep. Patricia Todd called the creation of the database a good first step in the regulation of the payday loan industry.

Existing law says people can't have more than $500 out in loans out at one time. She said without a central database customers could go from lender to lender taking out multiple loans exceeding the cap. She says that traps people in a cycle of high-interest debt.

The bill approved by the House does not include interest rate caps that Todd had sought to place on the loans.

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