Payday loan companies threatened by proposed legislation - WTVM.com-Columbus, GA News Weather & Sports

Payday loan companies threatened by proposed legislation

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MONTGOMERY, AL (WSFA) -

Members of the Southern Poverty Law Center and Alabama Appleseed stood before a packed crowd in the Alabama State House explaining why they believe the payday loan and title loan industries need increased regulation.

"They are simply looking to make a quick profit off of someone's misfortune," says an SPLC member.

"Today we stand together to say no more," says Shay Farley with Alabama Appleseed.

The groups, and some legislators, claim short-term loan businesses charge large amounts of interest to the tune of 300% in some cases in the course of one year.

They say customers often end up paying more in interest than the loan is worth.

Their suggestion? Reduce the annual interest rate on short-term loans to 36%.

The federal government recently did the same thing for members of the military seeking short-term loans.

"What is good for the goose is good for the gander," adds Farley.

Opponents to the legislation say it would only do one thing.

"Would put us out of business," says Max Wood, President of Borrow Smart Alabama, a group supported by the loan industry. 

"A lot of people would be out of their jobs," says Gera Smith.

Gera smith was once a short-term loan customer, herself.

Now she works for a lending company.

She says the industry is often misunderstood.

"We have definitely given a service for a lot of people, honestly, that didn't know what way to go."

Only time will tell how legislators will respond to the proposed bill as both sides make their arguments heard.

Opponents to the legislation say their industry doesn't prey on the poor.

They say their customers have a median income of $54,000 dollars a year.

There are multiple bills being introduced regarding the issue originating in both the House and Senate.

Copyright 2013  WSFA 12 News.  All rights reserved.

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