Unfair Lending Practices

Alabama law allows payday lenders to charge an annual interest rate of 455 percent for a two-week loan and 300 percent for a pawn. Any financial transaction that allows a triple-digit interest rate, specifies a short term of one month or less, and requires a balloon payment is generally considered to be predatory. These types of transactions target low-income individuals and families and trap people in a cycle of debt.

This fact sheet  This fact sheet outlines proposed predatory lending reform legislation for 2007.

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