2018 legislative update: Senate passes 30-days-to-pay bill that would help Alabama payday loan borrowers

Payday loan borrowers across Alabama would get more time to repay and collectively would save tens of millions of dollars a year under a bill that the state Senate passed 20-4 Thursday. The 30-days-to-pay bill – SB 138, sponsored by Sen. Arthur Orr, R-Decatur – now goes to the House.

SB 138 would extend Alabama’s repayment period for payday loans to 30 days, up from as few as 10 days now. The bill would ease the financial pressure on struggling borrowers by reducing the maximum annual percentage rate (APR) on payday loans in Alabama from 456 percent to about 220 percent. That change would mean a significant reduction in the amount that Alabamians pay each year in payday loan fees, which was more than $100 million last year alone, according to Alabama Appleseed. Click here to learn more about how SB 138 would help Alabama borrowers.

The Senate’s vote for the bill followed an hour-long filibuster by Sen. Tom Whatley, R-Auburn, who claimed the measure would force many payday lenders out of business. Orr denied that closures would be widespread and said that employees of any lenders that did close likely would have little trouble finding a new job, given Alabama’s relatively low unemployment rate.

Arise members played an important role in urging SB 138’s passage Thursday. Numerous Arise members from Whatley’s district quickly sprang into action during the filibuster, calling his office to ask him to allow SB 138 to come to a vote. Reformists from the Alliance for Responsible Lending in Alabama (ARLA), of which Arise is a member, also contacted Whatley with the same message. Near the end of his filibuster, Whatley acknowledged on the Senate floor that he was receiving many phone calls from advocates for payday lending reform.

Senate passage did not come without confusion and tension. Immediately after the 20-4 vote in favor of SB 138, Orr made a procedural motion to try to block a second vote on the bill – but it failed on an 11-11 vote. (“Yes” votes on that list were to prevent the Senate from revisiting its vote to pass the bill.)

The final episode of the vote trilogy came moments later, when an effort to reconsider Senate passage of the bill lost 14-13. (“No” votes on that list were to prevent the Senate from revisiting its vote to pass the bill.) Senate President Pro Tem Del Marsh, R-Anniston, who was presiding over the Senate, cast a dramatic tie-breaking vote to prevent reconsideration of SB 138 and send the bill to the House.

By Chris Sanders, communications director. Posted March 8, 2018.

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