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Payday and title lending reform resources

On busy highways and run-down streets across Alabama, you can't miss them: big, bright signs promising easy money. From payday loans to title pawns, Alabamians face a dizzying array of credit services that can trap too many consumers in financial quicksand.

Most states have laws against usury, or excessive interest. Alabama's Small Loan Act caps the interest rate on small, short-term loans at 3 percent a month, or an annual percentage rate (APR) of 36 percent. But laws covering payday lenders pemit certain kinds of loans at APRs of more than 10 times that limit. Payday loans can carry interest rates up to 456 percent APR in Alabama, and auto title loans can carry rates up to 300 percent APR under state law.

The following resources highlight the dangers of high-cost lending for Alabama consumers and examine reform measures that are protecting residents of other states:

A plan for payday lending reform by ACPP and Alabama Appleseed

A plan for auto title lending reform by ACPP and Alabama Appleseed

ACPP fact sheet on high-cost lending (2010)

ACPP issue brief on payday and title lending (2015)

SB 91: A step in the right direction for Alabama borrowers (2016)

The new proposed federal payday lending rules are a good start, but they need to be even stronger (2016)

SB 284 offers Alabama consumers protections from high-cost loans and moves lending reform forward (2017)

Payday lending reform: Ending a debt trap in Alabama (2018)

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