Meeting to address payday lender concerns
by Emily McLain
Jan 07, 2014 | 1501 views |  0 comments | 14 14 recommendations | email to a friend | print
SYLACAUGA – An informational meeting Thursday will shed light on the risks of payday lending and title loans and the recent growth of these businesses in the area, according to a press release.

Alabama Arise, a nonprofit group that advocates for policies affecting lower income people, will host the Jan. 9 meeting at noon at the Sylacauga Chamber of Commerce.

“The meeting is purely informational,” said David Stout of Alabama Arise. “There is increasing controversy about the growth of these high-interest payday loans and auto title loans. We intend to inform people of the history of how this business came to be and why it is detrimental for the community and the people in the community.”

Stout will host the meeting, which community leaders including the mayor, City Council and economic developers have been invited to attend, he said.

“There are other cities, like Decatur and Birmingham, where this is becoming a real issue because of the growth and the impact on the people they loan money to,” Stout said. “We are starting to organize these meetings everywhere to help people understand the issue and the impact of the industry here.”

A similar meeting is scheduled Jan. 16 in Talladega at the Talladega Family Life Center. It will be hosted by City Council President Horace Patterson and the NAACP, chaired by the Rev. High Morris.

The release announcing the meetings said payday lenders in Alabama legally charge more than 400 percent annualized rates “on loans designed for quick repayments and rollovers, while auto title loan interest rates are capped at 25 percent per month, which amounts to a 300 percent annualized rate.

“Alabama Arise members believe these loans devastate family finances, remove wealth from low-income communities, target those who can least afford to pay and reflect poorly on the quality of life in communities with the rapid growth of these storefront operations. Recent information from Arise confirms that there are four times as many payday lending storefronts as there are McDonald’s locations across Alabama.”

Talladega imposed a moratorium on licensing new title pawn and payday lending locations last year. Sylacauga City Council is researching the topic after being approached by citizen Ross Reddick, who is also pastor of First Presbyterian Church, three months ago asking for a two-year moratorium.

In information Reddick provided the council at the time, he said the expenses associated with predatory lending services is “not only exorbitant, but it strips wealth out of local communities. It prevents personal/family asset building and savings in which municipalities have an economic interest. It prevents people from paying their bills and increases domestic strife. There is a clear negative correlation between property values and payday storefronts.”

According to his research, the average borrower takes eight to nine payday loans per year and spends 212 days of the year in debt.

Contact Emily McLain at eadams@dailyhome.com.