In last news you had read about key lobbyists combined to defeat broad coalition and Kill Bill. Now here is the news on what the industry is determined to block this legislation. It’s quite obvious that the Payday Loans Industry was also determined to stop any measure that was appearing. The President of Borrow Smart Alabama named Max Wood said “Payday Customers might be discouraged from borrowing if they knew their names would be in a certain database.” Moreover he said “The whole focus on what we are doing does not make sense and if we have a chance over next few months to communicate it logically, I think they would understand what we’re doing is a good thing, not a bad thing.”
According to the 2003 Law, there are more than 1000 lenders that are allowed to charge for a fee of 17.5 Cent per Dollar. If you calculate an extrapolated over a year, the rate on a two week loan is 456 APR. The lenders of Title loans can charge up to 300 APR under the Alabama Pawn Shop Act. Critics claims that these payday Lenders targets poor and working class people and trap them in Debt Cycle.
A report by Pew Charitable Trusts said that an average payday and title loan customer took out an average of eight loans a year, oftentimes to service interest rates on prior loans. But as per Payday Loans Industry, they provide a service that other regular financial companies are unable to serve as and says that a cap of 36 percent on their high risk loans would force them to close their doors.
Payday Lenders Had Seven Lobbying Firms
According to the Alabama Ethics Commission, the Payday Loans and Title Loans Lenders and groups representing them hired at least 7 lobbying firms. Their names involved authorities such as Dax Swatek and Associates, which has done graft for the House Republican caucus, and Michael Sullivan, whose clientele contains the National Rifle Association.
Rep. Rod Scott said “I called it the Full Employment for Lobbyists Act of 2013”. Rep. D-Fairfield, who had sponsored legislation that would have capped title loan interest rates, said “The industry is just so profitable and yet they really hired lobbyists with relationships with People to suppress the bill.”