YWCA Central Alabama Wants Fair Lending Laws In Alabama

Alicia (name changed) is a Birmingham resident who used a Payday loan when she ran into financial trouble. She decided to take out a loan for $500. However, it took months to pay off the loan because she could only afford to pay off the interest, which was 85 dollars after two weeks. After renewing the loan seven times, she was able to pay it off. However, she ended up paying $595 in interest for the original loan and took out two more loans to make ends meet. The interest for these loans totaled $2350.

Alicia’s story is a familiar one for many individuals and families in Alabama. Payday lenders advertise easy money with low interest rates. However, the annual percentage rate attached to these loans is 456% in this state. Because of this, many borrowers cannot afford to pay back the principal in a month. Instead, they renew the loan and the interest continues to accumulate. As the months go by, countless people are trapped in a cycle of debt.

The YWCA Central Alabama is a member of the Alliance for Responsible Lending in Alabama (ARLA). ARLA’s mission is to support laws that regulate small loan lenders, teach the public about predatory lending, and help find alternatives to these lenders. 

ARLA members include: AARP of AlabamaAlabama Appleseed Center for Law & JusticeAlabama Asset Building CoalitionAlabama PossibleAlabama State Conference of the NAACP, Arise Citizens’ Policy ProjectBirmingham Faith in Action (includes 25 congregations), Birmingham-Southern CollegeGateway Financial FreedomFirst Presbyterian Church of BirminghamGreater Birmingham MinistriesLeading Edge InstituteNeighborhood Housing Services of BirminghamSouthern Poverty Law CenterThe Women’s Fund of Greater BirminghamYWCA Central AlabamaZonta Birmingham, and individuals across Alabama.   

Make an Impact!

Spread the Word
Tell 3 people each week about this information
Like the ARLA Facebook page to stay up to date
Use the hashtag #endusury when you talk about the issue on twitter
Write an op-ed or letter to the editor

Contact your legislator
Find your legislator and their contact information here
Let them know you support a 36% rate cap on payday and title loans

For quick information, click here:
How payday and title loans work
What predatory lending does to the borrowers
What predatory lending does to communities

For more in-depth information, click here:
Payday lending report from Pew Charitable Trusts
SPLC report Easy Money, Impossible Debt

To tell your story or file a complaint, click here:
Consumer Financial Protection Bureau

Alabama Asset Building Coalition Predatory Lending Video

This video presents information about how payday loans work and recent efforts to regulate them.

YWCA #EndUsury Video

This video shows the damage predatory lending has caused to women in Alabama.