ALABAMA News UPDATE
Payday advance interest rate cap stalls. A movement to put a cap on the high-interest rates on payday advance loans was put off following a brief deliberation in the Alabama House of Representatives.
The bill, sponsored by Rep. Danny Garrett, R-Trussville, would prolong the payment period on cash advance loans from 14 days to 6 months.
Alabama payday loans signify short-term advances enduring between 14 days to 30 days, this is normally for small sum amounts. Interest rates on these sorts of loans can an interest rate as high as 456 percent APR, and critics of the trade say they deceive people in rounds of debt and plunder on the poor. The industry has demonstrated it provides a source of capital to people that traditional banks generally do not help.
Garrett said the loans put people on "a treadmill of debt" by forcing them to take out additional loans to service the debt on existing ones.
"I think there's a moral problem with the whole concept," Garrett said. The legislation was moved over on a voice vote