payday lending

A bill that passed the Alabama Senate yesterday would give payday loan customers longer to repay their loans.

The bill, sponsored by Senator Arthur Orr, would give borrowers 30 days to repay a loan, instead of as little as 10 days in some cases. Orr says that change would give people a much better chance at paying off the loan. He says the change drops the effective yearly interest rate of payday loans from 450 percent APR down to 220 percent.

Lawmakers in both chambers of Alabama’s legislature are debating changes to payday loans in the state.

Dueling bills in both the House and the Senate each aim to reform short-term lending in Alabama, but they go about it in different ways.