"This is not something that's going to run away from us in a week," said Rep.
The committee held public hearings Wednesday on a pair of bills that would limit interest on payday and title loans to an annual rate of 36 percent, and would limit the number of loans someone could take from short-term lenders in one year.
Payday loans are short-term loans in which borrowers pay a fee -- typically about
Critics of the industry say payday and title lenders take advantage of poor people who are short on cash, saddling them with interest payments that often far exceed the amount borrowed.
"You're giving them a life preserver that sinks them to the bottom in their time of need," said
Supporters of the payday and title loan bills pulled together a bipartisan coalition in favor of the bills this year, drawing on groups as diverse as the
At Wednesday's hearing, speakers against the bills were few.
"We're here to say there are other financial services that cost more than we charge," he said. Overdraft fees and late fees on bills, he said, are more expensive than payday loans.
"People use us to avoid those fees," he said.
Critics said there's no justification for the interest rates the check cashing and title loan services charge.
"If you don't think triple digits are usury and immoral, I don't know what we would define usury and immoral as," said
Committee member McClammy urged the committee to take its time with the bill, saying the House should look into the deeper causes of why people fall into debt. He said he'd heard of a number of people who'd faced financial hardship because of high fees on city parking tickets and other issues.
"We have to look at this from a holistic standpoint," he said.
By voice vote, committee members chose to send the bill regulating payday loans to subcommittee -- a move that would delay its passage at least until the committee's next meeting. With time running out for a vote on the title loan bill, sponsor Scott consented to have it "carried over" to a future meeting.
"As much confusion as the bill caused here in committee, you can just imagine what it would be like when it gets to the full House," he said.
Several members of the committee have accepted campaign contributions from payday or title lenders, according to records in the secretary of state's office.
McClammy's campaign has received
Hurst said the PAC wasn't connected to payday lenders. Asked who did fund Alabama Lenders PAC, he said he didn't know.
"These PACs that they have, sometimes you don't have any idea where the money comes from," he said.
The Star didn't find any recent campaign finance filings for Alabama Lenders PAC in the state's campaign finance records, but records from 2011 and earlier show it took money from businesses such as
Hurst said he didn't know that Select Management was a title loan company. He said he'd returned a donation from another title loan company earlier.
Still, Hurst said his skepticism of the lending bills was based primarily on his belief that people need a place to borrow small amounts of money in an emergency -- and not on any donations to his campaign.
"When I go to church, I put money in the collection plate, but I don't tell the preacher how to preach," he said.
Attempts to reach
"I'm absolutely for limiting payday loans because of the destruction they cause in the community, she said.
Capitol & statewide correspondent
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