News Column

Payday lending lawsuit dismissed; database to be created

August 7, 2014

By Mary Sell, The Decatur Daily, Ala.

Aug. 07--MONTGOMERY -- A Montgomery County Circuit Court judge this week threw out a lawsuit challenging the state's creation of a database to track payday loans made in the state.

Alabamians aren't supposed to have more than $500 in payday loans at any one time. But there's been no way to track if people loan shop from lender to lender. Legislation to set up a statewide database died last year. In September, Gov. Robert Bentley and the state banking department announced new regulations to create the database.

A group of payday lenders soon filed a lawsuit to block the database, calling it government overreach.

On Wednesday, the lawsuit was dismissed.

"The ruling is a significant step toward ending the practice of predatory loan lending in Alabama," Bentley said in a statement. "Our Banking Department will proceed with the central database to ensure our compliance with Alabama's payday lending law, the Alabama Deferred Presentment Services Act. The database will help consumers avoid the trap of predatory payday loans and protect lenders from overextending loans to consumers."

Mary Sell covers state government for The Decatur Daily. She can be reached at Follow on Twitter @DD_MarySell.


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Source: Decatur Daily (AL)

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