By: Lee Hedgepeth
Alabama Political Reporter
As the Alabama Political Reporter had predicted on Wednesday, two bills that would deal with predatory payday and title lending being considered by the House Financial Services Committee were killed in its meeting last week.
The payday lending regulations bill, HB145, is sponsored by Birmingham Democrat Patricia Todd. The title loan regulation bill, HB106, is sponsored by Fairfield Democrat Rod Scott.
Last year, 28 members of the House cosponsored identical legislation that proposed a cap at 36% for annual yearly percentages, a level adopted by as many seventeen states and the US Armed Forces. This year, though, the title loan legislation has 56 cosponsors at last count — more than half of the Alabama House of Representatives.
The committee meeting also served as a public hearing for those who wished to testify about the legislation.
Several opponents, all lobbyists or industry insiders, spoke to the proposals, citing the severe impact they felt the bill would have on loaning companies.
Jay McDuffie of Check Depot, based in Birmingham, Alabama spoke in opposition:
“Our customers have financial needs that they can’t can’t produce…and banks and credit unions can’t make those kinds of loans… The provisions in the proposed bill will take this choice from Alabamians… You’re gonna hear from our opponents today that we are unfair when we charge outrageous annual percentage rates, but we’re to say there are other alternatives that cost even more than what we charge — overdraft — so-called overdraft protection, late payments, utility reconnection charges. People use us to avoid those fees.”
Shay Farley, the legal director of Alabama Appleseed, a nonprofit advocacy group, spoke in favor of the bills:
“If you don’t think triple digits are usury and immoral, I don’t know what we would define ‘usury’ and ‘immoral’ as,” she said to a room packed with legislators, lobbyists, news media and the like. She then moved on to the fact that over a dozen cities around Alabama are already taking action against the industry, but are mostly ineffective. Farley pointed out that four cities who passed local legislation — Decatur, Montgomery, Birmingham, Talladega — who were represented by lawmakers in the room — wrote letters to the legislature asking for help…We can stop them from growing, but we cannot stop them from preying.”
The Alabama Political Reporter extensively covered the widespread nature of payday loan storefronts, and on the increasing number of cities taking action.
Our reporting can be read here.
She ended on a note that made much of the attentive audience chuckle:
“This is not government regulation. Your body yesterday voted to regulate tanning beds.”
Democratic Representative Thad McClammy of Montgomery showed apprehension towards the bill, saying that he wanted to get at the real problem behind payday and title loans, namely, issues like parking tickets that burden state employees.”
In response, Representative Rod Scott noted that if the government addressed every underlying problem, we’d live “in a utopia.”
Rep. Todd’s payday lending regulations bill was moved to subcommittee, usually a sign of a bill’s last bow. Some point to Todd’s “lone wolf” personality as a possible factor affected her bill’s ability to gain support, with the Birmingham Democrat, Alabama’s first openly gay legislator, not rallying for cosponsors; none are currently listed in ALISON, the legislature’s electronic bill database.
Rep. Scott’s title loan regulations bill with 56 co-sponsors was carried over for further consideration at the call of the chair. Representative Scott, a Yale economics graduate, told the Alabama Political Reporter that he is confident that his legislation will come back up for consideration. “Chairman Vance just told me to let him know,” he said. Scott commented both in the meeting and after that some compromise may have to take place, with a sit down between the industry, the banking department, and the committee a must.
Exclusive video highlights of the House Financial Services Committee meeting can be viewed here.
During the few months leading up to this meeting, payday and title lending companies donated a total of over $100,000 in campaign contributions to members of the legislature, $45,000 of which went to either members of the committee or members of the legislative leadership. One company, TitleMax, contributed nearly $50,000 alone.
Payday and Title Loan Cash Recipients
1. Republican Senate Pro Tem Del Marsh, $15,000
Title Max $5,000
SMR $10,000
2. Storming the State House – $13,500
Title Max $2,500
Cash America $1,000
SMR $10,000
3. Committee Chairman: Lesley Vance R-Phenix City – $3,500
Check into Cash $400
Check Smart $100
Title Max $1,500
Cash America $500
SMR $1,000
4. Oliver Robinson, D-Birmingham – $2,890
Check into Cash $240
Check Smart $150
Title Max $1,000
Cash America $500
SMR $1,000
5. Marcel Black D-Tuscumbia – $2,000
Title Max $1,000
SMR $1,000
Others:
Mack Butler R-Rainbow City – $2,000
Title Max $1,000
SMR $1,000
Thad McClammy, D-Montgomery – $2,000
Title Max $1,000
SMR $1,000
Committee Vice-Chairman: Jack Williams R-Vestavia Hills – $1,600
Check Smart $500
Magic City Title $100
SMR $1,000
Republican Attorney General Luther Strange – $1,500
Check Smart $500
SMR $1,000
Steve Hurst R-Munford – $1,000
SMR $1,000
Wes Long R-Guntersville – $1,000
SMR $1,000
Mike Hubbard, R – Speaker of the House – $835
Check into Cash $635
Check Smart $200
At this time, the only member of the House Financial Services committee that the Alabama Political Reporter has not found proof of accepting payday or title lending contributions is DuWayne Bridges, R-Valley, who does not have an active principal campaign committee visible on the Secretary of State’s website.
