Simple Cash, Impossible Financial Obligation: How Predatory Lending Traps Alabama’s Bad
In this essay
This report contains stories of an individual and families across Alabama that have dropped into this trap.
Alabama has four times as numerous payday loan providers as McDonald’s restaurants. And possesses more title loan lenders, per capita, than other state.
This would come as no surprise. Using the nation’s third poverty rate that is highest and a shamefully lax regulatory environment, Alabama is really an utopia for predatory lenders. By marketing “easy cash” with no credit checks, they victimize low-income individuals and families in their time of best economic need – deliberately trapping them in a period of high-interest, unaffordable financial obligation and draining resources from impoverished communities.
This is only part of the story although these small-dollar loans are explained to lawmakers as short-term, emergency credit extended to borrowers until their next payday.
Truth be told, the profit type of this industry is dependant on lending to down-on-their-luck customers who're struggling to pay back loans inside a two-week (for pay day loans) or one-month (for name loans) duration prior to the lender offers to “roll over” the key into a brand new loan.