City council wants county delegation to help curb payday loan bu - wistv.com - Columbia, South Carolina

City council wants county delegation to help curb payday loan businesses

Source: WBRC video Source: WBRC video
BIRMINGHAM, AL (WBRC) -

The Birmingham city council is set to consider a resolution asking the Jefferson County delegation to help them curb payday loan businesses.

The council wants to ask the delegation to sponsor a bill that would cap the amount of interest payday loan businesses can charge as well as restrict the spread of the industry.

Lashunda Scales is the councilor behind the resolution. She couldn't be reached for this story, but in the past has been outspoken against the industry. Scales has called payday loan shops "predatory lending agencies."

It's a view not everyone shares.

"If we go away then the only thing that is left is unregulated internet lending that has no oversight by anyone, and who's rates are considerably higher than ours," said Max Wood, the president of Borrow Smart Alabama, a payday loan trade group.

He says his industry represents a way for people get quick and easy money.

"It's the most economical alternative the consumer has for small dollar loans. You can't go to the bank and borrow $300. You just can't do it," said wood

However critics claim the lenders prey on the poor. If the loan is rolled over, the fees add up and the interest can be around 400%!

Wood says payday lenders should not be criticized for that fact, because the loans are never meant to last longer than a month.

"The loans are short term, so to equate that to an interest rate is not reasonable," said Wood.

The resolution comes up for a vote during Tuesday's council meeting.

Copyright 2013 WBRC. All rights reserved.

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