MONTGOMERY, Ala. — The Legislature is moving ahead with a bill to create a state database to enforce an existing $500 limit on how much people can borrow at once from payday lenders.
The Senate Banking and Insurance Committee approved the bill 6-0 today. It passed in the House 93-1 last week and now goes to the Senate for a vote.
Existing law prohibits people from securing more than $500 in loans at one time. The bill's sponsor, Democratic Rep. Patricia Todd of Birmingham, says without a central database, customers go from lender to lender taking out multiple loans exceeding the cap. She says that traps people in a cycle of high-interest debt.
The Senate committee amended the bill to make sure the state takes competitive bids to develop the database.