MONTGOMERY, Ala. - A coalition of groups is pushing legislation to place tighter regulations on payday and title loans, including limiting interest to 36 percent annually.
The groups, including the Southern Poverty Law Center, Arise Citizens' Policy Council and AARP, say payday loans and title loans are a paradise for predatory lenders. At a news conference today, they said interest rates can hit 456 percent annually for payday loans and 300 percent for title loans. In addition to limiting interest rates, they are proposing bills that limit the number of loans a borrower can get each year.
The president of the loan industry group, Max Wood of Birmingham, says 36 percent would close down businesses because that wouldn't cover costs. He says customers would be left to deal with unregulated Internet lenders.