MONTGOMERY, Ala. - Alabama's Banking Department plans to start a database of payday loans to make sure lenders don't issue more of the loans than state law allows.
State law prohibits payday lenders from issuing new loans to customers who have more than $500 in existing payday loan debt. Gov. Robert Bentley said there is no uniform, statewide database to ensure compliance. He said that's why the Banking Department issued regulations Wednesday that will allow it to create a database. He said the database will help keep consumers from being trapped by debt.
Banking Superintendent John Harrison said the database should be operational by January. The department's new regulations also require payday lenders to have a license, and they provide that payday loans issued without a license are not collectable in Alabama.