By PHILLIP RAWLS
Associated Press
MONTGOMERY, Ala. – After years of killing bills to tighten regulations on payday loans, the legislature may agree to set up a database to make sure people don’t take out more than $500 in loans at one time.
The House Financial Services Committee voted unanimously today to approve a bill that would set up the statewide database of payday loans in the Alabama Banking Department. Businesses would have to enter information in the database each time they got ready to issue a loan. If someone already had $500 in loans, the business could not issue one exceeding that.
The bill’s sponsor, Democratic Rep. Patricia Todd of Birmingham, said Alabama has had a $500 limit, but there was no way to enforce it without a central database. She said people would go to multiple lenders and take out more than $500 in loans, trapping them in a cycle of high-interest debt.