While Florida’s governor is considering a bill that would weaken payday lending laws, Alabama’s state legislature is considering a bill that would strengthen them.

Senate bill 138, authored by Sen. Arthur Orr, R-Decatur, recently passed the Alabama Senate, 20-4. The bill would raise the term minimum on payday loans to 30 days.

According to an email from Jared Ross, SVP of association services and governmental affairs at the League of Southeastern Credit Unions and Affiliates, which serves CUs in Florida and Alabama, credit union advocates in the state are expecting an uphill battle in the House.

“It took quite a bit of time to get this bill through the full Senate, and as time runs thin with the remainder of the Alabama session, we know we have a lot of work to do in a short period to get this through committee and to the House floor,” Ross said. “We do, however, expect that if it gets to the House floor, we would have the votes to pass it.”

Jared Ross, SVP of association services and governmental affairs at the League of Southeastern Credit Unions and Affiliates
Jared Ross, SVP of association services and governmental affairs at the League of Southeastern Credit Unions and Affiliates

Credit unions in Alabama have been lobbying for payday reform for several years. Ross called the state an “epicenter” for payday lending, as lenders can charge Alabamans APRs of up to 456 percent.

The advocacy effort for SB 138 has been comprehensive.

“Early on, the league and others joined with partners from around the state to discuss the issue with lawmakers,” Ross said. “We held pre-session meetings around the state, focused much of our annual Alabama Advocacy Conference on the issue, and have been extremely involved in the messaging on the issue. We have also been working with our grassroots advocates to ensure they are getting the message to their local lawmakers, telling them how payday lending has affected their members.”

Meanwhile, Florida’s state legislature has passed a bill that would double the current limit on payday loans from $500 to $1,000 and would allow lenders to make 60- to 90-day loans in the state. The league has actively opposed this legislation that payday lenders have said would be needed in response to the Consumer Financial Protection Bureau’s pending small-dollar loan rule.

“We’ve tried to make lawmakers see that a) payday lending is bad for consumers as is, but to add this product makes it even worse and b) there is no guarantee that the rule ever goes into effect, so why change the law based on something that may or may not happen, particularly when there is another legislative session in 2019,” Ross said.

The league is asking the Republican Rick Scott, Florida’s governor, to veto the bill.

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