Supreme Court upholds payday loan database
MONTGOMERY, Ala. (AP) – The Alabama Supreme Court has ruled that the state Banking Department can establish a payday loan database to enforce an existing $500 limit on how much people can borrow at one time from the short-term lenders.
Justices on Friday upheld a Montgomery’s judge’s ruling that the state was within its rights to establish the database. Payday lenders sued Alabama’s Banking Department in 2013 to block creation of the system.
Existing law prohibits people from taking more than $500 out in loans at one time.
Birmingham Rep. Patricia Todd praised the court decision saying it will give the state the ability to enforce the loan limit.
However, Todd says the state needs to reduce the interest rates charged by the short-term lenders.