MADISON, Ala.- They're businesses that prey on the desperate. Payday lenders rake in millions of dollars every year from some of the poorest people in the state, and it's all legal.
State senator Arthur Orr is hoping to pass a new bill in Montgomery targeted at payday loan reform.
"After I got divorced, and raising two kids. I had a cut of income. Work kind of slowed down," Mike Soto said. "But I still had to pay bills, house payments, insurance, and utilities."
During one of the toughest years of his life, Mike Soto says he didn't have many options.
"Work had slowed down. That's not a good time to ask for more money," Soto said. "You're lucky to be working the hours you're working."
In a pinch financially, Soto turned to payday loans to cover his monthly expenses.
"It was a quick fix. I ended up with one. Then I had two. Then I ended up with a third one," Soto said.
Under Alabama law, payday lenders can charge up to 456% APR.
Which explains why it was so hard for Soto and around 200,000 thousand people in Alabama last year to pay them off.
And that's just an incredible debt load where you're paying interest on interest," Sen. Arthur Orr said.
"I was paying over $200 every two weeks to renew it," Soto said.
Orr is trying once again to get a payday lending reform bill to Governor Ivey's desk. The goal is to cap the interest rate and give customers 30 days to pay it back.
"We do our mortgages every 30 days, our credit card payments every 30 days, car payments, it's what the borrower is used to. Why not allow it in this situation," Sen. Orr said.
It took almost a year until Soto paid off his loans with a tax refund.
"The legislation I carry is not to put the payday lenders out of business. It's not to ban the product. But it is to give the borrower a little more time to repay the loan," Orr said.
Orr admits his biggest obstacle in Montgomery isn't public opinion, it's lobbyists. According to a report from the group Alabama Arise, payday lenders took in over $101 million in fees in Alabama last year and will fight to keep it.
Last spring, Orr's payday lending reform bill passed the Senate but failed in the house. He plans to re-introduce the bill in Montgomery next month.