Birmingham Looks to Ban New Payday Loan Stores
City Council Hopes Ordinance Will Inhibit Growth of the Industry
by Kevin Schneider on September 14, 2011
The Birmingham City Council has decided that it does not want any more payday lenders within the city limits. A recent ordinance will prohibit payday lenders from opening new stores in the Alabama city. The move will limit the options available to Birmingham consumers in need of emergency loans, but may also help curb the threat of predatory lenders.
“Our folks have been bamboozled and hoodwinked about these pay day loan operations,” said councilman Steven Hoyt. The city council feels that the number of payday loan stores has reached a critical mass. Says Councilwoman Lashunda Scales, “Our communities have been inundated throughout the city of Birmingham with these types of institutions.”
The council will not be able to institute a full ban on the industry, however, as state law allows payday lenders to operate in much the same as in other states.
“This ordinance does not deal with the existing businesses of this type,” says Scales, “however it does restrict anymore of those kind of businesses to come into our city.”
The ordinance is not without its share of critics. Charles Hunter, who works for Borrow Smart Alabama, an industry group for payday lenders in Alabama, has said the ordinance will cause people to live with one less way of making ends meet. “They’re in every community in this state,” said Hunter, “providing short day cash loans to people who cannot get short term loans any place else.”
As recent Census Bureau statistics report, there are over 46 million Americans currently living below the poverty line. Alabama and other southern states all rank high in the amount of people living with poverty within their borders. While not quite so high as neighbors Mississippi, Louisiana, and Georgia, which are the top 3 highest, Alabama nonetheless struggles with the problem.
The hope of the Birmingham City Council is not to force people to stay poor, of course, instead the council hopes to stop predatory lender from unlicensed lenders. While most cash advance locations are legitimate business, as with any industry, counterfeit products arise. To learn more about protecting yourself from scams when getting any type of loan, visit the CashAdvance.com Scam Report.
Since 1997, CashAdvance.com has been the most established and trusted name in the cash advance industry, connecting over a million consumers with payday loans from its vast network of reliable lenders.
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