By Bill Britt
Alabama Political Reporter
MONTGOMERY— Today, the House Financial Services Committee will hold a public hearing on HB406, a bi-partisan bill that would end the 300 percent interest rate regularly charged for auto title loans. But, this will most likely be a “show” hearing as word came down Tuesday night that the fix was in for the title lenders.
It should come as no surprise because the Republican Supermajority has taken hundreds of thousands of dollars from title lenders, payday lenders and check cashing businesses over the last three years. (But so have the Democrats.) These businesses, along with money from Big Tobacco and alcohol, are fueling the campaigns of Republicans across the State.
Last year, Senate President Pro Tem Del Marsh (R-Anniston) promised there would be a bill passed to limit the amount of interest that could be charged by such companies. But, at the eleventh hour, Marsh pulled his deal and the bill died in committee. More than likely, this same hypocrisy will be on display today, despite the fact that over half (54) members of the House serve as co-sponsors of the bill.
“The title lending industry preys upon financially vulnerable people and traps them in a cycle of debt that many simply cannot escape,” said Sara Zampierin, SPLC staff attorney. “Unfortunately, this committee has killed such legislation in the past rather than allow the full legislature to vote on it.”
Recent polling shows there is widespread public support (62 percent total favorable) for limiting the amount that these lenders can charge, yet the leadership of the Republicans in the House and Senate have repeatedly denied an up or down vote on bills like HB406.
Conservative Senator Scott Beason (R-Gardendale) said he is prepared to sponsor a like bill in the Senate, if the House will pass the legislation. Beason said, “It is time to put an end to usury in our State.” He said while conservatives are in favor of free markets, he believes that 300 percent interest crosses over the line into preying on the working poor.
The average title loan is $951 and is renewed eight times, costing Alabama borrowers almost $2,140 in interest alone, according to the Center for Responsible Lending. Most title loans, secured by the value of a car, must be repaid within 30 days. But many borrowers are only able to make interest payments due to this short repayment period. Under Alabama law, if a borrower doesn’t repay the loan, a lender can repossess the vehicle and sell it for a profit – sometimes earning thousands of dollars more than the amount borrowed.
The Alliance for Responsible Lending in Alabama (ARLA), a bi-partisan statewide coalition of faith, community and social justice organizations, has repeatedly asked lawmakers to support stronger laws regulating payday and title loan lenders in Alabama. Their pleas, it would seem, are being drowned out by the sound of the money lenders counting their profits.
So, while legislators are reelected using funds provided for by the title lenders, payday lenders and check cashers.
A recent study showed that Alabama has four times as many payday lenders as McDonald’s restaurants. And it has more title loan lenders, per capita, than any other state.
These businesses could easily be labeled poor farms, because they harvest much of what little income the working poor have. Meanwhile, so-called conservatives violate the principles of the Bibles they wave and the oath of office they have taken by denying a vote on this most pressing issue.
Committee Members Who Received Contributions from Lenders
Lesley Vance R-Phenix City
Select Management Resources $1,000 10/16/13
Cash America $500 1/2/14
Check into Cash of Alabama $400
Advance America $400 12/6/13
Checksmart $100 12/6/13
Jack Williams R-Vestavia Hills
Select Management Resources $1,000 12/16/13
Checksmart $500 1/13/14
Marcel Black D-Tuscumbia
Titlemax $1,000 11/26/13
Select Management Resources $1,000 11/23/13
Mack Butler R-Gadsden
Select Management Resources $1,000 10/5/13
TitleMax $1,000 1/8/14
Select Management Resources $1,000 10/5/13
Steve Hurst R-Munford
Select MGMT Resources $1,000 12/20/13
Thad McClammy D-Montgomery
Titlemax $1,000 1/10/14
Select Management Resources $1,000 1/10/14
Oliver Robinson D-Birmingham
Check into Cash of Alabama $240 9/5/13
Advance America $610 10/2/13
Checksmart $150 10/7/13
Title Max $1,000 10/22/13
Select Management Resources $1,000 11/15/13
Committee Members Who Took $0 contributions
DuWayne Bridges (R-Valley), Wes Long (R-Guntersville)
Totals by Company
Select Management Resources $42,000
Cash America $4,500
Check into Cash of Alabama $3,030
Advance America $6,010
Select Management Resources
Storming the Statehouse $10,000 9/30/13
Del Marsh $10,000 10/4/13
Tucker PAC $18,500 10/25/13
Del Marsh $5,000 12/24/13