The Alabama Supreme Court, in a most important opinion, 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. This decision is a victory for advocates who have sought restrictions on the loans. But it does not go far enough in limiting an industry that preys upon the financially vulnerable. The Court did all it could do because the only thing before the justices in this case was this single issue.
Payday lenders sued Alabama’s Banking Department in 2013 to block creation of the system. Justices upheld a Montgomery’s judge’s ruling that the state was within its rights to establish the database. Existing law prohibits folks from taking more than $500 in loans at one time. But that limit is essentially unenforceable without a centralized system to track the loans. The database will give the state the tools it needs to enforce the loan limit.
The Supreme Court has done its work. Now it’s up to the members of the Alabama Legislature to do their job. Hopefully, they will do so in the Regular session which is at the halfway point.
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