Creation of Ala. payday loan database moving ahead

MONTGOMERY, Ala. (AP) – The Legislature is moving ahead with a bill to create a state database to enforce an existing $500 limit on how much people can borrow at once from payday lenders.

The Senate Banking and Insurance Committee approved the bill 6-0 Tuesday. It passed in the House 93-1 last week and now goes to the Senate for a vote.

Existing law prohibits people from securing more than $500 in loans at one time. The bill’s sponsor, Democratic Rep. Patricia Todd of Birmingham, says without a central database, customers go from lender to lender taking out multiple loans exceeding the cap. She says that traps people in a cycle of high-interest debt.

The Senate committee amended the bill to make sure the state takes competitive bids to develop the database.

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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