Birmingham extends ban on new payday loan businesses

Birmingham extends ban on new payday loan businesses

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No new payday loan businesses will be allowed to set up shop in Birmingham until at least next summer.

Today, the city council extended its ban on new payday businesses until June 19, 2013.

Extending the moratorium until next June was an intentional date on the calendar for the city council, because it's after next year's legislative session. That is where the council says they want to see something done about the number of payday loan businesses not only in Birmingham, but across the state.

The state regulates banks, but those banking laws do not address payday lenders, they have a different and what the council says are looser standards.

But after the council extended the local ban on new payday loan shops, a lobbyist for the payday lending business told the council they're the victims of a double-standard, not the beneficiaries.

"We think this decision is bad for consumers, furthermore it's very bad for small businesses," said Max Woods of Borrow Smart Alabama. "It discriminates against small businesses. This motion addresses short-term lenders like ourselves, but it doesn't address the banks."

"We want our folks to stop being fleeced, stop being taken advantage of, and if you tell me one bank that takes advantage of folks, you need to tell me, because I have no problems in calling them out, too," said Steven Hoyt, City Council President Pro Tem.    

The city has been trying to draft a new set of zoning laws and rules to try and limit the number of payday businesses in any given area, but that's been months in the works, and no sign of a proposal heading to the council anytime soon.

For now? The status quo continues.

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