Birmingham council delays action on payday loan ordinance

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Birmingham City Councilor Lashunda Scales City Councilor Lashunda Scales has requested a postponement of the payday loan proposal to give city lawyers time to review the order in addition to allowing time for a public hearing on the question. (Jeff Roberts / Birmngham News).

BIRMINGHAM, Alabama – Birmingham City Council today

pledge and check-cashing companies, agreeing to hold a public hearing on the matter instead.

The rulers of the city today again the delayed vote on the proposed limits for six weeks. Instead, Councilor Lashunda Scales, who sponsored the new rules, asked for a delay to give city lawyers time to review the order in addition to allowing time for a public hearing on the matter.

Scales maintains its position that the city is inundated with businesses that it believes are hurting economic development.

“Economic development depends on the type of businesses that can employ community members while still being a true community-friendly business,” she said in an interview after the meeting. “These companies have their own interests at heart, that’s obvious. However, my job and that of the city is to protect citizens from those who would benefit those who need this kind of service the most.

The date for the public hearing has not been set. While the hearing would allow city officials to get advice from residents, Scales said she had previously heard from people who support her new rules, many of whom are former clients of payday loan companies. .

Scales said companies have high interest rates that force many to “retrain a debt habit that can never be paid off.”

The ordinance proposed by Birmingham is modeled on that adopted in the midfield. However, this city is in court after a lender called the moratorium a violation of free trade.

Charles Hunter, spokesperson for Borrow Smart Alabama, the industry trade group, said Birmingham council was wise to take more time.

“This is a complicated decision that will have a significant impact on small businesses and consumers and could also have substantial legal ramifications,” he said. “As the board continues to work on this issue, we will absolutely support in any way we can.”

Hunter said his businesses provide a necessary service and are unfairly characterized. Additionally, he said the moratorium would affect existing businesses as it would prevent them from relocating or transferring ownership, both of which require a change in business license.

City Councilor Kim Rafferty criticized the draft ordinance, calling it legally unhealthy.

“There has been no review by the Legal Department to correct the language flaws and the order we are using is an exact copy of the Midfield Order which is currently being challenged in the courts,” he said. she declared.

Still Rafferty said she agreed with the goals of the proposal.

“I can see the need for more regulation of this type of business in the city, just like I would with liquor stores or where we had issues with bingo halls and strip clubs,” she declared. contribute to the integrity of any community.


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