Fast cash loans have been a popular means of obtaining quick cash for emergency expenses for some time now. All over the country, there are local locations that offer fast cash loans. People can even get online to take out payday loans on the Internet. It looks like Alabamians are quite fond of these types of short term loans, as data has shown that these folks took out more than 2 million fast cash loans last year. The average borrower took out about 8 loans.
This information was recently shared by the State Banking Department via a presentation given to Alabama Consumer Credit Task Force members. This group has been advising the state on changes to credit laws recently; including the laws that oversee the providers of fast cash loans.
The official data indicates that about 2.1 million fast cash loans were taken out since the state database got started back in the summer of 2015. Of those over 2 million fast cash loans, there were roughly 246,824 unique consumers who took out these loans.
Fast cash loans providers and consumer advocates are both on the same page with regards to how popular these types of loans are. Consumer advocates, however, don’t necessarily agree with the lending companies when it comes to how tight restrictions should be on the fast cash loans industry.
Those critical of fast cash loans believe that Alabama state leaders should take some more serious action to help protect consumers from getting caught up in “debt traps.” The lenders who provide fast cash loans, on the other hand, believe that the payday lending industry is already in a bit of a slump because of strict statewide regulations.
An analyst at Alabama Arise, named Stephen Stetson believes that Alabama consumers are taking out fast cash loans to pay for their routine expenses and not just for unexpected expenses. According to Stetson, “These loans are marketed for emergency use only. If somebody is taking out that many in a year, it means they are using them to pay the bills.
Most fast cash loans are taken out for a term of about two weeks. In Alabama, the average fast cash loans came in at about $326 with an average loan fee of $56.
The owner of Cash Spot locations in Alabama, Max Wood stated that the database numbers are pretty much on par with what those in the fast cash loans industry have been seeing in recent years. Wood is not a member of the task force. He said that lenders are in the business of providing necessary services for consumers who have no other borrowing options or who would have to pay expensive overdraft fees if they wrote bad checks.
Wood said, “There is no other place they can walk in the door and get $300.”
Fast cash loans started being tracked by the Alabama Banking Department in 2015 on the heels of a court battle over the implementation of the database. This was done to enforce a law that prohibits consumers in the state from taking out anything more than $500 in short term loans at any given time. The numbers that have been captured within the new database helps to provide a look at how much consumers in the state borrow from short term lending companies. It is readily apparent that Alabamians are comfortable with using payday lending locations and websites when they are short on cash. Many have argued that state leaders need to stop trying to limit access to these types of loans, since so many people in the state would have to go without access to credit when they need it the most.
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