Across the United States, there are new technologies being developed every day that can help people to make better decisions. When it comes to collecting data in the public’s interest, the government is very interested even if they are slightly behind the times. A new database proposition in Alabama has payday loan companies up in arms. The short term lending database in has attracted the eye of a few payday lenders that are not at all happy with the legislation. In fact, they have gone so far as to file a lawsuit to block the legislation from going anywhere.
Lending Database for Payday Loans
The lawsuit has been filed by companies in Alabama called Cash Mart, Rapid Cash, and a few other lenders. They claim that the Banking Department is working outside of bounds of their authority in order to over regulate the payday loan industry. While they have a valid point, it is hard to say where it will be valid in court given the public’s opinion on the payday loan industry.
Most people consider the industry to be very low quality and offering high interest rate loans that can really ruin some peoples’ lives. The majority of people who are dealing with these lenders are getting into debt with lenders and then finding themselves in debt with other companies to pay off the first debt. This type of payday loan trap is exactly what the government is seeking to avoid.
More importantly, the government wants to avoid lenders from providing loans that are over the $500 cap. They claim that the database is going to offer the tools necessary to track this type of thing and ensure that people do not end up paying too much for their loans.
Creating the Lending Database
After a law called the Deferred Presentment Services Act was passed in 2003, the regulators have been trying to implement it in order to get the database they need for protective purposes. For many years it was too difficult to pass any legislation that would allow the government to create a relevant database to track the lenders.
Today, it seems like it is a much more viable opportunity for the legislators to get the job done. Though most people are in favor of anything that helps the government regulate the payday loan industry, the legal representation of the industry is very strong.
Whether or not the database will be created is up to the courts to decide. Popular opinion says that they will be willing to create whatever it takes in order to stop the lenders from taking advantage, but lawmakers are a little more skeptical. The legal process for regulation is a tricky subject so it is going to take some time in order to determine the outcome. Overall, the move is an inevitable step in the direction towards regulating the industry with the use of modern technology. The database technology is making it easier to create these types of information banks, but only if the law allows society to do so.
At Payday Loan Management Services we are proud to be one of the very few companies that many short term lenders and lenders that offer signature loans will even work with. Call us at (877)834-6700 to see if we can help you too.
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