ALABAMA SENATE PASSES SENATOR ORR'S SB138 PAYDAY BILL
REDUCES INDUSTRY INCOME BY 33% OR MORE!
WHAT HAPPENED? SEE IF YOU CAN TELL!
READ ON TO SEE WHO VOTED TO KILL THE INDUSTRY
March 8, 2018
Updated: March 15, 2018
The Alabama Senate passed Senator Orr's SB138 payday lending bill in what appears to be a well orchestrated, pre-planned event on Thursday, March 8, 2018. We believe that Senator Orr takes
his guidance from the activists at the (very) left-leaning Southern Poverty Law Center (SPLC) (here and here) and other like-minded groups in our state. We also believe that the SPLC was instrumental in writing this bill for Senator Orr -- just as they may have done in the last five legislative sessions.
These activists and Senator Orr want to see the industry eliminated and have been working to this end for several years. This bill will reduce industry income by at least one-third - more in some cases! This Orr and SPLC trick changes the maturity date to 30 days, but the fee remains the same. It is a trick because borrowers today already have four extra months to repay - at no additional cost by state regulation and law (here).
INDUSTRY IS IN DECLINE
About 650 payday lenders remain in Alabama. This is down by 50% from prior years! This bill will be another devastating blow if passed into law and it will exacerbate the move to unregulated and more expensive sources like unregulated internet loans. These unregulated and dangerous internet loans are estimated to already serve 214,000 Alabamians with no state oversight. Although local stores will disappear, the demand will not disappear. The demand will simply move to options like unregulated online lending, as it has from previous closures, or result in more bounced checks at banks and credit unions at $30 apiece as reported by this Federal
Reserve Study. This also raises the question of a potential and blatant conflict of interest on the part of credit unions who rely heavily on income producing bounced check fees (here)!
TRICKERY & PERSONAL ATTACKS
This bill is only a "head fake" for Senator Orr, the activists and the credit unions to "pick winners and losers" and to promote their agenda to further eliminate local lenders. These well-placed groups make up facts and use their political and business connections to further degrade the industry, demean borrowers and even leaders who make significant contributions in unrelated areas in our state.
Here is a perfect example of one such attack. This assault was made by a leader of these groups, Dr. Neal Berte. The attack was against an investor in a very successful Birmingham based, nonrelated, company simply because that investor was the CEO of a national payday lending company. That company was co-founded by the CEO four years ago in Birmingham and was just sold for $550,000,000!
This article from the Alabama Political
Reporter describes SB138 and the vote in great detail. In particular, see the comment from the article as noted HERE that explains how the vote unfolded.
HOW DID THIS HAPPEN?
This is all very confusing, but it clearly reflects the "dodging and weaving" that goes on in the statehouse.
Click on the links below to see the Senators who voted for and against this legislation in all three of the votes (with only the last two votes counting):
First Vote (vote 716) - This was a vote for or against the bill. It is NOT a true reflection of the Senator's interest since it was a procedural vote to set up the next two votes, that would determine the final outcome.
Second Vote (vote 717) -- This was a tie vote and was followed by another vote, which actually ended the debate and passed the bill. The Senators vote here actually counted, and you can see who voted for the industry and who voted with Senator Orr.
Third Vote (vote 718) -- The final vote was also a tie. That tie was broken by Senator Marsh, and the result was that the bill was passed.
Notice the legislators who voted with Senator Orr. They were in favor of this bill in the second and third votes which further erodes the industry, that has already seen a 50% decline!
WHY BE A CYNIC?This is a true reflection of why so many (most) have a low opinion of politics in Alabama. Senator Orr was elected and ran as a Republican, but now seems to be taking his direction from left-leaning groups like the SPLC and other like-minded groups who are influencing (and probably writing) this legislation.
Finally, it has not gone unnoticed that the two major activists groups who attack our industry and who supposedly stand for the less fortunate among us have combined assets well in excess of $550,000,000! These two groups are the left-leaning SPLC as noted above, with net assets of over $300,000,000 (here) and the Community Foundation of Greater Birmingham, which has assets exceeding $250,000,000 (here). These activist, non-profit groups have spent significant dollars on media, flooding the statehouse halls with protestors, writing campaigns and other efforts to destroy our business and demean those who use our services.
This begs the question; why don't they put just a little of their massive cash assets towards actually helping the people they supposedly stand up for, as this group did, by providing the funds the consumer needs -- instead of working to eliminate market choices for the borrowers? They certainly have the wherewithal to do this! Don't forget, most of our legislators ran on and promised free market choices and less regulation if we elected them.
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