There are many places across the United States where small pockets of resistance are proving difficult for the payday loan industry to overcome. People across the country are starting to realize that even though the short term benefits might be there, the longer term impacts of debt to a payday lending company can be a huge problem. The people of Montgomery, Alabama have decided that they are going to put a moratorium on some payday loan lenders. The city council has decided through a 5-3 vote that they are no longer going to allow these types of companies to infiltrate their cities.
Montgomery and Payday Loans
The southern United States has a long history of dealing with underprivileged and economically depressed regions. In fact, most of the people who are on welfare and get assistance from the government are located in the southern region of the country. The payday loan industry has taken advantage of this fact in order to make a lot of money with these people.
By opening many international, national, and even regional payday lending companies, the owners have been able to profit for the past few years with near immunity. Only recently have people been complaining about the payday loan industry after all of their predatory practices have been found out. Since 2008, the recession has driven millions of people across the globe into the arms of payday lenders who want nothing more than to give a small loan that keeps you hooked for many years of your life.
While they are often vilified, they do provide a service that the public needs. People are in desperate need for money so they take a loan, but what happens when they don’t pay it back? It isn’t such a black and white situation, but it is obvious that more regulation is required.
Stopping More Payday Lending
Because it is so difficult to actually put a stop to the lending, people in the Montgomery, Alabama area have decided they are going to put a stop to it themselves. To do this, they have enlisted the support of the city council to vote whether or not to allow the new payday lender to enter their city and start to work amongst them.
The vast majority of people who are looking for payday loans do not realize that they could find themselves in a serious financial problem within only a few short months. The interest payments are high and most of the time the people who are taking them out do not realize the long term implications.
However, how this moratorium is going to bode for the industry as a whole is unknown. It shows that there are people who are not so happy about their dealings, but it may be temporary and most of the pundits think it will be overturned soon enough. Doing business in the state is a huge freedom that is hard to take away no matter what kind of legal business it might be.
