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Ala. Judge Throws Out Suit Targeting Loan Database

The Montgomery City Council has extended a moratorium on issuing new business licenses for payday lending companies.
Jason Comely
/
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The Montgomery City Council has extended a moratorium on issuing new business licenses for payday lending companies.

A state judge has thrown out a lawsuit from payday lenders looking to challenge regulations requiring a central database to track payday loans.

The Montgomery Advertiser reports a Montgomery judge ruled that the State Banking Department didn't exceed its authority last year by ordering a $500 cap on payday loans and a database to make sure consumers didn't have multiple loans out for more than that amount at one time.

Payday loans are short-term loans have annual interest rates that can hit 456 percent. Payday lenders say they serve a market that banks don't want to serve, and the costs are cheaper than bouncing a check.

Southern Poverty Law Center attorney Sara Zampierin says the ruling will help address predatory lending in the state and hold lenders accountable.

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