Birmingham extends moratorium on payday loan stores - ABC 33/40 - Birmingham News, Weather, Sports

Birmingham extends moratorium on payday loan stores

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BIRMINGHAM - AL -

The city of Birmingham is saying no to payday loan businesses. It extended a moratorium preventing new ones from setting up shop in the Magic City, but are the quick cash stops good for community development?

"When they come in, they have one thing on their mind, I need this money. I need it right now," Gera Smith, who works at a short term loan store said. 

Gera Smith now offers the loans - that she says, saved her financially. 

"My title was my credit," Smith said. "I was in the office 30 minutes or less - the person who did the pawn for me explained to me the terms and conditions."

"We wanted to do something to regulate these businesses that have inundated our community. We have 93," LaShunda Scales, Birmingham City Councilor said.

And there are quite a few. We counted 10 in just four blocks of Center Point Parkway. Councilor Scales says, the moratorium is about protection.

"When you're talking about these high interest rates on un-repayable loans it just creates a vicious cycle," Scales said.

And city councilors say - the plethora of payday loan stores is driving out other business growth including grocery stores in East Birmingham.

"What we have struggled with are trying to get those businesses that we want to attract to the city of Birmingham that our residents want, however the obvious sign of poverty has run those kids of developers and businesses away," Max Wood, who owns a payday loan store and represents Borrow Smart Alabama said.

But the representative for Borrow Smart Alabama disagrees.

"We believe we have not had any negative impact whatsoever on the growth of business," Wood said. "In fact, that stretch of Roebuck Parkway she represents is a pretty robust section."

Wood tells us,  clients seek them out because they're out of options.

"If you or I wanted to borrow $500 and we walked into a bank, we probably wouldn't be able to do that," Wood said. "We might be able to borrow $10,000 or $15,000 but to borrow $500 for a short period of time, it's just not an option."

The moratorium on payday loan stores is extended for the next eight months ending on June 19th.

 

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