President Obama visits Lawson State to address the economy
As Birmingham City Councilors anxiously await the arrival of President Barack Obama to address officials and students at Lawson State Community College, many are anticipating his speech on the dangerous cycles of payday lending.
Payday lending is an ongoing battle that Councilor Lashunda Scales especially has a heart to continue.
“Predatory lending has been a problem that has contributed to the unending cycle of poverty in our communities,” Councilor Scales said. “The fact that President Obama will visit our city to address this issue says that Birmingham is on the forefront of helping solve a problem that has plagued our nation, we are beyond excited to move toward realizing this change.”
Councilor Scales adds that the short term options often offered ultimately have long term consequences and that credit unions are one of many financial institutions that can offer more products that help citizens achieve responsible spending habits. Having recently led the Birmingham City Council to extend Birmingham’s moratorium on new pay loan, check cashing and title pawn business, Councilor Scales said that this topic is one that should never cease until these establishments are held accountable.
Council President Austin shared the sentiments of Councilor Scales. “We are honored that President Obama is visiting our city and addressing solutions to issues that need resolving,” President Austin said. “It’s our responsibility to see the solutions through. I’m excited to be a part of this movement.”
According to an article on nerdwallet.com, Federal regulators may soon be cracking down on payday loans, the short-term, high-interest loans they say too often lure consumers looking for quick help into expensive, long-term debt traps.
The Consumer Financial Protection Bureau, created in the wake of the Wall Street financial crisis, is looking to establish nationwide rules to police lenders who have proven adept at skirting a patchwork of state laws.
“The CFPB is considering what rules may be appropriate for addressing the sustained use of short-term, high-cost credit products, including payday loans,” spokesman Sam Gilford said in an email. “The bureau’s research has found that what is supposed to be a short-term emergency loan can turn into a long-term and expensive debt trap.”
New rules would mark the first time the federal government has stepped in to regulate the controversial industry.
This article is a contribution from Chiara Morrow (email@example.com) in the Birmingham City Council Public Information Office. For more information please contact 205.254.2294.