BIRMINGHAM — Law firm Bond & Botes, P.C., is urging Alabama lawmakers to enact legislation to protect Alabama citizens from predatory payday lenders, according to a press release.

The firm recently launched a campaign to demand state lawmakers take swift against payday lenders who prey on vulnerable, cash-strapped individuals desperate to take a “so-called helping hand” at any cost.

“We believe the predatory payday lenders have been allowed to run roughshod over our vulnerable citizens for long enough,” said attorney Brad Botes in the release. “We believe that our state leaders are not doing enough to protect our citizens from the predatory payday loan industry, and we are working to make our voices heard.”

According to a report from the Federal Reserve, nearly half of Americans don’t have enough in savings to cover a $400 emergency. That essentially means that 47 percent of the population is living paycheck to paycheck, forcing many to turn to payday loans.

While supporters argue that payday lending is a vital way to help underserved people solve temporary cash-flow problems, Bond & Botes, P.C. believes that the controversial practice creates an even bigger hole for financially-burdened people, putting them further in debt.

“The only option other than paying is to roll over the loan into a new term of several weeks, with an additional fee added,” Botes said. “Many consumers who use payday loans often cannot get loans through traditional sources. In a time of great need, they turn to payday lenders, but it ultimately costs them more in the end.”

Payday loan borrowers spend approximately $7.4 billion annually at 20,000 storefronts and hundreds of websites, plus additional sums at a growing number of banks, according to a report by The Pew Charitable Trusts. State regulatory data show that borrowers take out eight payday loans a year, spending about $520 on interest with an average loan size of $375. Payday loan rates allow up to 13 times prior limitations provided in Alabama’s Small Loan Act.

Ten states, including Georgia, Arkansas and North Carolina, already ban payday loans. Other states, like Connecticut, cap rates at 30 percent. Montana, New Hampshire and Oregon cap rates at 36 percent.

The law firm is hoping to collect at least 2000 signatures. The petition will then be sent to Senate President Pro Tem Del Marsh; Senator Slade Blackwell, Chair, Banking and Insurance Committee; Senator Greg Reed, Senate Majority Leader; and Senator Quinton Ross, Senate Minority Leader.

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