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In payday press, two Alabama Republicans break with Trump, on the side of liberal supporters

In the media room on the third floor of the State House, a self-identified group of liberals and conservatives spoke out to introduce legislation to further restrict small consumer payday loans.

In a surprising gesture, Republican lawmakers at the event disagreed with President Donald Trump, with one stating he was not a “sycophant,” presumably referring to those who are fully aligned with Trump’s “Make America Great Again” program.

Republican Senator for Decatur Arthur Orr, along with Republican Representatives Danny Garrett, R-Trussville, and David Faulkner, R-Mountain Brook, joined forces with liberal militant organizations at the Southern Poverty Law Center, Alabama Appleseed Center for Law & Justice, Alabama Arise, Community Foundation of Greater Birmingham and others to cap payday loan fees and extend the time borrowers have to pay off their debt.

The SPLC is usually at the forefront of these announcements, but with the recent negative headlines and the departure of its top leaders, the SPLC was not among those presenting information at the press conference.

During the press, Neal Berte, president emeritus of Birmingham-Southern College, referred to a PARCA investigation as evidence the Alabamians wanted to restrict payday lending further. Garrett and others used the same poll as evidence.

Berte also said that Alabama had the third highest concentration of payday lenders in the country.

Berte, Garrett and others used the PARCA investigation along with anecdotal evidence to convince the assembled press of the need to impose new regulations on small borrowers.

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What Berte, Garrett and others did not do was inform those present that the PARCA study was funded by the Community Foundation of Greater Birmingham.

Kim Rogers, program manager for the Community Foundation of Greater Birmingham, said Alabama political reporter that the foundation not only paid for the report, but also formulated the questions posed to survey participants.

“The statewide survey used a random-dialed sample of landlines and cell phones provided by Survey Sampling International,” according to PARCA. “The survey produced 421 completed interviews, which gives a margin of error of +/- 4.78%. Responses were weighted based on race, gender, and age to match state demographics.

When APR asked Berte if the survey included those who had used a financial product such as payday loans, he avoided the direct question by saying they had held focus groups.

The statistics Berte used to claim the state had the third highest concentration of payday lenders in the country came from a study published in 2016, with information collected in 2015 and before.

The study Berte cited predated the full implementation of legislative reforms in 2015. A study prepared for lawmakers show a nearly 50 percent drop in the number of payday lenders in the state – something Berte didn’t mention. In 2013, there were 1,043 licensed payday lenders, with state statistics showing only 609.

In his opening remarks, Berte said borrowers who renew their loans “on average 12 times a year could easily end up paying 456% interest.” Berte said his figures are based on a report from the Alabama state banking department. Other speakers cited the APR that consumers also pay on payday loans.

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Payday lenders charge a fixed fee for their loans, not compound interest or APR.

Most consumer loans charge compound interest with a APR attached to these loans, but this is not the case with payday loans which only charge a lump sum.

Equating a package deal like Berte and others have done to an annual percentage can confuse or mislead someone unfamiliar with industry standards.

President Trump has made rescinding Obama-era regulations on small consumer borrowing part of his Make America Great Again agenda. When Garrett and Faulkner were asked if they supported MAGA, Garrett didn’t hesitate to say, “I’m not a sycophant. I have my own opinions on the issues.

Faulkner said APR question about MAGA was unfair, at that time APR removed the question. However, Faulkner took the microphone to extend his point of view by saying that he opposed some CFPB regulations adding: “You can – look problem by problem to take positions and not line up, at the same pace. ” Adding, “I don’t think Donald Trump has looked at our laws and our payday loan law, and I don’t think he weighed in on our law. You will not find anyone more pro-business, pro-jobs, more pro-economic development, frankly less regulations for companies than this guy.

He went on to say that the current state law had loopholes.

During the press conference, a sponsored poll, an outdated fact sheet, distorting charges like an interest rate and a horror story about a couple whose house was seized by a bank were the evidence provided to explain why the state needs to reform wages. ready.

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None of the speakers spoke of the nearly 1,200 jobs that could be lost if their legislation is passed, nor did they say who people who use payday loans can turn to if payday lenders are driven out of business.

Orr left the bailiff early without answering questions.

In an email to APR after the initial publication of this story, a spokesperson for SPLC wrote: “[O]our internal changes have not prevented us from participating in or hosting press conferences in Alabama or elsewhere.