Our Mission To promote and support programs, policies and initiatives that lead to asset building, asset retention, and economic security. Objectives Provide support to organizations that are engaged in asset building initiatives Identify asset building opportunities and implement programs & initiatives with identified partners and stakeholders Serve as an education and training resource for asset building practitioners Work with policy partners in advocating for improved public policies that support asset building for our low-to-moderate income citizens of Alabama

 Informal lending  Rise of bank lending  “Black market” lending and loan sharks  The rise and fall of reform Property of Stephen Stetson of Alabama Arise

1914 – 1943: 34 States adopt a version of the uniform small loan law 1960s: Credit Cards Emerge / Consumer Protection Laws 1980s: De-regulation and Lending Innovation Depository Institutions Deregulation and Monetary Control Act Source: National Consumer Law Center; April 2013

 Legislative findings recognize the need for credit and its connection to protecting the public welfare  Sets a rate “not exceeding three percent a month” on loans for less than $1,000  Quadruples allowable interest rates - from existing usury law (8%) to 36% APR  Does not cover: banks, pawn transactions or payday loans Property of Stephen Stetson of Alabama Arise

 1960s-1990s: Small Loan Act – 36%  A rising trend in pawns shops: from guitars to cars  A new invention from TN: the payday loan  Very Profitable Property of Stephen Stetson of Alabama Arise

Payday loans:  The 1990s: Payday industry grew significantly. Flying largely under the radar, charged interest rates far above the then-allowable 36%.  2003: Alabama Legislature carved out additional exceptions: Deferred Presentment Services Act passed, allowing 456% APR. Title loans:  1993: Alabama Supreme Court classified title lenders as pawnbrokers. Title loans are still governed by Alabama Pawnshop Act (300% APR). Alabama Asset Building Policy Conference 7/24/13

Payday loan:  Must have a checking account  Present a check post- dated for the amount borrowed (>$500)  10 to 31 day loan term  Laden with fees; encourages rollover  456 percent APR Property of Stephen Stetson of Alabama Arise

Title loan:  Must own vehicle title  No cap on loan amounts  Usually half amount of vehicle value  30 day loan term  300 percent APR Property of Stephen Stetson of Alabama Arise

1. The Cost 2. The Cycle 3. The Moral Argument Property of Stephen Stetson of Alabama Arise

 Strips wealth out of communities  Prevents asset building and savings  Prevents people from paying bills  Domestic strife  Property values from payday storefronts Property of Stephen Stetson of Alabama Arise

 Average borrower takes out 8 or 9 payday loans per year  212 days out of the calendar year in debt  Designed this way: repeat borrowers are repeat profits  Debt treadmill and financial quicksand  Not using them as emergency sources of credit Property of Stephen Stetson of Alabama Arise

The Bible on Usury “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as a usuer, neither shall thou lay upon him usury.” – Exodus 22:25 (King James) Other scriptures  Leviticus, 25:35-37  Ezekiel 18: 8-17  Ezekiel 22:16-16  Proverbs 28: 6-9  Luke 6:33-35  Matthew 5:42 Property of Stephen Stetson of Alabama Arise

 The Military Lending Act of 2007  17 States & DC  Local ordinances ALABAMA: No legislative action Property of Stephen Stetson of Alabama Arise

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 Mission: to Educate the Public and the Alabama Legislature  Printed booklets and educational materials  Hosted Town hall meetings across the state  Produced a 22 minute video with stories from victims and experts. Showing on the AABC website, YouTube, and a DVD being mailed to the Alabama Legislative body, to faith-based organizations and community groups all over the state  Strategizing with the Alliance for Responsible Lending in Alabama(ARLA), ( an organize that AABC helped to start )

 Got The Governor’s support  ARLA worked with the State Banking Department to establish regulations requiring a data base to be establish of all payday lending establishments  Fast growing support from the community  Bi-partisan support  Recently got the support of the League of Municipalities.

 Michael E Milner  Executive Director  Alabama Asset Building Coalition  th Street, 2 nd Floor  Birmingham, Alabama   cell  fax 