Pay Day Loan Industry Self-Regualtes, Targets Trust

  In hundreds of pay-day loan stores across Alabama, the holiday rush for quick cash comes with advice from loan managers like Steve Scott, the President of Pelham’s Cash Max. As part of his effort to help self-regulate the short-term cash loan industry, he reminds customers that they must re-pay him within two weeks, usually, and he tells them not to borrow too much money. The tactic may sound unusual, but it’s becoming a trend in Alabama as pay-day loan bosses try to clean up their image.

  “We are concerned about our perception, and we're not a bunch of loan sharks that are just out to line our pockets with cash. We actually care about the consumer," Scott says.

  He’s helping spread the word about the Borrow Smart Alabama campaign which sets a code of ethics for pay-day loan operations. It's centered on fair lending, up-front pricing and clear rules for re-payment, along with other commitments posted along with a green seal of participation in loan shops involved with the program.

  “We don't want to loan the customer any more than they can pay back. We don't want to be a burden on the customer. It doesn't do us any good, or the customer any good if they can't pay us back," Scott says.

  “They can be assured that we do follow all the state laws as far as roll-overs and interest rates and the data-base check we have to adhere to," Scott explains.

  The goal is to clean up and build consumer confidence in the pay-day loan industry, and educate customers.

  “We're trying to teach … to borrow smart. We're here to help them in times of need but we're not a long term lender, we're short term lenders," Scott says.

  More than 200 pay-day loan businesses across Alabama are already part of the Borrow Smart campaign, with dozens more expected to sign on next year. Member stores display a green Borrow Smart Alabama seal and code of lending in their businesses.