President Obama Visits Birmingham Laying Out His Plans for an Issue that Birmingham City Councilors Have Long Had Concerns For
As Congress readies for the next fiscal year, United States President Barack Obama took note and packed a bag to Birmingham to discuss what citizens could expect from Congress in the upcoming budget. Using a platform centered on “middle class economics” the President outlined what he hopes to accomplish with new laws and initiatives to help working families. Specifically he dissected the dangerous cycle of payday lending and how ‘new proposed federal regulations for the industry’ should be put in place to combat this issue that keeps so many families in bondage.
“There are four times as many payday loans as there are McDonalds in the state of Alabama,” said President Obama. “We must put laws in place to make sure our folks aren’t getting taken advantage of.” He further emphasized our need to teach young people ‘as we indeed are our brother’s keeper’ the need to be financially educated at a young age, citing decisions that they make can have long term consequences for the family. He used an example of one family who borrowed payday loans to get out of loans and instead ended up worse than they began. President Obama said if this is the business of payday lending institutions, then they ‘need to find a new way of doing business.’
Most of the Birmingham City Councilors attended and took note as they felt the need to recharge their standpoint on this near decade-old debate that began with Councilor Hoyt in 2008. Councilor Hoyt then made the issue known of the sudden growth and negative impact of payday lender businesses in the City of Birmingham and received an opinion from the City of Birmingham law department that councilors could not regulate their business, but that there might be other options afforded to councilors. He and other contributing colleagues on the council are pleased that the dire issue is now getting its due assessment.
Not to let the issue dissolve, Councilor Kim Rafferty then picked up the loose ends and discovered the zoning option, which Councilor Valerie Abbott closely mentored through the system, resulting in the ordinance modifications approved by the council in which Councilor Lashunda Scales moved for its moratorium.
“It was a challenge as we kept the moratorium in place while Councilor Abbott and others worked with zoning and the law department to strengthen the City code that
limits the number of lenders in the city,” Councilor Rafferty said. “The council passed those amendments in 2012 and 2013 and the moratorium was lifted. The biggest hindrance is that the state Legislature voted to recognize them as legit banking operations in our state laws and local jurisdictions have only the power to limit them under zoning laws.”
The Birmingham City Council’s collective teamwork brought about numerous banking options and products led by Councilor Rafferty such as Bank on Birmingham, an initiative to get banking institutions to become invoked in reaching under banked citizens with viable options other than payday lending. Bank on Birmingham is also a
partnership between the banking industry in the City of Birmingham and the nonprofit
organizations who counsel the victims of payday lending practices.
“We are glad to see that this issue is now getting the attention of the federal government through President Obama so that strict regulations can be put in place, Councilor Rafferty said. “It’s important that citizens, no matter what economic status they hold, are able to move forward and continue to provide for their families.”
This article is a contribution from Chiara Morrow (chiara.morrow@birminghamal.gov) in the Birmingham City Council Public Information Office.

