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Emergency loans, the River City way
Quick-cash industry transforms 6th Ave.; 21 businesses are lenders of last resort

By Paul Huggins · 340-2395

nother sign for a title loan business is about to go up on Sixth Avenue Southeast.

Competitors and those worried about the negative image a proliferation of this type of store has on a community can take some comfort knowing it’s not a new store, just an existing one relocating.

That will keep the number of pawnshops, title loan stores and payday advance businesses at 21 on Decatur’s second-busiest roadway. There are 15 more around town.

“Without getting into the debate of whether they’re right or wrong, that’s not the type of business we’re trying to attract to Sixth Avenue,” said Jim Page, vice president for governmental affairs and communications at the Decatur-Morgan County Chamber of Commerce.

Those opposed to pawn/payday stores say they give an image of low-income residents and people living paycheck to paycheck, and that a high concentration of them means a community is not viable for retail development.

Proponents counter that there wouldn’t be so many stores if there weren’t a need.

The image concern is one reason state legislators may make changes next spring to reduce or eliminate the stores, specifically the payday advance stores, as North Carolina and Georgia did recently.

Decatur’s experience is much like that of the rest of the state.

There are 1,080 licensed payday lenders statewide, according to the Alabama Banking Department.

Their numbers exploded after 2003 when the Legislature responded to complaints and questions that the businesses were illegal. The state set restrictions on them to curb predatory lending practices and in doing so, one state legislator said, legalized loan sharking.

Meanwhile, title loan stores — borrowing with a car title as collateral — also grew significantly, from 712 statewide in 1998 to 1,019 in 2006, state records show. That figure also includes traditional pawnshops.

It means everyone is getting a smaller piece of the same pie, said Bob Lewis, owner of Mid-City Pawn at 1029 Sixth Ave. and Cash Exchange next door.

“My book is probably half what it was five years ago because of all this influx,” he said of payday lenders.

Lewis, a pawnbroker for 34 years, said he needs both his title loans and traditional pawns to be profitable, and believes at least a handful of title/payday loan stores will close or be bought out in the coming months.

“I have a friend in Johnson City, Tenn., and he just sold 120 stores,” Lewis said.

As for why Sixth Avenue came to have as many pawnshops and title/payday lenders as it has restaurants, Em Barron of Gateway Commercial Brokerage, who rents to several of the loan stores, said it’s a combination of factors.

“Decatur is a two-street city,” he said of prime retail locations of Sixth and Beltline Road Southwest.

Sixth has more than Beltline (six total) because Beltline property carries higher rent and it has fewer places available.

In addition, many retail stores locate near existing competitors to feed off their customers, Barron said, listing pharmacies such as CVS and Walgreens as examples.

“One guy’s out there advertising; the others feed off it,” he said.

North American Title Loans is the store relocating. It will leave its address of the past five years and move to the former Taco Bell.

Nell Frazier, manager, said she’s moving because her lease expires in February and she fears her building will be bought, forcing her to move in three months anyway.

As for why she stayed on Sixth Avenue, Frazier said being close to the competition is the best motivator for her and her employees.

State Sen. Arthur Orr, R-Decatur, said he would like to see fewer title loan/payday lenders, and he wouldn’t be surprised if the Legislature makes changes next year.

“I do not think it’s representative of the type of business environment we want to exhibit in Decatur and Morgan County,” he said.

Former Sen. Bradley Byrne, R-Fairhope, submitted legislation last spring that would bring payday lenders under the state’s 35 percent annual rate ceiling, but it never made it out of committee.

Lewis said a measure like that probably would put a lot of payday lenders out of business.

“If they do outlaw it, there will be another vehicle discovered on how to get this money to these people,” he said.

Mike Hall, owner of Beltline Pawn and Jewelry, which sells neither title pawns nor payday loans, said he thinks natural competition will eventually rid the landscape of most payday lenders.

Payday lenders, which essentially took all his $500 and $1,000 pawn customers with middle and high incomes, appear to be a better deal because they don’t require collateral, Hall said.

17.5 percent interest

But payday lenders require customers to pay back the loan and the 17.5 percent interest in 14 days, Hall said, and in his experience, people in a sudden financial rut can’t make the payments in two weeks. So they end up paying an additional 17.5 percent to roll over the loan for two more weeks.

“They end up paying more than if they borrowed (at 25 percent) from a pawn shop because we give them 30 days,” he said.

Like Lewis, Hall thinks there are too many competitors for the same piece of pie and their proliferation will force the state to make changes.

“You drive down Sixth Avenue and it’s almost embarrassing,” he said, alluding to both their numbers and the gaudy, bright red and yellow signs and buildings.

“I don’t mind them being there,” he said, “but let’s get it professional.”

Decatur’s pawn shops, title-loan and payday lenders

A-1 Title Pawn Inc., 2109-A Danville Road S.W.

AAA Pawn, 1508 W. moulton St.

Advance America Cash Advance Centers of Alabama Inc., 1820-B Sixth Ave. S.E.

Advance America Cash Advance Centers of Alabama Inc., 1622 Beltline Road S.W.

Alabama Title Loans Inc., 1315 Sixth Ave. S.E.

Alabama Title Loans Inc., 2204 Sixth Ave. S.E.

Approved Cash Advance Centers (AL) LLC, 901 Wimberly Drive, Suite A.

Beltline Pawn & Jewelry, 901-I Wimberly Drive S.W.

Cash Exchange Inc., 1029 Sixth Ave. S.E.

Cash Express Decatur LLC, 1412 Sixth Ave. S.E.

Cash Mart Inc., 1506 Sixth Ave. S.E.

Cash USA Inc., 2312 Beltline Road S.W., Suite 1.

Check ’n Go of Alabama Inc., 2019 Sixth Ave. S.E., Suite 10.

Check into Cash of Alabama LLC, 1000 Beltline Road S.W., Suite N.

Complete Financial Service Inc., 2222 Sixth Ave. S.E.

Decatur Title Pawn Inc., 1716 Sixth Ave. S.E.

Eagle Title Loans Inc., 1423 Sixth Ave. S.E.

Economy Check Advance of Alabama Inc., 137 14th St. S.W.

First Cash Express LLC, 1814-A Beltline Road S.W.

First Credit Inc., 1406-B Beltline Road S.W.

First Credit Inc., 921 Sixth Ave. S.E.

Flash Cash Inc., 1042 Sixth Ave. S.E.

Grant Enterprises Inc., 305 Beltline Road S.W.

Green Spot Loans Inc., 443 Holly St. N.E.

JT’s Auto Sales and Title Pawn, 1304 Sixth Ave. S.E.

Mid-City Pawn Inc., 1029 Sixth Ave. S.E.

Money Service Centers LLC, 2008 Danville Road.

North American Title Loans Inc., 2407 Sixth Ave. S.E.

Rapid Cash of Alabama Inc., 1815-F Sixth Ave. S.E.

Rapid Title Loans, 1321 Sixth Ave. S.E.

Super Pawns of Decatur, 1707 A-B Sixth Ave. S.E.

Title Cash of Huntsville Inc., 1026 Sixth Ave. S.E.

Titlemax of Alabama Inc., 1235 Beltline Road S.W.

Titlemax of Alabama Inc., 901 Sixth Ave. S.E.

Thrifty Check Advance of Alabama Inc., 1020-A Sixth Ave. S.E.

Valued Services of Alabama LLC, 2215 Danville Road, S.W., Suite B.

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