A federal proposal that would further regulate short-term lending may not go far enough, say some critics.

According to the Associated Press, the proposal brought by the Consumer Financial Protection Bureau would require lenders to prove that borrowers are able to repay money without taking out additional loans and give additional warnings before debiting borrowers’ accounts.

Regulations could impact Alabama more than most states, as a study by the Center for Responsible Lending in Durham, North Carolina, found that it has the most title loan lenders per capita. That same study said Troy has about 25 lenders in its city limits.

Troy City Councilwoman Dejerilyn Henderson, who has spoken against such programs in the past, said the new proposal does not go far enough.

“More should be done at the state and local levels,” she said. “Local governments should place a moratorium on lending licenses given in a set period of time, and then when that happens, the state can begin to work on better regulating them.”

Stephen Stetson, an analyst with Arise Citizens’ Policy Project in Montgomery, also said that the proposals stopped short of what the organization is seeking.

“We would like to see rules that address the affordability of the loan directly. We don’t just want to see the lenders making a cursory check, you know?” Stetson told the Associated Press. “We don’t just want to see an additional layer of paperwork applied to the process. And most importantly, we don’t want lenders to be able to tweak their products to get out from under the rule.”

Stetson, who is originally from Troy, gave his insight into payday lending in the city. “There are too many high-cost lenders in Troy for a city of its size,” he said. “These lenders tend to prey on people that don’t have a lot of savings and are living paycheck to paycheck.”

Stetson said it was a dangerous sign that people aren’t using mainstream lenders.

“For every dollar given to these lenders, it takes $2 out of the economy,” he said. “It’s not just the borrowers that are affected. Local businesses suffer when these borrowers get stuck in the debt-trap.”

Max Wood, president of the lending trade group Borrow Smart Alabama, talked to the Associated Press about the effect the proposed rules would have on the industry.

“The bottom line is that if the rules go into effect as proposed … 70 to 80 percent of the industry will no longer exist,” he said. “There is a large demand for this service and we don’t want to see it go away for the sake of the consumer.”

Stetson answered the comment in the Associated Press story. “The demand is real and the demand is an important component. But just because somebody’s hungry doesn’t mean you feed them poison.”

Stetson is encouraging the public to comment on the proposal during its 90-day public comment period to “tighten loopholes” in the regulations.

“The payday lending industry will be making comments,” he said. “So if you’re concerned about it, let the government know.”

Comments can be made at www.stoppaydaypredators.org/ARLA.