HB34 Alabama 2010 Session

Summary

Primary Sponsor

Craig Ford

Independent

Session

Regular Session 2010

Title

Mini-Code, consumer credit transactions, late charge increased under certain conditions, Sec. 5-19-4 am'd.

Summary

HB34 would raise the maximum late charge allowed on certain closed-end consumer loans if the late charge is in the contract.

What This Bill Does

HB34 amends Section 5-19-4 to set the new late-charge cap as the greater of $10, $18, or 5% of the defaulted payment, not to exceed $100, provided the late charge is in the contract. The late charge may be collected only once per scheduled payment in default. The changes apply to closed-end consumer credit transactions under the Mini-Code; open-end credit plans are not affected by these subsections. The bill keeps existing rules about deferral charges, refunds on prepayment, and related fees for real-property secured loans in place.

Who It Affects

• Borrowers in Alabama who have closed-end consumer credit transactions under the Mini-Code; they could be charged higher late fees up to the new cap if they miss payments and the charge is in the contract.
• Lenders offering closed-end consumer credit transactions under the Mini-Code; they may charge higher late fees up to the cap when borrowers are in default, if the contract allows.

Key Provisions

• Late charge cap increased: the maximum late charge is the greater of $10, $18, or 5% of the defaulted payment, not to exceed $100, and only if the late charge is stated in the contract.
• Late charge can be collected only once per scheduled payment in default.
• Open-end credit plans are not subject to these late-charge subsections.
• The bill preserves existing rules about deferral charges, refunds of unearned finance charges on prepayment, and related fees for real-property secured loans.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Banks and Banking