HB3 Alabama 2011 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Craig Ford
Independent
Session: Regular Session 2011
Title: Mini-Code, consumer credit transactions, late charge increased under certain conditions, Sec. 5-19-4 am'd. (2011-20001)
Summary: HB3 ties Mini-Code late charges to the Small Loan Act, so late fees are capped and automatically adjust when the Small Loan Act increases its minimum charge.
What This Bill Does
It amends Section 5-19-4 to set the late charge as the greater of $10 or 5% of the overdue payment, not to exceed the amount allowed by the Small Loan Act (5-18-15.1). If the Small Loan Act raises its minimum late charge (currently $18), the Mini-Code late charge will automatically increase by the same amount without another legislative amendment. The late charge may be collected after 10 days of default and only once per scheduled payment, provided the contract specifies the late charge; other related rules about deferrals, refunds, and certain fees remain in place.

Who It Affects
Consumers with Mini-Code consumer credit transactions, whose late charges will be governed by the Small Loan Act limits and may change if the Act changes.
Creditors and lenders offering Mini-Code or small-loan products, whose late-charge limits will now automatically adjust with changes to the Small Loan Act.

Key Provisions
Replaces 5-19-4(a) with a late charge equal to the greater of $10 or 5% of the defaulted payment, not to exceed the Small Loan Act limit in 5-18-15.1, and with a minimum $18 late charge that automatically increases if the Small Loan Act is amended.
Authorizes collection of the late charge after 10 days of default and only once per scheduled payment, when the charge is stipulated in the loan contract.
Establishes automatic adjustment so that any future increase in the Small Loan Act's minimum late charge is mirrored in the Mini-Code late charge without needing a new amendment.

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