HB680 Alabama 2012 Session

Summary

Primary Sponsor

Patricia Todd

Democrat

Session

Regular Session 2012

Title

Deferred presentment services, bad check fee, common database, roll-over of deferred presentment transactions, violations, Secs. 5-18A-2, 5-18A-12, 5-18A-13, 5-18A-16 am'd.

Summary

HB680 would tighten Alabama's Deferred Presentment Services Act by capping fees, creating a real-time common database to track transactions, clarifying rollover rules, and strengthening penalties for violations.

What This Bill Does

Sets a maximum fee of 17.5% of the amount advanced, with a hard cap of $500 per transaction. Creates a common, real-time database accessible to regulators and providers to track outstanding deferred presentment transactions and prevent balances from exceeding $500. Clarifies rollover rules, limiting to two continuous transactions and requiring full repayment before new deals, with an option for four monthly installments if the balance is not paid; requires advance notice before collection on defaults. Strengthens enforcement with possible refunds, civil penalties up to $1,000 per transaction, and prohibitions on deceptive practices; requires clear disclosures and written agreements, and sets an effective date for the changes.

Who It Affects

• Licensees (deferred presentment providers): must comply with fee caps, rollover limits, disclosure and contract requirements, use of the common database, and enforcement actions if violated.
• Borrowers/customers: subject to lower, clearly disclosed fees; must receive written agreements and upfront disclosures; may have access to an extended repayment option and protections against unfair or deceptive practices.

Key Provisions

• Maximum fee: up to 17.5% of the amount advanced, with a cap of $500 per transaction.
• Rollover/continuation rules: defines continuous transactions, limits to two continuous transactions, and requires repayment in full or via an extended four-month installment option after the initial period.
• Default and collection process: requires a 15-day period for extended repayment rights after notice, and allows civil action only after notice if not exercised.
• Outstanding balance limit: licensees may not enter new deferred presentment transactions if total outstanding debt exceeds $500.
• Disclosures and agreements: written contracts signed by the borrower; clear disclosure of all fees; disclosures comply with Truth-in-Lending standards; copies of agreements provided to borrowers.
• Database requirement: use of a common real-time database for tracking transactions; submission of specific borrower and transaction data; potential $1 per transaction data fee, not increasing borrower costs.
• Prohibited practices: bans deceptive acts and improper alterations to checks; ensures funds are paid to borrowers with no extra charges beyond those authorized.
• Enforcement and penalties: supervisor may order refunds, issue civil penalties up to $1,000 per transaction, and declare violations uncollectable or unenforceable in some cases.
• Effective date: changes take effect on the first day of the third month after passage and governor approval.

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

Subjects

Deferred Presentment Services