SB533 Alabama 2012 Session

Summary

Primary Sponsor

Bryan Taylor

Republican

Session

Regular Session 2012

Title

Motor vehicles, title loan business, licensure and regulation, fees, fines, penalties, enforcement, Alabama Title Pledge Act

Summary

SB533 would create the Alabama Title Pledge Act to license and regulate title pledge loans (title pawns) and set rules for how they work.

What This Bill Does

The bill replaces the current title loan regulation with a new framework under the Alabama Title Pledge Act, creating a licensure system for title pledge lenders and offices. It requires a standardized title pledge transaction form, detailed recordkeeping, and enforcement powers for the Banking Department. It also limits charges, sets a 30-day initial loan term with options to extend under specific rules, and establishes procedures for redemption, repossession, and sale of pledged property, including how proceeds are shared with the pledgor. Additionally, it sets license fees, bonds, criminal and civil penalties for violations, and allows municipalities to align with the act.

Who It Affects

• Title pledge lenders and title pledge offices would need to obtain licenses, post bonds or deposits, follow recordkeeping and examination requirements, and adhere to strict operational rules and penalties.
• Pledgors (borrowers who pledge titles) would gain defined rights to redeem pledged property, face specific consequences if they do not redeem, and be subject to terms on charges, repayment, and potential loss of property through sale.

Key Provisions

• Creates the Alabama Title Pledge Act to license and regulate the title loan business, with licensure required for lenders and each title pledge office.
• Requires a title pledge transaction form approved by the Supervisor of the Bureau of Loans, capturing details about the pledged property, pledgor, loan terms, and fees.
• Imposes recordkeeping requirements, including two-year transaction records and complete payment histories, and authorizes inspections by authorities.
• Limits the title pledge service charge to up to 25 percent per month of the principal amount financed, and sets rules for extensions that require at least a 10 percent reduction of the original principal on extensions.
• Prescribes the process for redemption, possession, and sale of pledged property, including an 85 percent share of sale proceeds to the pledgor after deductions (unpaid principal, delinquent charges, repossession costs, and a $100 sale fee).
• Sets license fees: $600 initial application fee and $500 annual renewal, requires bonds or deposits for each location, and includes criminal and civil penalties for violations.
• Authorizes local ordinances to be in line with the act, with certain exemptions, and clarifies effective date and local funding implications.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Motor Vehicles