HB319 Alabama 2013 Session

Summary

Primary Sponsor

Patricia Todd

Democrat

Co-Sponsors

Laura HallLawrence McAdoryJames E. BuskeyMerika Coleman

Session

Regular Session 2013

Title

Title loan business, regulation and licensure, charges, fines, penalties, Alabama Title Pledge Act

Summary

HB319 would create the Alabama Title Pledge Act to license and regulate title loan lenders, set loan charges and interest, and enforce violations with fines and penalties.

What This Bill Does

It would license title pledge offices and require per-location licenses, annual renewals, bonds or deposits, and annual reporting to the state supervisor. It sets financial limits such as a 36% annual percentage rate cap and a maximum of $2,500 financed per loan, with detailed disclosures required on a title pledge transaction form. Lenders must provide borrower copies of forms, a plain-language pamphlet, and maintain records, while borrowers gain defined redemption rights and protections around repossession and sale of pledged property. Violations could lead to license actions, civil penalties, and criminal charges, enforced by the State Banking Department's supervisor.

Who It Affects

• Pledgors (borrowers who pledge titled property) would gain clearer protections, disclosures, and rules governing redemption, repossession, and sale, plus limits on penalties and a requirement for plain-language information and copies of forms. The act also specifies redemption rights, a requirement that there be no penalty for early payment, and notes no sales tax on redeemed pledged property.
• Title pledge lenders and offices would face new requirements including licensing, location-specific licenses, annual fees, bonds or deposits, background checks, and regular reporting, along with strict rules on fees, disclosures, record-keeping, and enforcement, with penalties for violations.

Key Provisions

• Licensing and regulation: requires licensure for each title pledge office and location, annual renewal fees (initial $600, annual $500), background checks, bonds or deposits, and posting of licenses; moving a title pledge office requires 30 days' notice.
• Definitions and scope: establishes standard terms for pledged property, title pledge agreements, pledged property, pledgor, and title pledge lender to create a uniform regulatory framework.
• Financial terms and disclosures: sets a maximum APR of 36% and a cap on amount financed per loan at $2,500; requires a detailed title pledge transaction form with data such as vehicle details, borrower information, amount financed, maturity, finance charge, installments, and late fees.
• Borrower protections and notices: requires printed disclosures on the form, a plain-language pamphlet for borrowers, copies of completed forms for pledgor, and statements clarifying rights to redeem and conditions around repossession and sale.
• Repossession and sale process: outlines notice requirements, the 5-day default window for late payments, a 15-day redeem period after possession, and how sale proceeds are handled, including costs of repossession.
• Fees and refunds: allows a title pledge service charge up to the equivalent of a 36% APR; restricts additional fees beyond stated charges, late fees, and repossession costs; mandates a refund/credit formula if paid early.
• Recordkeeping and reporting: requires annual reports to the supervisor, retention of transaction records for two years, and providing records to law enforcement upon request.
• Enforcement and penalties: imposes misdemeanor, civil penalties, and potential license suspension/revocation for violations; bond forfeiture provisions and court remedies for enforcement; supervisor can issue cease-and-desist orders.
• Advertising and conduct restrictions: prohibits false or misleading advertising and improper collection practices; prohibits certain disqualifications and abusive tactics.
• Local government effects: preempts local fees or taxes on title pledge transactions; municipalities may enact stricter rules but cannot impose new fees or reporting requirements conflicting with the act.
• Compliance and inspection: authorizes the supervisor to examine licensees and require cooperation; authorizes complaint investigations and subpoenas.
• Effective date and transition: existing title pledge lenders have a specified period to apply for licenses; act becomes effective after passage and governor's approval, with severability preserved.

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

Subjects

Licenses and Licensing