HB421 Alabama 2013 Session

Summary

Primary Sponsor

Lesley Vance

Republican

Co-Sponsors

Mack N. ButlerThad McClammyDuwayne BridgesOliver RobinsonRon JohnsonLynn GreerJames E. BuskeyWes LongHoward SanderfordSteve Hurst

Session

Regular Session 2013

Title

Pawns, further regulate pawn transactions, Secs. 5-19A-2 am'd.; Secs. 5-19A-21, 5-19A-22, 5-19A-23, 5-19A-24, 5-19A-25 added

Summary

HB421 would define motor vehicle title pawns, require specific printing and notices on pawn tickets, and limit certain fees and terms for vehicle-related pawn transactions.

What This Bill Does

It defines 'title pawn' and specifies which motor vehicles are covered, while excluding manufactured homes. It requires title pawns involving motor vehicles to include printed information and consumer notices on the pawn ticket, plus a department contact for complaints and rescission rights. It creates rules for single- or multiple-installment pawns, including renewal terms, principal reductions, and limits on fees and repossession costs.

Who It Affects

• Pawnbrokers/pawn shops: must implement the new definitions, ticket printing requirements, fee limits, and verification rules for motor vehicle title pawns.
• Pledgors (customers who pawn motor vehicle titles): gain new disclosures, notices, rights (including rescission), and structured payment options with fee limits and potential renewal terms.

Key Provisions

• Defines 'title pawn' as a pawn where the pledgor leaves title documents for a motor vehicle as security while keeping use of the vehicle, and bans title pawns for manufactured homes.
• 5-19A-21: Title pawn tickets must show the department's name and address, a complaint phone number, and specific notices about lower-cost borrowing options, the right to rescind, and the pledge terms.
• 5-19A-22: Limits on repossession-related charges; allows recovery of handling and selling costs; pledgors are not liable for storage fees after repossession.
• 5-19A-23: Allows title pawns to be structured as single- or multiple-installment loans; sets one-month initial term for single-installment pawns; outlines renewal rules, principal reduction requirements (minimum 5% of original principal at each renewal), and how charges accrue for renewals.
• For multiple-installment pawns, sets terms of 12–24 months with monthly payments and a daily interest charge based on the outstanding balance; first payment may be adjusted to fit the schedule.
• 5-19A-24: Pledgor may rescind the title pawn by returning the cash, check, or funds equal to the loan proceeds before the close of business the next day; business day is when the licensee is open for business.
• 5-19A-25: Licensees must verify ownership by matching the pledgor's name to the vehicle's title/ownership documents and by physically inspecting the vehicle at the licensee's Alabama office.
• Effective date: January 1, 2014.

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

Subjects

Pawn Transactions