SB331 Alabama 2013 Session

Summary

Primary Sponsor

George M. “Marc” Keahey

Democrat

Co-Sponsors

Priscilla DunnGerald H. AllenHarri Anne SmithLinda Coleman-MadisonJerry L. FieldingRodger SmithermanDel MarshScott BeasonBryan TaylorVivian Davis FiguresTammy IronsPaul Bussman

Session

Regular Session 2013

Title

Alabama Title Loan Act, licensure by Banking Dept., bonds, fees, penalties

Summary

SB331 creates the Alabama Title Loan Act to license and regulate title loan lenders through the State Banking Department, setting rules on licenses, rates, loans, repossession, and penalties.

What This Bill Does

The bill establishes statewide licensing for title loan lenders, with application processes, bonds or equivalent security, and annual license renewals. It places a cap on interest (36% APR) and requires clear disclosures, loan terms, and procedures for extensions. It creates detailed rules for handling pledged vehicles, redemption rights, and sale proceeds, and gives the state Banking Department enforcement power with fines and penalties for violations. It also lets local governments adopt stricter rules and notes an effective date and a deadline for existing lenders to apply.

Who It Affects

• Title loan lenders and their owners/operators: must obtain and maintain a license, post bonds or equivalent security, pay fees, and follow strict operating rules.
• Borrowers/consumers who use title loans: gain rate limits, required disclosures, defined redemption and repossession processes, and protections related to collateral and refunds for improper charges.

Key Provisions

• Creates the Alabama Title Loan Act and requires licensure by the State Banking Department to operate as a title loan lender; licenses cover title loan offices and must be renewed annually.
• License requirements include an application form, a bond of $100,000 per license (aggregate cap $1,000,000) or an equivalent instrument, fingerprints, and nonrefundable fees: $1,200 application fee and $200 investigation fee.
• Licenses last up to one year and may be renewed; inactive licenses can be Reactivated for a fee; licenses are not transferable and licensees must designate a registered agent.
• Maximum title loan interest rate is 36% APR; extensions are allowed with the same rate and no capitalizing of unpaid interest; other fees beyond late charges and repossession costs are prohibited.
• Title loan agreements must include specific details such as vehicle info, borrower info, amount financed, maturity (30 days), total payments, and the annual percentage rate; notice and disclosures must be provided to the borrower.
• Repossession and redemption rules require a 15-day period to redeem after notice; costs of repossession and sale may be recovered; excess sale proceeds must be returned to the borrower after deducting owed amounts.
• Unlicensed title loans are void; the department may impose disciplinary actions (denial, suspension, revocation, probation, reprimand) and civil fines up to $5,000 per violation; licensees’ employees are also subject to penalties for violations.
• Department powers include subpoenas, investigations, rulemaking, and enforcement actions; records must be kept and annual reports filed; municipalities may enact stricter local ordinances.
• Section 22 requires existing title loan lenders to apply for a license by January 1, 2014; Section 25 outlines the act taking effect on the first day of the third month after passage and governor approval; Amendment 621 local-funding provisions are addressed as exceptions.

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

Subjects

Banks and Financial Institutions