SB449 Alabama 2013 Session

Summary

Primary Sponsor

Del Marsh

Republican

Co-Sponsors

Bill HoltzclawScott Beason

Session

Regular Session 2013

Title

Deferred presentment services, define principal balance, common database, limits on interest that can be charged, violations, Secs. 5-18A-2, 5-18A-12, 5-18A-13, 5-18A-16 am'd.

Summary

SB449 would tighten Alabama payday loan rules by defining principal balance, restricting certain loan practices, and creating a shared database with reporting requirements.

What This Bill Does

It adds a definition for Principal Balance and clarifies that non-exempt borrowers are subject to the Deferred Presentment Services Act. It makes any loan contract made in violation of the act void. It restricts licensees from extending loans to borrowers with an outstanding transaction of $500 or more, with six or more transactions in 12 months, with extended repayment until 14 days after payment in full, or if the borrower or their spouse/dependent is in the military. It also prohibits licensees from using force or threats and limits threats of criminal prosecution. Finally, it requires licensees to use a supervisor-designated common database to verify balances and to report specified information to the supervisor.

Who It Affects

• Borrowers of deferred presentment transactions (payday loan customers) who would face new limits on how much they can borrow, how often they can borrow in a year, and protections against aggressive practices.
• Licensees/deferred presentment providers (payday lenders) who must follow new borrowing limits, use the common database, report data to the supervisor, and follow new disclosure and conduct rules.

Key Provisions

• Define Principal Balance as the balance due, excluding interest, service charges, or other loan-related charges.
• Any loan contract entered into in violation of the act would be void; lenders may not collect on such contracts.
• Licensees may not extend a loan to a borrower with (a) outstanding deferred presentment transactions of $500 or more, (b) six or more transactions in a 12-month period, (c) an extended repayment plan until 14 days after the plan is paid in full, or (d) military status.
• Licensees may not use force or threats against a borrower and must limit threats of criminal prosecution.
• The deferred presentment period does not begin until the borrower receives the funds from the licensee.
• Licensees must use a designated common database to ensure borrowers do not have outstanding transactions over $500 and must report required information to the supervisor, with real-time access to the database; data submission may incur a fee of up to $1 per transaction.

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

Subjects

Deferred Presentment Services