HB145 Alabama 2014 Session

Summary

Primary Sponsor

Patricia Todd

Democrat

Session

Regular Session 2014

Title

Deferred presentment transactions, customer repayment period revised, extensions prohibited, collection of a bad check fee under certain conditions, use of database by licensees required, Sec. 5-18A-13 am'd.

Summary

HB145 tightens Alabama payday loan rules by adding a new definition, limiting loans, and mandating data sharing through a state database.

What This Bill Does

It adds a definition for Principal Balance and applies the act to all non-exempt lenders, making any loan contract that violates the act void. It imposes limits on loans, such as restrictions when a borrower has more than $500 outstanding or six or more deferred presentment transactions in the past year, and sets an extended repayment period of 14 days after the plan is paid in full; it also provides protections for military members. It changes when the deferment period begins (it starts when the borrower actually receives the funds) and prohibits the use or threat of force or criminal prosecution against borrowers. It requires licensees to use a designated database to verify borrower balances, requires reporting of information to the supervisor, and directs the supervisor to publish aggregated industry data to the public, with the act taking effect on January 1, 2015.

Who It Affects

• Borrowers/customers who use deferred presentment transactions: they would face new balance and usage limits, changes to when the repayment period starts, mandatory disclosures, and protection against coercive collection practices.
• Licensees/deferred presentment providers: they must use a supervisor-designated database (or third-party databases), report required information, follow new lending and conduct rules, and may incur costs related to database access (up to 75 cents per transaction) while ensuring compliance with the new restrictions.

Key Provisions

• Adds 'Principal Balance' definition and applies the act to non-exempt licensees; any loan contract that violates the act is void.
• Imposes lending limits: cannot extend a loan if the borrower has more than $500 outstanding or six or more deferred presentment transactions in 12 months; extended repayment is limited to 14 days after the plan is paid in full; protections for military members.
• Deferral timing and conduct rules: the deferment period begins only after the borrower receives the funds; licensees may not use force, threaten violence, or unduly threaten criminal prosecution.
• Database requirement: licensees must use a designated (or third-party) database to ensure borrowers do not have more than $500 in outstanding deferred presentment transactions; the supervisor will implement a common real-time database reachable by providers and the supervisor; a per-transaction data fee may be charged but not increasing borrower costs beyond existing legal limits.
• Reporting and transparency: licensees must report specified information to the supervisor; the supervisor will publish aggregated, annual data about deferred presentment usage.
• Disclosures and notices: written agreements must clearly disclose all fees and terms; ongoing disclosures and notices are required to ensure borrowers understand costs.
• Effective date: the act becomes effective January 1, 2015.

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

Subjects

Deferred Presentment Services