HB587 Alabama 2014 Session

Summary

Primary Sponsor

Terri CollinsRepresentative

Republican

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, Secs. 5-18A-2, 5-18A-12, 5-18A-13 am'd.

Summary

HB587 would overhaul Alabama's payday loan rules by changing repayment terms, adding a tracking database, and increasing disclosure and reporting requirements.

What This Bill Does

It would let a borrower repay a deferred presentment loan over six months. It would prohibit extensions/rollovers beyond the term and reduce the extended repayment option from four months to three monthly installments. It would permit licensees to charge a bad check fee for each bounced check and require use of a supervisor-designated database to ensure borrowers do not have more than $500 in outstanding deferred presentment transactions; licensees would also report information to the State Banking Department, which would publish aggregated data for the public.

Who It Affects

• Customers who use deferred presentment services would have a longer repayment window, stricter rules on rolling over loans, and enhanced fee disclosures.
• Licensees (payday loan providers) would need to use a central or designated database to check borrower debt, adjust fee structures, and meet new reporting and disclosure requirements.

Key Provisions

• Repayment period for deferred presentment loans may be extended to six months.
• Extensions or rollovers of a deferred presentment transaction are prohibited beyond the term.
• The extended repayment option is reduced from four months to three monthly installments.
• Licensees may charge a bad check fee for each returned or dishonored check.
• Licensees must use a state-designated or common database to verify that a borrower has no more than $500 in outstanding deferred presentment transactions; data access is real-time for the supervisor and providers.
• Licensees must report specified information to the State Banking Department; the supervisor will publish aggregated data to the public.
• Maximum finance charge cannot exceed 17.5% of the amount advanced; maximum amount advanced is $500.
• An annual, sworn report must be filed by December 1 detailing business operations for the prior year.

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