SB231 Alabama 2014 Session

This bill would regulate the lending of money or the providing of credit to a consumer pursuant to an agreement under which the consumer may use the money or credit for a purpose other than prosecuting a dispute by the consumer, where repayment of the money or credit is conditioned upon the consumer's recovery of money in a dispute or where recourse against the consumer by the person providing the money or credit is limited primarily to the amount recovered by the consumer in a dispute

The bill would provide that the person providing the money or credit would be defined to be a "consumer lawsuit lender" under the Alabama Mini-Code, Code of Alabama 1975, Chapter 19 of Title 5, and each provision of money or credit would be deemed to be a consumer loan that is subject to a certain monetary limitation on the amount of finance charge applicable to certain loans. This bill would provide that the terms of a consumer lawsuit lending agreement that are not in compliance with the requirements of this bill would be deemed to be unconscionable

This bill would provide that in any adjudication or arbitration of a dispute which is the subject of a consumer lawsuit lending agreement, all documents that the consumer has provided to the consumer lawsuit lender and a copy of the consumer lawsuit lending agreement would be required to be filed with the court or other tribunal and served on the opposing party without requirement that the opposing party must request them

Relating to the extension of money or credit to consumers for a purpose other than the prosecution of a dispute where repayment of the money or credit is conditioned upon the consumer's recovery of money in a dispute or where recourse against the consumer by the person providing the money or credit is limited primarily to the amount recovered by the consumer in a dispute; to amend Sections 5-19-1 and 5-19-3 of the Code of Alabama 1975, by expanding the definitions of the terms "finance charge," "consumer," and "creditor" and by adding definitions of the terms "consumer lawsuit lending agreement," "consumer lawsuit lender," "consumer lawsuit lending," and "dispute"; to provide that the finance charge limitations under subsection (a) and under Section 8-8-14, Code of Alabama 1975, apply to a consumer lawsuit lending transaction regardless of the amount of the loan or the manner in which the transaction is structured; and to amend Section 5-19-16, Code of Alabama 1975, to provide that any provision of a consumer lawsuit lending agreement that does not conform to the requirements of this bill shall be deemed to be unconscionable; to add Article 7 commencing with Section 6-8-120 to Chapter 8, of Title 6, Code of Alabama 1975, to provide that in any dispute with respect to which a consumer has received money from a consumer lawsuit lender, and any and all documents that the consumer or the consumer's representative provided to the consumer lawsuit lender must be produced to the opposing party without awaiting a discovery request, and a copy of any consumer lawsuit lending agreement between the consumer and a consumer lawsuit lender must be filed with the court or other tribunal hearing the dispute and served upon the opposing party; to provide that the provisions of this act are severable; and to provide for the effective date.