SB231 Alabama 2014 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2014

Title

Consumer, regulate the lending of money, Sec. 6-8-120 added; Secs. 5-19-1, 5-19-3, 5-19-16 am'd.

Summary

SB231 would regulate consumer lawsuit lending by defining lenders, capping finance charges, deeming noncompliant terms unconscionable, and requiring automatic disclosure and filing of lending documents in disputes.

What This Bill Does

It expands definitions to treat consumer lawsuit lending as a type of consumer loan and applies finance charge limits to these transactions regardless of loan amount. It makes terms that don’t meet the bill’s requirements unconscionable. It requires that in disputes involving such lending, all documents the consumer provided to the lender and a copy of the lending agreement be filed with the court and served on the opposing party without a discovery request. It also creates licensing requirements for consumer lawsuit lenders and sets an effective date and prorated license fees.

Who It Affects

• Consumers who receive money or credit from a consumer lawsuit lender, who would gain automatic disclosures and finance charge limits in disputes.
• Consumer lawsuit lenders (and their licensees), who would be regulated as creditors, subject to finance charge limits, mandated disclosures, and new filing/disclosure duties.

Key Provisions

• Amends definitions in 5-19-1 to include terms like 'consumer lawsuit lending,' 'consumer lawsuit lender,' and related concepts, treating such lending as a consumer loan.
• Extends finance charge limits to consumer lawsuit lending transactions regardless of loan amount; any charges paid beyond the money actually provided can be treated as a finance charge.
• Declares any consumer lawsuit lending agreement provisions that do not conform to the bill’s requirements to be unconscionable.
• Adds Article 7 (6-8-120 and related sections) requiring that in disputes where the consumer received money from a consumer lawsuit lender, all documents provided by the consumer must be produced without a discovery request, and the lending agreement must be filed with the court and served on the opposing party.
• Sets filing deadlines: if the agreement is executed before the complaint, file promptly; if executed after service, file within 10 days of execution.
• Requires licensing of consumer lawsuit lenders, with a prorated license fee of $125 per office for the period ending December 31, 2014, and a September 30, 2014 deadline for initial licensing where applicable.
• Includes severability and an effective date provision for the act.

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

Subjects

Consumer