HB531 Alabama 2015 Session

Summary

Primary Sponsor

Danny GarrettRepresentative

Republican

Session

Regular Session 2015

Title

Payday loans, transactions to be repaid over a three-month period, prohibit extensions, Secs. 5-18A-2, 5-18A-12, 5-18A-13 am'd.

Summary

HB531 would reform payday loan rules by letting borrowers repay deferred presentment loans over three months, reducing extensions, and adding disclosure and data-reporting requirements.

What This Bill Does

It allows a deferred presentment loan to be repaid over a three-month period. It reduces the extended repayment option to three monthly installments and limits extensions. It sets a maximum amount that can be advanced and requires clear fee disclosures, plus a bad-check fee for returned checks. It requires licensees to report loan information to the State Banking Department, with aggregated data to be published, and mandates the use of a third-party database to ensure no more than $500 is outstanding.

Who It Affects

• Borrowers/Consumers who use deferred presentment (payday) services: they could repay the loan over three months, must receive clear fee disclosures, and face a cap on the amount advanced and possible bad-check fees if payments bounce.
• Lenders/Licensees and the State Banking Department: lenders must follow new repayment, extension, disclosure, and reporting requirements; the Department will collect and publish aggregated data and oversee compliance, including use of a third-party database to check outstanding balances.

Key Provisions

• Amends Sections 5-18A-2, 5-18A-12, and 5-18A-13 to implement new rules for deferred presentment transactions.
• Allows repayment of a deferred presentment loan over three months and reduces the extended repayment option to three monthly installments.
• Limits extensions/renewals to at most one additional extension, for up to two consecutive transactions, and requires the balance to be due after the initial loan and one rollover.
• Sets a maximum amount that can be advanced at $500 and a maximum finance charge of 17.5% of the amount advanced; permits a bad-check fee for each returned check.
• Requires written agreements with clear disclosures of all fees, provides customers with copies of the agreement, and imposes reporting requirements to the State Banking Department with aggregated data to be published.
• Requires licensees to use a third-party private sector database to ensure customers do not have more than $500 in outstanding deferred presentment transactions.
• Effective date: becomes law on the first day of the third month after passage.

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

Subjects

Payday Loans