SB446 Alabama 2015 Session

Summary

Primary Sponsor

Tom Whatley

Republican

Session

Regular Session 2015

Title

Deferred presentment transactions, maximum amount advanced, increased, provide licensee accessing statewide database to be charged a maximum fee, Secs. 5-18A-12, 5-18A-13 am'd.

Summary

SB446 would raise the max amount that can be advanced in a deferred presentment transaction, cap the database access fee, and create a new Alabama Financial Education Endowment Fund to support financial education programs.

What This Bill Does

If enacted, it increases the maximum advance from $500 to $1,000 per deferred presentment transaction and sets a maximum loan fee at 17.5% of the amount advanced. It also caps the licensee’s access fee for the statewide database at 62 cents per use and requires ongoing disclosures and written agreements. Additionally, it creates the Alabama Financial Education Endowment Fund in the State Treasury, funded by a per-transaction remittance from database fees, to support statewide financial education and consumer credit programs, with the department managing and potentially expanding funding through gifts and partnerships.

Who It Affects

• Licensees/deferred presentment providers: can offer loans up to $1,000, face new fee caps and disclosure requirements, must use the statewide database and comply with rollover limits and repayment rules.
• Consumers/borrowers: may access larger short-term loans (up to $1,000), receive clearer fee disclosures, face specific repayment timelines and options, and benefit from strengthened consumer protections and future financial education programs.

Key Provisions

• Amends 5-18A-12 and 5-18A-13 to raise the maximum amount advanced in a deferred presentment transaction from $500 to $1,000 and to set a maximum fee of 17.5% of the amount advanced.
• Allows up to two continuous transactions with the same customer; after two, new transactions may only occur after the next business day following full repayment.
• After the initial loan period and one rollover, the remaining balance becomes due; offers an extended repayment option of four equal monthly installments; requires written notice before collection and a 15-day period for customer rights.
• Imposes rules on insufficient funds fees (one fee per transaction) and limits other fees or charges; requires clear disclosures in writing prior to consummation and ongoing notices.
• Requires licensees to check outstanding deferred presentment transactions using a statewide/private database; prohibits entering new transactions if outstanding amounts exceed $500, rising to $1,000 in this bill.
• Cap on the database access fee charged by licensees for the State Banking Department database at 62 cents per use, not to be passed as an extra borrower fee.
• Creates the Alabama Financial Education Endowment Fund in the State Treasury, administered by the department to fund financial education and consumer credit programs.
• Funds to be supported by a 15-cent remittance per database transaction to the department; the department may allocate additional funds as needed, and may solicit gifts or grants; funds invested in an interest-bearing account and used only for the stated purposes.
• Effective date: the act takes effect on the first day of the third month after passage and approval.

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