HB296 Alabama 2016 Session

Summary

Primary Sponsor

Danny GarrettRepresentative

Republican

Session

Regular Session 2016

Title

Deferred Presentment Services Act repealed, short-term cash advance loans, prohibited, Secs. 5-18A-1 to 5-18A-22, inclusive, repealed

Summary

HB296 would repeal Alabama's Deferred Presentment Services Act and ban short-term cash advances (payday loans), with civil penalties for violations.

What This Bill Does

The bill repeals the entire Deferred Presentment Services Act. It makes it unlawful to offer or provide short-term cash advances for a fee, whether paid in cash, via direct deposit, or on a prepaid card, in exchange for a check or debit authorization to be cashed on a future date. Violations would incur a civil penalty of $1,000 per violation, and the Banking Department would enforce the rule. The law would take effect immediately after passage and governor approval.

Who It Affects

• Short-term lenders/payday loan providers: prohibited from offering or providing such loans.
• Consumers who might use payday loans: lose access to short-term cash advance lending.
• Banking Department: charged with enforcing the prohibition and penalties.

Key Provisions

• Repeals Chapter 18A, Title 5 of the Code of Alabama 1975 (Deferred Presentment Services Act) in its entirety.
• Prohibits any person from advancing funds for a fee in exchange for a future-dated check or debit authorization, regardless of delivery method (cash, direct deposit, or prepaid card).
• Imposes civil penalties of $1,000 per violation for these acts.
• Assigns enforcement to the Banking Department.
• Establishes immediate effectiveness following passage and governor 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

Payday Loans