HB395 Alabama 2016 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Chris PringleRepresentative
Republican
Session: Regular Session 2016
Title: Consumer, regulate the lending of money, provide criminal penalties, Alabama Consumer Lawsuit Lending Act
Summary: The Alabama Consumer Lawsuit Lending Act creates a licensing regime and oversight to regulate lenders who provide money to consumers for dispute-related purposes, with a cap on charges and specific rules for these loans.
What This Bill Does
It defines what constitutes consumer lawsuit lending and who qualifies as a consumer lawsuit lender. It requires lenders to obtain a state license and to follow applicable lending laws, while setting a maximum finance charge of $9 per $100 of the loan principal per year, regardless of loan size or structure. It treats every provision of money as a loan and gives the State Superintendent of Banks authority to issue regulations and interpretations to enforce the act. It also specifies licensing timelines and fees for lenders operating in Alabama.

Who It Affects
Consumers in Alabama who receive funds under dispute-related lending agreements, who would be protected by a formal cap on charges and regulatory oversight.
Consumer lawsuit lenders (lenders offering dispute-related financing), who must be licensed, comply with specific code sections, and operate under state regulatory oversight.

Key Provisions
Defines consumer lawsuit lending, consumer lawsuit lender, and that each money provision is treated as a loan with a defined maximum finance charge, independent of how the transaction is structured.
Maximum finance charge is capped at $9 per $100 of principal per year, applicable to all such loans regardless of amount or term.
Lenders must obtain a license under Section 5-19-22 and are subject to Sections 5-19-16, 5-19-19, 5-19-23 through 5-19-26; the Superintendent of Banks may issue regulations and interpretations to enforce 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