SB301 Alabama 2016 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2016

Title

Title loan lenders, licensure and regulation of, established, Alabama Title Loan Act

Summary

SB301 would license and regulate title loan lenders in Alabama, cap interest, set borrower protections (including a prohibition on loans to those under 19), and establish enforcement penalties.

What This Bill Does

It creates the Alabama Title Loan Act, giving the State Banking Department the authority to license, examine, and regulate title loan lenders. It sets a tiered cap on interest rates and requires full disclosure in the loan contract. It specifies default and repossession procedures, including when and how a title can be taken and what happens if a borrower prepaid or fails to repay. It also bans issuing title loans to anyone under 19 and provides for fines, criminal penalties, and private rights of action for violations; it includes a constitutional amendment provision to manage local-fund expenditure rules.

Who It Affects

• Title loan lenders and their offices in Alabama, who must obtain and maintain licenses, follow regulatory rules, and face penalties for noncompliance.
• Borrowers and potential borrowers seeking title loans, who gain rate caps, required disclosures, clear repayment terms, and defined remedies if lenders violate the act.

Key Provisions

• Licensure and regulation of title loan lenders by the State Banking Department, including licensing procedures, annual renewals, and display of licenses at each title loan office.
• Maximum annual interest rates with a tiered structure: 36% per year on the first $2,000, 24% on the portion between $2,000 and $3,000, and 18% on amounts over $3,000, all computed as simple interest and disclosed up front.
• Prohibition of issuing title loans to individuals under 19 years old.
• Detailed title loan contracts and required disclosures (finance charge, total amount owed, installment schedule, APR, late fees, and a 14-point notice about borrower rights), plus rights to redemption and refund provisions for prepaid loans.
• Enforcement provisions including fines up to $5,000 per violation, potential criminal penalties, a private right of action for borrowers, and voiding of unlicensed loans; also, a constitutional provision regarding local-fund expenditures with exceptions.

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

Subjects

Title Loan Businesses