SB330 Alabama 2016 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2016

Title

Flex loans, authorizing, licensure and regulation of

Summary

SB330 would create a Flexible Credit Act that allows non-bank lenders to offer short-term, unsecured flex loans in Alabama under state licensing and regulation.

What This Bill Does

It authorizes non-bank lenders to issue flex loans and establishes licensure and regulation by the State Banking Department. It sets financial and operating limits, including a 36% annual interest cap, a maximum outstanding balance of $2,000, and a minimum principal reduction of 3% per month. It requires lenders to meet net worth, background, and bonding/credit requirements, submit annual reports, and comply with consumer disclosures; it also empowers the Department to enforce the act and discipline violators.

Who It Affects

• Consumers in Alabama who may borrow via flex loan plans and receive mandated disclosures, price caps, and protections.
• Non-bank lenders offering flex loans, who must obtain licenses for each location, meet financial and background requirements, post bonds or letters of credit, and comply with ongoing regulatory and reporting obligations.

Key Provisions

• Establishes the Flexible Credit Act and allows non-bank lenders to issue flex loans in Alabama under state regulation.
• Requires a per-location license (with resident agent for nonresidents) and authorizes separate licenses for each location.
• Imposes licensing qualifications: tangible net worth of at least $50,000 per location; financial responsibility and fitness; criminal history checks; and, for each license, a $25,000 surety bond (up to a total of $200,000) or an irrevocable letter of credit.
• Sets maximums: 36% annual interest, up to $2,000 outstanding at any time, and a required minimum payment that reduces principal by at least 3% per month; no fixed loan term.
• Requires upfront disclosures and account-opening statements compliant with truth-in-lending laws; allows next-day rescission for draws and prohibits requiring full drawing of credit.
• Allows customary fees to defray opening, administering, and terminating costs; these fees are not counted as interest.
• Gives the Department authority to enforce, promulgate rules, examine licensees, and impose penalties including suspensions, revocations, and civil fines (up to $1,000 per transaction or per day).
• Mandates annual reporting and possible transition to a multi-state licensing system; outlines change-in-control approvals and related costs.

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

Subjects

Loans