HB314 Alabama 2017 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Ken Johnson
Republican
Session: Regular Session 2017
Title: Small loans under Ala. Small Loan Act, minimum and maximum amount of loans increased and corresponding interest rates, max term of loans, Secs. 5-18-4, 5-18-10, 5-18-13, 5-18-15 am'd.
Summary: HB314 expands Alabama's Small Loan Act to permit loans up to 1,500 with new term limits and revised interest and fee rules.
What This Bill Does
Licensed lenders would be allowed to make loans up to 1,500 under the Small Loan Act. The bill sets a minimum loan term of 3 months and a maximum of 18 months. It offers two charging options: a standard rate with 3% per month on the first 200 dollars and 2% per month on the remainder up to 1,500, or an alternative structure with acquisition charges up to 10% of the loan plus installment handling charges based on loan size; there are requirements for disclosure and caps on other charges. It also requires clear schedules of charges in offices, allows an account maintenance fee up to 3 dollars per month (if monthly payments are at least 30 dollars), and provides rules for refunds, late charges, and enforcement.

Who It Affects
Licensed lenders under the Alabama Small Loan Act, who can offer loans up to 1,500 and choose among revised rate structures.
Borrowers who take small loans up to 1,500, who would face new term lengths, fee structures, disclosure requirements, and potential refunds or late charges.

Key Provisions
Lending authority increased from 1,000 to 1,500 dollars for licensed lenders.
Minimum loan term set at 3 months; maximum loan term set at 18 months.
Standard rate option: up to 3% per month on the first 200 dollars, and 2% per month on the remainder up to 1,500 dollars; or an alternative rate option with acquisition charges up to 10% of principal plus monthly installment handling charges based on loan size.
Account maintenance fee allowed up to 3 dollars per month, only if monthly payments are at least 30 dollars; this fee is part of the finance charge and not interest.
Charges must be clearly disclosed; schedule of charges must be displayed in each licensed place of business.
Refund rules for overcharges and prepayment, including method-based refunds and partial prepayment adjustments.
Late charges allowed: up to 10 dollars or 5% of the delinquent payment after 10 days, charged per applicable installment.
Restrictions on other charges beyond those authorized; certain limitations on the alternative rate structure (e.g., no insurance charges beyond what's permitted, and limits on multiple loans under the same structure).
Enforcement provisions include examinations, investigations, cease-and-desist orders, and penalties for violations, plus related refunds and liability rules.

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