HB535 Alabama 2017 Session

Updated Feb 26, 2026

High Interest

Summary

Primary Sponsor: Danny GarrettRepresentative
Republican
Session: Regular Session 2017
Title: Checks, deferred presentment, regulation by Banking Dept., renewals, repayment plans further authorized, licensees to notify customer of installment loans, Secs. 5-18A-2, 5-18A-3, 5-18A-12, 5-18A-13 am'd.
Summary: HB535 tightens Alabama's deferred presentment laws by expanding licensing, limiting renewals, adding a no-cost extended repayment option with education, and boosting disclosures and product notices to protect consumers.
What This Bill Does
Requires licensing for all deferred presentment activities (including by mail, phone, Internet, or in person) and voids any unlicensed transactions. Eliminates or limits renewals so customers can have at most two consecutive transactions and must wait 48 hours after repayment before a new one. Creates a free extended repayment plan (no interest) available once per 12 months, with required financial literacy or counseling and a possible late charge for missed payments. Imposes notices about other installment products after six successful transactions, and imposes restrictions on using loan proceeds to repay deferred presentment or vice versa. After twelve transactions in 12 months, a new deferred presentment transaction with the same customer must wait 14 days after repayment. Requires clear disclosures of all fees and other protections for customers.

Who It Affects
Consumers who use deferred presentment services in Alabama, who gain licensing oversight, clearer disclosures, education requirements, and repayment protections.
Licensees (deferred presentment providers) who must obtain licenses for each location, limit renewals, implement new repayment options and disclosures, and follow stricter rules on product notices and recordkeeping.

Key Provisions
License required for all deferred presentment activities; unlicensed transactions are void.
Renewal or extension of a deferred presentment transaction is limited; no renewal beyond the initial term; a new transaction cannot occur until at least 48 hours after repayment in full; a maximum of two continuous transactions is allowed.
Introduction of a free extended repayment plan (60 days) if the customer cannot repay or a payment is returned; available once per 12 months; no interest or fees during the plan except a late charge for missed payments; requires financial literacy education or referral to counseling; licensee must maintain records of education or referrals.
Licensees may not begin a new deferred presentment transaction with a customer while the extended repayment plan is in effect; late charges up to $18 may apply for missed payments under the plan.
If six deferred presentment transactions are completed in 12 months, licensees must inform the customer about the availability of other installment loan products; funds from other loans cannot be used to repay a deferred presentment transaction and vice versa.
After 12 transactions in 12 months, a new deferred presentment transaction with the same customer may only occur after 14 days following full repayment of the previous amount.
Licensees must display a clear fee schedule, provide written disclosures of all fees and costs, endorse checks with the licensee’s actual name, and maintain records of disclosures and compliance; licensees must use a state database to ensure customers do not have more than $500 in outstanding deferred presentment transactions.
If a check is altered or fraudulent, the licensee must report to the district attorney within five business days; licensees must comply with applicable cash transaction laws.
Restrictions on using proceeds of other loans to repay deferred presentment transactions and vice versa; overall aim to curb abusive practices and improve consumer protections.
Effective date: January 1, 2018.

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