HB258 Alabama 2019 Session

Summary

Primary Sponsor

Danny GarrettRepresentative

Republican

Session

Regular Session 2019

Title

Deferred presentment transactions, term set at 30 days, Sec. 5-18A-13 amd.

Summary

HB 258 would require deferred presentment transactions to have a minimum term of 30 calendar days and add stronger disclosures and limits on lenders.

What This Bill Does

It would set a minimum term of 30 calendar days for deferred presentment transactions, replacing the current 10-31 day range. It would bar new transactions for customers who already have outstanding deferred presentment balances totaling more than $500 across all lenders. It would require written agreements, upfront disclosures of all fees as finance charges, and copies of the agreement for the customer. It would also require reporting of altered or forged checks to the district attorney, prohibit changing the date on checks, ensure proceeds are paid in cash to the customer, and require use of a third party database to verify that customers do not have outstanding balances over $500.

Who It Affects

• Customers who use deferred presentment transactions would experience longer loan terms, clearer fee disclosures, and limits on taking additional loans if they carry large existing balances.
• Deferred presentment licensees (lenders) would need to implement longer minimum terms, provide written disclosures, post and supply fee information, maintain detailed records, report issues to authorities, and use a third party database to check customer balances.

Key Provisions

• Minimum term of 30 calendar days for each deferred presentment transaction.
• Licensees may not enter into a new deferred presentment transaction with a customer who has outstanding balances exceeding $500 across all lenders.
• All agreements must be in writing and signed; customers may redeem before the deposit date by paying the contract amount.
• Fees must be disclosed as finance charges before consummation; itemized total amounts must be provided; disclosures must be clear and conspicuous; a fee schedule must be displayed with a warning that fees may be significantly higher than other loans.
• Copies of the written agreement must be provided to the customer; extended repayment program disclosures required where applicable.
• Licensees must report to the district attorney within five business days after being advised that a check was altered, forged, stolen, or otherwise invalid, and must not release funds without consent.
• Licensees shall comply with all state and federal cash transaction laws and reporting requirements.
• No unfair or deceptive acts or advertising; no requirement for customers to provide security or a guaranty.
• Proceeds of deferred presentment transactions must be paid in cash to the customer.
• A third party private sector database must be used to verify that the customer does not have outstanding deferred presentment transactions exceeding $500.
• If a check is returned for insufficient funds or a closed account, civil remedies may be pursued with attorney's fees capped at 15% of the face amount; the issuer may not be criminally convicted for insufficient funds.
• No alteration or deletion of the date on any check; undated checks or checks dated after the date of acceptance are not allowed.
• Effective immediately upon passage and governor's approval.

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

Subjects

Deferred Presentment Transactions