HB452 Alabama 2023 Session

Summary

Primary Sponsor

Phillip EnslerRepresentative

Democrat

Session

Regular Session 2023

Title

Relating to deferred presentment transactions; to amend Section 5-18A-13, Code of Alabama 1975, to require the term of a deferred presentment transaction to be a minimum of 30 calendar days.

Summary

HB452 would require deferred presentment transactions in Alabama to have a minimum 30-day term and add consumer protections and disclosure requirements for these payday-style loans.

What This Bill Does

It sets the minimum term for deferred presentment transactions to 30 calendar days (instead of the current 10–31 days). It also restricts opening a new transaction for a customer who has more than $500 in outstanding deferred presentment transactions. Additionally, it codifies several consumer protections—written, signed agreements; proper check endorsements; clear, required disclosures of all fees; redemption rights; and rules for handling altered or fraudulent checks—along with reporting duties and compliance with cash transaction and disclosure laws.

Who It Affects

• Licensees/deferred presentment providers who must adjust terms, disclosures, endorsements, and reporting to comply with the new 30-day minimum and related protections.
• Customers who use deferred presentment transactions, who gain clearer fee disclosures, redemption rights, and protections against deceptive practices and aggressive lending,

Key Provisions

• Minimum term of 30 calendar days for deferred presentment transactions.
• Licensee may not enter into a new deferred presentment with a customer who has outstanding deferred presentment transactions totaling more than $500 with any lender.
• Checks or debit authorizations must be endorsed with the actual business name; agreements must be in writing and signed by the customer; customers have redemption rights.
• Notices and disclosures: itemized fees and costs must be disclosed in a form consistent with Truth-in-Lending Act requirements; customers must acknowledge the disclosures before entering the agreement.
• Fees and disclosures must be prominently displayed; a warning about potentially higher fees compared to other loans must be included.
• Licensees must provide proceeds in cash to customers and maintain various anti-fraud, reporting, and compliance standards (including reporting altered/forged checks to authorities).
• Prohibitions on unfair or deceptive practices, undated checks, and requiring security or guarantees from customers.
• Use of a third-party database to verify that customers do not have more than $500 in outstanding deferred presentment transactions.
• Effective date: the act becomes law on the first day of the third month after passage.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Payday loans, impose minimum 30-day term for transactions