Legal Status
Legal
Citation
§§ 5-18A-1 et seq.
Loan Terms
Maximum Loan Amount: $500
Loan Term: 10-31 days
Maximum Finance Rate and Fees: No more than 17.5% of the amount advanced
Finance Charge for 14-day $100 Loan: $17.50
APR for 14-day $100 Loan: 456%
Debt Limits
Maximum Number of Outstanding Loans at One Time: None (max loan amount allowed: $500 - see Code of Ala. §5-18A-12(a)). A licensee may not knowingly enter into a deferred presentment transaction with a customer that has outstanding deferred presentment transactions from any lender at any location that exceeds five hundred dollars ($500) for the term of the loan. See Code of Ala. §5-18A-13(a).
Rollovers Permitted: Each licensee may renew or extend a deferred presentment transaction with the same customer no more than one additional time at this fee for a maximum of two continuous transactions. (Code of Ala. §5-18A-12(b)). After the initial loan period and one rollover with the same customer, the full outstanding amount of the loan, including, but not limited to, held check or debt authorization, shall become due. (Code of Ala. § 5-18A-12(c))
Cooling-off Period: After two continuous transactions with the customer, the licensee shall not enter into a new deferred presentment transaction with that same customer until the next business day after the transaction amount is repaid in full. Code of Ala. §5-18A-12(b). (translation: next business day after 2 continuous loans repaid)
Repayment Plan: If the customer is unable to repay the outstanding balance in full, the licensee may offer the customer an extended repayment option of four equal monthly installments of the remaining balance. The licensee shall not commence any civil action to collect on a transaction in default until written notice has been sent notifying the customer of his or her rights. If the customer fails to exercise his or her rights within 15 days of the notice, the licensee may commence action to collect on a transaction in default. Code of Ala. §5-18A-12(c)
Collection Limits
Collection Fees: If a check is returned to the licensee from a payer financial institution due to insufficient funds or a closed account, the licensee shall have the right to all civil remedies allowed by law, except as provided for in Section 5-18A-12, to collect the check and may recover court costs and a reasonable attorney’s fee. The attorney’s fee may not exceed 15 percent of the face amount of the check or debit authorization. Code of Ala. §5-18A-13(h). ONE bad check charge of $30.00 may be charged (see Code of Ala. 5-18A-12(d), Code of Ala. §8-8-15(b))
Criminal Action: Prohibited unless check returned due to closed account. See Code of Ala. §13A-9-13.
Where to Complain, Get Information
Regulator: State Banking Dept. See also Code of Ala. § 5-18A-18