HB3 Summary

• Amends Section 5-19-4 of the Alabama Consumer Credit Act (Mini-Code) to increase the maximum late charge creditors may collect when a scheduled payment is 10 or more days in default.

• Increases the minimum late charge from $10 to $18, or five percent of the defaulted payment amount, whichever is greater, with a maximum cap of $100.

• Ties late charge limits to the Alabama Small Loan Act (Section 5-18-15.1), allowing automatic increases to the $18 minimum if that Act is amended without requiring a new amendment to this section.

• Specifies that late charges may be collected only once per scheduled payment, regardless of how long the payment remains in default.

• Became effective immediately upon Governor's approval (passed by Senate June 2, 2011 and House June 2, 2011).