SB533 - Alabama Title Pledge Act Summary

• Creates the Alabama Title Pledge Act to regulate title loan businesses separate from the existing Pawnshop Act, requiring licensure of title pledge lenders by the Supervisor of the Bureau of Loans.

• Establishes a standardized title pledge transaction form to record loan agreements, including borrower information, vehicle details, loan amounts, maturity dates (30 days), and service charges capped at 25 percent per month of principal advanced.

• Grants pledgors the right to redeem pledged vehicle titles within 30 days of maturity, with an additional 3-day redemption period after repossession; lenders may take possession and sell property if redemption fails, returning 85 percent of sale proceeds to pledgors after deducting costs.

• Requires licensure with $600 initial fee and $500 annual renewal fee, a $50,000 surety bond per location, fingerprinting, and background checks; prohibits lenders from working with minors, accepting encumbered titles, or loaning over $2,500 per pledged vehicle.

• Establishes criminal penalties including misdemeanor charges (up to $1,000 fine and one year jail) for unlicensed operations and false record-keeping, plus felony charges (up to $5,000 fine and five-year prison sentence) for failing to record transactions before selling pledged property.