HB421 Summary

• Defines "title pawn" as a pawn transaction where a pledgor pledges both a motor vehicle and its title as security while maintaining possession and use of the vehicle, with prohibition on title pawns for manufactured homes.

• Requires pawn tickets for motor vehicle title transactions to include in at least 12-point bold type the department's name, address, complaint telephone number, and specific consumer warning notices about borrowing alternatives, repossession rights, rescission rights, and liability limits.

• Limits repossession charges to actual third-party repossession costs and reasonable preparation/sale costs, prohibiting pledgor liability for post-repossession storage fees, with pledgors entitled to excess sale proceeds within 30 days.

• Permits single-installment title pawn transactions (one-month term with possible renewals requiring 5% principal reduction payments) and multiple-installment agreements (12-24 months with substantially equal monthly payments).

• Requires licensees to verify vehicle ownership by matching pledgor identification to title and physically inspecting the motor vehicle in Alabama before executing a title pawn, grants rescission rights until close of next business day, and effective date is January 1, 2014.