SB381 - Alabama Title Loan Act Summary

• Establishes licensing and regulatory framework for title loan lenders under the Alabama State Banking Department, requiring separate licenses for each office and annual renewal fees of $1,200.

• Sets maximum interest rates of 30% per annum on first $2,000 of principal, 24% on amounts $2,000-$3,000, and 18% on amounts exceeding $3,000, with minimum 180-day loan terms and prohibitions on prepayment penalties.

• Requires title loan agreements to include specific disclosures, vehicle identification details, maturity dates, and standardized language about borrower rights, with lenders holding certificates of title only until redemption.

• Prohibits lending to customers with outstanding deferred presentment transactions exceeding $500, more than six loans in 12 months, active extended repayment plans, or military personnel (unless compliant with federal Military Lending Act).

• Establishes enforcement mechanisms including administrative fines up to $5,000 per violation, borrower civil remedies for damages plus twice the finance charge, and criminal penalties including Class A misdemeanor and Class C felony charges for violations.