HB526 Summary: Alabama Motor Vehicle Title Loan Act

• Creates the Alabama Motor Vehicle Title Loan Act requiring State Banking Department licensure for title loan lenders, with $500 license fee, $100 investigation fee, and $50,000 bond per location (up to $500,000 total).

• Establishes loan requirements including maximum principal of $3,500 (50% of vehicle value), 10% monthly interest rate (120% annually), mandatory 120-day to 12-month terms, and prohibition on loan extensions or refinancing.

• Mandates comprehensive borrower protections: written agreements with specific disclosures, right to prepay without penalty, prohibition on power of attorney provisions, restrictions on repossession, and right to vehicle surplus after sale.

• Prohibits title loans to covered armed forces members and their dependents, prevents multiple simultaneous title loans per borrower, and requires use of statewide database to verify borrower eligibility.

• Authorizes State Banking Department enforcement through examination, cease-and-desist orders, license suspension/revocation, fines up to $1,000 per violation, and criminal penalties (Class A misdemeanor) for unlicensed lending.