SB301 - Alabama Title Loan Act Summary

• Establishes State Banking Department licensure and regulation of title loan lenders, with separate license required for each office location and maximum one-year license terms.

• Sets tiered maximum annual interest rates: 36% on first $2,000 of principal, 24% on $2,000-$3,000, and 18% on amounts exceeding $3,000, calculated using simple interest.

• Requires written title loan agreements with specific disclosures including loan terms (180-365 days), interest rates, late fees ($18 or 5% of payment, whichever is greater), and mandatory borrower warning statement in 14-point bold type.

• Prohibits title loans to persons under 19 years old and establishes borrower protections including no prepayment penalties, pro-rata interest refunds for early payoff, 15-day redemption period after repossession, and liability for lender non-compliance of actual damages plus twice the finance charge.

• Creates Class A misdemeanor penalties for willful violations and Class C felony for failure to record transactions followed by sale of titled property; establishes Department enforcement authority including cease-and-desist orders, administrative fines up to $5,000, and borrower right to private civil action with attorney's fees.