HB526 Alabama 2016 Session

This bill would create the Alabama Motor Vehicle Title Loan Act

The bill would: Require licensure by the State Banking Department for a person to act as a title loan lender; provide for the application for licensure; require a bond and a nonrefundable application and investigation fee; provide for inactive licenses, renewal and reactivation of licenses, a fee for the license, and for the denial, suspension, or revocation of licenses

The bill would specify acts which constitute violations for which certain disciplinary actions may be taken; would provide for the imposition of fines and criminal penalties; and would provide remedies for title loans made or serviced without proper licensure

The bill would establish requirements for a title loan agreement; would provide for reclaiming a repossessed motor vehicle under certain circumstances; and would provide payment of excess proceeds from a sale or disposal of a motor vehicle

The bill would provide for title loan interest rates; would prohibit extensions; would provide for return of principal and interest to the borrower under certain circumstances; and provide for a holding period when there is a failure to reclaim loan property

Amendment 621 of the Constitution of Alabama of 1901 prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of Amendment 621. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in Amendment 621

Relating to title loan transactions; creating the Alabama Motor Vehicle Title Loan Act; to require and establish requirements for licensure by the State Banking Department to act as a title loan lender; to specify acts which would constitute violations for which certain disciplinary actions may be taken; to provide for fines and criminal penalties; to provide for the title loan agreement; to provide for title loan interest rates; to prohibit extension of a loan; to provide for return of principal and interest to the borrower under certain circumstances; to provide a holding period when there is a failure to reclaim; to provide for the disposal of pledged property; to provide for a title loan lenders lien; to provide for criminal penalties; to provide for investigations and complaints; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901.