Alabama 2023 Regular Session

Alabama House Bill HB452 Compare Versions

Only one version of the bill is available at this time.

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1	1	HB452INTRODUCED
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3	3	54TK66-1
4	4	By Representatives Ensler, Garrett
5	5	RFD: Financial Services
6	6	First Read: 09-May-23
7	7	2023 Regular Session
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13	13	6 54TK66-1 04/26/2023 PMG (L)tgw 2023-1773
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15	15	SYNOPSIS:
16	16	Under existing law, the term of a deferred
17	17	presentment transaction is between 10 and 31 calendar
18	18	days.
19	19	This bill would require the term of a deferred
20	20	presentment transaction to be a minimum of 30 calendar
21	21	days.
22	22	A BILL
23	23	TO BE ENTITLED
24	24	AN ACT
25	25	Relating to deferred presentment transactions; to amend
26	26	Section 5-18A-13, Code of Alabama 1975, to require the term of
27	27	a deferred presentment transaction to be a minimum of 30
28	28	calendar days.
29	29	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
30	30	Section 1. Section 5-18A-13, Code of Alabama 1975, is
31	31	amended to read as follows:
32	32	"§5-18A-13
33	33	(a) A licensee may not knowingly enter into a deferred
34	34	presentment transaction with a customer that has outstanding
35	35	deferred presentment transactions from any lender at any
36	36	location that exceeds five hundred dollars ($500) for the term
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66	66	of the loan.
67	67	(b) Before a licensee shall present for payment or
68	68	deposit a check or debit authorization accepted by the
69	69	licensee, the check shall be endorsed with the actual name
70	70	under which the licensee is doing business.
71	71	(c) Any agreement for a deferred presentment
72	72	transaction shall be in writing and signed by the checking
73	73	account holder. The customer in a deferred presentment
74	74	contract shall have the right to redeem the check or debit
75	75	authorization from the licensee before the agreed date of
76	76	deposit upon payment to the licensee of the amount of the
77	77	contract. A licensee shall not defer presentment of any
78	78	personal check or debit authorization for less than 10 days
79	79	nor more than 31 a minimum of 30 calendar days after the date
80	80	of the contract.
81	81	(d) The licensee shall notify the district attorney for
82	82	the circuit in which the check was received within five
83	83	business days after being advised by the payer financial
84	84	institution that a check or draft has been altered, forged,
85	85	stolen, obtained through fraudulent or illegal means,
86	86	negotiated without proper legal authority, or represents the
87	87	proceeds of illegal activity. If a check or draft is returned
88	88	to the licensee by the payer financial institution for any of
89	89	these reasons, the licensee shall not release the check,
90	90	draft, or money order without the consent of the district
91	91	attorney or other investigating law enforcement authority.
92	92	(e) A licensee shall comply with all provisions of
93	93	state and federal law regarding cash transactions and cash
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123	123	transaction reporting.
124	124	(f) A licensee shall provide each prospective customer,
125	125	before consummation of the deferred presentment agreement,
126	126	with a written explanation in clear, understandable language
127	127	of the fees to be charged by the licensee and the date on
128	128	which the check or debit authorization may be deposited or
129	129	presented by the licensee. All fees associated with deferred
130	130	presentment transactions shall be disclosed as finance charges
131	131	as required by the Federal Truth-in-Lending Act, 15 U.S.C. §
132	132	1605, its regulations, 12 C.F.R. Part 226, and Official Staff
133	133	Commentary as adopted by the Federal Reserve Board. The
134	134	supervisor may promulgate adopt rules establishing additional
135	135	requirements in order to assure complete and accurate
136	136	disclosures. The customer, prior to entering into a deferred
137	137	presentment transaction, shall receive and acknowledge an
138	138	accurate and complete notification and disclosure of the
139	139	itemized and total amounts of all fees and other costs that
140	140	will or potentially could be imposed as a result of such the
141	141	agreement. This subsection shall not create any inference that
142	142	a particular method of disclosure was required prior to June
143	143	20, 2003. All customers will be notified in clear and
144	144	conspicuous language that the deferred presentment check or
145	145	debit authorization after one rollover , will be subject to
146	146	terms and conditions described in subsection (c) of Section
147	147	5-18A-12. The terms and conditions of the transaction shall be
148	148	provided in the notification.
149	149	(g) A licensee shall issue a copy of the written
150	150	agreement to each person for whom a licensee defers deposit of
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180	180	a check or debit authorization. The written agreement shall
181	181	include the information described in subsection (f) and the
182	182	extended repayment program described in subsection (c) of
183	183	Section 5-18A-12.
184	184	(h) If a check is returned to the licensee from a payer
185	185	financial institution due to insufficient funds or a closed
186	186	account, the licensee shall have the right to all civil
187	187	remedies allowed by law, except as provided for in Section
188	188	5-18A-12, to collect the check and may recover court costs and
189	189	a reasonable attorney's fee. The attorney's fee may not exceed
190	190	15 percent of the face amount of the check or debit
191	191	authorization. No individual who issues a personal check or
192	192	authorizes a debit for his or her checking account to a
193	193	licensee for the purpose of a deferred presentment transaction
194	194	under this chapter shall be convicted pursuant to Section
195	195	13A-9-13.1, if the check or debit authorization is returned
196	196	due to insufficient funds. Checks or debit authorizations
197	197	returned to the licensee due to a closed account may be
198	198	collected pursuant to Section 13A-9-13.1.
199	199	(i) No licensee may alter or delete the date on any
200	200	check accepted by the licensee. No licensee may accept an
201	201	undated check or debit authorization or a check or debit
202	202	authorization dated on a date other than the date on which the
203	203	licensee accepts the check or debit authorization.
204	204	(j) No licensee shall engage in unfair or deceptive
205	205	acts, practices, or advertising in the conduct of the licensed
206	206	business.
207	207	(k) No licensee shall require a customer to provide
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237	237	security for the transaction or require the customer to
238	238	provide a guaranty from another person.
239	239	(l) Each licensee shall pay all proceeds for any
240	240	deferred presentment transaction in cash and directly to the
241	241	customer.
242	242	(m) Every licensee shall conspicuously and continuously
243	243	display a schedule of all fees, charges, and penalties for all
244	244	services provided by the licensee. The schedule of fees shall
245	245	contain the following statement in all capital letters and in
246	246	l2-point type or larger immediately above the space for the
247	247	borrower's signature: NOTICE: FEES FOR DEFERRED PRESENTMENT
248	248	TRANSACTIONS MAY BE SIGNIFICANTLY HIGHER THAN FOR OTHER TYPES
249	249	OF LOANS.
250	250	(n) A deferred presentment provider shall not redeem,
251	251	extend, or otherwise consolidate a deferred deposit agreement
252	252	with the proceeds of another deferred presentment transaction
253	253	made by the same or affiliated deferred presentment provider
254	254	except as expressly provided in Section 5-18A-12.
255	255	(o) The licensee shall use a third party private sector
256	256	database, where available, to ensure that the customer does
257	257	not have outstanding deferred presentment transactions that
258	258	exceed five hundred dollars ($500)."
259	259	Section 2. This act shall become effective on the first
260	260	day of the third month following its passage and approval by
261	261	the Governor, or its otherwise becoming law.
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