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Capped at 17.5% of the cash advanced, tracked in a statewide database — and the statute instructs courts to read it in the consumer's favour.
Deferred Presentment Services Act — Code of Alabama 1975, Title 5, Chapter 18A
The Act states its own purpose: to protect consumers entering short-term cash advances from abuses in the marketplace — and directs that it shall be liberally construed to effectuate its purpose as a consumer protection statute.Alabama · StatuteAlabama Deferred Presentment Services Act, Title 5 Ch. 18A — the purpose of this chapter is to protect consumers who enter into short-term cash advances from abuses that occur in the marketplace; this chapter shall be liberally construed to effectuate its purpose as a consumer protection statute
That instruction matters. Where a term is ambiguous, the statute tells a court which way to lean.
The maximum charge is 17.5% of the cash advanced.Alabama · RegulationAlabama State Banking Department, Bureau of Loans regulations Ch. 155-2-4 — the maximum charge for deferred presentment transactions is 17.5% of the cash advanced
One NSF fee only. A licensee may charge only one insufficient funds fee on a returned check, and the check must actually have been presented to the bank first.Alabama · RegulationBureau of Loans regulations — the licensee may charge only one NSF fee on a returned check and the check must be presented to the depository institution before the imposition of the single NSF fee
No splitting. Licensees may not split a deferred presentment transaction to get around the limits.
No date games. A licensee may not alter or delete the date on a check, and may not accept an undated check or one dated other than the transaction date.
Attorney fees capped. On collection, any attorney fee may not exceed 15% of the face amount of the check or debit authorisation.
Alabama runs a statewide deferred presentment database. Lenders pay a per-transaction fee to use it — and the Banking Department states that this fee may not be charged to the borrower as an additional charge beyond what the statute allows.Alabama · RegulatorAlabama State Banking Department database FAQ — the fee for licensee use of the statewide database may not be charged to the borrower as an additional fee beyond what is allowed by the Deferred Presentment statute
If you see a database or verification fee itemised on your agreement, that is worth querying.
You can revoke authorisation and instruct your bank to stop the payment, whatever your agreement says.
What Regulation E says about automatic payments →
A payday loan is a consumer debt. If it goes unpaid, two Alabama rules decide what a lender can do next: how long it has to sue you, and how much of your pay a court can order taken.
Being sued over an old payday loan? A collector can still file, but the time limit is a defence you can raise — and you cannot be jailed for the debt. What can and cannot happen if you don’t pay →