Regulatory Alerts1997-10-01
155-2-3-.08 Prohibited Charges Under the Small Loan Act
The Alabama regulatory authority issued this rule to prohibit lenders from charging borrowers any fees or charges not specifically authorized by the Small Loan Act or other applicable state laws. The regulation explicitly bans indirect costs such as finder’s, referral, notary, and attorney fees unless they are permitted exceptions. A prepaid interest surcharge authorized under Section 8-8-14(a) is excluded from the definition of prohibited charges.
155-2-3-.08 Prohibited Charges - Small Loan Act
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No fees or charges, including but not limited to finder’s or referral fees charged either directly or indirectly to the referred or prospective borrower, notary fees and attorney’s fees shall be contracted for, charged to or collected from the borrower except those specifically authorized and permitted by the Small Loan Act and charges for permissible insurance written in connection with credit transactions under the Small Loan Act authorized by the Alabama Consumer Credit Act - Mini Code and other lawful charges authorized by various state laws.
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Prohibited charges do not include a prepaid interest surcharge authorized under Section 8-8-14(a). Author: Scott Corscadden, General Counsel Statutory Authority: Code of Alabama 1975, §5-18-12, §5-18-15 History: Effective October 1, 1997