October 15, 2019

AILA Members and Friends:

Our Regulators have been busy of late. On September 19th, the Department published several proposed Rule changes to the Mini-Code and the Alabama Small Loan Act. We have until November 4, 2019 to make any comments. Here are the proposed Rule Amendments affecting Mini-Code and Small Loan Act licensees:

Small Loan Act Rule 155-2-3.11 Minimum Loan Term: This Rule would amend current Rule to provide that only traditional SLA loans (not Alternative Rate Small Loan Act loans) have a minimum term for repayment of one month. Alternative Rate loan terms are now addressed in the Small Loan Act itself and provide for a minimum term of three months and a maximum term of 18 months. (Section 5-18-15(m)(2).)

Small Loan Act Rule 155-2-3-.10 Examination Fees—Small Loan Act: This rule is being repealed and replaced. Examinations will now be addressed in proposed Rule 155-2-1.07. (See below.)

Mini-Code Rule 155-2-2-.14 Examination Fees – ACCA: This rule is being repealed and replaced by proposed Rule 155-2-1.07.

Mini-Code Rule 155-2-2-.12 Insurance—ACCA: This Rule is being amended to address one non-filing insurance issue. That is, the Department proposes to add a sentence into paragraph 11, as follows:

“Like other credit property insurance, the retail value of the secured property must be used when evaluating the sufficiency of collateral.”

While the Notice of Intended Action states that there will be no economic impact on licensees from the proposed Rule change, I am not so sure. At a minimum, licensees will have to be in a position to prove the retail value of collateral. That is, retail value may be easy enough to determine on a vehicle; but, determining such on used personal property could prove exceedingly difficult.

Mini-Code Rule 155-2-2-.11 Deferral and Extension Charges – ACCA: Language referring to the exemption for HUD-approved mortgagees is being deleted, as superseded by statute.

Mini-Code Rule 155-2-2-.03 Amendment of License—ACCA: This rule is being amended to provide for a fee for amendments to licenses to be addressed in a revision to Rule 155-2-1-.05(1). (See below.)

Mini-Code Rule 155-2-2.01 Licensing—ACCA: This Rule is being amended to delete language relating to exemption from licensing of subsidiaries of mortgagees under the provisions of the National Housing Act, as the deleted language has now been superseded by statute.

General Application Regulations Rule 155-2-1-.05 Fee Schedule: This Rule is being amended to add a fee of $50 to the cost of amendment to an existing license.

General Application Regulation Rule 155-2-1-.06 Application Forms: This Rule is being repealed as obsolete.

General Application Regulations Rule 155-2-1-.07 Examination Fees: This is a proposed new rule to consolidate all Bureau of Loan examination fees and to increase current examination fees, as follows:

(a) SLA–$200

(b) MBA–$200

(c) Mini-Code–$300

(d) DPSA–$300

(e) APA–$400

(f) Desk examinations–$100

(g) Each additional license in consolidated examination–$100.

Also, when an examination is conducted outside of the State of Alabama, the licensee shall pay the reasonable and necessary expenses for the Administrator or his/her representative to examine their records at the place of business where they are maintained. In addition, the licensee shall also pay the above referenced examination fee(s) as applicable.

Let me know if you have any questions.


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