Updates

March 27, 2020

AILA Members and Friends:

Every day brings new developments. All of us are trying to keep up both to make certain that we are supporting the fight against the pandemic and that we are following the requirements of law.

Based on a new State Health Department Order just issued today, beginning March 28, 2020 at 5:00 p.m., “all non-work related gatherings of 10 persons or more, or non-work related gatherings of any size that cannot maintain a consistent six-foot distance between persons, are prohibited.” See the Order here: (CLICK HERE). The order also requires a number of specific “non-essential” businesses to close. This order is statewide in nature and overrides orders issued by the Jefferson and Mobile County Health Departments. The order is not inconsistent with the determination that financial services are “essential” and that consumer finance companies are “financial services.” However, the order restates the premise that in remaining open for business, businesses must respect the numerosity and distance standards.

The new state order expires on April 17, 2020, at 5:00 p.m.

On a personal note, I am profoundly proud of the response of our fellow citizens to this unbelievable situation that we are all commonly suffering. The pandemic knows no race, class or economic distinctions. Truly, this event has changed every American’s life, and has put us into the position that it is truly in everyone’s best interest that we hang-in there together.

Your safety and health remain constantly in my thoughts and prayers.

Maury

March 25, 2020

AILA Members and Friends:

The Alabama State Banking Department has determined that licensees are performing Essential Services as described in the attached Memorandum from the Secretary of the Treasury. For those choosing to rely upon it to remain open for business, please be mindful of various Health Department Orders and Municipal Ordinances that have been adopted throughout the Cities, Counties and the State.

In response to my request the State Banking Department has offered guidance with respect to handling deferral of payments under the Small Loan Act Alternative Rate structure of Section 5-18-15(m):

Mr. Shevin,

In response to your recent question, please be advised that the Department offers the following guidance. In working with customers during these uncertain times, Small Loan Act licensees offering loans under the Alternative Rate may, but are not required, to charge up to a maximum of $18 to defer a payment 10 days or more if late or deferral charges are provided in their loan contract. Deferral fees under the SLA are treated the same as Late fees under Section 5-18-15(e). Therefore, only one deferral fee may be assessed per deferred installment.

Scott Corscadden

Supervisor, Bureau of Loans

Alabama Banking Department

401 Adams Avenue, Suite 680

Montgomery, AL 36104

I hope that you and your family remain healthy. Maury

March 20, 2020

Members and Friends of AILA:

I have been in constant discussions with association officers and members and the State Banking Department about the impact of the COVID-19 pandemic on consumer finance companies in Alabama. The information is constantly evolving. But, I wanted to write this email to report to you what I know as of now.

1. Supervisor Corscadden put out an email bulletin yesterday that I forwarded to you. While there is limited specificity in the email, the general tone of it advises licensees that the Department expects licensees to work closely with customers that may be impacted by circumstances related to COVID -19, including the possibility of the deferral of fees or other charges. It also provides that licensees should notify the Department of any circumstances that require the closure, relocation, or remote work program. And, most significantly the email reminds licensees to protect the health and safety of employees and customers alike.

2. The Governor of Alabama has issued three Proclamations related to COVID-19—one on March 13th another on March 16th, and another today. None of these Proclamations requires any actions of consumer finance companies with respect to closure of offices or dealing with customers.

3. The State of Alabama Department of Public Health issued an Order on March 16th addressing restrictions on gatherings, and specifically permitting County Health Officers in Jefferson, and Shelby Counties to issue more stringent orders. The State Public Health Department’s order does not restrict finance company offices from their routine operations.

4. The Jefferson County Department of Public Health through its County Health Officer, Dr. Mark Wilson has issued two orders—one on March 16th and another at 5:00 tonight, March 19th. While the latter order is very stringent in its effect (including gatherings of 10 or more people), it does not alter the base right of consumer finance companies to conduct business. That order specifically identifies “nonessential businesses” that must be closed. Consumer finance companies are not so identified.

It goes without saying that COVID-19 has turned our lives upside down. Business is not being conducted as usual. Those finance companies that have perfected on-line lending may find their business lives a little easier than those which are totally dependent on “brick & mortar.” But, please know that as of this writing, there is no restriction that I know of, on the state or local level that prohibits a loan office from conducting business from its physical location. Of course, the judgment of bringing customers and employees into a confined physical location is one that is currently left up to ownership.

I will be happy to discuss further with anyone. Maury

March 18, 2020

In an effort to keep our licensees informed during this time, we may be reaching out to the various trade associations as well as individual licensees. We are confident that our licensees will communicate and work closely with customers that may be impacted by circumstances related to COVID -19, including the possibility of the deferral of fees or other charges. Please remind your members that they should immediately notify the Department of any circumstances that require the closure, relocation, or remote work program as well as efforts taken to work with customers.

We would also expect those licensee that remain open to comply with the CDC’s guidelines regarding best practices for environmental cleaning for the safety of all. Please be advised that our examination schedule may be disrupted during this time and we will be operating with a limited staff in our Montgomery office as of March 23rd. Nevertheless, you may contact us via email or our Department main phone number: (334) 242-3452. See our website at www.banking.alabama.gov for the latest information.

Scott Corscadden

Supervisor, Bureau of Loans

Alabama Banking Department

401 Adams Avenue, Suite 680

Montgomery, AL 36104

February 26, 2020

AILA Members and Friends:

Thanks to all who attended our Legislative Meeting & Reception in Montgomery last week. We got good reviews from our friends in the Legislature.

Please mark your calendar now for our Annual Convention, June 18th through 20th, 2020 at the Beau Rivage in Biloxi. We always have a good time in Biloxi!

More information including registration, will follow soon!

Maury

January 15, 2020

AILA Members and Friends:

Our next Legislative Meeting & Reception is in Montgomery, Tuesday, February 18, 2020, on the 6th floor of the RSA Plaza Building, 770 Washington Avenue. The RSA Plaza Building is located directly across Washington Avenue from the Alabama State House which is behind the State Capitol. The business meeting will start at 3:00 PM, and the Reception for Members of the Legislature and Staff will start at 5:00 PM.

We want to make a good showing for our friends in the Legislature; and, we will be making a special presentation to our past-president Kevin Gardner.

I look forward to seeing you next month. Thanks!

Maury

January 15, 2020

AILA Members and Friends:

The long awaited decision in the case challenging the Constitutionality of the 2015 Garnishment Law has now been handed down by an appellate court in Alabama. Regrettably, the Alabama Court of Civil Appeals determined that the “new” Garnishment law, excluding “wages, salaries or other compensation” from being within the meaning of “personal property” is unconstitutional. The case, released January 10, 2020, is attached for those who want to study the decision.

Unfortunately, this decision returns the state of the law to that existing immediately prior to the passage of Section 6-10-6.1 – that is, each and every paycheck of an amount equal to or less than $1000 may be claimed as exempt personal property by a judgment debtor to effectively avoid garnishment in Alabama.

This decision, if not reconsidered or appealed, and reversed, impairs the effectiveness of a significantly important tool in a creditor’s ability to collect its just debts.

Maury

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.

Maury

June 11, 2019

The AILA just concluded our 27th Annual Meeting and Convention. This year’s meeting was held at the Hilton Sandestin Beach Golf Resort & Spa. The Convention—which has always been a family friendly event—was well attended. In addition to conducting the business of the Association, there were educational sessions led by former Secretary of State Beth Chapman, former Alabama Ethics Commission Chairman General Ed Crowell, and Government Affairs Representative Jerry Spencer, as well as by Association Counsel Maury Shevin and Sam Friedman. Topics ranged from the new make-up of the Alabama Legislature to ethical dealings wtih our customers to recent developments from Washington with the CFPB. In addition, Members of the Alabama House and Senate spoke about the session just ended.

The Association continues to maintain its pre-eminent position as Alabama’s most prominent trade association of traditional installment lenders. AILA has a strong and abiding friendship with our regulators and legislators, that assures that our voice will continue to be heard in Montgomery on issues important to the industry.

April 4, 2019

AILA Members:

It is time to focus attention on our upcoming Annual Convention in Destin. This year’s meeting will be another great opportunity for fellowship and learning while at a beautiful venue on the beach. I am excited about this meeting! Our Association always shines brightest at the beach.

Please don’t be left out. The Hilton room block will close on May 6th. So, why wait? I have attached the Hotel and the Convention registration materials to this message. Let me or Jan or Susan know if you have any questions.

I look forward to seeing you in Destin!

Maury