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.


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Small Loan Act Rule 155-2-3-.10 Examination Fees—Small Loan Act: This rule is being repealed and replaced.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Mini-Code Rule 155-2-2-.14 Examination Fees – ACCA: This rule is being repealed and replaced by proposed Rule 155-2-1.07.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.


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!


March 20, 2019

Members and Friends of AILA:

Yesterday, in Montgomery, the Association held its most successful Legislative Day Meeting to date. Thank you to the many members who attended.

The afternoon meeting started at 3:00 with a report from Alabama Banking Department Supervisor Scott Corscadden. The Supervisor first reviewed some staffing changes at the Department, and then reported on the number of licensed entity locations supervised by the Department. There are currently 13,343 total licensees, of which 3,250 are either Small Loan Act or Mini-Code licensees. Corscadden reported that the Department expects to conduct over 3,000 examinations in 2019. There was a general discussion of multi-state license registration and examination.

Mr. Corscadden addressed the Department’s continuing review of cyber security, credit reporting and debt repair, consolidation and collection issues. He also discussed the amorphous “Fintech” and “Pay Advance” developments in connection with the delivery of loan products and wages to consumers. He also reported to our group that the SLA and M/C licensees continue to handle complaints in an exemplary fashion. Scott took questions. His presentation provided good insight into how the Department views its role in consumer protection.

At 4:00, Members of the Alabama Legislature and staff began arriving for the Legislative Reception. We have never had a larger turn-out of Senators and Representatives, including attendance of Speaker Pro Tem Marsh and Lieutenant Governor Ainsworth. Since we are so early in the Regular Session, our Representatives used our reception as a great opportunity to socialize with us and with their colleagues. We had the chance to review our industry with many of the “newer” Representatives who may not be as knowledgeable about traditional installment lending.

All in all, yesterday was a great day for the Alabama Installment Lenders Association. I thank the leadership of the Association and our Government Affairs Team who spent all day and prior days at the State House talking-up our Legislative Reception, which resulted in such an outstanding attendance. Although these receptions are expensive to hold, they are invaluable in establishing and cementing strong relationships with our Representatives.

Maury Shevin

November 13, 2018

AILA Members and Friends:

Please find attached the PEW Charitable Trusts October, 2018 report, State Laws Put Installment Loan Borrowers at Risk; How outdated policies discourage safer lending. I share this report with you so that you will know the type of information that is being circulated to policy makers.

There are some seriously misleading conclusions. For example, PEW criticizes repeat borrowing as a characteristic of installment lending, while wholly failing to acknowledge and address repeat borrowing on credit cards, charge cards and equity credit lines as comparable activities. Rather, the report only compares payday and title loans. Further, PEW criticizes the inclusion of voluntary ancillary products in loan transactions while not analyzing the relatively inexpensive cost of such products against the occurrence of more and more frequent, devastating losses to borrowers—especially subprime borrowers—from hurricanes, wildfires, tornadoes, volcanoes and floods.

Most significantly, the PEW report completely ignores the economic reasons why an installment loan is such an important product, as well as the competitive reasons why installment loans are such an attractive product for 10’s of millions of customers.


November 7, 2018

AILA Members and Friends:

Our next Legislative Meeting & Reception in Montgomery is set for Tuesday, March 19, 2019, 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.

Please plan to stay and talk to our friends in the Legislature, until approximately 8:00 PM. This will be the beginning of a new quadrennium, with a lot of new faces. Our Legislators will have a direct impact on our business.

Parking in the adjacent lot, will open at 2:30.

I look forward to seeing you in Montgomery.


June 5, 2018

From: Shevin, Maury
Sent: Tuesday, June 05, 2018 1:24 PM
To: ‘ birmingham@bizjournals.com’ < birmingham@bizjournals.com>
Subject: Your recent article concerning the OCC, banks and short-term, small-dollar loans

I am the Association Director of the Alabama Installment Lenders Association, the oldest and most respected Alabama trade association devoted to the consumer finance industry in the State of Alabama. Your article and your experts left a gaping hole in your reporting on recent developments with the OCC’s small dollar loan policy. By writing only about banks and payday lenders, you completely ignored the most significant and safest source for small-dollar lending in the USA—traditional installment loans.

In Alabama, traditional installment lenders are licensed by the State of Alabama Banking Department to make loans under the Alabama Small Loan Act and the Alabama Consumer Credit Act. These loans are fixed-rate, fully amortizing, closed-end extensions of consumer credit, under which the principal amount financed and scheduled interest are repaid in substantially equal installments. Further traditional installment loans do not include interest-only payments nor balloon payments at maturity. And, the traditional installment lender determines the borrower’s ability to repay before extending the loan.

The traditional installment loan has served American borrowers for more than a century. In the fiscal year ending 2016, the Alabama Banking Department reported that licensees under these two laws had 725,000 loans outstanding. This vast number of loans means that these licensed lenders fulfilled the financing needs for many Alabamians. As of the reporting date, the total outstanding balance on these loans was $4.344 billion; and these licensees had combined assets of some $5.538 billion.

It is surprising to me that you would ignore this most common form of consumer credit extension.

Traditional installment lenders will continue to meet the growing demand of Alabamians for the efficient delivery of consumer loans at a fair price. Consumer credit is the fuel that drives the American and Alabama economy. The Alabama Installment Lenders Association is proud of the role that we are playing in making credit available to so many worthy people in Alabama.

Very truly yours,

Maurice L. Shevin

July 6, 2017

AILA Members and Friends: I think you will find the following message from AFSA regarding arbitration to be of interest. Maury

AFSA (American Financial Services Association) Email dated July 6, 2017

The Consumer Financial Protection Bureau (CFPB) is continuing its efforts to finalize an arbitration rule, as well as a small-dollar loan rule.

AFSA expects the CFPB to issue a final rule prohibiting the use of class action waivers in arbitration clauses very soon. The final rule is likely to be similar to the one that was proposed in May of 2016. AFSA anticipates that financial institutions will have around seven months to come into compliance with the final rule.

AFSA is working with its sister trade associations on a response to the final rule, which includes discussions with members of Congress about using the Congressional Review Act (CRA) to overturn it. As a reminder, regulations can be overturned by simple majority vote and the president’s signature. Industry is working with Congressional leaders to garner the 51 votes needed for Senate passage. The trade associations are also discussing potential litigation challenging the rule.

The CFPB is also working to finalize the small-dollar loan rule. AFSA expects a final rule by this fall. The proposed small-dollar loan rule had an effective date of 15 months. AFSA continues to advocate for a narrower scope for the rule.

If there is a new CFPB director, the effective dates of either rule could be moved, the rules could be altered, or the rules could be withdrawn.

For questions or comments, please contact AFSA EVP Bill Himpler via email or at 202-466-8616.

July 29, 2017

AILA Members and Friends:

I have compared some statistics from the Alabama State Banking Department Annual Reports for FY 2016 and FY 2015. The fiscal year in Alabama runs from October 1st to September 30th. We are probably five months away from seeing the next Annual Report from the Alabama State Banking Department. The following statistics are based on a comparison of 2016 with 2015:

Number of Mini-Code Licensed Offices: increased by 10.9%.

Number of Mini-Code Total Receivables: increased by 64.9%.

Dollar Amount of Mini Code Receivables: increased by 8.23%.

Net Profit: decreased by 10.1%.

Number of Small Loan Act Licensed Offices: decreased by 0.6%.

Number of Small Loan Act Loans Outstanding: decreased by 8.9%.

Dollar Amount of Total Loans Outstanding: decreased by 3%.

Net Profit: decreased by 20.7%.

Combined Number of Mini-Code and SLA Licensed Offices: increased by 6.7%.

Combined Number of Mini-Code and SLA Receivables: increased by 26.7%.

Combined Dollar Amount of Mini-Code and SLA Receivables Outstanding: increased by 7.6%.

Net Profit of combined Mini-Code and SLA: decreased by 10.8%.

I expect that the next Annual Report will show a marked increase in Small Loan Act licenses, both because of the continuing transition of Deferred Presentment licensees to installment lending, and because of the increase lending limits under the Small Loan Act. We will soon see whether the change in the law has a positive effect on profitability.