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January 29, 2021

AILA is pleased to welcome Acceptance Loan Company as a Member of the Association.  ALC, a wholly owned subsidiary of First US Bank, is a well-respected member of the financial services community with16 branches located in Alabama and 5 branches in Mississippi. Their corporate office is located in Mobile.  ALC’s President and Chief Executive Officer is Helen Thrash.  We greatly appreciate Acceptance’s decision to join us.  We expect to have the opportunity to welcome Helen and ALC in person this summer, at our Annual Meeting in June!


May 27, 2020

AILA Members and Friends:

Supervisor Corscadden reported today that the Alabama State Banking Department will begin conducting remote in-state exams in the near future.  Examiners will contact a branch via email or phone.  Exams will be streamlined as much as possible, focusing the review on disclosures, paid-outs and insurance claims.  While BOL examiners will not complete their review on-site, they will go to the assigned branch location to pick up records, such as the “State Examiner files” of disclosures and paid-outs, and insurance logs, which will be returned upon completion.  The Department will be looking for our cooperation.



May 26, 2020


AILA Members and Friends: 

Above is a link to a press release containing a joint agency statement.  I just find it so interesting and ironic [and frankly infuriating] that the federal agencies that once attacked banks and credit unions for their “short term” lending are just now waking up to the reality of the needs and preferences of America’s consumers.   We have always said that traditional installment lenders offer the best and safest financial products to our customers.  And, there is a very real difference between traditional installment loans on the one hand, and payday/title loans on the other. 

I do hope you enjoy a nice Memorial Day Weekend.  Always remember that Memorial Day is our time as Americans for honoring the men and women who died while serving in the U.S. military.  We live free today because of the sacrifice of so many who came before us.



May 20, 2020

AILA Members and Friends:  I want to share two pieces of news before the weekend.

First, the United States District Court for the Western District of Texas has continued its stay in the case involving the CFPB Small Dollar Rule.  This means that those installment lenders who are concerned about the use of leveraged payment mechanisms bringing them within the application of the Rule, have more time to consider the matter.  Wednesday’s Order is copied above.

Second, for those installment lenders who received PPP loans of less than $2.0 million, and may have been concerned about their certification of eligibility, we learned earlier this week that the  U.S. Treasury has issued an advisory that such certifications will not be subject to challenge.

Please stay safe and vigilant as we begin to unfurl. 




May 20, 2020

AILA Members and Friends:  Please find below a message sent out today from the American Financial Services Association that addresses Paycheck Protection Program loan uncertainty.  Thanks to our friends at AFSA for keeping us up to date on developments.   Please let me know if you have any questions. 



AFSA is continually updating its Coronavirus Resource Page with Federal / State Government Affairs materials, including maps, policy updates and federal and state guidance. Please check back often. If you require additional information, contact Dan Bucherer at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it  

Some Legal Clarity on PPP Loans?

With the uncertainty around the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) and the extra scrutiny that the Administration has promised, we understand that some members may be considering returning the funds they received.  

While AFSA doesn’t offer legal advice and you should consult your own attorneys, you may want to review a recent decision out of a U.S. district court in Michigan before doing so. The court issued a preliminary injunction barring the SBA from enforcing a rule to exclude businesses that present live performances or sell products of a “prurient sexual nature” from loans under the PPP. While that’s obviously not the business that AFSA members are engaged in, the judge also said the SBA cannot exclude other businesses, i.e. banks, because Congress intended to support all qualified small businesses, including those it might have “disfavored” before the coronavirus hit.

The ruling can be reviewed here. The district court noted that, “The COVID-19 pandemic has decimated the country’s economy, and the PPP is an unprecedented effort to undo that financial ruin. More importantly, the PPP is an effort to protect American workers … and Congress could rationally have concluded that those workers need protection no matter the line of business in which they work.”

The ruling goes on:  "[T]he text of the PPP makes clear that every business concern meeting the statutory criteria is eligible for a PPP loan during the covered period.  Congress identified in the PPP only two criteria that a business concern must satisfy in order to qualify for loan guarantee eligibility: (1) during the covered period (2) it must have less than 500 employees or less than the size standard in number of employees established by the Administration for the industry in which the business operates.” U.S. District Judge Matthew Leitman wrote, adding, “Simply put, Congress did not pick winners and losers in the PPP…. It would ordinarily be absurd to conclude that Congress meant to provide financial assistance to, among others, certain sexually oriented businesses and private clubs that discriminate. But these are no ordinary times, and the PPP is no ordinary legislation.”

The decision may be appealed, but if it is not, it could provide the clarity that has been lacking in the SBA’s interim rules and FAQs. In addition, we’re awaiting a decision out of another U.S. district court in California. Payday Loan LLC, which engages in lending and check cashing in 22 stores in California, sued the SBA on April 25 after its request for a $644,000 forgivable loan was denied. The application was rejected on the grounds that PPP funds can’t be distributed to companies that profit mostly from making loans. A decision is expected soon.

However, it is unclear whether a decision will come before May 14, which is the date that companies can return PPP loans without paying a penalty. AFSA Staff is pressing the SBA to abandon the May 14 return deadline, or extend it, in light of the ongoing litigation and legislative efforts.  Again, in considering your options and the needs of your business, we advise that you discuss these matters with legal counsel, and we will continue to keep you updated.  If you have additional questions or concerns, please feel free to contact Celia Winslow at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it


April 24, 2020 

AILA Members and Friends:

I want to send this brief note to clarify what may be a misconception concerning the granting of “accommodations” and credit reporting duties during the pandemic.  

The CARES Act does have a section addressing credit reporting obligations on furnishers of data to a Credit Reporting Agency (“CRA”).  Specifically, if an accommodation (forgiveness of payments, forbearance of payments, etc.) is granted to a customer, and the customer meets his or her obligation pursuant to the accommodation, then what would otherwise be a delinquent account must be reported as “current” (with limited exception).  However, nothing in the CARES Act requires that a creditor offer any accommodation to a customer.   

Please work with your CRA to make certain that you continue to report properly under the Fair Credit Reporting Act, as amended by the CARES Act. 

I hope that you continue to weather the storm safely.  Please let me know if I can answer any questions for you.



 April 16, 2020

AILA Members and Friends: 

On the “loan” side of this pandemic, I have focused on the Paycheck Protection Program and the potential for licensees to get loans under that program.  However, there is another set of pandemic loan opportunities for the larger licensees known as the “Main Street Loan Facilities.”  Please see my law firm’s COVID-19 Blog below for details.  If your company qualifies, these programs may prove helpful. 


CARES Act Stimulus Comes to Main Street on the Wings of the Federal Reserve

 By Timothy Davis   

 April 15, 2020

 As we near the point of exhausting the initial (hopefully) allocation of funds for the Small Business Administration’s Paycheck Protection Program, we can now pivot to the next stimulus mechanism being implemented by the Federal Reserve – Main Street Lending.  There are two separate components of the Main Street Lending program (New Loans and Expanded Loans). The details of the Main Street Lending programs are still limited, since the initial release of information by the Federal Reserve only occurred on April 9, 2020.  A summary of what we know so far is set out below.

The Main Street New Loan Facility (“MSNLF”) and the Main Street Expanded Loan Facility (MSELF) are intended to facilitate lending to small and medium-sized businesses by Eligible Lenders. The combined size of the MSNLF and the MSELF will not exceed $600 billion.

Under both facilities, Eligible Lenders are U.S. insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies.  Eligible Borrowers are businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. Each Eligible Borrower must be a business that is created or organized in the United States (or under the laws of the United States) with significant operations in, and a majority of its employees based in, the United States.

An MSNLF Eligible Loan is an unsecured term loan made by an Eligible Lender(s) to an Eligible Borrower that was originated on or after April 8, 2020, provided that the loan has the following features:

1.4 year maturity;

2.Amortization of principal and interest deferred for one year;

3.Adjustable rate of SOFR 250-400 basis points;

4.Minimum loan size of $1 million;

5.Maximum loan size that is the lesser of (i) $25 million or (ii) an amount that, when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization (“EBITDA”); and

6.Prepayment permitted without penalty.

The Federal Reserve, acting through a newly-created special purpose entity (“SPV”), will purchase a 95% participation in an MSNLF Eligible Loan at par value, and the Eligible Lender will retain 5% of the MSNLF Eligible Loan. The SPV and the Eligible Lender will share risk on a pari passu basis.

In addition to certifications required by applicable statutes and regulations, the following certifications will be required with respect to each MSNLF Eligible Loan:

•The Eligible Lender must attest that the proceeds of the MSNLF Eligible Loan will not be used to repay or refinance pre-existing loans or lines of credit made by the Eligible Lender to the Eligible Borrower.

•The Eligible Borrower must commit to refrain from using the proceeds of the MSNLF Eligible Loan to repay other loan balances. The Eligible Borrower must commit to refrain from repaying other debt of equal or lower priority, with the exception of mandatory principal payments, unless the Eligible Borrower has first repaid the MSNLF Eligible Loan in full.

•The Eligible Lender must attest that it will not cancel or reduce any existing lines of credit outstanding to the Eligible Borrower. The Eligible Borrower must attest that it will not seek to cancel or reduce any of its outstanding lines of credit with the Eligible Lender or any other lender.

•The Eligible Borrower must attest that it requires financing due to the exigent circumstances presented by the coronavirus disease 2019 (“COVID-19”) pandemic, and that, using the proceeds of the MSNLF Eligible Loan, it will make reasonable efforts to maintain its payroll and retain its employees during the term of the MSNLF Eligible Loan.

•The Eligible Borrower must attest that it meets the EBITDA leverage condition stated in section 5(ii) of the paragraph above specifying the required features of MSNLF Eligible Loans.

•The Eligible Borrower must attest that it will follow compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under section 4003(c)(3)(A)(ii) of the CARES Act.

•Eligible Lenders and Eligible Borrowers will each be required to certify that the entity is eligible to participate in the MSNLF.

An Eligible Lender will pay the SPV an MSNLF fee of 100 basis points of the principal amount of the loan participation purchased by the SPV. The Eligible Lender may require the Eligible Borrower to pay this fee.

An Eligible Borrower will pay an Eligible Lender an origination fee of 100 basis points of the principal amount of the MSNLF Eligible Loan. The SPV will pay an Eligible Lender 25 basis points of the principal amount of its participation in the Eligible Loan per annum for loan servicing.

The MSELF is primarily the same program, with the primary differences being the definition of Eligible loans.  Under the MSELF, an MSELF Eligible Loan is a term loan made by an Eligible Lender(s) to an Eligible Borrower that was originated before April 8, 2020, provided that the upsized tranche of the loan has the following features:

1.4 year maturity;

2.Amortization of principal and interest deferred for one year;

3.Adjustable rate of SOFR 250-400 basis points;

4.Minimum loan size of $1 million;

5.Maximum loan size that is the lesser of (i) $150 million, (ii) 30% of the Eligible Borrower’s existing outstanding and committed but undrawn bank debt, or (iii) an amount that, when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed six times the Eligible Borrower’s 2019 EBITDA; and

6.Prepayment permitted without penalty.

The required certifications are slightly different for the MSELF loans, but the substance of the certifications remains the same, as do the various fees.

Sirote is focused on these facilities and will be keeping you updated as details and guidance emerge in the coming days.  If you have questions or need assistance, please reach out to your Sirote attorney.


April 15, 2020

AILA Members and Friends:

I want to continue my effort to keep you advised of COVID-19 developments, and particularly the Paycheck Protection Program loan requirements.   I take this opportunity to again attach below a memorandum from the Kassouf & Co., P.C. accounting firm that was published yesterday.  It addresses the accounting requirements relating to proceeds and expenses in connection with a PPP loan.

This is a good, succinct statement of what loan recipients should be doing.  Kassouf & Co. has again graciously permitted me to share this with you.  For those obtaining loans, I trust this will be helpful. 


Kassouf - COVID-19 Update 

Expenses Paid from Proceeds of Paycheck Protection Program Loan Proceeds

April 14, 2020

As businesses begin to receive funding of loans under the Paycheck Protection Program, it is vitally important to properly track the spending of the proceeds and accumulate the necessary documentation that will be needed for calculating the amount of any loan forgiveness.

A business may receive forgiveness of a loan issued under the Paycheck Protection Program if the business can demonstrate that it paid and incurred covered costs during the 8-week period beginning with the date of the origination of the covered loan. The Frequently Asked Questions document currently posted on the website of the United States Treasury states that the 8-week period begins on the date the lender makes the first disbursement of the Paycheck Protection Loan to a borrower. Covered costs include certain payroll costs, payments of interest on a covered mortgage obligation, payments on any covered rent obligation and payments of a covered utility payment. The Small Business Administration stated that a business receiving a loan under this program must spend at least 75% of the proceeds on payroll costs.

In addition to the requirements regarding allowable expenses, the amount of any potential loan forgiveness is decreased if the business reduced the number of its employees as measured before and after the loan is received. The amount of the forgiveness is also reduced by the amount of any reduction of total salary or wages of any employee paid in the covered period in excess of 25 percent of salary and wages of the employee paid during the most recent full quarter in which the employee was paid before the covered period. This provision applies to any employee who was not paid, during any single pay period during 2019, wages or salary at an annualized rate of pay in an amount more than $100,000. The Act does include certain provisions which allow for restoration of head-count by June 30, 2020.

Given the nature of the forgiveness, businesses should immediately create accounting systems which will track the use of the funds with a focus on the documentation that will be required upon application for forgiveness. Given that the loan funds must be spent on covered payroll costs, rent, interest on covered mortgages and utilities, businesses should, as practically as possible, pay for those expenses directly from the loan proceeds. Businesses should consider segregating the loan proceeds into a separate bank account to allow for tracking of unspent proceeds and better demonstration of spending on allowable costs. Alternatively, for businesses already processing payroll from a separate bank account, a business could also reimburse the payroll directly from a segregated bank account that had been established for loan tracking purposes.

While it is likely additional SBA guidance will be issued which will provide more clarity regarding loan forgiveness and what is needed to support the loan forgiveness application, the CARES Act provides that loan forgiveness applications will include items such as:

Documentation verifying number of full-time equivalents on payroll and pay rates for the periods including:

           Payroll tax filings reported to IRS;

           State income, payroll and unemployment insurance filings.

Documentation including cancelled checks, payment receipts, transcripts, or other documents verifying payments on covered mortgage obligations, covered lease obligations and covered utility payments.

Businesses receiving an Economic Injury Disaster Loan (EIDL) and a Paycheck Protection Program loan should also ensure that funds received from the two programs are not utilized to pay the for the same expenses. 

Please don't hesitate to contact us if you have any questions or if can assist in helping you track expenditures under this loan program.


 April 14, 2020

AILA Members and Friends: 

I report to you that some of the lenders to the consumer finance industry have taken a hard, second look at the Paycheck Protection Program.  Recall that there has been concern that since finance companies have historically been ineligible under the Small Business Act Section 7(a) loan program, that such ineligibility continued under the Paycheck Protection Program.  Based on the subsequent “guidance” offered by the Small Business Administration however, these lenders have satisfied themselves that the Program permits consumer finance companies to receive Program funds under the massive stimulus CARES Act. 

Since there remains concern as to the clarity of this position, some lenders may only be accepting applications from their existing customer base. If your lender is still reticent about processing your application, I will be pleased to discuss the SBA Guidance with it.



April 3, 2020

AILA Members and Friends:

I write to advise you of several developments:

1.         We have cancelled the 2020 AILA Annual Meeting in Biloxi that was set for June.  Regrettably, the Coronavirus is not going to allow us to meet early in the summer.  We have worked with our Event Planning team and the Beau Rivage to cancel without penalty.  We are in discussions with the Beau about having our convention in Biloxi in 2023.

2.         We have set Tuesday, October 13th, 2020, for our next Committee Day Meeting in Birmingham.  Our current Officers and Directors will continue to serve the Association until we can hold an election at that meeting.

3.         As best I can determine, consumer finance companies are not directly eligible for the Paycheck Protection Program, because consumer lenders are not eligible for SBA 7(a) loans.  However, I continue to look for circumstances that may allow a service company to a finance company to be eligible.

4.         Earlier this week, the CFPB released additional Credit Reporting Guidance During COVID-19 Pandemic, with two key points. The first point reemphasizes the FCRA amendments passed in the CARES Act last week, which we discussed in detail in our blog this week. The other key development is that the CFPB will allow flexibility in the amount of time it takes furnishers to respond to direct disputes, as long as the company is making good faith efforts to respond as quickly as possible.

Please stay in touch and continue to send to me and Sam any updated information that you think will be helpful to the industry.  I hope that everyone has a safe weekend.



April 1, 2020


AILA Members and Friends: 

I know that many members are scrambling to understand borrowing options for their companies during this uncertain time.  Reviewing the information that is coming from so many sources is like trying to drink from a firehose.

I received the attached memorandum from the Kassouf & Co., P.C. accounting firm yesterday that I think is one of the more succinct analyses of options that I have seen.  I have obtained the permission of Kassouf to share this with you.  (Interestingly, they have told me this morning that some of the required documentation discussed in the memorandum already requires addition.)

I have previously forwarded to you a good summary that my partners have prepared on SBA loans; and, I previously sent out a summary of a loan opportunity through the Birmingham Strong Fund (for companies domiciled in the City of Birmingham).

Please let Sam or me know if we can assist you with any of these programs.




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.




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 for the latest information. 

Scott Corscadden

Supervisor, Bureau of Loans

Alabama Banking Department

401 Adams Avenue, Suite 680

Montgomery, AL 36104


March 12th, 2020

Please see the attached memo regarding pandemic planning.


Scott Corscadden

SupervisorBureau of Loans


Pandemic Planning 3-12-2020.pdf


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! 



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.



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!



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.


Pew Installment Loans Report

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: ' This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ' < This e-mail address is being protected from spam bots, you need JavaScript enabled to view it >
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 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.



July 25, 2017

 AILA Members and Friends:  With Jonathan Paret’s permission, I share with you the following information concerning the likelihood of a CRA intervention in the CFPB’s proposed Arbitration Rule.  Maury

 BEGINNING OF THE END FOR CFPB ARBITRATION RULE? - House Republicans today are expected to pass legislation that would block a CFPB rule banning mandatory arbitration language in consumers' contracts with credit card companies and banks.

The White House "strongly supports" the resolution. It said the CFPB's rule "would benefit trial lawyers by increasing frivolous class-action lawsuits." Read more.

Compass Point analyst Isaac Boltansky on what's next - "We now peg the odds of the mandatory arbitration rule being reversed through the [Congressional Review Act] at 60 percent. The House will easily clear the measure, but the whip count in the Senate is still fluid at this juncture and appears to be losing its footing."




July 11, 2017


CFPB Pulls the Trigger on Arbitration Agreements Rule

Yesterday, July 10th, the Consumer Financial Protection Bureau released its Arbitration Agreements Rule pursuant to the Dodd-Frank Act.  The release of this Rule has been much anticipated since the publication of the Proposals last year.  True to the Proposals, the Rule does not prohibit mandatory arbitration on a non-class wide basis.  However, it does eliminate the imposition of mandatory, class-wide arbitration by those who provide consumer products and services on a repetitive basis (for example, “creditors” as that term is used in the Truth-in-Lending Act, and those participating in credit decisions, acquiring consumer contracts, leasing automobiles, providing debt management services, debt collection and more).

The Rule imposes specific language to include in a pre-dispute arbitration agreement to make crystal clear that the agreement does not prevent a consumer from being part of a class action case in court.  It also imposes requirements on those who are subject to the Rule, to submit detailed records of arbitrations and arbitration related information to the Bureau.

The effective date of the Rule is March, 2018, at the earliest.  And, there is still the possibility that Congress will act under its powers to reject the Rule within the next 60 days.

In preparation for an effective final Rule, creditors using pre-dispute arbitration agreements in their consumer finance transaction contracts, should consider the benefits of such agreements absent class-wide waiver, particularly in light of the “submission of records” requirement.

If a creditor determines that an arbitration agreement, without class-wide arbitration, is still of benefit, then the form of the agreement currently in use will require modification.  If a creditor determines that arbitration without the component of mandatory class-wide arbitration is not of value, a “jury trial waiver” provision is a matter to be considered.  The rules concerning jury trial waiver, differ from jurisdiction to jurisdiction.

Please let me know if you have questions.  Maury


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.


March 1, 2017

Today, Rep. Fincher and 44 co-sponsors introduced HB 321 into the Alabama House, calling for a Constitutional Amendment to set the maximum interest rate a lender may charge “on a consumer loan, line of credit, or other financial product” at 36% APR.  A copy of the Bill is linked above. 

As consumer finance companies well understand, such a limit would end most all sub-prime consumer loans and sales made in Alabama, including traditional installment loans, credit appliance, furniture and other product sales, and automobile and boat financing.  The ramification of such a law would have draconian consequences to Alabama’s consumers. 

While I understand the intent of the proponents of this measure -- to reign in consumer loan products that create a cycle-of-debt -- the result of the passage of this Bill and the adoption of such an Amendment would cripple the very people the Bill is intended to help. 

There are other more appropriate approaches to address loan products that are problems for Alabama’s consumers.  The Governor’s Task Force on Consumer Credit Laws has been hard at work on effective solutions.  This Bill’s approach is not one of them.  The Alabama Installment Lenders Association will be joining with others to explain the serious problems with this Bill and the severe implications for Alabama’s consumers that would result from its becoming law. 

Maury Shevin


December 14, 2016


A Message to

Alabama Installment Lenders Association Members and Friends

We are drawing to the end of another year; and, it has been a good one for our Association and most of our members.  Despite some concerns early in the year about the direction of the Alabama Legislature and notwithstanding some poor press reporting in the summer, the Alabama Installment Lenders Association has prevailed as a strong trade association that provides valuable and fair loan products to our customers.  Because of our work this past year, I think that all stakeholders in the consumer finance world -- lenders, customers, regulators, consumer advocates and academicians -- have a better understanding of what a traditional installment loan is and how it works to the needs of our customers.  And this is important.

There are still significant “threats” out there that have to be addressed in 2017.  The Consumer Financial Protection Bureau remains high on the list of threats along with some consumer advocates who have difficulty distinguishing beneficial consumer loan products and services from those that are problematic.  We will continue our outreach to regulators, legislators and consumer advocates to encourage their understanding of how traditional installment loans work for the good of our customers.

Next year will likely see changes in our industry.  On the federal level, there is the possibility that the Trump Administration will oversee the dismantling of significant aspects of the CFPB through legislative changes to Dodd-Frank.  But, don’t jump for joy quite yet.  It remains to be seen whether the pieces of Dodd-Frank that are altered only apply to Wall Street and Money Center Banks, or whether the changes also affect Main Street consumer finance companies.    We will look for some regulatory relief as “compliance” has become a significant cost of doing business for traditional finance companies, despite little showing that traditional installment loans are any real problem for consumers.  Our sister trade association, the American Financial Services Association, is hard at work on our behalf in Washington, pushing for regulatory relief.  The National Installment Lenders Association works diligently on our issues as well.

On the state level, those who would impose rate caps at unworkable levels will, no doubt, continue in their efforts.  We’ve seen some of this approach promoted at the Governor’s Task Force Meetings on Consumer Credit held last October and November.  We just need to stay the course, explaining how traditional installment lending works, and why rate caps do not.  Our Association will meet in Montgomery on February 21, 2017, to discuss industry developments and meet our Legislators.  This annual program is always one that I look forward to.  I trust that this date is already on your calendar.

I hope that all AILA members enjoy this Holiday Season with good deeds, with good cheer, with family and with friends.  And, may the New Year bring you peace and happiness.


Maury Shevin, Association Director

November 23, 2016

AILA Members and Friends:

The Internal Revenue Service has eliminated one of the more troubling regulations affecting consumer finance companies, dealing with the 36-month “deemed discharge of indebtedness.”  For the past several years, confusion has resulted as to whether the expiration of the 36-month rule is equivalent to the actual discharge of the indebtedness—resulting in uncertainty by creditors as to whether they may lawfully continue to pursue debt after issuance of a 1099-C based upon the 36-month deemed discharge.

The IRS has now issued its final rule that will eliminate the required issuance of form 1099-C based upon the finance company not receiving debt repayment for 36 months. 

The final regulation applies to information returns and payee statements required to be filed after 12/31/2016.  Therefore, for calendar year filers any 36-month expiration period that occurred during 2016, will no longer trigger the 1099-C filing.  However, 1099-C’s must still be filed when debt is discharged.  The remaining seven “identifiable events” that trigger information reporting obligations continue in full force and effect.

Happy Thanksgiving to all.


November 1, 2016

Kevin Gardner, President, has announced that the Alabama Lenders Association has officially been renamed the Alabama Installment Lenders Association.

The Alabama Installment Lenders Association, the oldest and most respected Alabama trade association devoted to the consumer finance industry, was originally founded in 1960.

“The name change reflects the importance that we attach to being traditional installment lenders,” Gardner said. “We want to clearly differentiate our loan products – which are fully amortizing, payable in equal installments and without prepayment penalty and balloon payment – from the more troubling loan products on the market today, such as payday and title pledge loans.  This ‘rebranding’ should help us explain to customers and regulators exactly who we are and what we do.”

The website of the Association remains 


October 11, 2016

We changed our name from Alabama Lenders Association to Alabama Installment Lenders Association so that there would be no misunderstanding of our mission. 

September 26, 2016

ALA Members and Friends:

 I thought we had a great Committee Day Meeting last week.  It’s always good to get together to discuss the status of the industry.  I appreciate our new Secretary Shane Turner’s quick turn-around on the minutes and will be happy to share a copy with any member who may have missed.  (Susan Rochester did the same thing for many years!)

We had a serious discussion about our finances and it was very enlightening.  I am convinced that we need to expand our membership if we want to be in the position of continuing to provide good and timely information to our Association’s members.  To this end, I want to repeat Mike Whitaker’s invitation to let the Membership Committee know of any prospects for both regular Members and Associate Members.  We also discussed changing our name to the “Alabama Installment Lenders Association.”  Several of us are working on that now to make it happen. 

Please note that our next Association meeting will be our Meeting and Legislative Reception in Montgomery on February 21st, 2017.

I also want to report that Kevin Gardner, Mike Whitaker and I went to Montgomery for the inaugural Governor’s Task Force on Consumer Credit, immediately following the Committee Day Meeting.  The Task Force Meeting held in the Old Capitol Building was a good beginning.  Rep. David Faulkner is the Chair and he is relying heavily on Banking Department Supervisor Scott Corscadden and Associate Counsel Anne Gunter.  The Task Force is composed of legislators, regulators, consumer advocates, industry representatives and academics.  It is the first time in my career that I’ve sat in a room with all of the “stakeholders” represented.  It really was a good start.  Chairman Faulkner wants to focus first on Title Pledge.  I think that he reasons that we may be able to secure general agreement on the need to break-out title pledge from the Alabama Pawn Shop Act, and lower its rate.  We’ll see.

Then, he intends to move on to Payday.  The traditional installment lenders on the Panel were very clear in differentiating installment lending from title pledge and payday.   While some of the more strident consumer advocates don’t want to see a difference (and the payday industry wants to “blend-in”),  I think that the majority of the Task Force noted and understands the distinction.  This bodes well if the Task Force is going to succeed in modifying the Deferred Presentment Services Act.

I will keep you advised of our progress.  Meanwhile, please let me know if you have any questions.  Thanks for your support of the Association.



August 31, 2016

ALA Members and Friends: 

For those of you who will continue to make Covered Loans to Covered Borrowers after October 3rd, the following information from AFSA and the attached Military Lending Act Guidance from the Department of Defense will be useful.  Remember that even if you do not intend to be making loans to Covered Borrowers, you must “scrub” your applicant to make certain that he or she is not a Covered Borrower.  Checking with your credit reporting agency, or checking the Department of Defense Database are the basic methods for retaining a “safe harbor” after October 2nd.  (The current separate statement signed by the applicant will no longer protect you after that date.)  And, the penalties for violating the law and regulation are severe including: imprisonment for creditors who knowingly violate the law, the contract is void, a civil penalty of not less than $500, and attorneys’ fees and court costs.

Please let me know if you have any questions.  Maury

The DoD issued the attached guidance interpreting its regulation implementing the MLA. The guidance answers some questions posed by AFSA and its members, but unfortunately does not address all of our concerns. The DoD has said that it remains open to talking with the financial services industry. However, we do not expect more guidance at this time. We’re looking for opportunities to work with the DoD as they educate service members and their families about the MLA.


Here are a few key points from the guidance:

 ·The DoD answered AFSA’s question about what methods of transportation are included within the definition of a “vehicle.” For the purposes of the MLA, the term “vehicle” means any self-propelled vehicle primarily used for personal, family, or household purposes for on-road transportation. The term does not include motor homes, RVs, golf carts, or motor scooters.

 ·The DoD clarified that credit extended for the purpose of purchasing personal property which secures the credit, does NOT fall within the exception to “consumer credit” under 32 CFR 232.3(f)(2)(iii) where the creditor simultaneously extends credit in an amount greater than the purchase price. In other words, any credit transaction that provides purchase money secured financing of personal property along with additional “cash-out” financing is not eligible for the exception.

 ·In answer to a question asking if fees that a creditor is required to pay by law and passes through to a covered borrower are required to be included in the calculation of the MAPR, the DoD said that if such fees are considered “finance charges” under Regulation Z, then such fees must be included in the calculation of the MAPR. However, if the fees are not “finance charges” under Regulation Z, they may be excluded from the calculation of the MAPR, provided they do not qualify for any other categories of charges.

 ·Regarding the requirement to provide oral disclosures which AFSA and others asked about, the DoD clarified that a creditor may orally provide a clear description of how the payment obligation is calculated or a description of what the borrower’s payment obligation would be based on an estimate of the amount the borrower may borrow.  Alternatively, a creditor could choose to generally describe borrowers’ obligations to make a monthly, bi-monthly, or weekly payment as the case may be.

 ·The DoD specified that the limitation in section 232.8(e) on a creditor using a check or other method of access to a deposit, savings, or other financial account maintained by the covered borrower does NOT prohibit the borrower from repaying a credit transaction by check or electronic fund transfer. It prohibits a creditor from using the borrower’s account information to create a remotely created check or payment order in order to collect payments. It also prohibits a creditor from using a post-dated check provided at or around the time the credit is extended.

 ·In answer to a question posed by AFSA and others, the DoD clarified that an assignee is permitted to avail itself of a covered borrower identification safe harbor if the assignee has maintained the original creditor’s record of a covered borrower check.

Maurice L. Shevin, Association Director

 MLA_DOD Guidance_8.26.16-C2-C1.pdf

July 18, 2016

Maurice Shevin has been asked to serve on Governor Robert Bentley's Alabama Consumer Credit Task Force.  Congratulations, Maury! 

July 5, 2016

ALA Members and Friends:

The end of June and beginning of July have started out with several important developments for Alabama’s consumer finance industry. 

John Harrison, who has served as Superintendent of the State of Alabama Banking Department for 11 years, resigned his office effective June 30th.  Mr. Harrison has been an excellent leader of the Banking Department serving with distinction under two Governors, garnering the respect of consumer activists, industry members and legislators.  He has worked tirelessly to continue Alabama’s rich tradition of excellence among state banking departments across the nation.

We are delighted with Governor Bentley’s selection of Rep. Mike Hill to replace Mr. Harrison.  Mr. Hill has been very active in the banking and finance world for many years.  He has served in the Alabama Legislature for 30 years, where he chaired the Banking & Insurance Committee in years past, now known as Financial Services.  He has been involved in most every significant legislative act important to the consumer finance industry and the consumers of Alabama for years.  We do not think that the Governor could have found a more appropriate replacement for Mr. Harrison.

With the creation by the Governor of the Alabama Consumer Credit Task Force designed to study all consumer lending laws in Alabama, Mr. Hill will have a unique opportunity to shape the future of the consumer finance industry in Alabama.  We look forward to working with Mr. Hill in this effort.


CFPB Small Dollar Loan Rule Proposal—What the Director Said Next

By Maurice Shevin • Friday, June 24, 2016

Several years ago, one of our local traditional installment lenders said that payday and title pledge lenders were going to cause a serious disruption in traditional installment lending.  Boy was he right.

As reported recently, the CFPB's Proposal released for comment on June 2nd treats vehicle secured loans of more than 45 days with a Total Cost of Credit (i.e., an “all-in APR”) of greater than 36% as a “longer-term covered loan.”  The significance of this designation is that a lender of such a loan must jump through a series of analytical hoops before it may make such a loan.  

So, what is wrong with that?  That answer lies in the nature of the traditional installment lending business itself, and how consumer loans are made and their cost structure determined.  Economics dictate that smaller dollar consumer loans (basically under $2500) cannot be made profitably and securely today within the all-in APR guidelines set forth in the Proposal.  And, when additional costs of compliance are layered onto such loans, such increases will be passed along to the borrower.  It is also a certainty that the break-even point for lenders will dictate the need for a higher loan amount.

These issues were covered with Director Cordray when he attended the meeting of the National Installment Lenders Association (“NILA”) in Washington earlier this week.  The take away by attendees is that the Bureau's Proposal is not cast in stone, and the Bureau is open to rethinking its positions—but only based on data.  Recall that the CFPB prides itself on being a data driven agency.

The Director generally introduced the Proposal and explained that the CFPB intends to require an ability to repay determination for consumer loans creating and existing for repetitive roll-overs, whether the characterization of the loan is payday, title pledge or installment.  The Director heard from the group that the traditional installment lenders represented by NILA do not make consumer loans that abuse via a cycle-of-debt, because traditional installment loans are underwritten, fully amortizing with equal installment payments, made with no prepayment penalty nor balloon payments, made with no required leveraged payment mechanism, and generally reported to credit reporting agencies.

While acknowledging that this type of loan product in general may be beneficial to consumers, the Director said that the bureau is concerned that very high-cost lenders can adapt to include these indicia; and, if the Rule ultimately adopted with respect to vehicle security in particular does not address these loans as “covered” then the intent of the Rule to rein in abusive loans will not have been achieved.

The Director was aware that high-cost lenders have already succeeded in a legislative effort to avoid the Proposed Rule.  An installment loan made under the new Mississippi Credit Availability Act would not be a covered loan if vehicle security is not taken.  The Director invited NILA to address this issue and make suggestions in any comment letter that it chooses to write.

Director Cordray was generous with his time and NILA made its presentation efficiently in recognition of the Director's busy schedule.  The hard work begins now:  That is, we need to suggest changes in the Proposal, backed by data, because as one presenter said earlier in the meeting, “The demand for credit cannot be legislated away, but the source for credit can be.” 

October 23, 2015

ALA Members and Friends:

The Alabama Lenders Association is committed to differentiating ourselves from payday and title pawn lenders, who are not traditional installment lenders.  Our website at clearly sets forth who we are and what we are about:

We are traditional installment lenders.  Our lending is based on three principles:  (i) equal installment payments (ii) for customers who have the ability to repay (iii) with a clear pathway out of debt. Installment loans show with clarity precisely when the loan will pay out based upon the payment schedule. We help our customers build their credit record by reporting to credit bureaus.  This encourages both responsible borrowing and responsible lending.  Our loans are customer driven—no prepayment penalties and understandable repayment terms are the rule.  Our loans are transparent, making them the safest loan product for consumers.  And, we make loans from local offices with local lenders, offering much more personalized service than a bank.

Our members—whether large or small--are committed to traditional installment lending.  The Association adopted a policy that our Members may not hold licenses under the acts permitting these other types of lending.  The Executive Committee, now joined by the chairman of the Membership Committee, carefully vets all applicants for membership to ensure that their business methods comport to our Association’s Code of Ethics, adopted over 10 years ago.  Our Code of Ethics is clearly presented on our website.

We recognize that it is vitally important that the good name of installment lenders, and the Alabama Lenders Association in particular, not be confused with payday and title pawn lending.  We work hard to distinguish ourselves, and tell the story of our good work.

Should you have any questions concerning membership or the mission of the Association, please raise them with me, President Kevin Gardner, or any member of the Board of Directors.


October 07, 2015

To ALA Members and Friends:

This morning the CFPB announced its proposal to ban mandatory pre-dispute arbitration clauses in consumer contracts that require a consumer’s claims to be arbitrated separately and severally.  Over the years, creditors have developed arbitration clauses that require claims between consumers and creditors to be arbitrated, and that limit such arbitrations to individual actions as opposed to class-wide arbitration.  In other words, consumers can’t join with others similarly situated to pursue claims together.  Consumer advocates and others have argued that such contractual provisions frustrate consumers, prevent remedial class action, and unfairly protect bad-actors.

Section 1028 of the Dodd-Frank Wall Street Reform and Consumer Protection Act specifically mandates the CFPB to conduct a study—which it has—and if the Bureau finds that prohibiting or limiting arbitration “is in the public interest and for the protection of consumers” then it may adopt a rule consistent with the study’s findings. 

The March, 2015, study by the CFPB analyzed

*             over 1,800 consumer finance arbitration disputes filed over a period of three years,

*             a sample of nearly 3,500 individual consumer finance cases filed in federal court over the same three year period,

*             all of the 562  consumer finance class cases filed in federal court and in selected state courts during the same period,

*             40,000 small claims filings over the course of a single year,

*             more than 400 consumer financial class settlements in federal courts over a period of five years, and

*             more than 1,100 state and federal public enforcement actions relating to consumer finance.

According to the CFPB, the study results prove that consumers are adversely served by limiting their access to class action litigation.  The full study is available for review at

The Outline of Proposals found at  would not ban mandatory, pre-dispute arbitration clauses entirely.  Rather, the CFPB proposes that arbitration clauses in consumer finance contracts would have to explicitly say that they do not apply to cases filed as class actions unless and until the class certification is denied by the court or the class claims are dismissed in court.

The arbitration procedure for individual claims is not left entirely alone in the Proposal.  The CFPB is also considering mandating that companies that use arbitration clauses for individual disputes, submit to the CFPB the arbitration claims filed and awards issued.  Also, the CFPB is considering as part of the Proposal, the publishing of the claims and awards on its website.

The CFPB’s Outline of the Proposal to address arbitration is the first step in the rulemaking process.  The next step is to convene a Small Business Review panel to gather feedback from interested parties. Once that is done, then the CFPB would adopt a Rule to become operative no earlier than 180 days after the effective date of a final rule.  The CFPB contemplates setting an effective date of 30 days after the rule is published, thus giving creditors 210 days after a rule is published to make changes to form contracts.

I will discuss this with you in more detail as matters progress.


CFPB logo

July 21, 2015

Office of Communications
Tel: (202) 435-7170


WASHINGTON, D.C. – Today, the U.S. Department of Defense issued a final rule expanding the types of credit products that are covered by the 36-percent rate cap and other military-specific protections under the Military Lending Act. The rule closes loopholes that have led to lenders skirting the law with products that fall outside the scope of the existing regulation.

Consumer Financial Protection Bureau Director Richard Cordray issued the following statement:

“I congratulate Secretary Carter and the Department of Defense on the final rule published today. The CFPB strongly supports the Department’s efforts to strengthen consumer protections for our nation’s military families. Today’s rule will help ensure that American servicemembers get the legal protections they deserve. As one of the agencies responsible for enforcing the Military Lending Act, we stand ready to stop illegal lending to military families.”

Holly Petraeus, Consumer Financial Protection Bureau Assistant Director, Office of Servicemember Affairs, issued the following statement:

“When I drive down the strip outside a military installation and count 20 fast-cash lenders in less than 4 miles, that’s not a convenience, that’s a problem.  I commend Secretary Carter for taking this important step to make the Military Lending Act more effective.”


The Military Lending Act provides servicemembers and their dependents with specific protections for their “consumer credit” transactions. Among other protections, the law limits the annual rate on an extension of such credit to 36 percent, provides for military-specific disclosures, and prohibits creditors from requiring a servicemember to submit to arbitration in the event of a dispute. As initially implemented by the Department of Defense in 2007, the Military Lending Act protections applied to three narrowly-defined “consumer credit” products:

  • closed-end payday loans for no more than $2,000 and with a term of 91 days or fewer;
  • closed-end auto title loans with a term of 181 days or fewer; and
  • closed-end tax refund anticipation loans.

The final rule announced today amends the definition of “consumer credit” covered by the regulation to more closely align with the broad, traditional definition of credit covered by the Truth in Lending Act. The rule generally covers consumer credit offered or extended to active-duty servicemembers or their dependents, as long as the credit is subject to a finance charge or payable by written agreement in more than four installments. In accordance with the statute, the MLA regulation would continue to exclude residential mortgages and credit extended to finance the purchase of, and secured by, personal property, such as vehicle purchase loans.

The Military Lending Act is implemented by the Department of Defense, and is enforced by the CFPB and other federal regulators. In September 2013, the CFPB released guidelines on how its examiners will identify consumer harm and risks related to MLA violations when supervising payday lenders. In November 2013, the Bureau took action against a payday lender, Cash America, for extending payday loans to servicemembers and their families in violation of the Military Lending Act. In December 2014, the Bureau issued a report highlighting how lenders had continued to exploit loopholes in the existing Military Lending Act rules.

The announcement by the Department of Defense is available here:


The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit


June 11, 2015 

Two developments to report to you:

 Frist, SB 327, the exemptions/garnishment bill that we fought so hard for was just signed by the Governor this afternoon.  I want to take this opportunity to thank John and Tami Teague for the great job that they did in seeing this bill through passage in the 11th hour in the Senate, with our amendment on it.   This amendment will have far reaching effect if it is successfully used to reverse the decision of the Alabama Court of Civil Appeals in Pruett.  I thought the bill was dead (and reported it to some as such) one week ago.  But, because of John’s extraordinary efforts, he was able to get it brought up for consideration by the full Senate in the midst of the battle over the Budget.  And, now the Governor has signed.

 The result is that we have increased personal property and homestead exemptions in Alabama together with a clearly stated “intent of the Legislature” that wages, salaries and bonuses are not personal property for the purposes of Alabama law and the Alabama Constitution.  This law is in effect now.

Also, the Small Claims Court jurisdictional amount increase to $6000 was passed and signed by the Governor.  This new law is Act No. 2015-224.  It becomes effective on August 1, 2015.  Some of our members took the lead on getting this bill shepherded through the Legislature.  . 

When we are in Point Clear, be sure to thank all of the people who work so hard for us in and on Montgomery matters—our friends in the Legislature, our members and our government affairs experts!


April 7, 2015

Social media policies: Why every employer needs one

By Daniel J. Burnick • Friday, March 27, 2015

Over the past several weeks, you may have read about the murder of a young girl in Birmingham at a fight that was arranged through Facebook; or the fight in Birmingham's Railroad Park that was posted on Facebook; or the fight in Green County at a school bus stop where shots were fired that was posted on Facebook; or Wisconsin Governor and Presidential hopeful Scott Walker's Director of Social Media who resigned after inappropriate tweets.  It seems as if every day or two, there is another instance of social media activity that makes you shake your head and wonder what is going on.

Employers often face the same predicament.  Recently in Montgomery, an employee at Max Credit Union was placed on leave after being accused of commenting on a customer's account on a local Facebook page.  According to the report, “a MAX employee posted a couple’s account information claiming they had a negative balance in their account on the Prattville-Millbrook Montgomery Black List Facebook page.  Max Credit Union is investigating the claim.”

Any employer faces the risk of having inappropriate information posted on Social Media by an employee that should not be posted.  The information can be trade secrets or confidential information, such as customer lists, pricing information or a secret formula.  It can be personal identifying information such as social security numbers, addresses or dates of birth.  Medical practices have patient information that if posted on social media can be a violation of HIPAA.  Social media posting by attorneys or their clients can waive the Attorney-Client privilege or breach settlement agreements that have confidentiality provisions.  Unlawful harassment, be it based on race, sex, pregnancy, disability or other protected classifications can occur on social media. Every Employer has information that it does not want posted on Social Media.

Employers should be proactive in addressing the improper dissemination of information through social media by implementing a social media Policy, educating and training the workforce on the policy, and enforcing the Policy.  Although the implementation of a social media policy may not prevent improper postings, the policy can be the basis for disciplinary action, up to and including termination.  Such a policy may also provide some measure of protection for the Employer should the Employer be sued as the result of an improper posting on social media.

Practice pointer:  Employees are constantly acting inappropriately on social media.  Oftentimes, the inappropriate conduct centers on work issues.  It is important for Employers to implement a social media policy, which is in compliance with the National Labor Relations Act, educate and train their employees on the policy, and enforce it.

For more information, please contact:

Daniel J. Burnick

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March 26th, 2015

To: AFSA Membership

From: Chris Stinebert

Re: CFPB Provides Early Look at Payday Loan Proposal

Date: March 26, 2015

Early this morning, the Consumer Financial Protection Bureau (CFPB) published an outline of proposals it is considering regarding payday loans in advance of convening a Small Business Review Panel to gather feedback from small lenders, which is the next required step in the rulemaking process. The CFPB is also hosting a field hearing on the subject today at 12:00 p.m. EDT.

Despite specifically mentioning certain high-cost installment loans, the proposals shared by the CFPB today focus on ability to repay, loans requiring repayment via a deposit account or paycheck, or the lender holding a security interest in the borrower’s vehicle. The proposals would cover short-term credit products that require consumers to pay back the loan in full within 45 days, as well as “high-cost, longer-term credit products of more than 45 days where the lender collects payments through access to the consumer’s deposit account or paycheck, or holds a security interest in the consumer’s vehicle, and the all-in (including add-on charges) annual percentage rate is more than 36 percent.” This all-in rate could be analogous to the Military Annual Percentage Rate or MAPR.

The CFPB announcement specifically references installment loans. “Installment loans typically stretch longer than a two-week or one-month payday loan, have loan amounts ranging from a hundred dollars to several thousand dollars, and may impose very high interest rates. The principal, interest, and other finance charges on these loans are typically repaid in installments. Some have balloon payments. The proposal would also apply to high-cost open-end lines of credit with account access or a security interest in a vehicle.”

The proposals fall into two categories: one covering short-term loans and the other covering longer-term loans. Both categories include two sets of requirements that lenders could choose to follow, either prevention requirements or protection requirements. Under the prevention requirements, lenders would have to verify the consumer’s income, major financial obligations, and borrowing history to determine a consumer’s ability to repay the loan. For longer-term loans, fees for ancillary products must be included in the ability-to-repay calculation. Under the protection requirements, lenders would have to comply with certain restrictions intended to ensure that consumers can affordably repay their debt. Both categories would include restrictions on the number of loans consumers can receive in given time periods.

The proposal also includes restrictions on collection practices. The CFPB is considering requiring lenders to provide borrowers three business days' notice before submitting a transaction to the consumer’s bank. In addition, a lender could not attempt a third withdrawal from a consumer's deposit account if the two prior attempts were unsuccessful without obtaining a new authorization. Finally, the proposal caps short-term loan rollovers at two – three total – followed by a mandatory 60 day cooling off period. Refinances on longer term loans would be prohibited if the consumer is delinquent on previous loan obligations.

It appears that the CFPB was intending to cover title loan products in this area of their proposal; however, if a traditional installment lender holds a security interest in the borrower’s vehicle, it would be covered under the proposal. AFSA will seek clarification on this requirement as well as ensuring that the ACH portion of the proposal is only triggered if a lender requires access to a consumer’s deposit account rather than offering the service as a convenience to the consumer.

Although we are encouraged that the CFPB’s outline of various proposals under consideration does not focus on traditional installment loans, we remain diligent and concerned that the actual proposed rule may adversely impact our member’s business practices, and more importantly, consumers’ ability to access credit through the most affordable product available – traditional installment loans.

The proposals published today are the first step of a lengthy process and could change substantially. Next, the CFPB must convene a Small Business Review Panel. After the panel, the CFPB may formally propose rules, which must be subject to the public comment and review process. AFSA will be represented on the upcoming Small Business Review Panel, and will continue to work with the CFPB throughout the process. AFSA will continue to make the distinction between traditional installment loans and other small dollar products to the CFPB, policymakers, and the general public.

The field hearing will be streamed live via the CFPB blog starting at 12:00 p.m. EDT.

Relevant Links:

Outline of Proposals

Fact Sheet on Proposals

Fact Sheet on SBREFA panel process

Fact Sheet on SBREFA panel

Press release

For more information, please contact AFSA Executive Vice President Bill Himpler at 202-466-8616 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .


January 16, 2015

ALA Members and Friends:

We’ve gotten a number of inquiries recently about the dates for our next two meetings:

The Legislative Meeting & Reception in Montgomery is March 17th,  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 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.  Parking in the adjacent lot, will open at 2:30.

The Annual Convention in Pt. Clear is June 18th through 20th.  This Conference will take place at the Marriott Grand Hotel on Mobile Bay, and will include counsel information from Sam and me on the topics of compliance, legislation and more.  Association business topics include mapping out the direction for the Association in the coming year.  And, of course, we will have all of our fun activities and entertainment including great food, golf, and fishing.  Be on the look-out for the 2015 Registration Brochure. 

I look forward to seeing you at both meetings.