HB400 By Representatives Scott, Melton, Hammon, Sanderford, Boyd, Brown, Beech, Drake, Wadsworth, Morrow, Hall, Williams (JW), Coleman-Evans, Alexander, Buskey, Todd, Treadaway, Bracy, Faust, Ball, England, Wilcox, Tuggle, Patterson, Howard, Davis, Chesteen, Baker, Daniels, Rowe, South, Jackson, Garrett, McMillan, Forte, Knight, Moore (M), Shiver, Pringle, Sessions, Johnson (R), Warren, McCampbell, Nordgren, Collins, Butler, Drummond, Hanes, Whorton (R), Harper, Grimsley, Clarke, Martin, Fincher, Whorton (I), Ledbetter, Givan, Sells, Lawrence, Williams (P), Lindsey, Faulkner, Shedd, Poole, McCutcheon, Weaver and Bandy RFD Financial Services Rd 1 02-APR-15

SYNOPSIS: This bill would provide for the Alabama Title Pledge Act to license and regulate the title loan business; would provide or charges, interest, and fees for loans; and to provide for the enforcement of the act by fines and criminal penalties.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

A BILL TO BE ENTITLED AN ACT

To license and regulate the title loan business; to provide definitions; to require licensure of title pledge lenders and offices and to provide for charges, interest, and fees concerning title pledge loans; to provide for fines, penalties, and enforcement for violations; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall be known and may be cited as the Alabama Title Pledge Act.

Section 2. As used in this act, the following words and phrases shall have the following meanings:

(1) APPROPRIATE LAW ENFORCEMENT AGENCY. The sheriff of each county in which a title pledge lender maintains an office, the police chief of the municipality in which a title pledge lender maintains an office, or law enforcement officers of the Department of Public Safety.

(2) ATTORNEY GENERAL. The Attorney General of the State of Alabama.

(3) DOCUMENTS. Any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic, or otherwise. Any reproduction of a document shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

(4) IDENTIFICATION. A government issued photographic identification.

(5) PERSON. An individual, partnership, corporation, joint venture, trust, association, or other legal entity.

(6) PLEDGED PROPERTY. Any personal property certificate of title that is deposited with a title pledge lender in the course of the title pledge lender's business and is the subject of a title pledge agreement.

(7) PLEDGOR. The person to whom the property is titled.

(8) PRINCIPAL BALANCE. The balance due and owed exclusive of any interest, service charges, or other loan-related charges.

(9) RECORDS. Any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic, or otherwise. Any reproduction of a record shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

(10) SUPERVISOR. The Supervisor of the Bureau of Loans of the State Banking Department.

(11) TITLE PLEDGE AGREEMENT. A written agreement that complies with the requirements of this act whereby a title pledge lender agrees to make a loan of money to a pledgor, and the pledgor agrees to give the title pledge lender a security interest in unencumbered titled personal property owned by the pledgor.

(12) TITLED PERSONAL PROPERTY. Any personal property the ownership of which is evidenced and delineated by a state-issued certificate of title, except manufactured housing.

(13) TITLE PLEDGE LENDER. Any person engaged in the business of making, offering, or brokering title pledge agreements with pledgors. The term does not include a bank that is regulated by the State Banking Department, the Comptroller of the Currency of the United States, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, or any other federal or state authority and all affiliates of such bank, any state or federally chartered credit union, and any finance company subject to licensing and regulation by the State Banking Department.

(14) TITLE PLEDGE OFFICE. The location at which, or premises in which, a title pledge lender regularly conducts business. No business other than title pledge business shall be conducted at a title pledge office without the prior written approval of the supervisor.

(15) TITLE PLEDGE SERVICE CHARGE. A charge for investigating the title, appraising the titled personal property to which the pledged property relates, documenting and closing the title pledge agreement transaction, making required reports to appropriate law enforcement officials, and for all of the services provided by the title pledge lender.

(16) TITLE PLEDGE TRANSACTION FORM. The instrument on which a title pledge lender records title pledge agreements pursuant to this act.

Section 3. At the time a title pledge lender enters into each title pledge agreement, the title pledge lender shall complete a consecutively numbered title pledge transaction form for the transaction, and the pledgor shall sign the completed form. The supervisor shall approve the design and format of the title pledge transaction form, which shall elicit the information required under this section. In completing the title pledge transaction form, the title pledge lender shall type or write indelibly and legibly in English, the following information:

(1) The make, model, and year of the titled personal property to which the pledged property relates.

(2) The vehicle identification number, or other comparable identification number, along with the license plate number, if applicable, of the titled personal property to which the pledged property relates.

(3) The name, address, date of birth, physical description, Social Security number of the pledgor, and one photo identification.

(4) The date of the transaction.

(5) The identification number and type of identification, including the issuing agency, accepted from the pledgor.

(6) The amount of money advanced, which shall be designated as the amount financed.

(7) The maturity date of the title pledge agreement, which shall be no less than 180 days or more than one year after the date of the transaction.

(8) The total title pledge service charge payable over the loan term, designated as the finance charge.

(9) The total amount, amount financed, plus finance charge, which must be paid to redeem the pledged property on the maturity date, designated as the total of payments.

(10) The amount that pledgor must pay in each installment, designated as the installment payments, and the date that each installment payment is due, designated as installment due dates.

(11) The annual percentage rate, no greater than 36 percent, computed in accordance with the regulations adopted by the Federal Reserve Board pursuant to the Federal Truth-in-Lending Act.

(12) Any late charge that the title pledge lender will charge the pledgor, and an explanation of when it will be imposed, designated as late fee.

Section 4. (a) The following information shall also be printed on all title pledge transaction forms:

(1) The name and address of the title pledge office.

(2) The following statements, in at least 14-point bold type immediately above the pledgor's signature and the statement required by subdivision (4) of this subsection:

a. The pledgor is not obligated to redeem the pledged certificate of title.

b. There shall be no penalty for early payment of any amount owed before the installment date or maturity date. The lender must accept payments of any amount at any time.

c. If the pledgor does not make the installment payment and pay any late charge by 30 days after the due date, the title pledge lender may take possession of the titled personal property to which the certificate of title relates.

d. If the pledgor does not redeem the pledged property within 15 days after the repossession by paying all outstanding principal, interest, and other fees, then the pledgor forfeits all right, title, and interest in titled personal property, other than the interest in the sale proceeds, to the title pledge lender, who shall thereby acquire an absolute right of title and ownership to the titled personal property.

e. If the personal property is sold due to the pledgor's default, the pledgor is entitled to any surplus obtained at such sale beyond the remaining principal and interest owed on the title pledge transaction.

f. The pledgor shall retain the completed title pledge transaction form for the duration of the loan term. If the title pledge transaction form is lost, destroyed, or stolen, the pledgor shall immediately advise the issuing title pledge lender and may be required to pay a fee of five dollars ($5) to obtain a new form. The title pledge lender may allow any person with the title pledge transaction form to redeem the pledged property.

(3) The statement that "The pledgor represents and warrants that the titled personal property to which the pledged property relates is not stolen, it has no liens or encumbrances against it, and the pledgor has the right to enter into this transaction."

(4) Immediately above the signature of the pledgor or seller, the statement that "I, the pledgor declare under penalty of perjury that I have read the foregoing document and that, to the best of my knowledge and belief, the facts contained in it are true and correct."

(5) A blank line for the signature of the pledgor.

(b) At the time of the transaction, the title pledge lender shall deliver to the pledgor a copy of the completed title pledge transaction form.

(c) At the time of the transaction, the title pledge lender shall also provide each pledgor with a pamphlet, in a form consistent with regulations adopted by the supervisor, explaining in plain language the rights and responsibilities of the borrower and providing a toll free number at the State Banking Department for assistance with complaints.

Section 5. (a) The pledgor shall sign a statement verifying that the pledgor is the rightful owner of the pledged property and is entitled to pledge it. The pledgor shall receive an exact copy of the title pledge agreement which shall be signed by the title pledge lender or any employee of the title pledge lender.

(b) The title pledge lender shall maintain a record of all transactions of pledged property on the premises for a period of two years. Upon request, a title pledge lender shall provide to the appropriate law enforcement agency a complete record of all transactions. These records shall be a correct copy of the entries made of the title pledge transaction.

(c) The title pledge lender shall maintain records that contain a complete payment history of each pledgor evidencing all installment payments and other charges and payments. Those records also shall reflect any unpaid principal balance as well as a payoff balance that includes the accrued service charges.

Section 6. (a) A pledgor shall have no obligation to redeem pledged property or make any payment on a title pledge transaction.

(b) A title pledge lender may pay all proceeds for a title pledge transaction in cash directly to the pledgor or electronic funds transfer directly to the pledgor or pledgor's account. The period of the title pledge transaction shall not begin until the funds are received by the pledgor. There shall be no additional charge related to the payment of the proceeds of any title pledge transaction.

(c) The title pledge lender shall not impose a penalty for early payment of any amount owed before the installment date or maturity date. The lender must accept payments of any amount at any time.

(d) When a scheduled payment is in default or delinquent for five or more days, the title pledge lender may charge a late fee not to exceed the greater of eighteen dollars ($18) or five percent of the amount of the scheduled payment in default. Each of the late charges permitted under this subsection may be collected only once on any scheduled installment payment, regardless of the period during which the payment remains in default or is delinquent, and may only be collected on or after the fifth day after the due date. The late fee may be imposed only if the rate or amount was explained in the title pledge form.

(e) If the pledgor does not make the late installment payment and pay any late charge by 30 days after the installment due date, the title pledge lender may take possession of the titled personal property to which the certificate of title relates. In taking possession, the title pledge lender or his or her agency may proceed without judicial process if this can be done without breach of the peace or, if necessary, may proceed by action to obtain judicial process. At least 15 days before this due date, the lender must provide the pledgor with notice of the amount of the overdue installment payment, any late charge, and the deadline to make these payments. The notice must also inform the pledgor that the property may be repossessed on this deadline if full payment is not received. This notice must be in writing, personally served or sent by certified or registered mail, return receipt requested.

(f) If, within 15 days after the title pledge lender obtains possession of the personal property, the pledgor redeems the pledged property by paying all outstanding principal and applicable service charges, late charges, and the actual cost of repossession, the pledgor shall be given possession of the titled personal property and the pledged property without further delay. At the time of possession or within five days thereafter, the lender must provide the pledgor with notice of this right of redemption, the deadline to redeem, and any actual costs incurred in repossessing the property. This notice must be in writing, personally served or sent by certified or registered mail, return receipt requested.

(g) If the pledgor fails to redeem the pledged property during the 15-day period provided in subsection (f) and has received notice of the right to redeem according to subsection (e), then the pledgor shall thereby forfeit all right, title, and interest in and to the titled personal property, other than the interest in the sale proceeds specified in Section (6)(g), to the title pledge lender who shall thereby acquire an absolute right of title and ownership to the titled personal property. The title pledge lender shall then have the sole right and authority to sell or dispose of the titled personal property.

(h) If the property is sold after the 15-day period, the title pledge lender shall return to the pledgor the amount received from the sale less the amount of the unpaid principal balance and service charge, any outstanding late charge, and the reasonable and necessary actual costs of the repossession and sale. The cost of repossession shall include reasonable towing charges, storage charges paid to a third party, and repairs made to the property to render it operable. Even if the lender believes that no money is due to the pledgor under this subsection, it must provide the pledgor with a written statement documenting each of these amounts, including the amount and a short description of each individual charge incurred in repossession.

Section 7. (a) A title pledge lender may contract for and receive a title pledge service charge in lieu of interest or other charges for all services, expenses, costs, and losses of every nature not to exceed a rate equal to 36 percent annual percentage rate of the principal amount advanced in the title pledge transaction. The provisions of Section 8-8-5, Code of Alabama 1975, do not apply to any title pledge agreements made under this act. This service charge may be imposed only if disclosed in full at the time the contract is created, and cannot be modified. No additional fees may be imposed on the pledgor, except a late charge if it is specified in the title pledge form, and the actual costs expended on repossession and sale.

(b) Any interest, charge, or fees contracted for or received, directly or indirectly, in excess of the amount permitted under subsection (a) shall be uncollectible and the title pledge transaction shall be void.

(c) When the title pledge transaction is paid in full one month or more before the final installment date, the title pledge lender shall refund or credit the borrower with that portion of the total charges which shall be due the borrower as determined by schedules prepared under the rule of seventy-eighths or sum of the digits principle as follows: The amount of the refund or credit shall be as great a proportion of the total service charge originally contracted for as the sum of the periodic time balances of the agreement scheduled to follow the date of prepayment bears to the sum of all the periodic time balances of the contract, both sums to be determined according to the installment payment schedule contained in the title pledge agreement.

Section 8. (a) Each licensee under this act shall annually, on or before December 1, file a written report with the supervisor containing such information as the supervisor may require concerning his or her business and operations during the preceding calendar year as to each approved office. Reports shall be made under oath and shall be in the form prescribed by the supervisor.

(b) Using the information reported to the supervisor under subsection (a) and the information contained in the database, the supervisor shall make and publish annually an analysis and recapitulation of such reports regarding the utilization of title pledge transactions.

Section 9. A title pledge lender, or any agent or employee of a title pledge lender, shall not do any of the following:

(1) Falsify or intentionally fail to make an entry of any material matter in a title pledge lender transaction form.

(2) Refuse to allow the supervisor, an appropriate law enforcement official, the Attorney General, or any of their designated representatives having appropriate jurisdiction, to inspect completed title pledge transaction forms or pledged property during the ordinary hours of the pledge lender's business or other times acceptable to both parties.

(3) Enter into a title pledge agreement with a person under the age of 19 years.

(4) Make any agreement requiring or allowing the personal liability of a pledgor or the waiver of any provisions of this act.

(5) Knowingly enter into a title pledge agreement with any person who is under the influence of drugs or alcohol when such condition is visible or apparent, or with any person using a name other than his or her own name or the registered name of his or her business.

(6) Enter into a title pledge agreement in which the amount financed in consideration of the pledge of any single certificate of title exceeds two thousand five hundred dollars ($2,500).

(7) Fail to exercise reasonable care in the safekeeping of pledged property or of titled personal property repossessed pursuant to this act.

(8) Fail to return pledged property or repossessed or forfeited titled personal property to a pledgor, with any and all of the title pledge lender's liens on the property properly released, upon payment of the full amount due the title pledge lender, unless the property has been seized or impounded by an authorized law enforcement agency, taken into custody by a court, or otherwise disposed of by court order.

(9) Refuse or fail to return to the pledgor all personal items contained in the vehicle at the time of repossession and not considered part of the vehicle.

(10) Sell or otherwise charge for insurance in connection with a title pledge agreement, including motor club memberships.

(11) Use or threaten force or violence against any pledgor, nor may any licensee threaten criminal prosecution. No licensee shall trespass on a pledgor's property, other than taking possession without a breach of the peace as specified in Section (6)(e), use printed materials that resemble legal process, make collection attempts at unreasonable hours of the night, or deny the pledgor use of personal property not secured by the loan.

(12) Directly or indirectly employ any scheme, device, or artifice to defraud or mislead any pledgor, to defraud or mislead any lender, or to defraud or mislead any person, which shall render any title pledge agreement between the two parties void.

(13) Enter into a title pledge agreement with any member of the military services of the United States, or such a member's spouse or dependent, at a rate of above 36 percent annual percentage rate. Any such agreement shall be void.

Section 10. (a) Any person presenting identification of himself or herself and presenting the pledgor's copy of the title pledge transaction form to the title pledge lender is presumed to be entitled to redeem the pledged property described in the title pledge lender transaction form; provided, however, that if the title pledge lender determines that the person is not the original pledgor, the title pledge lender is not required to allow the redemption of the pledged property by that person. The person redeeming the pledged property must sign the pledgor's copy of the title pledge transaction form, which the title pledge lender may retain to evidence the person's receipt of the pledged property. If the person redeeming the pledged property is not the original pledgor, that person must show photo identification to the title pledge lender, and the title pledge lender shall record the person's name and address on the title pledge transaction form retained by the title pledge lender. The title pledge lender shall not be liable to the original pledgor for having allowed the redemption of the pledged property by another person pursuant to this subsection, unless the pledgor has reported the form as lost or stolen pursuant to subsection (b).

(b) If the pledgor's copy of the title pledge transaction form is lost, destroyed, or stolen, the pledgor must notify the title pledge lender in writing by certified or registered mail, return receipt requested, or in person evidenced by a signed receipt, and receipt of this notice shall invalidate the title pledge transaction form if the pledged property has not previously been redeemed. Before delivering the pledged property or issuing a new title pledge transaction form, the title pledge lender shall require the pledgor to make a written statement of the loss, destruction, or theft of the pledgor's copy of the title pledge transaction form. The title pledge lender shall record on the written statement the type of identification and the identification number accepted from the pledgor, the date the statement is given and the number of the title pledge transaction form lost, destroyed, or stolen. The statement shall be signed by the title pledge lender or the title pledge office employee who accepts the statement from the pledgor. A title pledge lender is entitled to a fee not to exceed five dollars ($5) in connection with each lost, destroyed, or stolen title pledge transaction form and the taking of a properly prepared written statement.

(c) No sales tax shall be deemed due or collectible in connection with the redemption of pledged property under this act.

Section 11. (a) A person may not engage in business as a title pledge lender or otherwise portray himself or herself as a title pledge lender in the State of Alabama unless the person has a valid license authorizing engagement in the business. This includes offering or agreeing to enter a title pledge transaction with a pledgor, or brokering or acting as an agent for a third party in such a transaction, regardless of whether approval, acceptance, or ratification is necessary to create a legal obligation for the third party. Actions and transactions in the State of Alabama, including transactions conducted through the use of the Internet, facsimile, telephone, kiosk, or other means. A separate license is required for each place of business under this act. The supervisor may issue more than one license to a person if that person complies with this act for each license. A new license or application to transfer an existing license is required upon a change, directly or beneficially, in the ownership of any licensed title pledge office and an application shall be made to the supervisor in accordance with this act.

(b) When a licensee wishes to move a title pledge office to another location, the licensee shall give 30 days' prior notice to the supervisor, who shall amend the license accordingly.

(c) Each license shall remain in full force and effect until relinquished, suspended, revoked, or expired. With each initial application for a license, the applicant shall pay the supervisor at the time of making the application a license fee of six hundred dollars ($600), and on or before December 1 of each year thereafter, an annual renewal fee of five hundred dollars ($500). If the annual fee remains unpaid 31 days after December 1, the license shall expire. If any person engages in business as provided for in this act without paying the license fee provided for in this act before commencing business or before the expiration of the person's current license, as the case may be, then the person shall be liable for the full amount of the license fee, plus a penalty in an amount not to exceed twenty-five dollars ($25) for each day that the person has engaged in the business without a license or after the expiration of a license. All licensing fees and penalties shall be paid into the special fund of the State Banking Department.

Section 12. (a) To be eligible for a title pledge lender license, an applicant shall meet all of the following criteria:

(1) Operate lawfully and fairly within the purposes of this act.

(2) Not have been convicted of a felony in the last 10 years or be active as a beneficial owner for someone who has been convicted of a felony in the last 10 years.

(3) File with the supervisor a bond with good security in the penal sum of fifty thousand dollars ($50,000) for each location at which the applicant proposes to engage in the business of title pledge lending, but in no event shall the aggregate amount of the bond for all locations per applicant exceed two hundred fifty thousand dollars ($250,000) and no more than fifty thousand dollars ($50,000) shall be payable or recoverable on the bond for each location; the bond shall be payable to the state for the faithful performance by the licensee of the duties and obligations pertaining to the business so licensed and the prompt payment of any judgment which may be recovered against the licensee on account of damages or other claims arising directly or collaterally from any violation of this act; the bond shall not be valid until it is approved by the supervisor; the applicant may file, in lieu thereof, cash, a certificate of deposit, or government bonds in the amount of twenty-five thousand dollars ($25,000) for each location at which the applicant proposes to engage in the business of title pledge lending, but in no event shall the aggregate amount of the cash, certificate of deposit, or government bonds for all locations per applicant exceed two hundred fifty thousand dollars ($250,000) and no more than twenty-five thousand dollars ($25,000) shall be payable or recoverable on the cash, certificate of deposit, or government bonds for each location; the deposit of the cash, certificate of deposit, or government bonds shall be filed with the supervisor and is subject to the same terms and conditions as are payable to the depositor.

(4) File with the supervisor an application accompanied by a set of fingerprints for each owner and officer from any local law enforcement agency and the initial license fee required in this act. In order to determine the applicant's suitability for license, the supervisor may forward the fingerprints to the appropriate state agency and forwarded by that agency to the Federal Bureau of Investigation for a national criminal history record check.

(b) Upon the filing of an application in a form prescribed by the supervisor, accompanied by the fee and documents required in this act, the department shall investigate to ascertain whether the qualifications prescribed by this act have been satisfied. If the supervisor finds that the qualifications have been satisfied and, if he or she approves the documents so filed by the applicant, a license shall be issued to the applicant to engage in the business of title pledge lending in this state.

(c) Complete and file with the supervisor an annual renewal application accompanied by the renewal fee required in this act.

(d) The license shall be kept conspicuously posted in the place of business of the licensee.

Section 13. (a) The supervisor, after notice and hearing, may suspend or revoke any license if he or she finds that any of the following occurred:

(1) The licensee, either knowingly, or without the exercise of due care to prevent the same, has violated any provision of this act.

(2) Any fact or condition exists which, if it had existed or had been known to exist at the time of the original application for the license, clearly would have justified the supervisor in refusing the license.

(3) The licensee has aided, abetted, or conspired with an individual or person to circumvent or violate the requirements of this act.

(4) The licensee, or a legal or beneficial owner of the license, has been convicted of a crime that the supervisor finds directly relates to the duties and responsibilities of the occupation of title pledge lender.

(b) The supervisor may conditionally license or place on probation a person whose license has been suspended or may reprimand a licensee for a violation of this act.

(c) A hearing shall be held on written notice given at least 20 days prior to the date of the hearing.

(d) Any licensee may surrender any license by delivering it to the supervisor with written notice of its surrender, but such surrender shall not affect the licensee's civil or criminal liability for acts committed prior thereto.

(e) No revocation, suspension, or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any pledgor. Any title pledge transaction made without a license is void.

(f) The supervisor may reinstate suspended licenses or issue new licenses to a person whose license or licenses have been revoked if no fact or condition then exists that clearly would have justified the supervisor in originally refusing to issue a license under this act.

(g) The appropriate local law enforcement agency shall be notified of any licensee who has his or her license suspended or revoked as provided by this act.

(h) The supervisor shall enforce the provisions of this section.

Section 14. (a) An application for a new title pledge office license, the transfer of an existing title pledge office license, or the approval of a change in the ownership of a licensed title pledge office shall be under oath and shall state the full name and place of residence of the applicant, the place where the business is to be conducted, and other relevant information required by the supervisor. If the applicant is a partnership, the application shall state the full name of each partner. If the applicant is a corporation, the application shall state the full name and address of each officer, shareholder, and director.

(b) Notwithstanding the provisions of this section, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission pursuant to Section 15(d) of the Securities Exchange Act, provided that the person files with the commissioner the information, documents, and reports as are required by the provision of the Securities Exchange Act to be filed by the issuer with the Securities and Exchange Commission.

(b) Notwithstanding the provisions of this section, the application need not state the full name and address of each shareholder, if the applicant is owned directly or beneficially by a person which as an issuer has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or is an issuer of securities which is required to file reports with the Securities and Exchange Commission pursuant to Section 15(d) of the Securities Exchange Act, provided that the person files with the commissioner the information, documents, and reports as are required by the provision of the Securities Exchange Act to be filed by the issuer with the Securities and Exchange Commission.

Section 15. (a) No pledged property may be confiscated by local law enforcement without the following actions having been accomplished:

(1) A police report being made in a timely manner.

(2) A warrant sworn out for the person who pledged the property to the title pledge lender.

(b) Pledged property may be put on a one-time seven-day hold by the authorized law enforcement authorities. This request for a seven-day hold shall be made in writing by the authorized law enforcement authorities.

(c) Confiscated pledged property shall be returned to the title pledge lender by the law enforcement authorities as soon as possible when determined that the pledged property has no rightful owner.

Section 16. Any person who engages in the business of operating a title pledge office without first securing a license prescribed by this act shall be guilty of a Class A misdemeanor.

Section 17. (a) Any person aggrieved by the conduct of a licensee under this act in connection with the regulated activities of the licensee may file a written complaint with the supervisor, who shall investigate the complaint.

(b) In the course of the investigation of the complaint, the supervisor may do the following:

(1) Subpoena witnesses.

(2) Administer oaths.

(3) Examine any individual under oath.

(4) Compel the production of records, books, papers, contracts, or other documents relevant to the investigation.

(c) If a person fails to comply with a subpoena of the supervisor under this act or to testify concerning any matter about which the person may be interrogated under this act, the supervisor may petition any court of competent jurisdiction for enforcement.

(d) The license of any licensee under this act who fails to comply with a subpoena issued by the supervisor may be suspended pending compliance with the subpoena.

Section 18. (a) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this act, or who willfully makes a false entry in any record specifically required by this act, shall be guilty of a Class A misdemeanor.

(b) In addition to any other penalty which may be applicable, any licensee or employee who fails to make a record of a title pledge transaction and subsequently sells or disposes of the pledged property from the transaction shall be punished as follows:

(1) For a first offense, the licensee or employee shall be guilty of a Class A misdemeanor.

(2) For a second offense, the licensee or employee shall be guilty of a Class C felony.

(c) Any licensee convicted in the manner provided in subsection (b) shall forfeit the surety bond or deposit required and the amount of the bond or deposit shall be credited to the budget of the state or local agency which directly participated in the prosecution of the licensee for the specific purpose of increasing law enforcement resources for that specific state or local agency. Any proceeds of a forfeited bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

(d) Compliance with the criminal provisions of this act shall be enforced by the appropriate law enforcement agency which may exercise for that purpose any authority conferred upon the agency by law.

(e) When the supervisor has reasonable cause to believe that a person is violating any provision of this act, the supervisor, in addition to and without prejudice to the authority provided elsewhere in this act, may enter an order requiring the person to cease and desist from the violation and requiring the person to refund any fees collected in violation of this act. The supervisor may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(f) The supervisor, after notice and hearing, may impose a civil penalty against any licensee if the licensee or employee is adjudged by the supervisor to be in violation of the provisions of this act. The civil penalty shall not exceed five hundred dollars ($500) per violation and shall be deposited into the special fund of the State Banking Department.

Section 19. If any pledged property from a title pledge transaction is found to be stolen and is returned to the rightful owner by law enforcement authorities and if the licensee who accepted the pledged property has complied with all of the duties and responsibilities as specified in this act during the transaction, then the rightful owner of the pledged property shall be liable to the licensee for the pledged amount if the rightful owner fails to prosecute or cooperate in the criminal prosecution related to the title pledge transaction. It shall also be the responsibility of the licensee to assist or cooperate in the criminal prosecution related to the title pledge transaction. If the identity of a person who pledged stolen goods can be determined, the district attorney may prosecute the person for any applicable criminal violations.

Section 20. (a) The supervisor shall develop and provide any necessary forms to carry out the provisions of this act.

(b) The department may adopt reasonable administrative rules, not inconsistent with law, for the enforcement of this act.

(c) To assure compliance with the provisions of this act, the department may examine the books and records of any licensee without notice during normal business hours. As cost of examination, the licensee shall pay the supervisor an examination fee as provided by Section 5-2A-24, Code of Alabama 1975, which shall be collected and paid into the special fund provided and used in the supervision and examination of licensees.

Section 21. Title pledge lenders in operation as of the effective date of this act shall have until January 1, 2014, to apply for a license under this act.

Section 22. Municipalities in this state may enact ordinances which are more restrictive than this act, but no municipality, county, or local government may enact local laws or ordinances that require the payment of any fee or tax related to a title pledge transaction or the reporting of any such transaction. Any existing or future order, ordinance, or regulation that conflicts with this provision shall be null and void.

Section 23. A licensee shall not advertise, display, or publish, or permit to be advertised, displayed, or published, in any manner whatsoever, any statement or representation that is false, misleading, or deceptive. A licensee also shall not make any false, misleading, or deceptive oral statements or misrepresent the terms of the contract to a pledgor.

Section 24. The supervisor, or his or her duly authorized representative, for the purpose of discovering violations of this act and for the purpose of determining whether persons are subject to the provisions of this act, may examine persons licensed under this act and persons reasonably suspected by the supervisor of conducting business that requires a license under this act, including all relevant books, records, and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or other matters as may be relevant to the discovery of violations of this act, including, without limitation, the conduct of business without a license as required under this act.

Section 25. A licensee under this act shall have no liability for any act or practice done or omitted in conformity with either of the following:

(1) Any rule, regulation, or written interpretation of the supervisor.

(2) Any rule, regulation, interpretation, or any opinion of any other state or federal agency or any opinion of the Attorney General, notwithstanding that after the act or omission has occurred, the rule, regulation, interpretation, approval, or opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.

Section 26. Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of local funds, the bill is excluded from further requirements and application under Amendment 621, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, because the bill defines a new crime or amends the definition of an existing crime.

Section 27. The provisions of this act are severable. If any part of this act is declared invalid or unconstitutional, that declaration shall not affect the part which remains.

Section 28. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

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