Code of Alabama

Ala. Code § 5-19-1 (2026)

Definitions.

✓ official Alabama Legislature (ALISON) text, current July 2026

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For the purposes of this chapter, the following terms shall have the following meanings respectively ascribed to them by this section:

(1) FINANCE CHARGE. The sum of all charges, payable directly or indirectly by the person to whom credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit. The amount of the finance charge in connection with any credit transaction (i) shall be determined, and shall include and exclude the fees and charges, as provided by Section 106 of the Federal Truth-in-Lending Act, 15 U.S.C. Section 1605 and the regulations of the Federal Reserve Board promulgated pursuant to the Federal Truth-in-Lending Act, 12 C.F.R. Part 226, and the Official Staff Commentary adopted by the Federal Reserve Board pursuant to that regulation, and without limiting or affecting the foregoing subparagraph (i), (ii) shall exclude, without limitation, late charges and other charges resulting from or arising out of late payment, delinquency, default, or other like occurrence. For the purpose of determining the permissible finance charge, any discount or point paid by the debtor in connection with a consumer credit transaction secured by a mortgage on real estate, even though paid at one time, shall be spread over the stated term of the consumer credit transaction. The administrator from time to time may promulgate regulations pursuant to Section 5-19-21 further establishing charges and fees which constitute a finance charge and the manner in which the finance charge is determined to assure consistency between the meaning of “finance charge” under this chapter and the meaning and application of “finance charge” under the above-referenced Federal Truth-in-Lending Act, regulations and Official Staff Commentary, as the same may be amended from time to time.

(2) CONSUMER. When used as an adjective with reference to a credit transaction, characterizes the credit transaction as one in which the party to whom credit is extended is a natural person and the money, property, or services which are the subject of the transaction are primarily for personal, family or household purposes.

(3) CREDITOR. A person who regularly extends or arranges for the extension of credit for which the payment of a finance charge is required, whether in connection with loans, sales of property or services, or otherwise. The provisions of this chapter apply to any such creditor irrespective of the creditor’s status as a natural person or any type of organization. A person is a creditor only if the person extended or arranged for the extension of credit more than 25 times in the preceding calendar year or more than five times in the preceding calendar year for credit transactions secured by a residential structure that contains one to four units.

(4) CREDIT SALE. Any sale with respect to which credit is extended or arranged by a seller who is a creditor. The term includes any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the property or services involved and it is agreed that the bailee or lessee may become for no other or a nominal consideration the owner of the property upon full compliance with the bailee’s or lessee’s obligations under the contract. A rental-purchase agreement which is subject to the provisions of Chapter 25 of Title 8 is not a credit sale.

(5) OPEN-END CREDIT PLAN. A plan prescribing the terms of credit transactions which may be made thereunder from time to time and under the terms of which a finance charge may be charged from time to time on an outstanding unpaid balance.

(6) ADMINISTRATOR. The Superintendent of Banks of the State Banking Department.

(7) SUPERVISOR OF THE BUREAU OF LOANS. The designated deputy administrator for the purpose of enforcing this chapter as to licensees.

(8) HOME SOLICITATION SALE. A consumer credit sale of goods or services, other than motor vehicles, in which the seller or a person acting for the seller engages in a personal solicitation of the sale at a place other than the seller’s place of business and the buyer’s agreement or offer to purchase is there given to the seller or a person acting for the seller. The term does not include a sale made pursuant to a preexisting open-end credit plan, a closed-end plan providing for a series of sales or a sale made pursuant to prior negotiations between the parties at the seller’s place of business where goods or services are offered or exhibited for sale.

(9) CREDIT TRANSACTION. A loan or credit sale made by a creditor. For purposes only of Sections 5-19-1(1) and 5-19-3, “credit transaction” shall include nonconsumer loans and credit sales as well as consumer loans and consumer credit sales with an original amount financed of less than two thousand dollars ($2,000). Otherwise, the term “credit transaction” refers only to consumer loans and consumer credit sales irrespective of whether the term is preceded by the word “consumer.”

(10) AMOUNT FINANCED. The sum determined by adding the principal loan amount or the cash price in a credit sale, less any down payment, and any other amounts that are financed by the creditor.

(Acts 1971, No. 2052, p. 3290, §1; Acts 1979, No. 79-428, p. 673, §1; Acts 1986, No. 86-304, p. 451, §1; Acts 1986, No. 86-497, p. 945, §7; Acts 1996, No. 96-576, p. 887, §2.)

Notes of Decisions

Cited in 69 cases (2 in the last 5 years), 1978–2024 · leading case: Mccullar v. Univ. Underwriters Life Ins., 687 So. 2d 156 (Ala. 1996).

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Mccullar v. Univ. Underwriters Life Ins., 687 So. 2d 156 (Ala. 1996). · cites it 5× “Floyd is one of the administrators responsible for enforcing that body of statutory law commonly called the "Mini-Code," Ala.Code 1975, §§ 5-19-1 to -31. The superintendent of banks is authorized under § 5-19-21 to make regulations necessary to enforce the Mini-Code.”

Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996). · cites it 2× “1 Unlike the initial and first amended complaints, which alleged violations arising from sales of service contracts' in connection with the sale of automobiles, the second amended complaint alleged violations of the Alabama Code §§ 5-19-1, 5 — 19—19, and 5-19-20, arising from…”

Voyager Ins. Companies v. Whitson, 867 So. 2d 1065 (Ala. 2003). · cites it 3× “" Mistake of fact is essential to the customers' unjust-enrichment claims, as evidenced by the language of the customers' complaint, which states: "Due to the actions of [Voyager], [charging premiums for credit-property and credit-life insurance that allegedly violate the…”

Rent-A-Ctr. v. Shelby (In Re Shelby), 127 B.R. 682 (Bankr. N.D. Ala. 1991). · cites it 10× “controlled, making this transaction an executory contract, and that it was not a credit sale as defined in Ala. Code § 5-19-1 (4). Both documents said: “It is the contention of this listed .”

Mitchell v. Indus. Credit Corp., 898 F. Supp. 1518 (N.D. Ala. 1995). · cites it 7× “Code § 5-19-1 et seq. (“Mini Code”); Count II — violation of the Truth in Lending Act, 15 U.”

Ex Parte Watley, 708 So. 2d 890 (Ala. 1997). · cites it 4× “Even though § 8-8-5 allows the interest rate to be as high as the market will bear and as high as the doctrine of unconscionability will allow, § 5-19-4(g) prevents a creditor from charging an excessive portion of that rate as "points" and thereby making the "interest"…”

Ex Parte Ocwen Fed. Bank, FSB, 872 So. 2d 810 (Ala. 2003). “As amended, the Dowdles' complaint alleges misrepresentation; suppression; breach of contract; breach of fiduciary duty; negligence; wantonness; intentional infliction of emotional distress; violations of Alabama's Mini-Code, § 5-19-1 et seq., Ala. Code 1975; conspiracy; money…”

Roberson v. Ammons, 477 So. 2d 957 (Ala. 1985). · cites it 2× “, as well as the Alabama Mini-Code, Code 1975, § 5-19-1 et seq., in deliberate disregard of a 1976 federal court order enjoining defendants from violating the provisions of these laws.”

Warehouse Home Furnishing Distributors, Inc. v. Whitson, 709 So. 2d 1144 (Ala. 1997). · cites it 3× “They alleged that Farmers Furniture had charged premiums for nonfiling insurance, property insurance, credit life insurance, accident and health insurance, and unemployment insurance in violation of the Alabama Consumer Credit Act, § 5-19-1 et seq., known as the "Mini-Code.”

First Fam. Fin. Servs., Inc. v. Rogers, 736 So. 2d 553 (Ala. 1999). · cites it 2× “Rogers, based on allegations of breach of contract, fraud, and violation of Ala.Code 1975, § 5-19-1 et seq. (the "Mini-Code").”

Ex Parte State Ex Rel. James, 711 So. 2d 952 (Ala. 1998). · cites it 2× “The State purported to seek a judgment declaring that "certain lending institutions," which were subject to provisions of the Mini-Code, currently codified at Ala.Code 1975, §§ 5-19-1 to -32, were imposing finance charges in excess of then existing interest and usury provisions.”

Centennial Assocs., Ltd. v. Clark, 384 So. 2d 616 (Ala. 1980). · cites it 3× “" Section 5-19-1 defines "finance charge:" "(1) FINANCE CHARGE.”

Show all 69 citing cases →

— Ala. Code § 5-19-1(1) — 9 cases

Ex Parte Watley, 708 So. 2d 890 (Ala. 1997). “Even though § 8-8-5 allows the interest rate to be as high as the market will bear and as high as the doctrine of unconscionability will allow, § 5-19-4(g) prevents a creditor from charging an excessive portion of that rate as "points" and thereby making the "interest"…”

Mitchell v. Indus. Credit Corp., 898 F. Supp. 1518 (N.D. Ala. 1995). “Code § 5-19-1 et seq. (“Mini Code”); Count II — violation of the Truth in Lending Act, 15 U.”

Warehouse Home Furnishing Distributors, Inc. v. Whitson, 709 So. 2d 1144 (Ala. 1997). “They alleged that Farmers Furniture had charged premiums for nonfiling insurance, property insurance, credit life insurance, accident and health insurance, and unemployment insurance in violation of the Alabama Consumer Credit Act, § 5-19-1 et seq., known as the "Mini-Code.”

Skinner's Furniture Store of Greenville, Inc. v. McCall (In Re McCall), 62 B.R. 57 (M.D. Ala. 1985).

Gerald Duncan Auto Sales, Inc. v. Russell (In Re Russell), 181 B.R. 616 (M.D. Ala. 1995).

— Ala. Code § 5-19-1(2) — 3 cases

Snap-On Tools Corp. v. Freeman (In Re Freeman), 124 B.R. 840 (N.D. Ala. 1991).

First Nat'l Bank of Jasper v. Robinson (In Re Robinson), 240 B.R. 70 (Bankr. N.D. Ala. 1999).

Richardson v. PNC Mortg. (In re Richardson), 538 B.R. 594 (Bankr. M.D. Ala. 2015).

— Ala. Code § 5-19-1(3) — 8 cases

Centennial Assocs., Ltd. v. Clark, 384 So. 2d 616 (Ala. 1980). “" Section 5-19-1 defines "finance charge:" "(1) FINANCE CHARGE.”

Watkins v. Birmingham Ret. Sys., 802 So. 2d 190 (Ala. 2001).

Ex Parte Brannon, 683 So. 2d 994 (Ala. 1996).

In Re Crotzer, 147 B.R. 252 (Bankr. N.D. Ala. 1992).

Davis v. Redstone Fed. Credit Union, 401 So. 2d 49 (Ala. Civ. App. 1979).

— Ala. Code § 5-19-1(4) — 3 cases

Rent-A-Ctr. v. Shelby (In Re Shelby), 127 B.R. 682 (Bankr. N.D. Ala. 1991). “controlled, making this transaction an executory contract, and that it was not a credit sale as defined in Ala. Code § 5-19-1 (4). Both documents said: “It is the contention of this listed .”

Givens v. Rent-A-Ctr., Inc., 720 F. Supp. 160 (S.D. Ala. 1988).

Ex Parte Thompson Tractor Co., Inc., 432 So. 2d 497 (Ala. 1983).

— Ala. Code § 5-19-1(9) — 2 cases

First Nat'l Bank of Jasper v. Robinson (In Re Robinson), 240 B.R. 70 (Bankr. N.D. Ala. 1999).

Watkins v. Birmingham Ret. Sys., 802 So. 2d 190 (Ala. 2001).

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