Ala. Code
Code of Alabama

Ala. Code § 5-19-22 (2026)

License to Engage in Business of Making Consumer Loans or Taking Assignments of Consumer Credit Contracts - Required; Exceptions; Application; Investigation; Standards for Issuance; Hearing; Licensing Under Small Loan Act; Fees; Participation in Nationwide Mortgage Licensing System and Registry.

✓ official Alabama Legislature (ALISON) text, laws through the 2026 Regular Session
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(a) No creditor shall engage in any one or more of the following activities without first having obtained a license from the administrator:

(1) Making consumer loans to Alabama residents, regardless of whether the creditor has a place of business in Alabama or an employee residing in Alabama.

(2) Making consumer loans originated by an individual required to be licensed as a mortgage loan originator under the Alabama Secure and Fair Enforcement for Mortgage Licensing Act of 2009.

(3) Taking assignments of consumer credit contracts, either from a place of business in Alabama or through use of an employee residing in Alabama whose employment includes taking assignments of consumer credit contracts.

Banks chartered by this state or any other state, banks chartered by the United States, trust companies, savings or building and loan associations, savings banks and other thrift institutions, bank holding companies, thrift holding companies, credit unions, and federally constituted agencies shall be exempt from licensing. A seller, with respect to consumer credit sale transactions and the financing of charges permitted by this chapter, is not required to be licensed under this chapter. Any creditor required to be licensed under this chapter shall obtain a license for each location in Alabama from which these activities are conducted or, if the creditor has no location in Alabama, for the location where the creditor maintains its records regarding Alabama loans or Alabama consumer credit contracts; provided, however, insurance companies and their subsidiaries and affiliates who do not make loans or take assignments of consumer credit contracts secured by real property may obtain a license for the location where the records are maintained in lieu of obtaining a license for each location where the activity is conducted.

(b) The license application shall be in writing, under oath, in the form prescribed by the administrator, and be accompanied by an investigation fee of one hundred dollars ($100).

(c) Upon receipt of the application and investigation fee, the administrator shall investigate the applicant and determine whether the license should be issued or denied.

(d) No license shall be issued unless the administrator determines that the financial responsibility, character, and fitness of the applicant, and of the members thereof if the applicant is a partnership or association, officers and directors thereof if the applicant is a corporation are such as to warrant belief that the business will be operated honestly and fairly within the purpose of this chapter and finds that the applicant has assets available for the operation of business under this chapter of at least twenty-five thousand dollars ($25,000). The State Banking Department may require the applicant or licensee engaging in extensions of credit secured by real estate to obtain a surety bond in lieu of the net asset requirement in order to fulfill the requirements of the Alabama Secure and Fair Enforcement for Mortgage Licensing Act. The amount of the surety bond will be determined by the department. The surety bond will be in favor of the State of Alabama for the use, benefit, and indemnity of any person who suffers damage or loss as a result of the company’s breach of contract or of any obligation arising therefrom or any violation of the law.

(e) Upon written request, the applicant is entitled to a hearing on the question of his qualifications for a license if:

(1) The administrator has notified the applicant in writing that the application has been denied; or

(2) The administrator has not issued a license within 60 days after the application for the license was filed.

A request for a hearing may not be made more than 15 days after the administrator has mailed by certified mail a writing to the applicant notifying him that the application has been denied stating in substance the administrator’s findings supporting denial of the application.

(f) Any person licensed under the Alabama Small Loan Act may engage in business under the Alabama Small Loan Act, but shall not make loans in excess of one thousand dollars ($1,000) unless such person is also licensed under this chapter. The payment of the license and examination fees required by this chapter shall be in lieu of the license and examination fees required by the Alabama Small Loan Act when the licensee is also licensed under the Alabama Small Loan Act.

(g) The license shall be in the form prescribed by the administrator, posted conspicuously in the place of business of the licensee, and shall not be assignable or transferable or removed to another location without permission of the administrator.

(h) The annual license fee shall be five hundred dollars ($500) for each office, branch, or place of business of the licensee, which shall be due on January 1 of each year, and shall be for a one-year period ending December 31, and shall be delinquent on February 1 of each year, and there shall be a penalty of 10 percent for each month or part thereof that the licensee is delinquent in the payment of such license fee. All license fees and investigation fees collected shall be nonrefundable and paid into the special fund provided by Section 5-2A-20 and used in the supervision and examination of licensees.

(i) With respect to any license applicants that will make Residential Mortgage Loans, as defined in the Alabama S.A.F.E. Act, the State Banking Department may require applicants to apply through the Nationwide Mortgage Licensing System and Registry. In order to carry out this requirement, the supervisor is authorized to participate in the Nationwide Mortgage Licensing System and Registry. For this purpose, the supervisor may establish by rule or order requirements as necessary, including, but not limited to, the following:

(1) Background checks for the following purposes:

a. Criminal history through fingerprint or other databases.

b. Civil or administrative records.

c. Credit history.

d. Any other information deemed necessary by the Nationwide Mortgage Licensing System and Registry.

(2) The payment of fees to apply for or renew licenses through the Nationwide Mortgage Licensing System and Registry.

(Acts 1971, No. 2052, p. 3920, §18; Acts 1983, No. 83-747, p. 1244, §1; Acts 1996, No. 96-576, p. 887, §2; Act 2009-625, p. 1900, §1.)

Notes of Decisions
Cited in 8 cases, 1986–2004 · leading case: Edwards v. Alabama Farm Bureau Mut. Cas. Ins., 509 So. 2d 232 (Ala. Civ. App. 1986).
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Edwards v. Alabama Farm Bureau Mut. Cas. Ins., 509 So. 2d 232 (Ala. Civ. App. 1986). · cites it 12× “Thereafter, the trial court held that the subject transaction was not a "consumer loan" pursuant to section 5-19-22, Code 1975, and therefore Farm Bureau was not subject to the licensing provision of that section of the Mini-Code.”
Ex Parte Alfa Fin. Corp., 762 So. 2d 850 (Ala. 1999). · cites it 9× “Because, in this present case, an action had been commenced on a viable cause of action, a cause of action that existed before the enactment of § 5-19-19(b), which took away a consumer/debtor's private cause of action against a creditor for failing to obtain a license under §…”
Johnson v. Alabama Power Co., 664 So. 2d 877 (Ala. 1995). · cites it 10× “The plaintiffs did not allege, and they have never contended, that APCo violated any provision of the consumer finance code—the "Mini-Code"—other than Ala.Code 1975, § 5-19-22, its licensing provision.”
Mayflower Nat. Life Ins. Co. v. Thomas, 894 So. 2d 637 (Ala. 2004). · cites it 4× “regularly made consumer loans without a license in violation of Alabama Code § 5-19-22(a)." "The Court therefore finds that Defendants charged a premium in excess of that filed with the Commissioner of Insurance.”
Watkins v. Birmingham Ret. Sys., 802 So. 2d 190 (Ala. 2001). · cites it 2× “The trial court granted the parties' joint stipulation to dismiss Protective Life.”
Smith v. Alfa Fin. Corp., 762 So. 2d 843 (Ala. Civ. App. 1997). · cites it 11× “The plaintiffs, claiming to be debtors of Alfa, filed their complaint in the Jefferson County Circuit Court on May 15, 1996, seeking an amount “equal to the interest charges on [their] consumer loans, plus costs, attorney’s fees, and all other appropriate relief’ based upon…”
Greathouse v. Alfa Fin. Corp., 732 So. 2d 1013 (Ala. Civ. App. 1999). · cites it 2× “Code 1975, stating that “no private cause of action exists against a creditor for failing to obtain a license required by Section 5-19-22” and expressly providing for retroactive effect, does not apply to his claim, which was filed in 1998.”
Briggs v. Countrywide Funding Corp., 931 F. Supp. 1545 (M.D. Ala. 1996). “…Ala.Code § 5-19-1 et seq. (1994). This so-called “Mini-Code” also contains licensing requirements for brokers (§ 5-19-22), limitations on the amount of certain fees which can be collected (§§ 5-19-3 & 5—19—4) and provisions for injunction, penalties and administrative…”
Ala. Code § 5-19-22(a): 7 cases
Ex Parte Alfa Fin. Corp., 762 So. 2d 850 (Ala. 1999). “Because, in this present case, an action had been commenced on a viable cause of action, a cause of action that existed before the enactment of § 5-19-19(b), which took away a consumer/debtor's private cause of action against a creditor for failing to obtain a license under §…”
Edwards v. Alabama Farm Bureau Mut. Cas. Ins., 509 So. 2d 232 (Ala. Civ. App. 1986). “Thereafter, the trial court held that the subject transaction was not a "consumer loan" pursuant to section 5-19-22, Code 1975, and therefore Farm Bureau was not subject to the licensing provision of that section of the Mini-Code.”
Mayflower Nat. Life Ins. Co. v. Thomas, 894 So. 2d 637 (Ala. 2004). “regularly made consumer loans without a license in violation of Alabama Code § 5-19-22(a)." "The Court therefore finds that Defendants charged a premium in excess of that filed with the Commissioner of Insurance.”
Watkins v. Birmingham Ret. Sys., 802 So. 2d 190 (Ala. 2001). “The trial court granted the parties' joint stipulation to dismiss Protective Life.”
Johnson v. Alabama Power Co., 664 So. 2d 877 (Ala. 1995). “The plaintiffs did not allege, and they have never contended, that APCo violated any provision of the consumer finance code—the "Mini-Code"—other than Ala.Code 1975, § 5-19-22, its licensing provision.”
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