(a) Any person or persons, corporations, trust, general partnership or partnerships, limited partnership or partnerships, or association may agree to pay such rate or rates of interest for the loan or forbearance of money and for any credit sales as such person, corporation, trust, general partnership, limited partnership, or association may determine, notwithstanding any law of this state otherwise prescribing or limiting such rate or rates of interest; provided, that the original principal balance of the loan or forbearance of money or credit sales is not less than $2,000; provided further, that all laws relating to unconscionability in consumer transactions including but not limited to the provisions of Chapter 19 of Title 5, known as the Mini-Code, shall apply to transactions covered by this section.
(b) As to any such loan or forbearance of money or credit sales made in compliance with subsection (a) of this section, neither such person, corporation, trust, general partnership, limited partnership, or association, nor their heirs, successors, or assigns, nor any surety, guarantor, endorser, or any other person, firm, partnership, association, trust, or corporation which may become liable, in whole or in part, for the payment of the debt and interest agreed to be paid thereon in accordance with the terms hereof, or any extension, amendment, or renewal thereof, may raise or claim the defense or benefit of the usury laws or any other law prescribing, regulating, or limiting such rate or rates of interest.
(c) The term “original principal balance,” as used herein, shall include the total principal amount of indebtedness incurred or contracted for in a loan, forbearance of money, credit sales, or in a single issue or sale of bonds, debentures, promissory notes, or like transaction, without regard either to the face amount or denomination of any bond, debenture, note, or other evidence of indebtedness constituting a part of such issue or sale, or to the amount of the initial or any subsequent advance pursuant to such loan, forbearance, or credit sales. The term “interest” as used herein shall include all direct or indirect charges imposed as an incident to a loan, forbearance of money, or credit sales.
(d) This section shall apply to any person or entity, whether or not organized for profit, and to transactions both prior to and after default, but shall not apply to any agreement involving the loan or forbearance of money or credit sales where the original principal balance is less than $2,000.
(e) The provisions of this section are cumulative to, and not in derogation of, rights under other provisions of state or federal law and shall not in any way repeal, amend, or modify the provisions of Public Law 96-221 enacted by the Congress of the United States and approved March 31, 1980, as amended.
(Acts 1970, Ex. Sess., No. 27, p. 2628; Acts 1980, No. 80-435, p. 659; Acts 1981, No. 81-503, p. 861, §1; Acts 1984, No. 84-108; Acts 1984, No. 84-308.)
Notes of Decisions
Cited in
9
cases (
2 in the last 5 years), 1985–2024 · leading case:
Ex Parte Watley, 708 So. 2d 890 (Ala. 1997).
Ex Parte Watley, 708 So. 2d 890 (Ala. 1997).
· cites it 68× “" That court concluded: "Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies." 708 So.2d at 890. As we understand its opinion, the Court of Civil Appeals held…”
Watley v. Transamerica Fin. Servs., Inc., 708 So. 2d 890 (Ala. 1997).
· cites it 65× “” That court concluded: “Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies.” 708 So.2d at 890 . As we understand its opinion, the Court of Civil Appeals…”
Watley v. Transamerica Fin. Servs., Inc., 708 So. 2d 889 (Ala. Civ. App. 1997).
· cites it 7× “” Transamerica contends that Ala.Code 1975, § 8-8-5, exclusively governs the amount of points it can charge' on this loan.”
Harris v. Howell, 739 F. Supp. 565 (N.D. Ala. 1989).
“Third, the terms of the loan transactions do not reflect usury or unconscionability as contemplated by either §§ 8-8-5 or 5-19-16 of the Alabama Code. This is particularly true given plaintiff’s credit status.”
TitleMax of Alabama, Inc. v. Arnett (LEAD) (M.D. Ala. 2022).
· cites it 2× “See Ala. Code § 8-8-5 . And as explained above, paragraph 22(j) is not void as against public policy, and so the bankruptcy court erred in failing to consider it in evaluating the debtors’ good faith.”
McNeal v. Exeter Fin. LLC (MAG+) (M.D. Ala. 2024).
· cites it 2× “Ala. Code § 8-8-5 (a)-(b). According to the allegations of the complaint, the principal balance on the automobile loan exceeded $2,000.”
Patterson v. Green, 474 So. 2d 725 (Ala. Civ. App. 1985).
“…current Alabama law, the parties might not be bound by the six percent interest limitation set forth in § 8-8-1. See § 8-8-5, Ala.Code (1975).”
First Fin. Bank v. Cs Assets, LLC, 678 F. Supp. 2d 1216 (S.D. Ala. 2010).
· cites it 2× “1996) (recognizing that “late charges may be treated as provisions for interest upon the underlying obligation” for loans exceeding $2,000, pursuant to Ala.Code § 8-8-5). There has been, and can reasonably be, no suggestion that a $60,000 late charge under the CS Assets/West…”
— Ala. Code § 8-8-5(a) — 2 cases
Ex Parte Watley, 708 So. 2d 890 (Ala. 1997).
“" That court concluded: "Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies." 708 So.2d at 890. As we understand its opinion, the Court of Civil Appeals held…”
Watley v. Transamerica Fin. Servs., Inc., 708 So. 2d 890 (Ala. 1997).
“” That court concluded: “Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies.” 708 So.2d at 890 . As we understand its opinion, the Court of Civil Appeals…”
— Ala. Code § 8-8-5(c) — 2 cases
Ex Parte Watley, 708 So. 2d 890 (Ala. 1997).
“" That court concluded: "Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies." 708 So.2d at 890. As we understand its opinion, the Court of Civil Appeals held…”
Watley v. Transamerica Fin. Servs., Inc., 708 So. 2d 890 (Ala. 1997).
“” That court concluded: “Therefore, because the loan in this case was greater than $2,000, the Mini-Code provisions relating to the points charged on this loan do not apply; rather, § 8-8-5 applies.” 708 So.2d at 890 . As we understand its opinion, the Court of Civil Appeals…”
— Ala. Code § 8-8-5(e) — 1 case
Watley v. Transamerica Fin. Servs., Inc., 708 So. 2d 889 (Ala. Civ. App. 1997).
“” Transamerica contends that Ala.Code 1975, § 8-8-5, exclusively governs the amount of points it can charge' on this loan.”
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