Code of Alabama
Chapter 19 - Consumer Finance.
Section 5-19-1 - Definitions.

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.

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