About Alabama Check Cashing Laws
Check-cashing facilities are all around the world. They all have the intent to offer people going through a financial hardship the option to borrow money to make ends meet. The regulations and laws for the check-cashing facilities vary from state to state.
Other People Are Reading
-
What Is Check Cashing?
-
Check cashing allows those who are in financial need the option to borrow money until they get paid or until another money option becomes available. With check cashing, you will be allowed to borrow up to a certain amount of money, usually starting from $100, and there will be a fee per $100 that you borrow. Once you have paid the fees and original amount you have borrowed, you will have the option to borrow again. Failing to pay the fees and amount borrowed will result in a negative bank account balance for you and possibly a civil suit or garnishment.
Maximum Loan Amount
-
In Alabama, one of the check-cashing laws that apply to borrowers and lenders is the amount of the loan. That loan amount may not exceed $500. You do not have to borrow the entire amount, but you cannot go over that amount. This is mandated to keep people from borrowing more than they can afford to pay back.
-
Maximum Loan Fee Percentage
-
The fee that the check cashing facilities in Alabama can charge also has a limit. The law makes the maximum loan fee amount a check-cashing facility can charge 17.5 percent. This fee is applied to the highest loan amount borrowed. The lower the loan amount, the lower the loan fee percentage will be. This law is made to prevent people who borrow at the check-cashing facilities from being overcharged. If there was no law, the facilities could charge a loan fee percentage as high as they would like.
Bankruptcy Laws
-
In Alabama, borrowers sign a form saying they will not file bankruptcy against their loans. However, the law allows the borrowers the right to include their check-cashing loans when they file for bankruptcy. You will not be prosecuted because you signed the form saying you would not file bankruptcy. Alabama law protects you from being prosecuted.
Fraud Laws
-
Most people believe that they will face fraud charges if they do not pay their check-cashing loans. The law in Alabama protects this from happening to you. When you apply for a loan, the check-cashing lender knows that the reason you are borrowing is that you do not have the funds available in your account. Therefore, no fraud has been committed. If your bank allows the check to go through, as well as the fees, then you will need to pay them back because criminal charges can occur in that case.
Other Checks Cashed
-
In addition to check-cashing loans, the check-cashing facilities in Alabama also cash payroll, government, school and personal checks. The law requires a valid identification card and a valid Social Security number. This keeps individuals from breaking the law by cashing a check that doesn't belong to them.
-
