debt collection
Alabama Debt Collection Laws & Regulations
Comprehensive guide to debt collection licensing requirements, regulations, and filing obligations in Alabama. Learn about licensing fees, bond requirements, key statutes, and regulatory bodies governing third-party debt collectors in Alabama.
Application process
To obtain a debt collection license in Alabama, applicants generally need to submit a completed application to the Alabama Banking Department, provide a surety bond of $5,000, pass background checks for all control persons, and meet net worth or financial requirements. The application review typically takes 30-90 days.
Renewals
Debt collection licenses in Alabama generally require annual renewal. Renewal generally involves submission of a renewal application, payment of renewal fees, updated surety bond confirmation, and any required annual reports. Late renewals may incur additional penalties.
Third-party debt collectors operating in Alabama are also generally expected to comply with the federal Fair Debt Collection Practices Act (FDCPA). Alabama may impose additional requirements beyond federal standards, including restrictions on communication methods, required disclosures, and limitations on fees that may be collected.
Key statutes
- Collection agency privilege license (Ala. Code § 40-12-80) . Sets the state privilege license tax every collection agency must pay, $100 in towns and cities of 20,000 or more inhabitants and $25 in smaller ones, and exempts anyone outside the definition of debt collector in 15 U.S.C. § 1692a(6).
