Auto Indirect

Yes.

The Alabama Consumer Credit Code, Ala. Code §§ 5-19-1 et seq. ("Mini-Code"), requires a motor vehicle retail installment sale contract to contain the following disclosures.

The Mini-Code requires the contract contain the following statement immediately above the space for the debtor's signature, in 8-point type or larger: "CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT." Ala. Code § 5-19-6(a).

The Mini-Code requires a creditor to give a copy of each instrument that the debtor has executed in connection with the consumer credit transaction when the creditor extends credit. Ala. Code § 5-19-6(a).

If the Creditor Offers Insurance. The Alabama Consumer Credit Act Regulations, Ala. Admin. Code r. 155-2-2-.01 et seq. ("Mini-Code Regulations"), require a Mini-Code licensee who offers insurance in conjunction with a consumer credit transaction to provide each prospective insured a disclosure statement. The licensee's agent and the principal debtor must each sign the disclosure statement, and the cosigner must also sign if the debtor will purchase joint insurance for that co-signer. The disclosure statement must indicate:

• a description of the insurance coverage(s) to be purchased;
• the principal debtor's desire to purchase the insurance, and if joint insurance is to be purchased the insured cosigner's desire to purchase the insurance;
• that the principal debtor and any insured co-signer fully understand that buying the insurance is not a condition of the transaction (this disclosure must be in boldface type);
• that the insured(s) may cancel the policy within 30 days after the insurance is issued and receive a full refund of the insurance premium paid by returning the insurance contract to the insurer or upon written instructions to the insurer from the insured; and
• that the insured(s) may cancel the insurance more than 30 days after the insurance has been issued by giving notice of cancellation to the insurer, and on cancellation will receive a portion of the insurance premium paid as provided by regulations, rules, and orders of the Alabama State Insurance Department.

Ala. Admin. Code r. 155-2-2-.12(13)(b).

The Mini-Code Regulations require a licensee offering insurance in conjunction with a consumer credit contract to provide the principal debtor with either the insurance contract purchased, or an easy to read and understand description for each insurance product requested for purchase, at the time of closing of the consumer credit transaction. Ala. Admin. Code r. 155-2-2-.12(13)(c).

August 26, 2020   Show Redlined Changes