Alabama Pawnshop Act
Law number: Alabama Code Sec.5-19A-1
Proposed: 01/01/91
Enacted: 01/01/92
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Enacted

An Alabama Circuit Court recently held that allowing title pawn lenders to charge 300% annual interest under the Alabama Pawn Shop Act violates the Equal Protection Clause.  The Court found that the statute in effect allows "pawnbrokers... to overcharge persons who would otherwise enter into loans subject to the Alabama Small Loan Act," which requires much lower rates.  This "discriminates, not only against other money lenders by allowing [pawnbrokers] to charge usurious interest rates, but also against the borrowers... whom the usurious rates were meant to protect."  As the Court noted, "allow[ing] pawnbrokers the right to charge twenty-five percent (25%) of the principle per month... directly conflicts with the stated purpose of The Small Loan Act and The Consumer Finance Act."

 Waites v. Express Enterprise Decision (pdf)