General Provisions.

Ala. Code tit. 5, ch. 1A

in effect

Ala. Code § 5-1A-1 Short Title.

5-1A-1. Short Title. Chapters 1A through 13B and Chapter 20 of this title shall be known and may be cited as the “Alabama Banking Code.” (Acts 1980, No. 80-658, §5-1-1; Acts 1995, No. 95-115, p. 134, §66.)

Ala. Code § 5-1A-2 Definitions.

5-1A-2. Definitions. For the purposes of Chapters 1A through 12A of this title, the following terms shall have the meanings respectively ascribed to them by this section: (1) BANK. Any banking corporation or trust company organized under the laws of this state under the jurisdiction of the superintendent of banks of this state or organized under the laws of the United States having its principal place of business in this state. (2) SUPERINTENDENT. The Superintendent of Banks of this state. (3) RECEIVERSHIP COURT. The circuit court of the county in which is located the principal office of a bank in receivership. (4) NATIONAL BANK. A national banking association organized pursuant to 12 U.S.C. § 21. (5) CAPITAL. The sum of the par value of the authorized shares of a bank which have been issued and remain outstanding. (6) SURPLUS. The aggregate of the amounts transferred to surplus pursuant to Section 5-5A-21 and any amounts subsequently designated as such by action of the board of directors of the bank. (7) UNDIVIDED PROFITS. The accumulated undistributed net profits of a bank. (8) BANK HOLDING COMPANY. A bank holding company as defined in 12 U.S.C. § 1841. (Acts 1980, No. 80-658, §5-1-2.)

Ala. Code § 5-1A-3 Use of Words “Bank,” “Banker,” “Banking,” Etc., Restricted.

5-1A-3. Use of Words “Bank,” “Banker,” “Banking,” Etc., Restricted. The use of the words “bank,” “banker,” “banking,” or words of similar meaning in any foreign language as a designation or name, or as part of a designation or name, under which business is or may be conducted in the State of Alabama, or in its advertising is restricted to banking corporations organized under the laws of Alabama, other states, the United States, or foreign countries. All other persons, firms, partnerships, limited liability companies, corporations, and other entities are prohibited from using the words “bank,” “banker,” or “banking” or words of similar meaning in any foreign language in advertising or as a designation or name or as part of a designation or name under which business may be conducted in this state unless the superintendent determines that the use of the word by the entity is unlikely to mislead or confuse the public or give the impression that such entity is lawfully organized and operating as a bank and authorizes the use of the word. Any violation of this prohibition shall subject the party chargeable therewith to a penalty of five hundred dollars ($500) for each day, with a maximum amount of fifty thousand dollars ($50,000), during which such violation is committed or repeated. Such penalty may be recovered by the superintendent by an action instituted for that purpose, and, in addition to the penalty, such violation may be enjoined and the injunction enforced as in other cases. If the directors, officers, or those persons performing similar functions as corporate directors or officers of any entity shall knowingly and willfully violate or knowingly and willfully permit any of the officers, agents, employees, or those persons performing similar functions of the entity to violate any of the provisions of this section, each and every such director, officer, or other person engaging in such knowing and willful violation or knowing and willful permission shall be liable in his or her personal and individual capacity for all damages which the entity or any other person shall have sustained in consequence of such violation. This section shall not be applicable to entities regularly engaged in business in this state which on and since July 12, 1949, have lawfully and continuously used such words in their trade or firm name. (Acts 1980, No. 80-658, §5-1-3; Act 2007-224, p. 284, §1.)

Ala. Code § 5-1A-4 Restrictions on Engaging in Banking Business.

5-1A-4. Restrictions on Engaging in Banking Business. No person, firm, corporation or other entity except a bank or if otherwise lawfully authorized a credit union or a savings and loan association may lend money and either receive deposits or pay checks at its principal office or branch in this state. (Acts 1980, No. 80-658, §5-1-4.)

Ala. Code § 5-1A-5 Supervisory Provisions Not Applicable to National Banks.

5-1A-5. Supervisory Provisions Not Applicable to National Banks. The supervisory provisions of Chapters 1A through 12A of this title shall not apply to national banks. (Acts 1980, No. 80-658, §5-1-5.)

Ala. Code § 5-1A-6 Inconsistent Provisions in Other Laws Superseded.

5-1A-6. Inconsistent Provisions in Other Laws Superseded. Insofar as the provisions of Chapters 1A through 13B and Chapter 20 of this title are inconsistent with the provisions of any other law, general or special, the provisions of Chapters 1A through 13B and Chapter 20 of this title shall be controlling. (Acts 1980, No. 80-658, §5-13-1; Acts 1995, No. 95-115, p. 134, §67.)

Ala. Code § 5-1A-7 Activities of Savings and Loan Associations and Credit Unions Not Restricted.

5-1A-7. Activities of Savings and Loan Associations and Credit Unions Not Restricted. Chapters 1A through 12A of this title are not intended to limit or restrict activities of savings and loan associations or credit unions now or hereafter lawfully authorized. Specifically, nothing contained herein shall be construed so as to alter, amend or repeal any of the provisions of Sections 5-2A-60 through 5-2A-63, 5-2A-100 through 5-2A-125, 5-16-1 through 5-16-53 and 5-17-1 through 5-17-28 relating to savings and loan associations and credit unions. (Acts 1980, No. 80-658, §5-13-3.)

Ala. Code § 5-1A-8 Effect of Repeal of Prior Acts.

5-1A-8. Effect of Repeal of Prior Acts. The repeal of a prior act by Chapters 1A through 12A of this title shall not impair, or otherwise affect, the organization or the continued existence of an existing bank. Nor shall the repeal of a prior act by Chapters 1A through 12A of this title affect any right accrued or established, or any liability or penalty incurred, or the construction of the certificate of incorporation or charter of any bank organized before the enactment of Chapters 1A through 12A of this title, or the determination of the rights and interests of any of its shareholders or creditors, under the provisions of such prior act before the repeal thereof. (Acts 1980, No. 80-658, §5-13-4.)

Ala. Code § 5-1A-9 Deposit Creates Debtor-Creditor Relationship; Agreement as to Person or Purpose for Which Deposit Made and Payable.

5-1A-9. Deposit Creates Debtor-Creditor Relationship; Agreement as to Person or Purpose for Which Deposit Made and Payable. A deposit to a bank or other financial institution permitted by law to take deposits from the general public (“depository institution”) creates the relationship of debtor and creditor between the depositor and the depository institution. All such deposits are general deposits unless there is a written agreement between the depositor and the depository institution which provides therein that the deposit is to be paid only to a particular identified or identifiable person or that the deposit is made and payable only for a specific and particular purpose. This section shall not affect accounts labeled “escrow” or “trust.” (Acts 1986, No. 86-543, p. 1075.)

Ala. Code § 5-1A-10 Use of Lender Information or Trade Name in Solicitations.

5-1A-10. Use of Lender Information or Trade Name in Solicitations. (a) For purposes of this section, the following terms shall have the following meanings: (1) LENDER. A bank, industrial bank, savings and loan association, savings bank, credit union, finance company, mortgage bank, mortgage broker, loan originator or holder of the loan, or other person who makes loans in this state, and any affiliate thereof, or any third party operating with the consent of the lender. A person shall not be considered a lender based on the person’s former employment with the lender. (2) PERSON. Any individual, firm, corporation, partnership, organization, association, or other legal entity. (b) A person other than the lender may not use the trade name or trademark of the lender or a trade name or trademark confusingly similar to that of the lender in a solicitation for the offering of services or products without the consent of the lender unless the solicitation clearly and conspicuously states in bold-face type on the front page of the correspondence containing the solicitation all of the following: (1) The name, address, and telephone number of the person making the solicitation. (2) That the person making the solicitation is not affiliated with the lender. (3) That the solicitation is not authorized or sponsored by the lender. (4) That the loan information referenced was not provided by the lender. (c) A person may not use a loan number, loan amount, or other specific loan information that is not publicly available in a solicitation for the purchase of services or products. Notwithstanding the foregoing, the prohibition does not apply to communications by a lender or its affiliates with a current customer of the lender or with a person who was a customer of the lender. (d)(1) A person other than the lender may not use a loan number, loan amount, or, other than the existence of the loan, any loan specific information that is publicly available in a solicitation for the purchase of services or products unless the communication clearly and conspicuously states in bold-faced type on the front page of the correspondence containing the solicitation all of the following: a. The name, address, and telephone number of the person making the solicitation. b. That the person making the solicitation is not affiliated with the lender. c. That the solicitation is not authorized or sponsored by the lender. d. That the loan information used was not provided by the lender. (2) The prohibition in subdivision (1) does not apply to communications by a lender or its affiliates with a current customer of the lender or with a person who was a customer of the lender. (e) Any reference to an existing lender without the consent of the lender and any reference to a loan number, loan amount, or, other than the existence of the loan, any loan specific information appearing on the outside of an envelope, visible through the envelope window, or on a postcard, in connection with any written communication that includes or contains a solicitation for services or products is prohibited. (f) It is not a violation of this section for a person to use the trade name of another lender in an advertisement for services or products to compare the services or products offered by the other lender. (g) A lender or owner of a trade name or trademark may seek an injunction against a person who violates this section to stop the unlawful use of the trade name, trademark, or loan information. The person seeking the injunction shall not be required to prove actual damage as a result of the violation. Irreparable harm to the lender or owner shall be presumed. The lender or owner seeking the injunction may seek to recover actual damages. (Act 2009-148, p. 301, §§1, 2.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026