§5-19-19. Liabilities of creditor making excess finance charge; failure to obtain license; damages for deliberate violation or reckless disregard; written notice of violations; oral statements not admissible; fiduciary duty not created.

(a)(1)(i) Any creditor charging a finance charge in excess of the amount authorized herein, except as specified in subdivision (2), shall forfeit debtor's actual economic damages not to exceed the finance charge, and shall refund to the debtor such amount of the actual economic damages, which may be done by reducing the amount of the debtor's obligation. If the debtor is entitled to a refund and the creditor refuses to refund within a reasonable time, not to exceed 60 days, after written demand, including the filing of a legal action, the debtor shall recover a penalty of five times the amount of the actual economic damages not to exceed the finance charge, but in any event not less than one hundred dollars ($100). Provided, however, as to any legal action pending on May 20, 1996, the debtor shall make a new written demand under this subsection.

(ii) As to transactions occurring after May 20, 1996, any creditor charging a finance charge in excess of the amount authorized herein, except as specified in subdivision (2), shall forfeit to the debtor the amount of the actual economic damages not to exceed the finance charge, which may be done by reducing the amount of the debtor's obligation. If the debtor is entitled to a refund and the creditor refuses to refund within a reasonable time, not to exceed 60 days, after written demand, including the filing of a legal action, the debtor shall recover twice the actual economic damages not to exceed the finance charge, but in any event not less than one hundred dollars ($100).

(2) If the creditor has made an excess finance charge in deliberate violation of or in reckless disregard for this chapter, the creditor shall forfeit the greater of the entire finance charge imposed or five times the amount of the actual economic damages, but not less than one hundred dollars ($100). No action under this subsection may be brought more than one year after the due date of the last scheduled payment of the agreement pursuant to which the charge was made or, in the case of an open-end credit plan, one year after the excess charge is made.

(3) Any creditor licensed under this chapter adjudged after May 20, 1996 by a court of competent jurisdiction in any civil action to be in deliberate violation of or in reckless disregard for this chapter shall within 10 days of such adjudication forward a copy of the judgment to the administrator. Within 10 days of such judgment becoming final and nonappealable, the creditor shall notify the administrator and the administrator shall, within 60 days of such notification, review the creditor's license in view of the matters on which the judgment was based and determine whether to conduct a license revocation hearing pursuant to Section 5-19-23. At any hearing conducted thereon by the administrator, such judgment shall be prima facie evidence in support of the revocation of the creditor's license.

(b) A creditor required to obtain a license who fails to obtain such license may not maintain a proceeding in any court in this state on a consumer credit transaction for which a license was required until the creditor obtains the license required by Section 5-19-22. If a court determines that an unlicensed creditor should have obtained a license, the action may be stayed until the creditor obtains the required license and satisfies the requirements of the next sentence of this subsection. The creditor shall pay to the administrator a civil penalty equal to three times the amount of the investigation fee and the annual license fee for each year or portion thereof, the creditor, in violation of Section 5-19-22, has engaged in the business of making consumer loans or taking assignments of consumer credit contracts without first having obtained a license, but in no event shall a civil penalty exceed one hundred thousand dollars ($100,000). All civil penalties shall be paid into the special fund set up by the State Treasurer pursuant to Section 5-2A-20 and used in the supervision and examination of licensees. After obtaining the required license, and paying the civil penalty prescribed by this subsection, the creditor may bring and maintain proceedings in the courts of this state on consumer credit transaction contracts, and the enforceability of the contracts shall not be impaired by the prior failure to obtain a license, irrespective of whether the consumer credit transaction contracts were made before or after the license was obtained. No private cause of action exists against a creditor for failing to obtain a license required by Section 5-19-22.

(c) Except for the specific remedies and obligations provided in subsection (a) with respect to excess finance charges, or subsection (b) with respect to licensing, in which event the remedy and obligations set forth in subsection (a) or (b), as applicable, shall apply, any provision of a consumer credit transaction which violates this chapter shall be unenforceable by the creditor to the extent, but only to the extent, of the violation, and the other remaining provisions and agreements shall be enforceable and shall not be void and shall not be affected by the violation. Except as provided in subsection (a), any creditor who fails to comply with any requirement imposed under this chapter with respect to any person is liable to the person only for the actual economic damages sustained by the person as the result of the failure. Except as set forth in subsection (a), no action may be brought by the debtor under this section based upon a violation of any provision of this chapter more than two years after the date the violation occurred; provided, however, this limitation shall not bar a debtor from asserting a violation of this chapter in an action brought by the creditor, as a matter of defense by recoupment or setoff in such action, if otherwise allowed by law.

(d) A creditor or assignee has no liability to the debtor for any violation of this chapter if, prior to receipt of written notice from the debtor of a violation, the creditor or assignee notifies the debtor of the violation and makes whatever adjustments in the appropriate account, or payments to the debtor, as are necessary to assure that the debtor will not be required to pay an amount in excess of the charges permitted by this chapter.

(e) An oral statement shall not be admissible to contradict the provisions of a credit transaction document, unless the debtor establishes by clear and convincing evidence that the oral statement was made and that it constituted a misrepresentation of a material fact relating to the character or essential terms of the transaction that was made principally to induce the debtor to sign the document and upon which the debtor reasonably relied in signing the document or entering into the transaction. This subsection shall not apply to credit transaction documents in effect on May 20, 1996, nor to causes of action that arise therefrom; nor shall this subsection apply to any credit transaction documents not covered by this chapter.

(f) A consumer credit transaction does not create or give rise to a fiduciary duty on the part of the creditor.

(Acts 1971, No. 2052, p. 3290, §15; Acts 1996, No. 96-576, p. 887, §2.)