Although no statute or regulation defines the term “predatory lending,” industry observers generally describe this type of behavior to include the theories discussed below. It has been estimated that predatory lending costs consumers nationwide $9.1 billion, annually.

Predatory lenders have been robbing the poor in our society for thousands of years. In Ezekiel 18:13, the prophet Ezekiel stated that “lending at usury and taking excessive interest is a detestable thing”. In Nehemiah 5:10 the prophet Nehemiah stated “let the exacting of usury stop”. In John 2:14, Jesus Christ himself became angry at the moneychangers in the Temple because they were gouging the poor with exorbitant and usurious interest rates.

As Alabamians, we have all been faced with, or forced to deal with, certain aspects of the blighted history of our state and its segregationist past. However, what many people don’t realize is that during our state’s most tumultuous time in history, Alabama also offered the nation a unique and profound piece of civility to which we can all be proud. Alabama is considered by many as the birth place of the Confederacy, the birth place of the Civil Rights movement - and - the birth place of the Professional Code of Conduct that governs our actions as lawyers.e

Alabama has seen increased activity in the area of commercial litigation. This is in large part because more businesses see Alabama as fertile ground for beginning new enterprises. If Alabama is to successfully foster its growing business community, the legal profession must do its part to help. Several illegal methods exist to block a new business’s entry into the community, impede a business’s growth in the community or push a business out of the community. Certain Alabama laws prevent this illegal activity and ensure that fair competition may proceed. The following is a synopsis of some of the most common claims seen in commercial litigation and a discussion of the current state of the law in those areas.

Alabama has long recognized a cause of action for fraud. Legal fraud in Alabama is described as misrepresentation of material fact made either willfully to deceive or recklessly without knowledge, and acted on by the other party, or made by mistake, and acted on by the other party; and as a suppression of a material fact which the party is under an obligation to communicate.