Virginia Code 6.2-2501: Advertising; posting refund anticipation loan fee schedules; and disclosures
A. Any facilitator who advertises the availability of a refund anticipation loan shall not directly or indirectly represent the loan as a customer‘s actual refund. Any advertisement that mentions a refund anticipation loan shall state conspicuously that it is a loan and that a fee or interest will be charged by the lending institution. The advertisement shall also disclose the name of the lending institution.
Terms Used In Virginia Code 6.2-2501
- Annual percentage rate: The cost of credit at a yearly rate. It is calculated in a standard way, taking the average compound interest rate over the term of the loan so borrowers can compare loans. Lenders are required by law to disclose a card account's APR. Source: FDIC
- Applicant: means a customer who applies for a refund anticipation loan through a facilitator. See Virginia Code 6.2-2500
- Borrower: means an applicant who receives a refund anticipation loan through a facilitator. See Virginia Code 6.2-2500
- Customer: means an individual for whom tax preparation services are performed. See Virginia Code 6.2-2500
- Facilitator: means a person who receives or accepts for delivery an application for a refund anticipation loan, delivers a check in payment of refund anticipation loan proceeds, or in any other manner acts to allow the making of a refund anticipation loan. See Virginia Code 6.2-2500
- Refund anticipation loan: means a loan, whether provided through a facilitator or by another entity such as a financial institution, in anticipation of, and whose payment is secured by, a customer's federal or state income tax refund or by both. See Virginia Code 6.2-2500
- Refund anticipation loan fee: means any fee, charge, or other consideration imposed by a lender or a facilitator for a refund anticipation loan. See Virginia Code 6.2-2500
- Refund anticipation loan fee schedule: means a list or table of refund anticipation loan fees that (i) includes three or more representative refund anticipation loan amounts; (ii) lists separately each fee or charge imposed, as well as a total of all fees imposed, related to the making of a refund anticipation loan; and (iii) includes, for each representative loan amount, the estimated annual percentage rate calculated under the guidelines established by the federal Truth in Lending Act (15 U. See Virginia Code 6.2-2500
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- State: when applied to a part of the United States, includes any of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, and the United States Virgin Islands. See Virginia Code 1-245
- Tax return: means a return, declaration, statement, refund claim, or other document required to be made or filed in connection with state or federal income taxes. See Virginia Code 6.2-2500
- Truth in Lending Act: The Truth in Lending Act is a federal law that requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on Source: OCC
B. Every facilitator who offers to facilitate, or who facilitates, a refund anticipation loan to a customer shall post a refund anticipation loan fee schedule showing the current fees for refund anticipation loans facilitated at the office, for the electronic filing of a customer’s tax return, for setting up a refund account, and any other related activities necessary to receive a refund anticipation loan. The refund anticipation loan fee schedule also shall include a statement indicating that a customer may have the tax return filed electronically without also obtaining a refund anticipation loan.
C. The refund anticipation loan fee schedule required by subsection B shall be made in not less than 28-point type on a document measuring not less than 16 inches by 20 inches. The postings required in this section shall be displayed in a prominent location at each office where any facilitator is offering to facilitate or is facilitating a refund anticipation loan.
D. Prior to an applicant completing a refund anticipation loan application, a facilitator that offers to facilitate a refund anticipation loan shall provide to the applicant a disclosure clearly setting forth the following:
1. The refund anticipation loan fee schedule;
2. That a refund anticipation loan is a loan and is not the applicant’s actual income tax refund;
3. That a customer can file an income tax return electronically without applying for a refund anticipation loan;
4. The average amount of time, according to the Internal Revenue Service, within which a customer who does not obtain a refund anticipation loan can expect to receive a refund if a customer’s return is filed or mailed as follows:
a. Filed electronically and the refund is deposited directly into a customer’s bank account or mailed to a customer; and
b. Mailed to the Internal Revenue Service and the refund is deposited directly into a customer’s bank account or mailed to a customer;
5. That the Internal Revenue Service does not guarantee that it will pay the full amount of the anticipated refund and it does not guarantee a specific date that a refund will be deposited into a customer’s bank account or mailed to a customer;
6. That the borrower is responsible for the repayment of the refund anticipation loan and the related fees in the event that the tax refund is not paid or not paid in full;
7. The estimated time within which the loan proceeds will be disbursed to the borrower if the loan is approved; and
8. The fee that will be charged, if any, if the applicant’s loan is not approved.
E. Prior to consummating a refund anticipation loan transaction, a facilitator shall provide to the applicant, in either written or electronic form, the following:
1. The estimated total fees for obtaining the refund anticipation loan;
2. The estimated annual percentage rate for the applicant’s refund anticipation loan, using the guidelines established under the federal Truth in Lending Act (15 U.S.C. § 1601 et seq.); and
3. The various costs, fees, and finance charges, if applicable, associated with receiving a refund by mail or by direct deposit directly from the Internal Revenue Service, a refund anticipation loan, a refund anticipation check, or any other refund settlement options facilitated by the facilitator.
F. When an application involves more than one applicant, a disclosure pursuant to this section need only be given to one of the applicants applying for the refund anticipation loan.