Each licensee shall comply with the following requirements and prohibitions:

Terms Used In Virginia Code 6.2-1816

  • Check: means a draft drawn on the account of an individual at a depository institution. See Virginia Code 6.2-1800
  • Commission: means the State Corporation Commission. See Virginia Code 6.2-100
  • Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
  • Dependent: A person dependent for support upon another.
  • Fair Debt Collection Practices Act: The Fair Debt Collection Practices Act is a set of United States statutes added as Title VIII of the Consumer Credit Protection Act. Its purpose is to ensure ethical practices in the collection of consumer debts and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. It is often used in conjunction with the Fair Credit Reporting Act. Source: OCC
  • Includes: means includes, but not limited to. See Virginia Code 1-218
  • Interest: means all charges payable directly or indirectly by a borrower to a licensee as a condition to a loan, including fees, service charges, and renewal charges, and any ancillary product sold in connection with a loan, but does not include the monthly maintenance fees, deposit item return fees, or late charges authorized under § 6. See Virginia Code 6.2-1800
  • Licensee: means a person to whom a license has been issued under this chapter. See Virginia Code 6.2-1800
  • Person: means any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or other legal or commercial entity. See Virginia Code 6.2-100
  • Power of attorney: A written instrument which authorizes one person to act as another's agent or attorney. The power of attorney may be for a definite, specific act, or it may be general in nature. The terms of the written power of attorney may specify when it will expire. If not, the power of attorney usually expires when the person granting it dies. Source: OCC
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Short-term loan: means a loan made pursuant to this chapter. See Virginia Code 6.2-1800
  • 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
  • United States: includes 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 1-255

1. A licensee shall not make a loan that does not comply with § 6.2-1816.1.

2. A licensee shall not charge, collect, or receive, directly or indirectly, credit insurance premiums, charges for any ancillary product sold, charges for disbursing loan proceeds or refunds including check-cashing charges and any other charges for negotiating forms of payment other than cash, charges for brokering or obtaining a loan, or any fees, interest, or charges in connection with a loan, other than fees and charges permitted by § 6.2-1817.

3. A licensee shall not obtain any agreement from the borrower (i) giving the licensee or any third person power of attorney or authority to confess judgment for the borrower; (ii) authorizing the licensee or any third party to bring suit against the borrower in a court outside the Commonwealth; or (iii) waiving the borrower’s right to legal recourse or any other right the borrower has under any otherwise applicable provision of state or federal law.

4. A licensee shall not make a loan to a person if that person is obligated upon any loan to a person licensed under Chapter 22 of Title 6.2 of the Code of Virginia, and any holder of this check takes it subject to all claims and defenses of the maker.”

17. Before entering into a short-term loan, the licensee shall provide each borrower with a pamphlet, in form consistent with regulations adopted by the Commission, explaining in plain language the rights and responsibilities of the borrower and providing a toll-free number at the Commission for assistance with complaints.

18. Each licensee shall conspicuously post in each approved office (i) a schedule of fees and interest charges, which shall include examples using a $300 loan repaid in three months, a $500 loan repaid in five months, and a $1,000 loan repaid in 10 months, and (ii) a notice containing the following statement: “If you wish to file a complaint against us, you may contact the Bureau of Financial Institutions at [insert contact information].” The Commission shall furnish licensees with the appropriate contact information.

19. A licensee shall not knowingly make a short-term loan to a person who is a member of the military services of the United States or the spouse or other dependent of a member of the military services of the United States. Prior to making a short-term loan, every licensee shall inquire of every prospective borrower if he is a member of the military services of the United States or the spouse or other dependent of a member of the military services of the United States. The loan documents shall include verification that the borrower is not a member of the military services of the United States or the spouse or other dependent of a member of the military services of the United States.

20. In collecting or attempting to collect a short-term loan, a licensee shall comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections.

21. A licensee shall not contact a borrower for any reason other than (i) for the borrower’s benefit regarding upcoming payments, options for obtaining loans, payment options, payment due dates, the effect of default, or, after default, receiving payments or other actions permitted by the licensee; (ii) to advise the borrower of missed payments or dishonored checks; or (iii) to assist the transmittal of payments via a third-party mechanism.

22. A short-term loan agreement shall not be sold or otherwise assigned to any other person who is not also a licensee, and if a loan agreement or its servicing is sold or assigned to another licensee, the buyer or assignee of the loan agreement shall be subject to the same obligations under this chapter that apply to the selling or assigning licensee. If a licensee sells or assigns a short-term loan or its servicing, the licensee shall provide to the borrower written notice and the information needed to make future payments no later than 10 days before the borrower’s next payment due date.

23. A licensee shall not make a loan to a borrower that includes an acceleration clause or demand feature that permits the licensee, in the event the borrower fails to meet the repayment terms for any outstanding balance, to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance, unless both of the following conditions are met: (i) not earlier than 10 days after the borrower’s payment was due, the licensee provides written notice to the borrower of the termination of the loan and (ii) in addition to the outstanding balance, the licensee collects only prorated interest and the fees earned up to termination of the loan. For purposes of this subdivision, the outstanding balance and prorated interest and fees shall be calculated as if the borrower had voluntarily prepaid the loan in full on the date of termination.

24. A licensee may not file or initiate a legal proceeding of any kind against a borrower until 60 days after the date of default on a short-term loan, during which period the licensee and borrower may voluntarily enter into a repayment arrangement.

25. A licensee shall not recommend to a borrower that the borrower obtain a loan for a dollar amount that is higher than the borrower has requested.

26. A licensee may not engage in any unfair, misleading, deceptive, or fraudulent acts or practices in the conduct of its business.

2002, c. 897, § 6.1-459; 2003, c. 593; 2004, c. 295; 2005, c. 571; 2008, cc. 849, 876; 2010, c. 794; 2016, c. 501; 2020, cc. 1215, 1258.

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