Virginia Code 6.2-312: Open-end credit plans
A. The provisions of this section shall apply to any person that makes, arranges, or negotiates a loan or otherwise extends credit under an open-end credit plan, whether or not the person maintains a physical presence in the Commonwealth. However, the provisions of this section shall not apply to any bank, savings institution, or credit union as such terms are defined in § 6.2-300.
Terms Used In Virginia Code 6.2-312
- Bank: means any national bank, any bank organized under Chapter 8 (§ 6. See Virginia Code 6.2-300
- Credit union: means any credit union organized under Chapter 13 (§ 6. See Virginia Code 6.2-300
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Loan: means a loan or forbearance of money. See Virginia Code 6.2-300
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
- open-end credit plan: means consumer credit extended by a creditor under a plan in which: (i) the creditor reasonably contemplates repeated transactions; (ii) the creditor may impose a finance charge from time to time on an outstanding unpaid balance; and (iii) the amount of credit that may be extended to the consumer during the term of the plan, up to any limit set by the creditor, is generally made available to the extent that any outstanding balance is repaid. See Virginia Code 6.2-300
- 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
- real estate: includes lands, tenements and hereditaments, and all rights and appurtenances thereto and interests therein, other than a chattel interest. See Virginia Code 1-219
- Savings institution: means any savings institution, as defined in § 6. See Virginia Code 6.2-300
B. Notwithstanding any provision of this chapter other than § 6.2-327, and except as provided in subsections D, E, and F, a seller or lender engaged in extending credit under an open-end credit plan may impose, on credit extended under the plan, finance charges and other charges and fees at such rates and in such amounts and manner as may be agreed upon by the creditor and the obligor, if under the plan a finance charge is imposed upon the obligor if payment in full of the unpaid balance is not received at the place designated by the creditor prior to the next billing date, which shall be at least 25 days later than the prior billing date.
C. Notwithstanding the provisions of § 6.2-327 and subject to the provisions of § 8.9A-204.1, any loan made under this section may be secured in whole or in part by a subordinate mortgage or deed of trust on residential real estate improved by the construction thereon of housing consisting of one- to four-family dwelling units.
D. The following persons are prohibited from engaging in the extension of credit under an open-end credit plan described in this section: (i) any person licensed under Chapter 18 (§ 6.2-1800 et seq.), any person affiliated through common ownership with such licensed person, and any person that is a subsidiary of such licensed person; (ii) any person licensed under Chapter 22 (§ 6.2-2200 et seq.), any person affiliated through common ownership with such licensed person, and any person that is a subsidiary of such licensed person; and (iii) any person conducting business at any office, suite, room, or place of business where a person described in clause (i) or (ii) is conducting business.
E. No person shall make a loan or otherwise extend credit under an open-end credit plan or any other lending arrangement that is secured by a non-purchase money security interest in a motor vehicle, as such term is defined in § 6.2-2200, unless such loan or extension of credit is made in accordance with, or is exempt from, the provisions of Chapter 22 (§ 6.2-2200 et seq.).
F. A seller or lender engaged in extending credit under an open-end credit plan to a resident of the Commonwealth or to any individual in the Commonwealth shall not charge, collect, or receive, directly or indirectly, credit insurance premiums, charges for any ancillary product sold, charges for negotiating forms of loan proceeds or refunds other than cash, charges for brokering or obtaining an extension of credit, or any fees, interest, or charges in connection with credit extended under the plan, other than (i) interest at a simple annual rate not to exceed 36 percent and (ii) a participation fee not to exceed $50 per year. Any extension of credit made in violation of this subsection is void and no person shall have the right to collect, receive, or retain any principal, interest, fees, or other charges in connection with the extension of credit.
G. Any violation of the provisions of this section shall constitute a prohibited practice in accordance with § 59.1-200 and shall be subject to any and all of the enforcement provisions of the Virginia Consumer Protection Act (§ 59.1-196 et seq.).
H. A third party shall not engage in the extension of credit under an open-end credit plan described in this section.
1987, cc. 622, 639, 714, § 6.1-330.78; 1992, Sp. Sess., c. 4; 1997, c. 112; 2009, cc. 784, 860; 2010, cc. 477, 794; 2020, cc. 1215, 1258.