Motor vehicle title loans; establishes requirements, penalties. (SB606)
Introduced By
Sen. Dick Saslaw (D-Springfield) with support from co-patron Del. Kaye Kory (D-Falls Church)
Progress
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Introduced |
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Passed Committee |
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Passed House |
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Passed Senate |
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Signed by Governor |
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Became Law |
Description
Motor vehicle title loans; penalties. Establishes requirements for motor vehicle title loans, which are nonpurchase money revolving loans secured by an interest in a motor vehicle. Under this measure, if the loan balance is not paid in full within a 25-day grace period (in which case interest does not accrue), interest shall not exceed 22 percent per month on the portion of the outstanding balance of the loan that does not exceed $700; 18 percent per month on the portion between $700 and $1,400; and 15 percent per month on the portion that exceeds $1,400. There is no cap on the size of such loans. Money advanced under the loan agreement is required to be repaid in monthly payments over the 12 months following an advance. Interest does not accrue on a loan after the motor vehicle securing the loan has been repossessed or after 60 days following the failure to make a payment. Lenders are barred from seeking a deficiency judgment against a borrower following repossession or sale of the motor vehicle. Motor vehicle equity lenders are required to be licensed by the State Corporation Commission. A violation of the measure is a prohibited practice under the Consumer Protection Act. Violations are subject to civil and criminal penalties. View Full Text »
