Payday Loan Act; requires SCC to contract with one or more parties to develop, etc. database. (SB588)

Introduced By

Sen. Phil Puckett (D-Tazewell)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Payday Loan Act. Requires the State Corporation Commission, by July 1, 2009, to certify and contract with one or more third parties to develop, implement, and maintain an Internet-accessible database, and requires payday lenders to query the database prior to making any loan to determine whether an applicant is eligible for the loan. Fifty cents may be charged to defray the costs of using the database. A payday lender is prohibited from making a payday loan to a person who has terminated a payday loan on the loan application date, or if the loan would cause the borrower to have more than three payday loans outstanding at the same time. Payday lenders are prohibited from knowingly making loans to a member of the military service or to the spouse or dependent of such person. If a borrower obtains three or more consecutive payday loans, the borrower may enter into an extended payment plan, which allows the borrower to repay the loan in at least two equal installments over 60 days. A payday loan may not be made to a borrower in an extended payment plan. Other provisions (i) prohibit a lender from engaging in any unfair, misleading, deceptive, or fraudulent acts or practices in the making or collecting of a payday loan; (ii) require a lender, when collecting or attempting to collect a payday loan when the check given as security for such loan is dishonored, to comply with certain restrictions and prohibitions contained in the Fair Debt Collection Practices Act; (iii) provide that any provision of a written loan agreement that violates the Payday Loan Act is unenforceable against the borrower; (iv) state that the provisions of the Payday Loan Act apply to Internet lenders; and (v) allow licensees to secure payday loans with the borrower's electronic debit authorization. Read the Bill »


03/12/2008: Passed the General Assembly


01/09/2008Prefiled and ordered printed; offered 01/09/08 080118300
01/09/2008Referred to Committee on Commerce and Labor
02/04/2008Impact statement from SCC (SB588)
02/06/2008Assigned C&L sub: Special on Payday Lending
02/12/2008Committee substitute printed 089553300-S1
02/12/2008Reported from Commerce and Labor with substitute (13-Y 1-N 1-A) (see vote tally)
02/12/2008Read first time
02/12/2008Floor substitute printed 089556328-S2 (Stolle)
02/12/2008Floor substitute printed 089557256-S3 (Locke)
02/12/2008Constitutional reading dispensed (38-Y 2-N) (see vote tally)
02/12/2008Reading of substitute waived
02/12/2008Committee substitute agreed to 089553300-S1 (23-Y 15-N 1-A) (see vote tally)
02/12/2008Floor substitute by Senator Stolle ruled out of order 089556328-S2
02/12/2008Floor substitute by Senator Locke ruled out of order 089557256-S3
02/12/2008Amendment by Senator Cuccinelli rejected (15-Y 24-N 1-A) (see vote tally)
02/12/2008Reading of amendment waived
02/12/2008Amendment by Senator Stolle agreed to
02/12/2008Engrossed by Senate - committee substitute with amendment SB588ES1
02/12/2008Printed as engrossed 089553300-ES1
02/12/2008Constitutional reading dispensed (39-Y 1-N) (see vote tally)
02/12/2008Passed Senate (37-Y 2-N 1-A) (see vote tally)
02/12/2008Communicated to House
02/14/2008Placed on Calendar
02/14/2008Read first time
02/14/2008Referred to Committee on Commerce and Labor
02/20/2008Impact statement from SCC (SB588ES1)
03/03/2008Reported from Commerce and Labor with substitute (13-Y 9-N)
03/04/2008Committee substitute printed 089631300-H1
03/04/2008Read second time
03/05/2008Passed by for the day
03/06/2008Read third time
03/06/2008Committee substitute agreed to 089631300-H1
03/06/2008Amendments by Delegate Kilgore agreed to
03/06/2008Engrossed by House - committee substitute with amendments SB588H1
03/06/2008Passed House with substitute with amendments (91-Y 9-N)
03/06/2008VOTE: --- PASSAGE (91-Y 9-N)
03/06/2008House substitute with amendments agreed to by Senate (34-Y 2-N 1-A)
03/08/2008Bill text as passed Senate and House (SB588ER)
03/08/2008Signed by Speaker
03/11/2008Impact statement from SCC (SB588ER)
03/11/2008Signed by President
03/12/2008Signed by Speaker
03/12/2008Signed by President
04/11/2008Governor's recommendation received by Senate


Tom Elliott writes:

This proposed change appears to be of prime benefit to the payday loan industry, not the borrower. It will provide the industry a database that protects them from making loans that are at high risk of not being repaid. The cost of this should be borne by the industry not the state or the borrower. There is no reason not to have the database but to label it as payday lender reform is at best misleading.

Doug Smith writes:

Kudos to the General Assembly for lowering the fees from 391% APR to 362% APR.