SB1548: Consumer finance companies; loans, licensing.
SENATE BILL NO. 1548
Be it enacted by the General Assembly of Virginia:
1. That §§ 6.2-1507, 6.2-1520, and 6.2-1523 of the Code of Virginia are amended and reenacted as follows:
§ 6.2-1507. Issuance of license.
A. The Commission shall issue and deliver to the applicant a license to make loans in accordance with the provisions of this chapter at the location in the Commonwealth specified in the application if it finds:
1. That the financial responsibility, experience, character and general fitness of the applicant and its members, senior officers, directors, and principals are such as to command the confidence of the public and to warrant belief that this business will be operated lawfully, honestly, fairly and efficiently within the purpose of this chapter;
2. That the applicant has available, for the operation of the
business at the specified location, liquid assets of at least $50,000 if the
specified location is in a locality with a population of more than 20,000, or
of at least $25,000 if the location is not in a locality with a population of
more than 20,000; and
3. That the applicant has complied with all of the prerequisites to obtaining the license prescribed by § 6.2-1505; and
4. That the applicant will not make loans in accordance with the provisions of this chapter at the same location at which the applicant conducts business under either Chapter 18 (§ 6.2-1800 et seq.) or Chapter 22 (§ 6.2-2200 et seq.).
If the Commission fails to make the findings required by
subdivisions 1, 2, and 3, and 4, it shall deny the
application for a license.
B. Notwithstanding the provisions of subsection A, if the applicant has an existing license at another location in the Commonwealth, the Commission shall issue and deliver to the applicant a license to make loans in accordance with the provisions of this chapter at the location specified in the application if it finds:
1. That the general fitness of the licensee is such as to
command the confidence of the public and to warrant belief that this business
will be operated lawfully, honestly, fairly and efficiently within the purpose
of this chapter; and
2. That the applicant has complied with all of the prerequisites to obtaining the license prescribed by § 6.2-1505; and
3. That the applicant will not make loans in accordance with the provisions of this chapter at the same location at which the applicant conducts business under either Chapter 18 (§ 6.2-1800 et seq.) or Chapter 22 (§ 6.2-2200 et seq.).
If the Commission fails to make the findings required by
subdivisions 1 and,
2, and 3, it shall deny the
application for a license.
C. If the Commission denies an application for a license, it shall notify the applicant of the denial. The Commission shall retain the application fee.
§ 6.2-1520. Rate of interest; late payment fees; other permitted fees.
A. A licensee may charge and receive interest
on make installment
loans of:
1. Not more than $2,500 between $500 and $35,000, which loans shall have a term of no fewer
than six months and no more
than 120 months and which shall be repayable in substantially equal consecutive
monthly payments. A licensee may charge and
collect interest on a loan made under this
chapter at a single annual contract
rate not to exceed 36 percent; and
2. More than $2,500, at such
single annual rate as shall be stated in the loan contract.
The annual rate of interest shall be
charged only upon principal balances
outstanding from time to time. Interest
shall not be charged on an add-on basis and shall not be
compounded or paid, deducted or received in advance but shall be computed and paid
only as a percentage of the unpaid principal balance. For the purpose of
calculating interest under this section, a year may be any period of time
consisting of 360 or 365 days. Interest
shall be computed on the basis of the number of days elapsed; however, if part
or all of the consideration for a loan contract is the unpaid principal balance
of a prior loan, then the principal amount payable under the loan contract may
include any unpaid interest on the prior loan that has accrued
within 90 days before the making of the new loan contract. For the purpose of
computing interest, a day may equal 1/360th or 1/365th of a year.
B. A licensee may impose charge a late charge for failure to make timely
payment fee of $20 for
any installment due on a debt, which late charge shall
not exceed five percent of the amount of such installment
payment or portion of a payment not received and applied
within 10 days of the contractual due
date. The late
charge shall be specified in the loan contract between the lender and the
borrower. For purposes of this section, "timely payment" means a payment made by
the date fixed for payment or within a period of seven calendar days after such
fixed date a late
payment fee for any individual scheduled contractual payment due may be
assessed only once. The late payment fee shall be
specified in the contract between the lender and the
borrower.
C. A licensee may charge and receive a loan
processing fee, charged on not to exceed the greater of $75 or five percent
of the principal amount of the loan, for processing the loan contract provided that the loan
processing fee shall in no event exceed $150. The loan processing fee shall be stated in the loan contract. Such The loan processing fee shall not be deemed to constitute interest charged on the principal
amount of the loan for purposes of determining whether the interest charged on a loan of not more than $2,500 exceeds the 36 percent annual contract interest rate limitation imposed by
subdivision subsection A 1. Upon payment of the full
amount of principal due plus accrued interest and any other applicable fees
within the first 30 days, whether through
outside funds or a refinancing under a new loan advance, the borrower shall be
entitled to a full rebate of the loan processing
fee less $50. If a loan is refinanced or
renewed, a licensee may assess an
additional loan processing fee on the loan
no more than once during any 12-month
period.
D. A licensee may collect from the borrower the amount of any actual fees necessary to file, record, or release its security interest with any public official or agency of a locality or the Commonwealth as may be required by statute.
§ 6.2-1523. Additional charges prohibited; exceptions.
In addition to the interest, late charges payment fees, and loan processing fee permitted
under § 6.2-1520, no further or other amount whatsoever for any examination
service, brokerage, commission, fine, notarial fee, or other thing or otherwise
shall be directly or indirectly charged, contracted for, collected, or
received, except:
1. Insurance premiums actually paid out by the licensee to any insurance company or agent duly authorized to do business in the Commonwealth for insurance for the protection and benefit of the borrower written in connection with any loan;
2. The actual cost of recordation fees or, on loans over $100, the amount of the lawful premiums, no greater than such fees, actually paid for insurance against the risk of not recording any instrument securing the loan; and
3. A handling fee not to exceed $15 $25 for each check returned to
the licensee because the drawer had no account or insufficient funds in the
payor bank.
2. That nothing contained in this act shall prohibit the collection of any outstanding loan or extension of credit made under Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia, as in effect prior to the effective date of this act, in accordance with the terms of a loan agreement made prior to the effective date of this act; however, no additional extensions of credit or advances that violate the provisions of this act shall be made under such a loan agreement on or after the effective date of this act.