Consumer lending; replaces references to payday loans with term 'short-term loans.' (SB421)

Introduced By

Sen. Mamie Locke (D-Hampton) with support from co-patron Sen. Scott Surovell (D-Mount Vernon)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Consumer lending. Replaces references to payday loans with the term "short-term loans." The measure caps the interest and fees that may be charged under a short-term loan at an annual rate of 36 percent, plus a maintenance fee; increases the maximum amount of such loans from $500 to $2,500; and sets the duration of such loans at a minimum of four months, subject to exceptions, and a maximum of 24 months. Short-term loan licensees are required to make a reasonable attempt to verify a borrower's income and may not collect fees and charges that exceed 50 percent of the original loan amount if such amount is equal to or less than $1,500 and 60 percent of the original loan amount if such amount is greater than $1,500. The measure amends the requirements for motor vehicle title loans, including requiring licensed lenders to use a database to determine a prospective borrower's eligibility for a loan and prohibiting loans to a borrower who has an outstanding short-term loan. The measure sets a 36-percent annual interest rate cap on open-end credit plans and allows a $50 annual participation fee. A violation of these provisions is made a prohibited practice under the Virginia Consumer Protection Act. The measure amends provisions of the Consumer Finance Act to, among other things, allow licensed lenders to use the services of access partners and establish requirements that loans be between $300 and $35,000; be repayable in substantially equal installment payments; have a term of no fewer than six and no more than 120 months; charge not more than 36 percent annual interest and a loan processing fee; and require licensees to post a bond. The measure prohibits credit service businesses from advertising, offering, or performing other services in connection with an extension of credit that has an annual interest rate exceeding 36 percent, is for less than $5,000, has a term of less than one year, or is provided under an open-end credit plan. The bill has a delayed effective date of July 1, 2021, and requires any person who would be required to be licensed under the provisions of the act to apply for a license by April 1, 2021. This bill is identical to HB 789. Read the Bill »


Bill Has Passed


01/07/2020Prefiled and ordered printed; offered 01/08/20 20104657D
01/07/2020Referred to Committee on Commerce and Labor
01/24/2020Impact statement from DPB (SB421)
01/27/2020Reported from Commerce and Labor with substitute (11-Y 4-N) (see vote tally)
01/27/2020Incorporates SB37 (Surovell)
01/27/2020Incorporates SB38 (Surovell)
01/27/2020Committee substitute printed 20106645D-S1
01/27/2020Rereferred to Finance and Appropriations
02/03/2020Impact statement from DPB (SB421S1)
02/04/2020Reported from Finance and Appropriations with amendments (11-Y 5-N) (see vote tally)
02/05/2020Constitutional reading dispensed (40-Y 0-N) (see vote tally)
02/06/2020Read second time
02/06/2020Reading of substitute waived
02/06/2020Committee substitute agreed to 20106645D-S1
02/06/2020Reading of amendments waived
02/06/2020Committee amendments agreed to
02/06/2020Engrossed by Senate - committee substitute with amendments SB421ES1
02/06/2020Printed as engrossed 20106645D-ES1
02/07/2020Passed by for the day
02/10/2020Impact statement from DPB (SB421ES1)
02/10/2020Engrossment reconsidered by Senate (39-Y 0-N) (see vote tally)
02/10/2020Reading of amendment waived
02/10/2020Amendment by Senator Norment rejected (18-Y 21-N) (see vote tally)
02/10/2020Reengrossed by Senate as amended SB421ES1
02/10/2020Constitutional reading dispensed (39-Y 0-N) (see vote tally)
02/10/2020Passed Senate (23-Y 16-N) (see vote tally)
02/13/2020Placed on Calendar
02/13/2020Read first time
02/13/2020Referred to Committee on Labor and Commerce
02/18/2020Reported from Labor and Commerce (13-Y 8-N) (see vote tally)
02/20/2020Read second time
02/21/2020Passed by for the day
02/21/2020Motion to reconsider pass by for the day agreed to
02/21/2020Read third time
02/21/2020Passed House (61-Y 36-N)
02/21/2020VOTE: Passage (61-Y 36-N) (see vote tally)
03/07/2020Bill text as passed Senate and House (SB421ER)
03/09/2020Impact statement from DPB (SB421ER)
03/12/2020Enrolled Bill Communicated to Governor on March 12, 2020
03/12/2020G Governor's Action Deadline 11:59 p.m., April 11, 2020
04/11/2020Governor's recommendation received by Senate
04/22/2020Senate concurred in Governor's recommendation (21-Y 18-N) (see vote tally)
04/22/2020Reconsideration of Governor's recommendation agreed to (40-Y 0-N) (see vote tally)
04/22/2020Senate rejected Governor's recommendation (19-Y 21-N) (see vote tally)
04/22/2020Reconsideration of Governor's recommendation agreed to (37-Y 0-N) (see vote tally)
04/22/2020Senate concurred in Governor's recommendation (22-Y 18-N) (see vote tally)
04/22/2020House concurred in Governor's recommendation (52-Y 33-N)
04/22/2020VOTE: (52-Y 33-N)
04/22/2020G Governor's recommendation adopted
04/22/2020Reenrolled bill text (SB421ER2)
04/22/2020Signed by President as reenrolled
04/22/2020Signed by Speaker as reenrolled
04/22/2020Enacted, Chapter 1258 (effective - see bill)
04/22/2020G Acts of Assembly Chapter text (CHAP1258)
05/01/2020VOTE: (52-Y 33-N)