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2005 SESSION

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HB 1156 Payday loans; cannot make loan to any State consumer, restric. on loan made by military spouse.

Introduced by: Harvey B. Morgan | all patrons    ...    notes | add to my profiles | history

SUMMARY AS PASSED:

Payday lending practices. Prohibits a licensed payday lender from entering into a payday loan with a member of the armed forces from a location that has been declared off-limits by a military base commander. With respect to payday loans to military personnel or their spouses, lenders shall not garnish military wages or conduct collection activities when the service member is deployed to a combat or combat support posting. The measure also clarifies that loans based on income tax refunds are not payday loans, and prohibits unlicensed person from engaging in payday loans or arranging or brokering payday loans for consumers residing in Virginia, whether or not the lender has a location in Virginia.

SUMMARY AS PASSED HOUSE:

Payday lending practices. Prohibits a licensed payday lender from entering into a payday loan with a member of the armed forces from a location that has been declared off-limits by a military base commander. With respect to payday loans to military personnel or their spouse, lenders shall not garnish military wages or conduct collection activities when the service member is deployed to a combat or combat support posting. The measure also clarifies that loans based on income tax refunds are not payday loans, and prohibits unlicensed person from engaging in payday loans or arranging or brokering payday loans for consumers residing in Virginia, whether or not the lender has a location in Virginia.

SUMMARY AS INTRODUCED:

Payday lending; creation of Internet database; specific power of attorney required for unemployed military spouses. Requires the State Corporation Commission on or before July 1, 2005, to implement a common database with real-time access through an Internet connection for payday lenders that would allow payday lenders to determine if a prospective borrower already has a loan outstanding or has closed a loan within the previous 24 hours. The Commission is authorized to charge a $1 fee per transaction. The bill prohibits a payday lender from entering into a payday loan (i) with a person who has an outstanding payday loan with that licensee or affiliate or with any other payday lender, or (ii) with a person whose previous payday loan has been terminated for less than 24 hours. The measure also requires a payday lender to maintain an internal common database and check the Commission's database to verify compliance with this prohibition, and prohibits a licensee from entering into a loan with a spouse of a member of the armed forces when the loan is secured against that member's pay unless a special power of attorney signed by the member of the armed forces is provided authorizing the loan.