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2011 SESSION
11100438DBe it enacted by the General Assembly of Virginia:
1. That § 6.2-2216 of the Code of Virginia is amended and reenacted as follows:
§ 6.2-2216. Interest and other charges; term; monthly payments.
A. A licensee may shall not charge and or
collect interest on a motor vehicle title loan at rates not
to exceed the following: a rate that exceeds 36
percent per year.
1. Twenty-two percent
per month on the portion of the principal that does not exceed $700;
2. Eighteen percent
per month on the portion of the principal that exceeds $700 but does not exceed
$1,400; and
3. Fifteen percent per
month on the portion of the principal that exceeds $1,400.
B. 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. On motor vehicle title loans in excess of $700, a
licensee may accrue interest utilizing a single blended interest rate provided
the maximum charge allowed pursuant to subsection A is not exceeded.
C. Notwithstanding anything set forth in subsection A, other provisions of this chapter, or in a motor vehicle title loan agreement, interest shall not accrue on the principal balance of a motor vehicle title loan from and after:
1. The date that the motor vehicle securing the title loan is repossessed by the licensee making the loan; or
2. Sixty days after the borrower has failed to make a monthly payment on a motor vehicle title loan as required by the loan agreement unless the borrower has not surrendered the motor vehicle and the borrower is concealing the motor vehicle.
D. In addition to the loan principal and interest permitted under subsection A, a licensee shall not directly or indirectly charge, contract for, collect, receive, recover, or require a borrower to pay any further or other fee, charge, or amount whatsoever except for (i) a licensee's actual cost of perfecting its security interest in a motor vehicle securing the borrower's obligations under a loan agreement and (ii) reasonable costs of repossession and sale of the motor vehicle in accordance with § 6.2-2217. A licensee shall not be entitled to collect or recover from a borrower any sum otherwise permitted pursuant to § 6.2-302, 8.01-27.2, or 8.01-382. In no event shall the borrower be liable for fees incurred in connection with the storage of a motor vehicle securing a title loan following the motor vehicle's repossession by the licensee or its agent, or the voluntary surrender of possession of the motor vehicle by the borrower to the licensee.
E. Every title loan shall be a term loan providing for repayment of the principal and interest in substantially equal monthly installments of principal and interest; however, nothing in this chapter shall prohibit a loan agreement from providing for an odd first payment period and an odd first payment greater than other monthly payments because of such odd first payment period.
F. A title loan agreement may not be extended, renewed, or refinanced.
G. A licensee may impose a late charge for failure to make timely payment of any amount due under the loan agreement provided that such late charge does not exceed the amount permitted by § 6.2-400.
H. Payments shall be credited by the licensee on the date received.