SEARCH SITE

VIRGINIA LAW PORTAL

SEARCHABLE DATABASES

ACROSS SESSIONS

Developed and maintained by the Division of Legislative Automated Systems.

2020 SESSION

  • | print version

HB 789 Consumer lending; replaces references to payday loans with term "short-term loans."

Introduced by: Lamont Bagby | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED HOUSE: (all summaries)

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 setting the duration of such loans at a minimum of six months, subject to exceptions, and a maximum of 24 months and prohibiting motor vehicle loans for amounts greater than §2,500. 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 measure has a delayed effective date of January 1, 2021.


FULL TEXT

AMENDMENTS

HISTORY