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1999 SESSION

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CHAPTER 610 An Act to amend and reenact § 6.1-330.60 of the Code of Virginia, relating to banking and finance; enforcement of education loans; certain defenses prohibited. [H 2494] Approved March 27, 1999

Be it enacted by the General Assembly of Virginia:

1. That § 6.1-330.60 of the Code of Virginia is amended and reenacted as follows:

§ 6.1-330.60. Charges by banks and savings institutions; installment loans.

A. Notwithstanding any statute or law relating to interest or usury, any loan made by a bank or savings institution payable in weekly, monthly or other periodic installments may be lawfully enforced as agreed in the contract of indebtedness. In addition to the foregoing, a loan fee not exceeding two percent of the principal amount of the loan may also be charged or collected in advance from the borrower. An interest rate charged in advance upon the entire principal amount of the loan or pursuant to a written modification agreement shall be lawful. The provisions of this section shall also apply to loans for the purpose of financing the purchase of a motor vehicle, made by a subsidiary or affiliate of a bank or savings institution that is not a licensee under the provisions of the Consumer Finance Act (§ 6.1-244 et seq.).

B. No person shall, by way of defense or otherwise, avail himself of the provisions of this chapter or any other section relating to usury to avoid or defeat the payment of interest, or any other sum, upon a loan made by a bank or savings institution to defray educational expenses, including, but not limited to, tuition, fees, books, supplies, room, board, and personal expenses. Notwithstanding any statute or law relating to interest or usury, including the deferral and capitalization of interest, any loan made by a bank or savings institution to defray educational expenses, including, but not limited to, tuition, fees, books, supplies, room, board, and personal expenses, shall be lawfully enforced as agreed in the contract of indebtedness.