Administrative Code

Virginia Administrative Code
6/26/2022

Chapter 200. Short-Term Lending

10VAC5-200-10. Definitions.

A. The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Act" means Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia.

"Advertisement" means a commercial message in any medium that promotes, directly or indirectly, a short-term loan. This includes a communication sent to a consumer as part of a solicitation of business, but excludes messages on promotional items such as pens, pencils, notepads, hats, and calendars.

"Business check" for purposes of the Act and this chapter means a paper check, an electronic check, or an electronic funds transfer through the Automated Clearing House system.

"Business day" for purposes of the Act and this chapter means a day on which the licensee is able to make loans pursuant to the Act.

"Duplicate original" means an exact copy of a signed original, an exact copy with signatures created by the same impression as the original, or an exact copy bearing an original signature.

"Good funds instrument" for purposes of the Act and this chapter means a certified check, cashier's check, money order or, if the licensee is equipped to handle such payments, payment effected by use of a credit card, prepaid card, debit card, or the Automated Clearing House system.

"Liquid assets" for purposes of the Act and this chapter means funds held in a checking account or savings account at a depository institution, money market funds, commercial paper, and treasury bills.

"Member of the military services of the United States" for purposes of the Act and this chapter means a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

"Other dependent of a member of the military services of the United States" for purposes of the Act and this chapter means (i) an individual under the age of 18 whose mother or father is a member of the military services of the United States or (ii) an individual for whom a member of the military services of the United States provided more than one-half of the individual's financial support for 180 days immediately preceding the date the individual applied for a short-term loan.

"Payday loan" means a loan made pursuant to the Act and this chapter prior to January 1, 2021.

"Prepaid card" means a card with a network logo (e.g., Visa, MasterCard, American Express, or Discover) that is used by a cardholder to access money that has been loaded onto the card in advance.

B. Other terms used in this chapter shall have the meanings set forth in § 6.2-100 or 6.2-1800 of the Code of Virginia.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 25, Issue 04, eff. January 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; Volume 30, Issue 17, eff. May 1, 2014; Volume 37, Issue 25, eff. August 1, 2021; Errata 38:9 VA.R. 829 December 20, 2021; amended, Virginia Register Volume 38, Issue 9, eff. December 15, 2021.

10VAC5-200-20. Requirements for licensees; operating rules; acquisitions.

A. A licensee shall maintain unencumbered liquid assets per place of business of at least $25,000 at all times. The minimum liquid assets required to be maintained pursuant to this subsection shall be separate and apart from, and in addition to, any minimum liquid assets that the licensee is required to maintain in connection with any other business conducted in the same office.

B. Any person submitting an application to acquire, directly or indirectly, 25% or more of the voting shares of a corporation or 25% or more of the ownership of any other person licensed to conduct business under the Act shall pay a nonrefundable application fee of $500.

C. Loans made pursuant to the Act prior to January 1, 2021, that remain outstanding on or after January 1, 2021, may be collected in accordance with the preexisting terms of the loan contracts provided that such terms were permitted by law when the loans were made.

D. If a person has filed a bond with the bureau, as required by § 6.2-1804 of the Code of Virginia, such bond shall be retained by the bureau notwithstanding the occurrence of any of the following events:

1. The person's license is surrendered, suspended, or revoked;

2. The person ceases engaging in business as a short-term lender; or

3. The person's application for a license is withdrawn or denied.

E. Upon becoming licensed, a licensee shall give written notice to the bureau within 10 days after it commences business.

F. A licensee shall not obtain any agreement from a borrower that gives the licensee or a third party the authority to create or otherwise prepare a check that is drawn upon the borrower's account at a depository institution.

G. The amount of the check given by a borrower to a licensee as security for a short-term loan shall not exceed the sum of the amount advanced to the borrower and the fees and charges permitted by § 6.2-1817 of the Code of Virginia.

H. Upon satisfaction of a loan or upon learning that a loan has been satisfied, a licensee shall retain either (i) a copy of the signed and dated receipt for the payment that satisfied the loan or (ii) if a judgment was obtained and satisfied, a copy of the judgment marked satisfied.

I. A licensee shall not deposit or otherwise present for payment a check given as security for a loan prior to the date stated on the face of the check. A licensee may require or accept multiple checks in connection with a short-term loan. However, a licensee shall not require or accept any additional or alternative security in connection with a short-term loan.

J. If a borrower (i) cancels or rescinds a loan , or (ii) repays a loan in full with cash or a good funds instrument and not with a check securing the loan, the licensee shall immediately return any check given as security for the loan to the borrower.

K. A licensee or former licensee shall provide the following information to the bureau within 10 days after such person's license is surrendered or revoked or the licensed business is otherwise closed: (i) the names, addresses, telephone numbers, and email addresses of a designated contact person, the person responsible for updating information in the short-term lending database, and the person who consumers may contact to make payment arrangements for outstanding payday loans or short-term loans; (ii) the location of the licensee's or former licensee's payday loan or short-term loan records; and (iii) any additional information that the bureau may reasonably require. A licensee or former licensee shall maintain current information with the bureau until the licensee or former licensee has no outstanding payday loans or short-term loans.

L. A person shall remain subject to the provisions of the Act and this chapter applicable to licensees in connection with all loans that the person made while licensed under the Act notwithstanding the occurrence of any of the following events:

1. The person's license is surrendered, suspended, or revoked; or

2. The person ceases making loans under the Act.

M. If a licensee or former licensee disposes of records containing a consumer's personal financial information, such records shall be shredded, incinerated, or otherwise disposed of in a secure manner. A licensee or former licensee may arrange for service from a business record destruction vendor.

N. Within 15 days following the occurrence of any of the following events, a licensee shall file a written report with the commissioner describing the event and its expected impact, if any, on the activities of the licensee in Virginia:

1. Bankruptcy, reorganization, or receivership proceedings are filed by or against the licensee.

2. The Attorney General or any other Virginia governmental authority institutes an action against the licensee under the Virginia Consumer Protection Act (§ 59.1-196 et seq. of the Code of Virginia).

3. Any local, state, or federal governmental authority institutes revocation, suspension, or other formal administrative, regulatory, or enforcement proceedings against the licensee.

4. Any local, state, or federal governmental authority (i) revokes or suspends the licensee's short-term lender license or similar license; (ii) takes formal administrative, regulatory, or enforcement action against the licensee relating to its short-term lending or similar business; or (iii) takes any other action against the licensee relating to its short-term lending or similar business where the total amount of restitution or other payment from the licensee exceeds $20,000. A licensee shall not be required to provide the commissioner with information about such event to the extent that such disclosure is prohibited by the laws of another state.

5. Based on allegations by any local, state, or federal governmental authority that the licensee violated any law or regulation applicable to the conduct of its licensed short-term lending or similar business, the licensee enters into, or otherwise agrees to the entry of, a settlement or consent order, decree, or agreement with or by such governmental authority.

6. The licensee surrenders its license to engage in short-term lending or similar business in another state in lieu of threatened or pending license revocation, license suspension, or other administrative, regulatory, or enforcement action.

7. The licensee is denied a license to engage in short-term lending or similar business in another state.

8. The licensee or any of its members, partners, directors, officers, principals, or employees is indicted for or convicted of a felony.

O. Pursuant to § 6.2-1801 of the Code of Virginia, a licensee shall not make a short-term loan that has been arranged or brokered by another person. This provision shall not be construed to prohibit a licensee from originating short-term loans through its own employees.

P. A licensee shall comply with all federal laws and regulations applicable to the conduct of its business, including the Truth in Lending Act (15 USC § 1601 et seq.), Regulation Z (12 CFR Part 1026), the Equal Credit Opportunity Act (15 USC § 1691 et seq.), Regulation B (12 CFR Part 1002), and the Standards for Safeguarding Customer Information (16 CFR Part 314).

Q. A licensee shall not obtain or receive a personal identification number (PIN) for a credit card, prepaid card, debit card, or any other type of card in connection with a short-term loan transaction.

R. A licensee shall not provide any information to a borrower or prospective borrower that is false, misleading, or deceptive.

S. A licensee shall not engage in any activity that directly or indirectly results in an evasion of the provisions of the Act or this chapter.

T. Any person licensed under the Act to make payday loans as of December 31, 2020, shall be deemed licensed and authorized to make short-term loans pursuant to the Act beginning on January 1, 2021. Licenses issued by the commission prior to January 1, 2021, shall remain in force until they have been surrendered, revoked, or suspended.

U. A licensee shall continuously maintain the requirements and standards for licensure prescribed in § 6.2-1806 of the Code of Virginia.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 25, Issue 04, eff. January 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; Volume 30, Issue 17, eff. May 1, 2014; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-30. Short-term lending pamphlet.

A. A licensee shall provide each applicant for a short-term loan with a pamphlet that uses the exact language set forth in 10VAC5-200-80. The pamphlet shall be printed without alteration separate from all other papers or documents obtained by the licensee in type of size not less than that known as 12 point. The title of the pamphlet (" Short-Term Lending in the Commonwealth of Virginia—Borrower Rights and Responsibilities") and the headings for the individual sections of the pamphlet (e.g., "In General," "Short-Term Lending Database," "Limitations on Security Interest / Obtaining PINs," etc.) shall be in bold-face print or type.

B. The end of each application form shall contain a separate acknowledgment stating the following: "I acknowledge that I have received the pamphlet entitled " Short-Term Lending in the Commonwealth of Virginia—Borrower Rights and Responsibilities." The acknowledgment must be initialed and dated by each applicant for a short-term loan.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-33. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; repealed, Virginia Register Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-35. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 30, Issue 17, eff. May 1, 2014; repealed, Virginia Register Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-40. (Repealed.)

Historical Notes

Derived from Virginia Register Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 25, Issue 4, eff. January 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; repealed, Virginia Register Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-50. Responding to requests from the Bureau of Financial Institutions; providing false, misleading, or deceptive information.

A. When the bureau requests a written response, books, records, documentation, or other information from a licensee in connection with the bureau's investigation, enforcement, or examination of compliance with applicable laws, the licensee shall deliver a written response as well as any requested books, records, documentation, or information within the time period specified in the bureau's request. If no time period is specified, a written response as well as any requested books, records, documentation, or information shall be delivered by the licensee to the bureau not later than 30 days from the date of such request. In determining the specified time period for responding to the bureau and when considering a request for an extension of time to respond, the bureau shall take into consideration the volume and complexity of the requested written response, books, records, documentation, or information, and such other factors as the bureau determines to be relevant under the circumstances.

B. A licensee shall not provide any false, misleading, or deceptive information to the bureau.

C. Requests made by the bureau pursuant to subsection A are deemed to be in furtherance of the bureau's investigation and examination authority provided for in § 6.2-1813 of the Code of Virginia. Failure to comply with subsection A or any violation of subsection B may result in civil penalties, license suspension, or license revocation.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 18, Issue 24, eff. July 22, 2002; amended Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 30, Issue 17, eff. May 1, 2014.

10VAC5-200-60. Posting of charges.

A. A licensee shall conspicuously post the following in each licensed location and on its website:

1. A schedule of payments, fees and interest charges, with examples using (i) a $300 loan that is repaid in three months; (ii) a $500 loan that is repaid in five months; and (iii) a $1,000 loan that is repaid in 10 months. A licensee may post additional examples when posting the information required by this subsection.

2. A notice with this statement: "If you wish to file a complaint against us, you may contact the Virginia Bureau of Financial Institutions at (800) 552-7945 or at scc.virginia.gov."

B. A licensee shall display its fees and interest charges not only as a dollar amount, but also as an Annual Percentage Rate, which shall be stated using this term, calculated in accordance with Regulation Z (12 CFR Part 1026).

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 25, Issue 14, eff. March 1, 2009; Volume 30, Issue 17, eff. May 1, 2014; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-70. Additional business requirements and restrictions.

A. A licensee shall post on its website, and in or on its licensed locations so that the posting is legible from the outside, the days and hours during which it is open for business.

B. Subject to subdivision 11 or 12 of § 6.2-1816 of the Code of Virginia, if applicable, a licensee may charge and collect from a borrower the actual amount of one or more deposit item return fees incurred by the licensee provided that (i) the conditions prescribed in § 6.2-1817 A 3 of the Code of Virginia are met, and (ii) the amount charged and collected does not exceed $25 per deposit item return fee.

C. A licensee shall not knowingly make a short-term loan to a member of the military services of the United States, or the spouse or other dependent of a member of the military services of the United States. To enable a licensee to make this determination, a licensee shall clearly and conspicuously include the following questions in its written loan application, which the licensee shall require each applicant to answer before making a short-term loan. A licensee shall not make a short-term loan to an applicant unless the applicant answers "no" to all of these questions:

1. Are you a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer?

2. Are you married to a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer?

3. Are you under the age of 18 and the son or daughter of a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer?

4. Was more than one-half of your financial support for the past 180 days provided by a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer?

D. A licensee shall maintain in its licensed offices such books, accounts, and records as the commissioner may reasonably require in order to determine whether such licensee is complying with the provisions of the Act and all rules and regulations adopted in furtherance thereof. Such books, accounts, and records shall be maintained apart and separate from those relating to any other business in which the licensee is involved. Such records relating to loans, including loan applications, shall be retained for at least three years after final payment is made on any loan.

E. A licensee shall require each applicant for a short-term loan to sign and date a written loan application prior to the licensee making a credit decision. An applicant may sign and date the loan application by hand or electronically.

F. A licensee shall endeavor to provide the loan documents and pamphlet required by 10VAC5-200-30 in a language other than English when a prospective borrower is unable to read the materials printed in English.

G. Nothing in the Act or this chapter shall be construed to prohibit a licensee from voluntarily accepting a payment on an outstanding loan from a borrower after the date that such payment was due to the licensee. However, except as otherwise permitted by the Act and this chapter, the licensee shall not collect, receive, or otherwise recover any additional interest, fees, or charges from the borrower.

H. If a licensee disburses loan proceeds by means of a check, the licensee shall not (i) charge the borrower a fee for cashing the check or (ii) permit either an affiliate or any person in the same office as the licensee to charge the borrower a fee for cashing the check.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 25, Issue 04, eff. January 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-75. Annual reporting requirements.

Unless otherwise directed by the commissioner, licensees shall provide the following data regarding loans made pursuant to the Act when making the annual report required by § 6.2-1811 of the Code of Virginia:

1. The total number and dollar amount of loans made.

2. The total number of individual borrowers to whom loans were made.

3. The minimum and maximum contracted loan amount.

4. The average contracted annual percentage rate.

5. The total amount of contracted loan charges.

6. The total amount of loan charges actually paid.

7. The total number and dollar amount of deposit item return fees paid by borrowers.

8. The total number of defaulted loans.

9. The total number of charged-off loans and the total dollar amount charged off.

10. The total number of individual borrowers against whom civil actions were brought.

11. Any additional information required by the commissioner.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 19, Issue 9, eff. January 1, 2003; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-80. Short-term lending pamphlet text.

The required text of the short-term lending pamphlet referred to in 10VAC5-200-30 is as follows:

SHORT-TERM LENDING IN THE COMMONWEALTH OF VIRGINIA

BORROWER RIGHTS AND RESPONSIBILITIES

Please take the time to carefully review the information contained in this pamphlet. It is designed to advise you of your rights and responsibilities in connection with obtaining a short-term loan in Virginia under Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia. If you have any questions about short-term lending or want additional information, you may contact the Virginia State Corporation Commission's Bureau of Financial Institutions toll-free at (800) 552-7945 or at scc.virginia.gov.

In General: You are responsible for evaluating whether a short-term loan is right for you. Alternatives may include among other things less expensive short-term financing from another financial institution, family, friends, or a cash advance on a credit card.

Advertisements: A lender is prohibited from sending you an envelope or other written material that gives the false impression that it is an official communication from a governmental entity, unless it is required by the United States Postal Service.

Information from Lender: Virginia law prohibits the lender from providing you with any false, misleading, or deceptive information.

Short-Term Lending Database: Before making a short-term loan to you, a lender is required by Virginia law to access a database that will inform the lender whether you are eligible for a short-term loan. The Bureau of Financial Institutions is unable to advise you of your eligibility for a short-term loan. If you are ineligible , the lender will provide you with the toll-free telephone number of the database provider, which you can use to find out the specific reason for your ineligibility. To enable the lender to check the database, you will be required to provide the lender with a signed and dated loan application and the original or a copy of your current driver's license or identification card issued by a state driver's licensing authority (e.g., Department of Motor Vehicles for the Commonwealth of Virginia).

Verification of Income: Before making a short-term loan to you, a lender must make a reasonable attempt to verify and document your income.

Prohibition on Loans to Members of the Military and their Spouses and Dependents: Virginia law prohibits lenders from making short-term loans to members of the military services of the United States as well as their spouses and dependents. If you are a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer, the lender is prohibited from making a short-term loan to you. The lender is also prohibited from making a loan to you if (i) you are married to such a member, (ii) you are less than 18 years old and the son or daughter of such a member, or (iii) more than one-half of your financial support for the past 180 days was provided by such a member.

Limitations on Security Interest / Obtaining PINs: The lender may require you to provide one or more checks as security for your short-term loan. The check or checks must be dated no earlier than the date of the first required loan payment shown in your loan agreement. The lender cannot require you to provide any security for your short-term loan other than one or more checks payable to the lender. The lender also cannot obtain any agreement from you that gives the lender or a third party the authority to prepare a check that is drawn upon your deposit account. Additionally, the lender is prohibited from obtaining or receiving a personal identification number (PIN) for a credit card, prepaid card, debit card, or any other type of card in connection with your loan.

One Loan at a Time / $2,500 Maximum: Virginia law prohibits you from having more than one short-term loan outstanding at any one time. If you have a short-term loan or a motor vehicle title loan from any lender that is licensed to make these types of loans, then you are prohibited from obtaining a short-term loan. The maximum loan amount is $2,500.

Loan Term: Under Virginia law, your loan term cannot be more than 24 months. Your loan term also cannot be less than four months unless your total monthly payment will not exceed the greater of (i) 5.0% of your verified gross monthly income or (ii) 6.0% of your verified net monthly income.

Fees, Charges, and Interest: Your loan is payable in substantially equal installments of principal, fees, and interest combined. The lender is permitted to charge you (i) interest at a simple annual rate not to exceed 36%; and (ii) a monthly maintenance fee that does not exceed the lesser of $25 or 8.0% of your originally contracted loan amount, provided that the maintenance fee is not added to your loan balance on which interest is charged. For example, if the lender advances you $500 and your loan is repayable in five substantially equal monthly installments, the lender may charge you interest totaling $45.90 and monthly maintenance fees totaling $125 for a combined total cost of $170.90. If the lender advances you $1,000 and your loan is repayable in 10 substantially equal monthly installments, the lender may charge you interest totaling $172.30 and monthly maintenance fees totaling $250 for a combined total cost of $422.30. Other than the specific fees and costs discussed in this section and the section of this pamphlet entitled "Failure to Repay" (see below), no additional amounts may be directly or indirectly charged, contracted for, collected, received, or recovered by the lender. Note that if your originally contracted loan amount is $1,500 or less, the lender cannot charge or receive from you a total amount of fees and charges greater than 50% of your loan amount. If your loan amount is more than $1,500, the total amount of fees and charges cannot exceed 60% of your loan amount.

In addition to interest and the monthly maintenance fee, the lender may charge you a deposit item return fee for the actual amount incurred by the lender, not to exceed $25, if your check or electronic payment is returned unpaid because the account on which it was drawn was closed by you or contained insufficient funds, or you stopped payment on the check or electronic payment. If you make a payment more than seven calendar days after its due date, the lender may also impose a late charge of up to 5.0% of the amount of the payment, but not to exceed $20.

You will receive your loan proceeds in the form of either cash or a check from the lender. The lender cannot charge you a fee for cashing their check. Similarly, an affiliate of the lender or a person in the lender's office cannot charge you a fee for cashing the lender's check.

The fees, charges, and interest mentioned in this section may not be charged, collected, or received unless they are included in your written loan agreement.

Written Agreement: The lender must provide you with a written loan agreement, which must be signed by both you and an authorized representative of the lender. The loan agreement is a binding, legal document that requires you to repay the loan. Make sure you read the entire loan agreement carefully before signing and dating it. The lender must provide you with a copy of the signed loan agreement at the time of your loan transaction. If any provision of your loan agreement violates Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia, the provision will not be enforceable against you.

Loans for Other Products & Services: You are prohibited from using any of the money from your short-term loan to purchase any other product or service sold (i) at the lender's business location, or (ii) on or through the lender's website or mobile application.

Right to Cancel or Rescind: You have the right to cancel or rescind your short-term loan at any time prior to 5 p.m. of the third business day immediately following the day you entered into the loan agreement by returning the loan proceeds check or paying the lender the amount advanced to you in cash, certified check, cashier's check, money order or, if the lender is equipped to handle such payments, by using a credit card, prepaid card, debit card, or the Automated Clearing House system. If you timely cancel or rescind your loan, the lender must mark your original loan agreement with the word "canceled" and return it to you along with any check that you provided as security for the loan.

Payments and Prepayments: The lender is required to accept any loan payment that you or another person acting on your behalf make provided that the payment is in the form of cash, certified check, cashier's check, money order or, if the lender is equipped to handle such payments, by use of a credit card, prepaid card, debit card, or the Automated Clearing House system. The lender is required to credit your loan account on the date that the lender receives your payment. You have the right to receive dated receipts for each payment made along with a statement of the balance remaining on your loan. If you have authorized electronic payments for your loan, you have the right to remove your authorization at any time. If the lender presents your check, negotiable order of withdrawal, share draft, or other negotiable instrument for payment and it is dishonored for any reason and returned to the lender, then the lender is prohibited from presenting it for payment again unless the lender obtains a new written authorization from you to present the previously returned item. Similarly, if the lender attempts on two consecutive occasions to transfer or withdraw funds electronically from your account and both attempts fail, then the lender is prohibited from making an additional attempt unless the lender obtains a new written authorization from you to transfer or withdraw funds electronically from your account. You also have the right to prepay your loan in full before its maturity date without penalty by paying the lender in cash, certified check, cashier's check, money order or, if the lender is equipped to handle such payments, by use of a credit card, prepaid card, debit card, or the Automated Clearing House system, the remaining outstanding balance as well as any accrued and unpaid interest and fees. If you prepay your loan in full or your loan is refinanced with another short-term loan, the lender must refund to you a prorated portion of fees and charges, except for any deposit item return fees and late charges, based on a ratio of the number of days the loan was outstanding and the number of days for which the loan was originally contracted. The lender must provide you with the refund in the form of cash or a business check as soon as reasonably possible but no later than two business days after receiving payment from you.

Lender to Return Original Loan Agreement: Upon repayment of your loan in full, the lender must mark your original loan agreement with the word "paid" or "canceled" and return it to you.

Lender to Return Security Check: If your loan is secured by a check and you cancel or rescind your loan (see "Right to Cancel or Rescind" above) or repay it in full , the lender must immediately return the check you gave as security for the loan.

Failure to Repay: Pay back your loan! Know when your payments are due and be sure to repay your loan on time and in full. If you fail to make a payment on your loan in accordance with your loan agreement, the loan agreement may permit the lender to terminate your loan in advance of the maturity date and demand repayment of the entire outstanding balance along with prorated interest and fees earned up to the date of termination. However, at least 10 days after your payment was due, the lender must provide you with written notice that it is terminating your loan.

In collecting or attempting to collect a short-term loan, the lender is required to comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act, 15 USC § 1692 et seq., regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections. The lender is also prohibited from threatening or beginning criminal proceedings against you if a check you provide to the lender bounces or if you fail to pay any amount owed according to your loan agreement.

If you default on your loan, the lender may bring a civil action against you 60 days or more after the date that you default. During this 60-day period the lender may voluntarily enter into a repayment arrangement with you.

Legal Action Against Lender: You have the right to bring a civil action against the lender if you suffer a loss as a result of the lender violating any provision of Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia. If you are successful in your civil action, you have the right to be reimbursed for reasonable attorney's fees, expert witness fees, and court costs you have incurred in connection with your civil action. Losses suffered as the result of the lender's violation of Chapter 18 of Title 6.2 of the Code of Virginia may also be pursued under the Virginia Consumer Protection Act (§ 59.1-196 et seq. of the Code of Virginia), which in some cases permits consumers to recover actual and punitive damages.

Complaints and Contacting the Bureau of Financial Institutions: For assistance with any complaints you may have against a short-term lender, please contact the Bureau of Financial Institutions toll free at (800) 552-7945 or at scc.virginia.gov. Complaints must be filed in writing with the Bureau of Financial Institutions and include copies of supporting documentation.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 18, Issue 24, eff. July 22, 2002; amended, Virginia Register Volume 22, Issue 11, eff. March 1, 2006; Volume 25, Issue 4, eff. January 1, 2009; Volume 30, Issue 17, eff. May 1, 2014; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-85. Advertising.

A. A licensee shall disclose the following information in its advertisements :

1. The name of the short-term lender as set forth in the license issued by the commission.

2. A statement that the short-term lender is "licensed by the Virginia State Corporation Commission."

3. The license number assigned by the commission to the short-term lender (i.e., PL-XXX).

B. A licensee shall not deliver or cause to be delivered to a consumer any envelope or other written material that gives the false impression that the mailing or written material is an official communication from a governmental entity, unless required by the United States Postal Service.

C. Every advertisement used by, or published on behalf of, a licensee shall comply with the disclosure requirements for advertisements contained in Regulation Z (12 CFR Part 1026).

D. The information required by subsection A of this section shall be disclosed in accordance with the disclosure standards prescribed in subsection C of § 6.2-1819 of the Code of Virginia.

E. Every licensee shall retain for at least three years after it is last published, delivered, transmitted, or made available, an example of every advertisement used, including but not limited to solicitation letters, print media proofs, commercial scripts, and recordings of all radio and television broadcasts, but excluding copies of Internet web pages.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 30, Issue 17, eff. May 1, 2014; amended, Virginia Register Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-90. Schedule of annual fees for the examination, supervision, and regulation of short-term lenders.

Pursuant to § 6.2-1814 of the Code of Virginia, the commission sets the following schedule of annual fees to be paid by licensees under the Act. Such fees are to defray the costs of the examination, supervision, and regulation of licensees by the bureau. The fees are related to the actual costs of the bureau, to the number of offices operated by licensees, to the volume of business of licensees, and to other factors relating to their supervision and regulation.

The annual fee shall be $500 per office plus $.47 per loan made by each licensee. The annual fee shall be computed on the basis of (i) the number of offices, authorized and opened, as of December 31 of the year preceding the year of the assessment, and (ii) the number of loans made under the Act during the calendar year preceding the year of the assessment.

Fees shall be assessed on or before September 15 for the current calendar year. The assessment shall be paid by licensees on or before October 15.

The annual report, due March 25 each year, of each licensee provides the basis for its assessment.

Fees prescribed and assessed pursuant to this schedule are apart from, and do not include, the reimbursement for expenses authorized by subsection B of § 6.2-1814 of the Code of Virginia.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 20, Issue 2, eff. September 11, 2003; amended, Virginia Register Volume 28, Issue 1, eff. September 1, 2011; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-100. Conducting other business.

A. This section governs the conduct of any business other than short-term lending where a licensed short-term lending business is conducted. As used in this section, the term "other business operator" refers to a licensee or third party, including an affiliate or subsidiary of the licensee, who conducts or wants to conduct other business from one or more short-term lending offices.

1. Pursuant to § 6.2-1820 of the Code of Virginia, a licensee shall not conduct the business of making short-term loans at any office, suite, room, or place of business where any other business is solicited or conducted, except a check cashing business registered under Chapter 21 (§ 6.2-2100 et seq.) of Title 6.2 of the Code of Virginia, a motor vehicle title lending business licensed under Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia, or such other business as the commission determines should be permitted, and subject to such conditions as the commission deems necessary and in the public interest.

2. Notwithstanding any provision of this section or order entered by the commission prior to October 1, 2010, the following other businesses shall not be conducted from any office, suite, room, or place of business where a licensed short-term lending business is conducted:

a. Selling insurance or enrolling borrowers under group insurance policies.

b. Making loans under an open-end credit plan as described in § 6.2-312 of the Code of Virginia.

3. This section shall not apply to any other business that is transacted solely with persons residing outside of the Commonwealth.

4. Notwithstanding any provision of this section or order entered by the commission prior to January 1, 2021, a licensee shall not make short-term loans at the same location at which the licensee, or any affiliate or owner of the licensee, conducts business under Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia. However, if prior to January 1, 2021, a licensee obtained authority under § 6.2-1820 for the licensee or its affiliate or owner to make consumer finance loans from the licensee's payday lending offices, then the licensee or its affiliate or owner may continue collecting payments on any outstanding consumer finance loans (i) in accordance with the preexisting terms of the loan contracts provided that such terms were permitted by law when the loans were made, and (ii) subject to the general conditions set forth in subsection E of this section.

5. If a licensee accepts loan applications, sends or receives loan-related information or documents, disburses loan funds, or accepts loan payments on or through the licensee's website or mobile application, and any other products or services are or will be offered or sold to Virginia residents on or through such website or mobile application, then the offer or sale of such other products or services shall constitute the conduct of other business and shall be subject to all of the provisions of this section to the same extent as if such other business was conducted by an other business operator from the licensee's short-term lending offices.

B. No other business shall be conducted in a location where a licensee conducts a short-term lending business unless the proposed other business is financial in nature and the licensee obtains prior approval from the commission. Applications for approval shall be made in writing on a form provided by the commissioner and shall be accompanied by payment of a $300 fee and any information relating to the application that the commissioner may require. In acting upon an application, the commission shall consider (i) whether the other business operator has the general fitness to warrant belief that the business will be operated in accordance with law; (ii) whether the applicant has been operating its business in accordance with the Act and this chapter; and (iii) any other factors that the commission deems relevant.

1. The commission shall in its discretion determine whether a proposed other business is "financial in nature," and shall not be obliged to consider the meaning of this term under federal law. A business is financial in nature if it primarily deals with the offering of debt, money or credit, or services directly related thereto.

2. Prior approval from the commission shall not be required for a licensee to conduct a short-term lending business from one or more locations where an other business operator will conduct (i) a registered check cashing business under Chapter 21 (§ 6.2-2100 et seq.) of Title 6.2 of the Code of Virginia, or (ii) a licensed motor vehicle title lending business under Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia. However, the conduct of these other businesses from a licensee's short-term lending offices shall otherwise be governed by this section, including the conditions prescribed in subsections E, F, and G of this section.

C. Nonfinancial other business may be conducted pursuant to any order of the commission entered on or before June 15, 2004. However, this subsection shall not be construed to authorize any person to begin engaging in such other business at locations where such other business was not conducted as of June 15, 2004.

D. Except as provided in subdivision B 2 of this section, written evidence of commission approval of each other business conducted by an other business operator should be maintained at each approved location.

E. Except as otherwise provided in subsection O of this section, all other businesses in short-term lending offices shall be conducted in accordance with the following conditions:

1. The licensee shall not make a short-term loan to a borrower to enable the borrower to purchase or pay any amount owed in connection with the (i) goods or services sold, or (ii) loans offered, facilitated, or made, by the other business operator at the licensee's short-term lending offices.

2. The other business operator shall comply with all federal and state laws and regulations applicable to its other business, including any applicable licensing or registration requirements.

3. The other business operator shall not use or cause to be published any advertisement or other information that contains any false, misleading, or deceptive statement or representation concerning its other business, including the rates, terms, or conditions of the products, services, or loans that it offers. The other business operator shall not make or cause to be made any misrepresentation as to (i) its being licensed to conduct the other business, or (ii) the extent to which it is subject to supervision or regulation.

4. The licensee shall not make a short-term loan or vary the terms of a short-term loan on the condition or requirement that a person also (i) purchase a good or service from, or (ii) obtain a loan from or through, the other business operator. The other business operator shall not (a) sell its goods or services, (b) offer, facilitate, or make loans, or (c) vary the terms of its goods, services, or loans, on the condition or requirement that a person also obtain a short-term loan from the licensee.

5. The other business operator shall maintain books and records for its other business separate and apart from the licensee's short-term lending business and in a different location within the licensee's short-term lending offices. The bureau shall be given access to all such books and records and be furnished with any information and records that it may require in order to determine compliance with all applicable conditions, laws, and regulations.

F. If an other business operator conducts a check cashing business from the licensee's short-term lending offices, the following additional conditions shall be applicable:

1. The other business operator shall be registered or exempt from registration under Chapter 21 (§ 6.2-2100 et seq.) of Title 6.2 of the Code of Virginia.

2. If the other business operator is registered under Chapter 21 (§ 6.2-2100 et seq.) of Title 6.2 of the Code of Virginia, then the other business operator shall not make any loans unless the other business operator is licensed under the Act and the loans are made in accordance with the Act.

3. The other business operator shall not charge a fee to cash a check issued by the licensee or any other person operating in the licensee's short-term lending offices.

G. If an other business operator conducts a motor vehicle title lending business from the licensee's short-term lending offices, the following additional conditions shall be applicable:

1. The other business operator shall be licensed or exempt from licensing under Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia.

2. The licensee shall not make a short-term loan to a person if (i) the person has an outstanding motor vehicle title loan from the other business operator, or (ii) on the same day the person repaid or satisfied in full a motor vehicle title loan from the other business operator.

3. The other business operator shall not make a motor vehicle title loan to a person if (i) the person has an outstanding short-term loan from the licensee, or (ii) on the same day the person repaid or satisfied in full a short-term loan from the licensee.

4. The other business operator and the licensee shall not make a motor vehicle title loan and a short-term loan contemporaneously or in response to a single request for a loan or credit.

5. The licensee and other business operator shall provide each applicant for a short-term loan or motor vehicle title loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's short-term lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

H. If a licensee received or receives commission authority for an other business operator to conduct business as an authorized delegate or agent of a money order seller or money transmitter from the licensee's short-term lending offices, the other business operator shall be and remain a party to a written agreement to act as an authorized delegate or agent of a person licensed or exempt from licensing as a money order seller or money transmitter under Chapter 19 (§ 6.2-1900 et seq.) of Title 6.2 of the Code of Virginia. The other business operator shall not engage in money order sales or money transmission services on its own behalf or on behalf of any person other than a licensed or exempt money order seller or money transmitter with whom it has a written agreement.

I. If a licensee received or receives commission authority for an other business operator to conduct the business of (i) tax preparation or electronic tax filing services, or (ii) facilitating third party tax preparation or electronic tax filing services, from the licensee's short-term lending offices, the following additional conditions shall be applicable:

1. The licensee shall not make a short-term loan that is secured by an interest in a borrower's tax refund.

2. The other business operator shall not engage in the business of (i) accepting funds for transmission to the Internal Revenue Service or other government instrumentalities, or (ii) receiving tax refunds for delivery to individuals, unless licensed or exempt from licensing under Chapter 19 (§ 6.2-1900 et seq.) of Title 6.2 of the Code of Virginia.

J. If a licensee received or receives commission authority for an other business operator to conduct the business of facilitating or arranging tax refund anticipation loans or tax refund payments from the licensee's short-term lending offices, the following additional conditions shall be applicable:

1. The other business operator shall not facilitate or arrange a tax refund anticipation loan or tax refund payment to enable a person to pay any amount owed to the licensee as a result of a short-term loan transaction.

2. The other business operator and the licensee shall not facilitate or arrange a tax refund anticipation loan or tax refund payment and make a short-term loan contemporaneously or in response to a single request for a loan or credit.

3. The licensee shall not make a short-term loan that is secured by an interest in a borrower's tax refund.

4. The other business operator shall not engage in the business of receiving tax refunds or tax refund payments for delivery to individuals unless licensed or exempt from licensing under Chapter 19 (§ 6.2-1900 et seq.) of Title 6.2 of the Code of Virginia.

5. The licensee and other business operator shall provide each applicant for a short-term loan or tax refund anticipation loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's short-term lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

K. If a licensee received or receives commission authority for an other business operator to conduct a consumer finance business from the licensee's short-term lending offices, the following additional conditions shall be applicable:

1. The other business operator shall be licensed or exempt from licensing under Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia.

2. Pursuant to subdivision A 4 of this section, the other business shall be conducted by a person other than the licensee or an affiliate or owner of the licensee.

3. The licensee shall not make a short-term loan to a person if (i) the person has an outstanding consumer finance loan from the other business operator, or (ii) on the same day the person repaid or satisfied in full a consumer finance loan from the other business operator.

4. The other business operator shall not make a consumer finance loan to a person if (i) the person has an outstanding short-term loan from the licensee, or (ii) on the same day the person repaid or satisfied in full a short-term loan from the licensee.

5. The licensee and other business operator shall not make a short-term loan and a consumer finance loan contemporaneously or in response to a single request for a loan or credit.

6. The licensee and other business operator shall provide each applicant for a short-term loan or consumer finance loan with a separate disclosure, signed by the applicant, that clearly identifies all of the loan products available in the licensee's short-term lending offices along with the corresponding Annual Percentage Rate, interest rate, and other costs associated with each loan product. The disclosure shall also identify the collateral, if any, that will be used to secure repayment of each loan product.

L. If a licensee received or receives commission authority for an other business operator to conduct the business of operating an automated teller machine from the licensee's short-term lending offices, the other business operator shall not charge a fee or receive other compensation in connection with the use of its automated teller machine by a person when the person is withdrawing funds in order to make a payment on a loan that was made by the licensee or any other lender conducting business from the licensee's short-term lending offices.

M. The commission may impose any additional conditions upon the conduct of other business in short-term lending offices that it deems necessary and in the public interest.

N. Except as otherwise provided in subsection O of this section, the conditions set forth or referred to in subsections E through M of this section shall supersede the conditions set forth in the commission's approval orders entered prior to January 1, 2021.

O. If prior to January 1, 2011, a licensee received commission authority for an other business operator to conduct a business not identified in subsections F through L of this section, the conditions that were imposed by the commission at the time of the approval shall remain in full force and effect.

P. Failure by a licensee or other business operator to comply with any provision of this section or any condition imposed by the commission, or failure by a licensee to comply with the Act, this chapter, or any other law or regulation applicable to the conduct of the licensee's business, may result in revocation of the authority to conduct other business or any form of enforcement action specified in 10VAC5-200-120.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 20, Issue 22, eff. June 15, 2004; amended, Virginia Register Volume 26, Issue 11, eff. February 1, 2010; Volume 27, Issue 10, eff. January 1, 2011; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-110. Short-term lending database.

A. This section sets forth the rules applicable to the short-term lending database referred to in § 6.2-1810 of the Code of Virginia.

B. Except as otherwise provided in this section, a licensee shall transmit all information to the database via the Internet. In order to maintain the confidentiality and security of the information, a licensee shall not transmit information to the database using publicly accessible computers, computers that are not under the licensee's control, unsecured wireless (Wi-Fi) connections, or other connections that are not secure. A licensee shall maintain generally accepted security safeguards to protect the confidentiality of the information transmitted to the database, including but not limited to installing and regularly updating malware protection (antivirus and antispyware) software and a firewall.

C. After receiving a completed written loan application but prior to making a short-term loan, a licensee shall transmit the following information to the database for purposes of determining whether an applicant is eligible for a short-term loan. The licensee shall obtain the applicant information required by this subsection in accordance with the provisions of subsection D of this section.

1. Name of licensee and license number.

2. Office location of licensee.

3. First and last name or identification number of employee entering information into the database.

4. Applicant's first and last name.

5. Last four digits of applicant's driver's license number or identification card number.

6. Applicant's address.

7. Applicant's date of birth.

8. Type of card (e.g., driver's license or identification card issued by a state driver's licensing authority) provided by the applicant pursuant to subdivision D 1 of this section.

D. 1. A licensee shall obtain the information required by subdivisions C 4, 5, 6, 7, and 8 of this section from the applicant's unexpired driver's license or identification card issued by a state driver's licensing authority (e.g., Department of Motor Vehicles for the Commonwealth of Virginia), regardless of whether the information on the driver's license or identification card is still accurate. A licensee may accept photocopies, facsimiles, or other reproductions of a driver's license or identification card.

2. A licensee shall retain a copy of the applicant's driver's license or identification card in its records. The driver's license number or identification card number shall be partially redacted by the licensee so that only the last four digits of the number remain visible.

3. A licensee shall not accept a driver's license or identification card from an applicant when there is reason to believe that (i) it belongs to an individual other than the applicant or (ii) it is fake, counterfeit, or has been altered, fraudulently obtained, forged, or is otherwise nongenuine or illegitimate.

E. If the database advises a licensee that an applicant is ineligible for a short-term loan, then the licensee shall inform the applicant of his ineligibility, instruct the applicant to contact the database provider for information about the specific reason for his ineligibility, and provide the applicant with the toll-free telephone number of the database provider.

F. Except as otherwise provided in subsection O of this section, if the database advises a licensee that an applicant is eligible for a short-term loan, then the licensee shall transmit the following additional information to the database prior to making a short-term loan:

1. Application date.

2. Loan number.

3. Date of loan.

4. Principal amount of loan.

5. Interest rate.

6. Dollar amount of precomputed interest to be charged until date of loan maturity.

7. Dollar amount of monthly maintenance fee to be charged.

8. Dollar amount of each payment.

9. Dollar amount of total fees and charges.

10. Annual Percentage Rate (APR) of loan.

11. Total number of payments.

12. Date of loan maturity.

13. If applicable, dollar amount of check given by applicant to secure the loan (i.e., at the time the loan is made).

G. A licensee shall generate a separate printout from the database showing the results of each loan eligibility query and retain the printout in its loan records.

H. Except as otherwise provided in subsection O of this section and subdivisions 3, 7, and 8 of this subsection, a licensee shall transmit the following additional information relating to loans made under the Act, as applicable, to the database no later than the end of the business day on the date of the event:

1. If a borrower cancels or rescinds a loan, the date of the cancellation or rescission.

2. If a loan is repaid or otherwise satisfied in full, (i) the date of repayment or satisfaction, and (ii) the total net dollar amount ultimately paid by the borrower in connection with the loan (i.e., principal amount of loan plus all fees and charges received or collected pursuant to § 6.2-1817 of the Code of Virginia, less any amount refunded to the borrower ).

3. If a borrower’s check or electronic draft is returned unpaid because the account on which it was drawn was closed by the borrower or contained insufficient funds, (i) the date the check or electronic draft is returned unpaid, and (ii) the dollar amount of the check or electronic draft. A licensee shall transmit such information to the database no later than five days after the date the check or electronic draft is returned unpaid.

4. If a licensee collects a deposit item return fee from a borrower, the dollar amount of the deposit item return fee.

5. If a licensee brings a civil action against a borrower for nonpayment of a loan, the date the proceeding is initiated and the total dollar amount sought to be recovered.

6. If a licensee obtains a judgment against a borrower, the date and total dollar amount of the judgment.

7. If a judgment obtained by a licensee against a borrower is satisfied, the date of satisfaction. A licensee shall transmit such information to the database on the date the licensee learns that the judgment has been satisfied.

8. If a licensee obtains a judgment against a borrower and collects any damages or costs from the borrower, the dollar amount of the damages or costs. A licensee shall transmit such information to the database on the date the licensee learns that the damages or costs have been paid.

9. If a licensee charges off a loan as uncollectible, the date the loan is charged off and the total dollar amount charged off.

I. 1. If any information required to be transmitted by a licensee to the database is automatically populated or calculated by the database provider, the licensee shall verify the information and immediately correct any inaccuracies or other errors.

2. If a licensee becomes aware of any changes, inaccuracies, or other errors in the information previously verified or transmitted by the licensee to the database, the licensee shall immediately update or correct the database.

J. The following provisions address a licensee's inability to access the database via the Internet at the time of loan application:

1. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall to the extent possible use the database provider's alternative means of database access, such as a telephone interactive voice response system, for purposes of transmitting the information required by this section and obtaining applicant eligibility information from the database.

2. If a licensee makes a short-term loan based on applicant eligibility information obtained from the database provider's alternative means of database access, then the licensee shall transmit to the database any remaining information required by this section no later than the date that the database becomes accessible to the licensee via the Internet.

3. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control and the database provider's alternative means of database access is unavailable or otherwise unable to provide the licensee with applicant eligibility information , then the licensee may make a short-term loan to an applicant if the applicant signs and dates a separate document containing all of the representations and responses to the questions set forth below and the prospective loan otherwise complies with the provisions of the Act and this chapter. The document shall be in a type size of not less than 14 point and contain a statement that the representations and questions relate to loans obtained from either the licensee or another short-term lender. The licensee shall retain the original document in its loan file and provide the applicant with a duplicate original.

a. The representations to be made by an applicant are as follows:

(1) I do not currently have any outstanding payday loans or short-term loans under Chapter 18 of Title 6.2 of the Code of Virginia.

(2) I am not a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(3) I am not married to a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(4) I am not under the age of 18 and the son or daughter of a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(5) One-half or less (including none) of my financial support for the past 180 days was provided by a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

b. If a licensee makes a short-term loan pursuant to subdivision 3 of this subsection, then the licensee shall transmit to the database the information required by this section no later than the date that the database becomes accessible to the licensee, via either the Internet or the database provider's alternative means of database access.

4. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall document in its records the technical problems it experienced and the date and time that it sought to access the database.

K. The following provisions address a licensee's inability to access the database via the Internet subsequent to making a loan:

1. If a licensee is required to transmit to the database information regarding a loan that has already been made, but the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall to the extent possible use the database provider's alternative means of database access, such as a telephone interactive voice response system, for purposes of transmitting the information required by this section to the database. If the database provider's alternative means of database access is unavailable or otherwise unable to accept the information, then the licensee shall transmit to the database the information required by this section no later than the date that the database becomes accessible to the licensee, via either the Internet or the database provider's alternative means of database access.

2. If a licensee is required to transmit to the database information regarding a loan that has already been made, but the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall document in its records the technical problems it experienced and the date and time that it sought to transmit the information to the database.

L. A licensee shall have limited access to the information contained in the database. The database shall only provide a licensee with the following information: (i) whether an applicant is eligible for a new short-term loan; and (ii) if an applicant is ineligible for a new short-term loan, the general reason for the ineligibility (e.g., the database may state that the applicant has an outstanding short-term loan but it shall not furnish any details regarding the outstanding loan). The database shall also permit a licensee to access information that the licensee is required to transmit to the database provided that such access is for the sole purpose of verifying, updating, or correcting the information. Except as otherwise provided in this subsection or 10VAC5-200-113, a licensee shall be prohibited from accessing or otherwise obtaining any information contained in or derived from the database.

M. If the commissioner determines that a licensee or former licensee has ceased business but still has one or more outstanding payday loans or short-term loans that cannot be repaid due to the licensee's or former licensee's closure, the commissioner may authorize the database provider to close the outstanding loans in the database in order to enable the affected borrowers to obtain short-term loans in the future. A licensee or former licensee shall be deemed by the commissioner to have ceased business if it (i) fails to respond to the bureau after two written requests mailed to the address on file with the bureau or (ii) fails to maintain its contact information in accordance with subsection K of 10VAC5-200-20.

N. Payday loans made prior to January 1, 2021, that remain outstanding on January 1, 2021, shall be considered for purposes of determining a borrower's eligibility for a short-term loan.

O. If the database provider is unable to complete the modifications to the database that are needed to accommodate the transmission of certain information required by this section, then the commissioner shall notify all licensees of this in writing and identify the specific information that they are not required to transmit until the commissioner further notifies them that the database provider has completed the modifications. Once the modifications have been completed, licensees shall not be required to transmit any information that they were previously unable to transmit due to the database being unable to accommodate it. The database provider shall complete all of the modifications no later than January 1, 2022.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; amended, Virginia Register Volume 25, Issue 14, eff. March 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; Volume 30, Issue 17, eff. May 1, 2014; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-113. Limited disclosure of data from short-term lending database.

A. Pursuant to § 6.2-1810 of the Code of Virginia, the information contained in the short-term lending database is confidential. However, provided that it does not directly or indirectly identify or pertain to any specific borrowers, licensees, or loan transactions, aggregate data and data that is otherwise derived from information contained in the database is not confidential and may be furnished by the database provider to the public. The database provider may charge and collect a fee to defray the cost of compiling and furnishing such data.

B. The database provider shall notify the bureau prior to furnishing data pursuant to this section.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 30, Issue 17, eff. May 1, 2014; amended, Virginia Register Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-115. Database inquiry fee.

Pursuant to subdivision B 4 of § 6.2-1810 of the Code of Virginia, a licensee shall pay a database inquiry fee to the database provider in connection with every short-term loan consummated by the licensee. The amount of the database inquiry fee shall be set by the commission, and all database inquiry fees shall be remitted by each licensee directly to the database provider on a weekly basis.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-120. Enforcement.

A. Failure to comply with any provision of the Act or this chapter may result in civil penalties, license suspension, or license revocation.

B. Pursuant to § 6.2-1824 of the Code of Virginia, a licensee shall be subject to a separate civil penalty of up to $1,000 for every violation of the Act, this chapter, or other law or regulation applicable to the conduct of the licensee's business. If a licensee violates any provision of the Act, this chapter, or other law or regulation applicable to the conduct of the licensee's business in connection with multiple loans or borrowers, the licensee shall be subject to a separate civil penalty for each loan or borrower. For example, if a licensee makes five loans and the licensee violates two provisions of this chapter that are applicable to the five loans, the licensee shall be subject to a maximum civil penalty of $10,000.

C. If a licensee (i) fails to transmit information to the short-term lending database in accordance with the Act or 10VAC5-200-110, (ii) transmits incorrect information to the database, or (iii) transmits information to the database in an untimely manner, the licensee shall be subject to a separate civil penalty under § 6.2-1824 of the Code of Virginia for each item of data that is omitted, incorrect, or untimely. For example, if a licensee makes three loans and fails to transmit two items of information to the database in connection with each of the three loans, the licensee shall be subject to a maximum civil penalty of $6,000.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012; Volume 37, Issue 25, eff. August 1, 2021.

10VAC5-200-130. Commission authority.

The commission may, at its discretion, waive or grant exceptions to any provision of this chapter for good cause shown.

Statutory Authority

§§ 6.2-1815 and 12.1-13 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 25, Issue 14, eff. March 1, 2009.

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