Administrative Code

Virginia Administrative Code
Title 10. Finance and Financial Institutions
Agency 5. State Corporation Commission
2/22/2019

Chapter 60. Consumer Finance Companies

10VAC5-60-10. [Repealed]

Historical Notes

Derived from VR225-01-0601, eff. January 1, 1993; repealed, Virginia Register Volume 11, Issue 22, eff. July 1, 1995.

10VAC5-60-20. Time limit for compliance.

Licensees shall have 30 days after the date a loan is paid in full, or a judgment is satisfied, or a borrower's obligation is otherwise terminated to accomplish the acts required by § 6.2-1524 G of the Code of Virginia.

Failure so to comply within that time limit shall constitute a violation of the subsection, which violation will result in penalties as provided by law.

Statutory Authority

§ 6.2-1535 of the Code of Virginia.

Historical Notes

Derived from VR225-01-0602, eff. May 1, 1976; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012.

10VAC5-60-30. Allotment program loans; applicability; definitions; rules.

A. This chapter applies to all licensees under Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia making any loan under Chapter 15 of Title 6.2 of the Code of Virginia in connection with which loan a borrower authorizes an allotment and automatic disbursement from an account for the purpose of making any payments required by the loan agreement. Such a loan is referred to herein as an "allotment program loan."

B. As used in this chapter the following terms shall have the following meanings:

"Allotment" means payment of any part of a borrower's military pay to a financial institution as permitted under federal law and regulations.

"Automatic disbursement" means payment, by a financial institution to a licensee, of funds received pursuant to an allotment.

"Borrower" means any person in the United States military service obligated, directly or contingently, to repay a loan made by a licensee.

"Licensee" has the meaning set forth in § 6.2-1500 of the Code of Virginia.

C.1. No licensee shall require any allotment or automatic disbursement, or a borrower's execution of the Allotment Disclosure Form appended to this chapter, as a condition to making a loan under Chapter 15 (§ 6.2-1500 et seq.) of Title 6.2 of the Code of Virginia.

2. A licensee making an allotment program loan shall bear all costs and expenses incident to the allotment and automatic disbursement.

3. When making an allotment program loan, a licensee shall use the Allotment Disclosure Form appended to this chapter. The form shall be printed or typed without alteration on one side of a paper separate from all other papers or documents obtained by the licensee in type of size not less than that known as 12 point. All blanks on the form, other than those blanks to be filled in with the name of the licensee shall be filled in by the borrower and the filled-in form shall be signed and dated by the borrower. The completed form shall be kept in the separate loan file maintained with respect to the loan for the period specified in § 6.2-1533 of the Code of Virginia.

4. No licensee making an allotment program loan shall withhold any part of the proceeds of the loan to be applied to any payment required under the loan.

Attachment: Allotment Disclosure Form

ALLOTMENT DISCLOSURE FORM

1. I, (APPLICANT'S NAME), intend to apply for an allotment of my military pay in the amount of $(AMOUNT) per month to an account in my name at (FINANCIAL INSTITUTION).

2. I also intend to authorize disbursement of funds from my account at (FINANCIAL INSTITUTION) in the amount of $ (AMOUNT) per month for the purpose of making monthly payments on my loan with (FINANCE COMPANY).

3. I am authorizing the allotment and automatic disbursement voluntarily and solely for my own convenience, and acknowledge that (FINANCE COMPANY) has not required me to authorize the allotment or automatic disbursement, or to sign this form, as a condition to making me a loan.

4. I understand that I can cancel the allotment and automatic disbursement at any time, and understand that I am not obligated to pay any fee or charge to any person or company, directly or indirectly, for the allotment or automatic disbursement.

(Applicant's Signature)

(Date)

Statutory Authority

§§ 6.2-1535 of the Code of Virginia.

Historical Notes

Derived from VR225-01-0603, eff. April 1, 1989; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012.

10VAC5-60-40. Rules governing open-end credit business in licensed consumer finance offices.

A. The business of extending open-end credit shall be conducted by a separate legal entity, and not by the consumer finance licensee. The separate, open-end credit entity ("separate entity") shall comply with all applicable state and federal laws.

B. Separate books and records shall be maintained by the licensee and the separate entity, and the books and records of the licensee shall not be commingled with those of the separate entity, but shall be kept in a different location within the office. The Bureau of Financial Institutions shall be given access to the books and records of the separate entity, and shall be furnished such information as it may require in order to assure compliance with this section.

C. The expenses of the two entities will be accounted for separately and so reported to the Bureau of Financial Institutions as of the end of each calendar year.

D. Advertising or other information published by the licensee or the separate entity shall not contain any false, misleading or deceptive statement or representation concerning the rates, terms or conditions for loans or credit made or extended by either of them. The separate entity shall not make or cause to be made any misrepresentation as to its being a licensed lender, or as to the extent to which it is subject to supervision or regulation.

E. The licensee and the separate entity shall not make both a consumer finance loan and an extension of open-end credit to the same borrower or borrowers as part of the same transaction.

F. Except as authorized by the Commissioner of Financial Institutions, or by order of the State Corporation Commission, insurance, other than credit life insurance, credit accident and sickness insurance, credit involuntary unemployment insurance, and noncredit-related life insurance sold pursuant to 10VAC5-70-10 et seq. shall not be sold in licensed consumer finance offices in connection with any extension of open-end credit by the separate entity.

G. When the balance owed under an open-end credit agreement is paid, finance charges will be assessed only to the date of payment.

Statutory Authority

§ 6.2-1535 of the Code of Virginia.

Historical Notes

Derived from VR225-01-0604, eff. February 1, 1990; amended, Virginia Register Volume 11, Issue 25, eff. August 15, 1995; Volume 13, Issue 3, eff. September 30, 1996; Volume 14, Issue 14, eff. March 10, 1998.

10VAC5-60-50. Rules governing real estate mortgage business in licensed consumer finance offices.

A. The business of making or purchasing loans secured by liens on real estate shall be conducted by a separate legal entity, and not by the consumer finance licensee. This separate, mortgage entity ("separate entity") shall comply with all applicable state and federal laws.

B. Separate books and records shall be maintained by the consumer finance licensee and the separate entity, and the books and records of the consumer finance licensee shall not be commingled with those of the separate entity, but shall be kept in a different location within the office. The Bureau of Financial Institutions shall be given access to the books and records of the separate entity, and shall be furnished such information as it may require in order to assure compliance with this section.

C. The expenses of the two entities shall be accounted for separately and so reported to the Bureau of Financial Institutions as of the end of each calendar year.

D. Advertising or other information published by the consumer finance licensee or the separate entity shall not contain any false, misleading or deceptive statement or representation concerning the rates, terms or conditions for loans made by either of them. The separate entity shall not make or cause to be made any misrepresentation as to its being a licensed lender, or as to the extent to which it is subject to supervision or regulation.

E. The consumer finance licensee and the separate entity shall not make both a consumer finance loan and a real estate mortgage loan to the same borrower or borrowers as part of the same transaction.

F. Any compensation paid by the separate entity to any other party for the referral of loans, pursuant to an agreement or understanding between the separate entity and such other party, shall be an expense borne entirely by the separate entity. Such expense shall not be charged directly or indirectly to the borrower.

G. Except as authorized by the Commissioner of Financial Institutions, or by order of the State Corporation Commission, insurance, other than credit life insurance, credit accident and sickness insurance, credit involuntary unemployment insurance, and noncredit-related life insurance sold pursuant to 10VAC5-70-10 et seq. shall not be sold in licensed consumer finance offices in connection with any mortgage loan made or purchased by the separate entity.

H. No interest in collateral other than real estate shall be taken in connection with any real estate mortgage loan made or purchased by the separate entity.

Statutory Authority

§ 6.2-1535 of the Code of Virginia.

Historical Notes

Derived from VR225-01-0605, eff. February 1, 1990; amended, Virginia Register Volume 11, Issue 25, eff. August 15, 1995; Volume 13, Issue 3, eff. September 30, 1996; Volume 14, Issue 14, eff. March 10, 1998.

10VAC5-60-60. Schedule prescribing annual fees paid for examination, supervision, and regulation of consumer finance licenses.

Pursuant to § 6.2-1532 of the Code of Virginia, the following schedule sets the fees to be paid annually by consumer finance licensees for their licenses, and to defray the costs of examination, supervision and regulation of licensed consumer finance offices:

Minimum fee - $300 per office open January 1 of the current calendar year.

In addition to the minimum fee, the following fee based on total assets:

SCHEDULE

Total Assets

Fee

Over $300,000 - $750,000

$.85 per $1,000 or fraction thereof

$750,000 - $2,000,000

$.70 per $1,000 or fraction thereof

Over $2,000,000

$.55 per $1,000 or fraction thereof

The annual fee for each licensee will be computed on the basis of its total assets combined with the total assets of all other businesses conducted in any of its licensed offices as of the close of business December 31 of the preceding calendar year. The amounts of such total assets will be derived from the annual reports which § 6.2-1534 of the Code of Virginia requires licensees to file with the Bureau of Financial Institutions on or before the first day of April of each year.

In accordance with § 6.2-1532 of the Code of Virginia, annual fees for any given calendar year will be assessed on or before May 1 of that year and must be paid on or before June 1 of that year. Fees are to be assessed using the foregoing schedule for the calendar year which began January 1, 1983. This fee schedule will be in effect until it is amended or revoked by order of the Commission.

Statutory Authority

§ 6.2-1535 of the Code of Virginia.

Historical Notes

Derived from VR225-01-0606, eff. April 14, 1983; amended, Virginia Register Volume 28, Issue 20, eff. June 1, 2012.



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