§ 6.2-1409 Prepayment by borrower from association; rebates for unearned interest; prepayment penalty
A. Any individual borrowing from an association shall have the right to anticipate payment of his debt at any time.
B. If interest has been added to the face amount of the note, the borrower shall have the right, upon prepayment of the debt, to receive a rebate by way of credit for any unearned interest. The rebate shall be computed:
1. On loans (i) with an initial maturity and corresponding amortization period of 61 months or less and (ii) payable in equal periodic installments, in accordance with the Rule of 78 as illustrated in § 6.2-403 or by using any other method that is at least as favorable to such borrower; and
2. On other loans, under a method at least as favorable to the borrower as the actuarial method.
C. An association may charge a prepayment penalty not to exceed two percent of the amount of the prepayment, provided such prepayment penalty, including the percent thereof, is set forth in the contract of indebtedness and is disclosed to the borrower pursuant to applicable federal interest disclosure laws.
History
This law was first created in 1987. The record of its establishment is cataloged in chapter 622 of that year’s edition of “Acts of Assembly,” the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1987 “Acts” aren’t available online. It has been modified 3 times. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. Those modifications are as follows: in 1990, chapter 338; in 1991, chapter 171; in 2010, chapter 794.
1987, c. 622, § 6.1-330.84; 1990, c. 338; 1991, c. 171; 2010, c. 794.