{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-1409.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-1409.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-1409.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-1409.html"}],"law_id":78712,"edition_id":1,"section_id":78712,"structure_id":13311,"section_number":"6.2-1409","catch_line":"Prepayment by borrower from association; rebates for unearned interest; prepayment penalty","history":"1987, c. 622, \u00a7 6.1-330.84; 1990, c. 338; 1991, c. 171; 2010, c. 794.","full_text":"A\n\nAny individual borrowing from an association shall have the right to anticipate payment of his debt at any time.B\n\nIf 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\n\nOn 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; and2\n\nOn other loans, under a method at least as favorable to the borrower as the actuarial method.C\n\nAn 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.","order_by":null,"text":{"0":{"id":282035,"text":"Any individual borrowing from an association shall have the right to anticipate payment of his debt at any time.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":282036,"text":"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:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":282037,"text":"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","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":282038,"text":"On other loans, under a method at least as favorable to the borrower as the actuarial method.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"4":{"id":282039,"text":"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.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2"}},"ancestry":[{"id":13311,"edition_id":1,"name":"Industrial Loan Associations","identifier":"14","label":"chapter","depth":3,"order_by":1,"parent_id":13060,"metadata":{},"date_created":"2026-06-26 03:44:37","date_modified":"2026-06-26 03:44:37","permalink":{"id":265723,"object_type":"structure","relational_id":13311,"identifier":"14","token":"6.2\/III\/14","url":"\/6.2\/III\/14\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13060,"edition_id":1,"name":"Other Regulated Providers of Financial Services","identifier":"III","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:44:12","date_modified":"2026-06-26 03:44:12","permalink":{"id":265721,"object_type":"structure","relational_id":13060,"identifier":"III","token":"6.2\/III","url":"\/6.2\/III\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":75973,"structure_id":13311,"section_number":"6.2-1400","catch_line":"Definitions","url":"\/6.2-1400\/","token":"6.2\/III\/14\/6.2-1400","metadata":false},{"id":72615,"structure_id":13311,"section_number":"6.2-1401","catch_line":"Powers of associations","url":"\/6.2-1401\/","token":"6.2\/III\/14\/6.2-1401","metadata":false},{"id":80300,"structure_id":13311,"section_number":"6.2-1402","catch_line":"Use of certain words in name prohibited","url":"\/6.2-1402\/","token":"6.2\/III\/14\/6.2-1402","metadata":false},{"id":54299,"structure_id":13311,"section_number":"6.2-1403","catch_line":"Directors","url":"\/6.2-1403\/","token":"6.2\/III\/14\/6.2-1403","metadata":false},{"id":58370,"structure_id":13311,"section_number":"6.2-1404","catch_line":"Commission may regulate issuance of evidences of debt","url":"\/6.2-1404\/","token":"6.2\/III\/14\/6.2-1404","metadata":false},{"id":84948,"structure_id":13311,"section_number":"6.2-1405","catch_line":"Extent to which associations regarded as banks; conversion of certain associations to banks; new associations not authorized","url":"\/6.2-1405\/","token":"6.2\/III\/14\/6.2-1405","metadata":false},{"id":73785,"structure_id":13311,"section_number":"6.2-1406","catch_line":"Sale of certificates of investment by certain associations prohibited","url":"\/6.2-1406\/","token":"6.2\/III\/14\/6.2-1406","metadata":false},{"id":81385,"structure_id":13311,"section_number":"6.2-1407","catch_line":"Prohibitions on associations with certificates issued and outstanding; advertisements","url":"\/6.2-1407\/","token":"6.2\/III\/14\/6.2-1407","metadata":false},{"id":81810,"structure_id":13311,"section_number":"6.2-1408","catch_line":"Associations to have one office; how office moved","url":"\/6.2-1408\/","token":"6.2\/III\/14\/6.2-1408","metadata":false},{"id":78712,"structure_id":13311,"section_number":"6.2-1409","catch_line":"Prepayment by borrower from association; rebates for unearned interest; prepayment penalty","url":"\/6.2-1409\/","token":"6.2\/III\/14\/6.2-1409","metadata":false},{"id":81838,"structure_id":13311,"section_number":"6.2-1410","catch_line":"Amount of loan","url":"\/6.2-1410\/","token":"6.2\/III\/14\/6.2-1410","metadata":false},{"id":86510,"structure_id":13311,"section_number":"6.2-1411","catch_line":"Retention of books, accounts, and records","url":"\/6.2-1411\/","token":"6.2\/III\/14\/6.2-1411","metadata":false},{"id":64378,"structure_id":13311,"section_number":"6.2-1412","catch_line":"Annual report","url":"\/6.2-1412\/","token":"6.2\/III\/14\/6.2-1412","metadata":false},{"id":80077,"structure_id":13311,"section_number":"6.2-1413","catch_line":"Investigations; examinations","url":"\/6.2-1413\/","token":"6.2\/III\/14\/6.2-1413","metadata":false},{"id":82795,"structure_id":13311,"section_number":"6.2-1414","catch_line":"Annual fees","url":"\/6.2-1414\/","token":"6.2\/III\/14\/6.2-1414","metadata":false},{"id":84791,"structure_id":13311,"section_number":"6.2-1415","catch_line":"Regulations","url":"\/6.2-1415\/","token":"6.2\/III\/14\/6.2-1415","metadata":false},{"id":56855,"structure_id":13311,"section_number":"6.2-1416","catch_line":"Prohibited practices","url":"\/6.2-1416\/","token":"6.2\/III\/14\/6.2-1416","metadata":false},{"id":76898,"structure_id":13311,"section_number":"6.2-1417","catch_line":"Escrow accounts","url":"\/6.2-1417\/","token":"6.2\/III\/14\/6.2-1417","metadata":false},{"id":54528,"structure_id":13311,"section_number":"6.2-1418","catch_line":"Suspension or revocation of authority","url":"\/6.2-1418\/","token":"6.2\/III\/14\/6.2-1418","metadata":false},{"id":55769,"structure_id":13311,"section_number":"6.2-1419","catch_line":"Cease and desist orders","url":"\/6.2-1419\/","token":"6.2\/III\/14\/6.2-1419","metadata":false},{"id":74966,"structure_id":13311,"section_number":"6.2-1420","catch_line":"Notice of proposed suspension or revocation","url":"\/6.2-1420\/","token":"6.2\/III\/14\/6.2-1420","metadata":false},{"id":85973,"structure_id":13311,"section_number":"6.2-1421","catch_line":"Civil penalties","url":"\/6.2-1421\/","token":"6.2\/III\/14\/6.2-1421","metadata":false}],"previous_section":{"id":81810,"structure_id":13311,"section_number":"6.2-1408","catch_line":"Associations to have one office; how office moved","url":"\/6.2-1408\/","token":"6.2\/III\/14\/6.2-1408","metadata":false},"next_section":{"id":81838,"structure_id":13311,"section_number":"6.2-1410","catch_line":"Amount of loan","url":"\/6.2-1410\/","token":"6.2\/III\/14\/6.2-1410","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-1409\/","history_text":"

This law was first created in 1987. The record of its establishment is cataloged in chapter 622 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1987 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1990, chapter 338; in 1991, chapter 171; in 2010, chapter 794<\/a>.<\/p>","references":[{"id":63347,"section_number":"6.2-405","catch_line":"References to sections regulating rebates of unearned interest and prepayment penalties","order_by":null,"url":"\/6.2-405\/"},{"id":76124,"section_number":"6.2-421","catch_line":"Certain contracts to permit prepayment; amount of prepayment penalty","order_by":null,"url":"\/6.2-421\/"}],"refers_to":[{"id":78834,"section_number":"6.2-403","catch_line":"The Rule of 78","order_by":null,"url":"\/6.2-403\/"}],"permalink":{"id":265761,"object_type":"law","relational_id":78712,"identifier":"6.2-1409","token":"6.2\/III\/14\/6.2-1409","url":"\/6.2-1409\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-1409\/","token":"6.2\/III\/14\/6.2-1409","dublin_core":{"Title":"Prepayment by borrower from association; rebates for unearned interest; prepayment penalty","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-1409","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Any individual borrowing from an association<\/span> shall have the right to anticipate payment of his debt at any time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> 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: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> 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<\/a> or by using any other method that is at least as favorable to such borrower; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> On other loans, under a method at least as favorable to the borrower as the actuarial method. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> An association<\/span> may charge a prepayment penalty<\/span> not to exceed two percent of the amount of the prepayment, provided such prepayment penalty<\/span>, including the percent thereof, is set forth in the contract<\/span> of indebtedness and is disclosed to the borrower pursuant to applicable federal interest disclosure laws<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPREPAYMENT BY BORROWER FROM ASSOCIATION; REBATES FOR UNEARNED INTEREST;\nPREPAYMENT PENALTY (\u00a7 6.2-1409)\n\nA. Any individual borrowing from an association shall have the right to\nanticipate payment of his debt at any time.\n\nB. If interest has been added to the face amount of the note, the borrower shall\nhave the right, upon prepayment of the debt, to receive a rebate by way of\ncredit for any unearned interest. The rebate shall be computed:\n\n 1. On loans (i) with an initial maturity and corresponding amortization period\n of 61 months or less and (ii) payable in equal periodic installments, in\n accordance with the Rule of 78 as illustrated in § 6.2-403 or by using\n any other method that is at least as favorable to such borrower; and\n\n 2. On other loans, under a method at least as favorable to the borrower as the\n actuarial method.\n\nC. An association may charge a prepayment penalty not to exceed two percent of\nthe amount of the prepayment, provided such prepayment penalty, including the\npercent thereof, is set forth in the contract of indebtedness and is disclosed\nto the borrower pursuant to applicable federal interest disclosure laws.\n\nHISTORY: 1987, c. 622, \u00a7 6.1-330.84; 1990, c. 338; 1991, c. 171; 2010, c. 794.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}