{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-1816.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-1816.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-1816.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-1816.html"}],"law_id":68051,"edition_id":1,"section_id":68051,"structure_id":13907,"section_number":"6.2-1816","catch_line":"Required and prohibited business methods","history":"2002, c. 897, \u00a7 6.1-459; 2003, c. 593; 2004, c. 295; 2005, c. 571; 2008, cc. 849, 876; 2010, c. 794; 2016, c. 501; 2020, cc. 1215, 1258; 2023, c. 287.","full_text":"Each licensee shall comply with the following requirements and prohibitions:\n\n1\n\nA licensee shall not make a loan that does not comply with § 6.2-1816.1.2\n\nA licensee shall not charge, collect, or receive, directly or indirectly, credit insurance premiums, charges for any ancillary product sold, charges for disbursing loan proceeds or refunds including check-cashing charges and any other charges for negotiating forms of payment other than cash, charges for brokering or obtaining a loan, or any fees, interest, or charges in connection with a loan, other than fees and charges permitted by § 6.2-1817.3\n\nA licensee shall not obtain any agreement from the borrower (i) giving the licensee or any third person power of attorney or authority to confess judgment for the borrower; (ii) authorizing the licensee or any third party to bring suit against the borrower in a court outside the Commonwealth; or (iii) waiving the borrower’s right to legal recourse or any other right the borrower has under any otherwise applicable provision of state or federal law.4\n\nA licensee shall not make a loan to a person if that person is obligated upon any loan to a person licensed under Chapter 22 (§ 6.2-2200 et seq.). Prior to making a loan, a licensee shall make a reasonable attempt to verify the borrower’s eligibility under this subsection that includes reviewing the files of any affiliate that is licensed under Chapter 22. Unless the Commission requires otherwise by administrative rule or policy statement, a licensee may rely on the loan applicant’s written representations with respect to the applicant’s obligations to lenders that are licensed under Chapter 22 (§ 6.2-2200 et seq.) but are not affiliates of the licensee, and a licensee is not subject to any administrative penalty or civil liability if such representations are later determined to be inaccurate.5\n\nA licensee shall not cause any person to be obligated to the licensee in any capacity at any time in the principal amount of more than $2,500.6\n\nExcept as provided in § 6.2-1818.1, a licensee shall not refinance, renew, or extend any short-term loan or make a loan to a person if the loan would cause the person to have more than one short-term loan from any licensee outstanding at the same time.7\n\nA licensee shall not cause a borrower to be obligated upon more than one loan at any time.8\n\nA check accepted by a licensee as security for any loan shall be dated no earlier than the date of the first required loan payment shown in the loan agreement.9\n\nNotwithstanding any provision of § 8.01-226.10 to the contrary, a licensee shall not threaten, or cause to be instigated, criminal proceedings against a borrower if a check given as security for a loan is dishonored or for any reason related to the borrower’s failure to pay any sum due under a loan agreement.10\n\nA licensee shall not (i) accept the title or registration of a vehicle, real or personal property, or any interest in any property other than a check payable to the licensee as security for a loan; (ii) create or accept any remotely created check, as defined in 12 C.F.R. § 229.2(fff), in connection with a loan; (iii) draft funds electronically from a borrower’s account without express written authorization from the borrower; or (iv) fail to stop attempts to draft funds electronically from a borrower’s account upon request from the borrower or his agent. Nothing in this section shall prohibit the conversion of a negotiable instrument into an electronic form for processing through the automated clearing house system.11\n\nA licensee shall not present a check, negotiable order of withdrawal, share draft, or other negotiable instrument that has been previously presented by the licensee and subsequently returned dishonored for any reason, unless the licensee obtains new written authorization from the borrower to present the previously returned item.12\n\nA licensee shall not attempt to draft funds electronically from a borrower’s account after two consecutive attempts have failed, unless the licensee obtains new written authorization from the borrower to transfer or withdraw funds electronically from the borrower’s account.13\n\nA licensee shall not make a loan to a borrower to enable the borrower to (i) pay for any other product or service sold at the licensee’s office location or (ii) repay any amount owed to the licensee or an affiliate of the licensee in connection with another credit transaction.14\n\nLoan proceeds shall be disbursed in cash or by the licensee’s business check. No fee shall be charged by the licensee or an affiliate for cashing a loan proceeds check.15\n\nA check given as security for a loan shall not be negotiated to a third party.16\n\nUpon receipt of a check given as security for a loan, the licensee shall stamp the check with an endorsement stating: “This check is being negotiated as part of a short-term loan pursuant to Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia, and any holder of this check takes it subject to all claims and defenses of the maker.”17\n\nBefore entering into a short-term loan, the licensee shall provide each borrower with a pamphlet, in form consistent with regulations adopted by the Commission, explaining in plain language the rights and responsibilities of the borrower and providing a toll-free number at the Commission for assistance with complaints.18\n\nEach licensee shall conspicuously post in each approved office (i) a schedule of fees and interest charges, which shall include examples using a $300 loan repaid in three months, a $500 loan repaid in five months, and a $1,000 loan repaid in 10 months, and (ii) a notice containing the following statement: “If you wish to file a complaint against us, you may contact the Bureau of Financial Institutions at [insert contact information].” The Commission shall furnish licensees with the appropriate contact information.19\n\nA licensee shall not knowingly make a short-term loan to a person who is 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. Prior to making a short-term loan, every licensee shall inquire of every prospective borrower if he is 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. The loan documents shall include verification that the borrower is not 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.20\n\nIn collecting or attempting to collect a short-term loan, a licensee shall comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections.21\n\nA licensee shall not contact a borrower for any reason other than (i) for the borrower’s benefit regarding upcoming payments, options for obtaining loans, payment options, payment due dates, the effect of default, or, after default, receiving payments or other actions permitted by the licensee; (ii) to advise the borrower of missed payments or dishonored checks; or (iii) to assist the transmittal of payments via a third-party mechanism.22\n\nA short-term loan agreement shall not be sold or otherwise assigned to any other person who is not also a licensee, and if a loan agreement or its servicing is sold or assigned to another licensee, the buyer or assignee of the loan agreement shall be subject to the same obligations under this chapter that apply to the selling or assigning licensee. If a licensee sells or assigns a short-term loan or its servicing, the licensee shall provide to the borrower written notice and the information needed to make future payments no later than 10 days before the borrower’s next payment due date.23\n\nA licensee shall not make a loan to a borrower that includes an acceleration clause or demand feature that permits the licensee, in the event the borrower fails to meet the repayment terms for any outstanding balance, to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance, unless both of the following conditions are met: (i) not earlier than 10 days after the borrower’s payment was due, the licensee provides written notice to the borrower of the termination of the loan and (ii) in addition to the outstanding balance, the licensee collects only prorated interest and the fees earned up to termination of the loan. For purposes of this subdivision, the outstanding balance and prorated interest and fees shall be calculated as if the borrower had voluntarily prepaid the loan in full on the date of termination.24\n\nA licensee may not file or initiate a legal proceeding of any kind against a borrower until 60 days after the date of default on a short-term loan, during which period the licensee and borrower may voluntarily enter into a repayment arrangement.25\n\nA licensee shall not recommend to a borrower that the borrower obtain a loan for a dollar amount that is higher than the borrower has requested.26\n\nA licensee may not engage in any unfair, misleading, deceptive, or fraudulent acts or practices in the conduct of its business.27\n\nA licensee shall include as part of every loan application a question regarding whether the potential borrower has been approached, including via telephone or electronic means, by any person to send money in consideration of receiving money via a government or lottery organization.","order_by":null,"text":{"0":{"id":246375,"text":"Each licensee shall comply with the following requirements and prohibitions:","type":"section","prefixes":[""],"prefix":"","entire_prefix":"","prefix_anchor":"","level":1,"next_prefix":"1"},"1":{"id":246376,"text":"A licensee shall not make a loan that does not comply with § 6.2-1816.1.","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"","next_prefix":"2"},"2":{"id":246377,"text":"A licensee shall not charge, collect, or receive, directly or indirectly, credit insurance premiums, charges for any ancillary product sold, charges for disbursing loan proceeds or refunds including check-cashing charges and any other charges for negotiating forms of payment other than cash, charges for brokering or obtaining a loan, or any fees, interest, or charges in connection with a loan, other than fees and charges permitted by § 6.2-1817.","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"3":{"id":246378,"text":"A licensee shall not obtain any agreement from the borrower (i) giving the licensee or any third person power of attorney or authority to confess judgment for the borrower; (ii) authorizing the licensee or any third party to bring suit against the borrower in a court outside the Commonwealth; or (iii) waiving the borrower’s right to legal recourse or any other right the borrower has under any otherwise applicable provision of state or federal law.","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"4":{"id":246379,"text":"A licensee shall not make a loan to a person if that person is obligated upon any loan to a person licensed under Chapter 22 (§ 6.2-2200 et seq.). Prior to making a loan, a licensee shall make a reasonable attempt to verify the borrower’s eligibility under this subsection that includes reviewing the files of any affiliate that is licensed under Chapter 22. Unless the Commission requires otherwise by administrative rule or policy statement, a licensee may rely on the loan applicant’s written representations with respect to the applicant’s obligations to lenders that are licensed under Chapter 22 (§ 6.2-2200 et seq.) but are not affiliates of the licensee, and a licensee is not subject to any administrative penalty or civil liability if such representations are later determined to be inaccurate.","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"5":{"id":246380,"text":"A licensee shall not cause any person to be obligated to the licensee in any capacity at any time in the principal amount of more than $2,500.","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"6"},"6":{"id":246381,"text":"Except as provided in § 6.2-1818.1, a licensee shall not refinance, renew, or extend any short-term loan or make a loan to a person if the loan would cause the person to have more than one short-term loan from any licensee outstanding at the same time.","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5","next_prefix":"7"},"7":{"id":246382,"text":"A licensee shall not cause a borrower to be obligated upon more than one loan at any time.","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6","next_prefix":"8"},"8":{"id":246383,"text":"A check accepted by a licensee as security for any loan shall be dated no earlier than the date of the first required loan payment shown in the loan agreement.","type":"section","prefixes":["8"],"prefix":"8","entire_prefix":"8","prefix_anchor":"8","level":1,"prior_prefix":"7","next_prefix":"9"},"9":{"id":246384,"text":"Notwithstanding any provision of § 8.01-226.10 to the contrary, a licensee shall not threaten, or cause to be instigated, criminal proceedings against a borrower if a check given as security for a loan is dishonored or for any reason related to the borrower’s failure to pay any sum due under a loan agreement.","type":"section","prefixes":["9"],"prefix":"9","entire_prefix":"9","prefix_anchor":"9","level":1,"prior_prefix":"8","next_prefix":"10"},"10":{"id":246385,"text":"A licensee shall not (i) accept the title or registration of a vehicle, real or personal property, or any interest in any property other than a check payable to the licensee as security for a loan; (ii) create or accept any remotely created check, as defined in 12 C.F.R. § 229.2(fff), in connection with a loan; (iii) draft funds electronically from a borrower’s account without express written authorization from the borrower; or (iv) fail to stop attempts to draft funds electronically from a borrower’s account upon request from the borrower or his agent. Nothing in this section shall prohibit the conversion of a negotiable instrument into an electronic form for processing through the automated clearing house system.","type":"section","prefixes":["10"],"prefix":"10","entire_prefix":"10","prefix_anchor":"10","level":1,"prior_prefix":"9","next_prefix":"11"},"11":{"id":246386,"text":"A licensee shall not present a check, negotiable order of withdrawal, share draft, or other negotiable instrument that has been previously presented by the licensee and subsequently returned dishonored for any reason, unless the licensee obtains new written authorization from the borrower to present the previously returned item.","type":"section","prefixes":["11"],"prefix":"11","entire_prefix":"11","prefix_anchor":"11","level":1,"prior_prefix":"10","next_prefix":"12"},"12":{"id":246387,"text":"A licensee shall not attempt to draft funds electronically from a borrower’s account after two consecutive attempts have failed, unless the licensee obtains new written authorization from the borrower to transfer or withdraw funds electronically from the borrower’s account.","type":"section","prefixes":["12"],"prefix":"12","entire_prefix":"12","prefix_anchor":"12","level":1,"prior_prefix":"11","next_prefix":"13"},"13":{"id":246388,"text":"A licensee shall not make a loan to a borrower to enable the borrower to (i) pay for any other product or service sold at the licensee’s office location or (ii) repay any amount owed to the licensee or an affiliate of the licensee in connection with another credit transaction.","type":"section","prefixes":["13"],"prefix":"13","entire_prefix":"13","prefix_anchor":"13","level":1,"prior_prefix":"12","next_prefix":"14"},"14":{"id":246389,"text":"Loan proceeds shall be disbursed in cash or by the licensee’s business check. No fee shall be charged by the licensee or an affiliate for cashing a loan proceeds check.","type":"section","prefixes":["14"],"prefix":"14","entire_prefix":"14","prefix_anchor":"14","level":1,"prior_prefix":"13","next_prefix":"15"},"15":{"id":246390,"text":"A check given as security for a loan shall not be negotiated to a third party.","type":"section","prefixes":["15"],"prefix":"15","entire_prefix":"15","prefix_anchor":"15","level":1,"prior_prefix":"14","next_prefix":"16"},"16":{"id":246391,"text":"Upon receipt of a check given as security for a loan, the licensee shall stamp the check with an endorsement stating: “This check is being negotiated as part of a short-term loan pursuant to Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia, and any holder of this check takes it subject to all claims and defenses of the maker.”","type":"section","prefixes":["16"],"prefix":"16","entire_prefix":"16","prefix_anchor":"16","level":1,"prior_prefix":"15","next_prefix":"17"},"17":{"id":246392,"text":"Before entering into a short-term loan, the licensee shall provide each borrower with a pamphlet, in form consistent with regulations adopted by the Commission, explaining in plain language the rights and responsibilities of the borrower and providing a toll-free number at the Commission for assistance with complaints.","type":"section","prefixes":["17"],"prefix":"17","entire_prefix":"17","prefix_anchor":"17","level":1,"prior_prefix":"16","next_prefix":"18"},"18":{"id":246393,"text":"Each licensee shall conspicuously post in each approved office (i) a schedule of fees and interest charges, which shall include examples using a $300 loan repaid in three months, a $500 loan repaid in five months, and a $1,000 loan repaid in 10 months, and (ii) a notice containing the following statement: “If you wish to file a complaint against us, you may contact the Bureau of Financial Institutions at [insert contact information].” The Commission shall furnish licensees with the appropriate contact information.","type":"section","prefixes":["18"],"prefix":"18","entire_prefix":"18","prefix_anchor":"18","level":1,"prior_prefix":"17","next_prefix":"19"},"19":{"id":246394,"text":"A licensee shall not knowingly make a short-term loan to a person who is 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. Prior to making a short-term loan, every licensee shall inquire of every prospective borrower if he is 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. The loan documents shall include verification that the borrower is not 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.","type":"section","prefixes":["19"],"prefix":"19","entire_prefix":"19","prefix_anchor":"19","level":1,"prior_prefix":"18","next_prefix":"20"},"20":{"id":246395,"text":"In collecting or attempting to collect a short-term loan, a licensee shall comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections.","type":"section","prefixes":["20"],"prefix":"20","entire_prefix":"20","prefix_anchor":"20","level":1,"prior_prefix":"19","next_prefix":"21"},"21":{"id":246396,"text":"A licensee shall not contact a borrower for any reason other than (i) for the borrower’s benefit regarding upcoming payments, options for obtaining loans, payment options, payment due dates, the effect of default, or, after default, receiving payments or other actions permitted by the licensee; (ii) to advise the borrower of missed payments or dishonored checks; or (iii) to assist the transmittal of payments via a third-party mechanism.","type":"section","prefixes":["21"],"prefix":"21","entire_prefix":"21","prefix_anchor":"21","level":1,"prior_prefix":"20","next_prefix":"22"},"22":{"id":246397,"text":"A short-term loan agreement shall not be sold or otherwise assigned to any other person who is not also a licensee, and if a loan agreement or its servicing is sold or assigned to another licensee, the buyer or assignee of the loan agreement shall be subject to the same obligations under this chapter that apply to the selling or assigning licensee. If a licensee sells or assigns a short-term loan or its servicing, the licensee shall provide to the borrower written notice and the information needed to make future payments no later than 10 days before the borrower’s next payment due date.","type":"section","prefixes":["22"],"prefix":"22","entire_prefix":"22","prefix_anchor":"22","level":1,"prior_prefix":"21","next_prefix":"23"},"23":{"id":246398,"text":"A licensee shall not make a loan to a borrower that includes an acceleration clause or demand feature that permits the licensee, in the event the borrower fails to meet the repayment terms for any outstanding balance, to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance, unless both of the following conditions are met: (i) not earlier than 10 days after the borrower’s payment was due, the licensee provides written notice to the borrower of the termination of the loan and (ii) in addition to the outstanding balance, the licensee collects only prorated interest and the fees earned up to termination of the loan. For purposes of this subdivision, the outstanding balance and prorated interest and fees shall be calculated as if the borrower had voluntarily prepaid the loan in full on the date of termination.","type":"section","prefixes":["23"],"prefix":"23","entire_prefix":"23","prefix_anchor":"23","level":1,"prior_prefix":"22","next_prefix":"24"},"24":{"id":246399,"text":"A licensee may not file or initiate a legal proceeding of any kind against a borrower until 60 days after the date of default on a short-term loan, during which period the licensee and borrower may voluntarily enter into a repayment arrangement.","type":"section","prefixes":["24"],"prefix":"24","entire_prefix":"24","prefix_anchor":"24","level":1,"prior_prefix":"23","next_prefix":"25"},"25":{"id":246400,"text":"A licensee shall not recommend to a borrower that the borrower obtain a loan for a dollar amount that is higher than the borrower has requested.","type":"section","prefixes":["25"],"prefix":"25","entire_prefix":"25","prefix_anchor":"25","level":1,"prior_prefix":"24","next_prefix":"26"},"26":{"id":246401,"text":"A licensee may not engage in any unfair, misleading, deceptive, or fraudulent acts or practices in the conduct of its business.","type":"section","prefixes":["26"],"prefix":"26","entire_prefix":"26","prefix_anchor":"26","level":1,"prior_prefix":"25","next_prefix":"27"},"27":{"id":246402,"text":"A licensee shall include as part of every loan application a question regarding whether the potential borrower has been approached, including via telephone or electronic means, by any person to send money in consideration of receiving money via a government or lottery organization.","type":"section","prefixes":["27"],"prefix":"27","entire_prefix":"27","prefix_anchor":"27","level":1,"prior_prefix":"26"}},"ancestry":[{"id":13907,"edition_id":1,"name":"Short-term Loans","identifier":"18","label":"chapter","depth":3,"order_by":1,"parent_id":13060,"metadata":{},"date_created":"2026-06-26 03:46:16","date_modified":"2026-06-26 03:46:16","permalink":{"id":266235,"object_type":"structure","relational_id":13907,"identifier":"18","token":"6.2\/III\/18","url":"\/6.2\/III\/18\/","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":66519,"structure_id":13907,"section_number":"6.2-1800","catch_line":"Definitions","url":"\/6.2-1800\/","token":"6.2\/III\/18\/6.2-1800","metadata":false},{"id":85131,"structure_id":13907,"section_number":"6.2-1801","catch_line":"License requirement","url":"\/6.2-1801\/","token":"6.2\/III\/18\/6.2-1801","metadata":false},{"id":60344,"structure_id":13907,"section_number":"6.2-1802","catch_line":"Applicability","url":"\/6.2-1802\/","token":"6.2\/III\/18\/6.2-1802","metadata":false},{"id":64905,"structure_id":13907,"section_number":"6.2-1803","catch_line":"Application for license; form; content; fee","url":"\/6.2-1803\/","token":"6.2\/III\/18\/6.2-1803","metadata":false},{"id":61878,"structure_id":13907,"section_number":"6.2-1804","catch_line":"Bond required","url":"\/6.2-1804\/","token":"6.2\/III\/18\/6.2-1804","metadata":false},{"id":59426,"structure_id":13907,"section_number":"6.2-1805","catch_line":"Investigation of applications","url":"\/6.2-1805\/","token":"6.2\/III\/18\/6.2-1805","metadata":false},{"id":85026,"structure_id":13907,"section_number":"6.2-1806","catch_line":"Qualifications","url":"\/6.2-1806\/","token":"6.2\/III\/18\/6.2-1806","metadata":false},{"id":75512,"structure_id":13907,"section_number":"6.2-1807","catch_line":"Licenses; places of offices; changes","url":"\/6.2-1807\/","token":"6.2\/III\/18\/6.2-1807","metadata":false},{"id":66531,"structure_id":13907,"section_number":"6.2-1808","catch_line":"Acquisition of control; application","url":"\/6.2-1808\/","token":"6.2\/III\/18\/6.2-1808","metadata":false},{"id":73239,"structure_id":13907,"section_number":"6.2-1809","catch_line":"Retention of books, accounts, and records","url":"\/6.2-1809\/","token":"6.2\/III\/18\/6.2-1809","metadata":false},{"id":70899,"structure_id":13907,"section_number":"6.2-1810","catch_line":"Loan database","url":"\/6.2-1810\/","token":"6.2\/III\/18\/6.2-1810","metadata":false},{"id":57801,"structure_id":13907,"section_number":"6.2-1811","catch_line":"Annual report","url":"\/6.2-1811\/","token":"6.2\/III\/18\/6.2-1811","metadata":false},{"id":61938,"structure_id":13907,"section_number":"6.2-1812","catch_line":"Other reporting requirements","url":"\/6.2-1812\/","token":"6.2\/III\/18\/6.2-1812","metadata":false},{"id":65458,"structure_id":13907,"section_number":"6.2-1813","catch_line":"Investigations; examinations","url":"\/6.2-1813\/","token":"6.2\/III\/18\/6.2-1813","metadata":false},{"id":84241,"structure_id":13907,"section_number":"6.2-1814","catch_line":"Annual fees","url":"\/6.2-1814\/","token":"6.2\/III\/18\/6.2-1814","metadata":false},{"id":60100,"structure_id":13907,"section_number":"6.2-1815","catch_line":"Regulations","url":"\/6.2-1815\/","token":"6.2\/III\/18\/6.2-1815","metadata":false},{"id":68051,"structure_id":13907,"section_number":"6.2-1816","catch_line":"Required and prohibited business methods","url":"\/6.2-1816\/","token":"6.2\/III\/18\/6.2-1816","metadata":false},{"id":55573,"structure_id":13907,"section_number":"6.2-1816.1","catch_line":"Loan terms and conditions","url":"\/6.2-1816.1\/","token":"6.2\/III\/18\/6.2-1816.1","metadata":false},{"id":83282,"structure_id":13907,"section_number":"6.2-1817","catch_line":"Authorized fees and charges","url":"\/6.2-1817\/","token":"6.2\/III\/18\/6.2-1817","metadata":false},{"id":77533,"structure_id":13907,"section_number":"6.2-1817.1","catch_line":"Inflation adjustment of maximum monthly maintenance fee","url":"\/6.2-1817.1\/","token":"6.2\/III\/18\/6.2-1817.1","metadata":false},{"id":61803,"structure_id":13907,"section_number":"6.2-1818","catch_line":"Repealed","url":"\/6.2-1818\/","token":"6.2\/III\/18\/6.2-1818","metadata":false},{"id":56654,"structure_id":13907,"section_number":"6.2-1818.1","catch_line":"Refinancing of short-term loans","url":"\/6.2-1818.1\/","token":"6.2\/III\/18\/6.2-1818.1","metadata":false},{"id":68312,"structure_id":13907,"section_number":"6.2-1818.2","catch_line":"Statement of balance due; repayment and refunds","url":"\/6.2-1818.2\/","token":"6.2\/III\/18\/6.2-1818.2","metadata":false},{"id":66523,"structure_id":13907,"section_number":"6.2-1818.3","catch_line":"Restriction on certain fees and charges","url":"\/6.2-1818.3\/","token":"6.2\/III\/18\/6.2-1818.3","metadata":false},{"id":86173,"structure_id":13907,"section_number":"6.2-1818.4","catch_line":"Verification of borrower's income","url":"\/6.2-1818.4\/","token":"6.2\/III\/18\/6.2-1818.4","metadata":false},{"id":73791,"structure_id":13907,"section_number":"6.2-1819","catch_line":"Advertising","url":"\/6.2-1819\/","token":"6.2\/III\/18\/6.2-1819","metadata":false},{"id":63310,"structure_id":13907,"section_number":"6.2-1820","catch_line":"Other business","url":"\/6.2-1820\/","token":"6.2\/III\/18\/6.2-1820","metadata":false},{"id":64472,"structure_id":13907,"section_number":"6.2-1821","catch_line":"Suspension or revocation of license","url":"\/6.2-1821\/","token":"6.2\/III\/18\/6.2-1821","metadata":false},{"id":54953,"structure_id":13907,"section_number":"6.2-1822","catch_line":"Cease and desist orders","url":"\/6.2-1822\/","token":"6.2\/III\/18\/6.2-1822","metadata":false},{"id":70277,"structure_id":13907,"section_number":"6.2-1823","catch_line":"Notice of proposed suspension or revocation","url":"\/6.2-1823\/","token":"6.2\/III\/18\/6.2-1823","metadata":false},{"id":78100,"structure_id":13907,"section_number":"6.2-1824","catch_line":"Civil penalties","url":"\/6.2-1824\/","token":"6.2\/III\/18\/6.2-1824","metadata":false},{"id":75542,"structure_id":13907,"section_number":"6.2-1825","catch_line":"Criminal penalties","url":"\/6.2-1825\/","token":"6.2\/III\/18\/6.2-1825","metadata":false},{"id":62632,"structure_id":13907,"section_number":"6.2-1826","catch_line":"Validity of noncompliant loan agreement; private right of action","url":"\/6.2-1826\/","token":"6.2\/III\/18\/6.2-1826","metadata":false},{"id":70623,"structure_id":13907,"section_number":"6.2-1827","catch_line":"Application of chapter to Internet loans","url":"\/6.2-1827\/","token":"6.2\/III\/18\/6.2-1827","metadata":false},{"id":68584,"structure_id":13907,"section_number":"6.2-1828","catch_line":"Authority of Attorney General; referral by Commission to Attorney General","url":"\/6.2-1828\/","token":"6.2\/III\/18\/6.2-1828","metadata":false},{"id":60701,"structure_id":13907,"section_number":"6.2-1829","catch_line":"Violation of the Virginia Consumer Protection Act","url":"\/6.2-1829\/","token":"6.2\/III\/18\/6.2-1829","metadata":false}],"previous_section":{"id":60100,"structure_id":13907,"section_number":"6.2-1815","catch_line":"Regulations","url":"\/6.2-1815\/","token":"6.2\/III\/18\/6.2-1815","metadata":false},"next_section":{"id":55573,"structure_id":13907,"section_number":"6.2-1816.1","catch_line":"Loan terms and conditions","url":"\/6.2-1816.1\/","token":"6.2\/III\/18\/6.2-1816.1","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-1816\/","history_text":"

This law was first created in 2002. The record of its establishment is cataloged in chapter 897<\/a> 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. It has been modified 8 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 2003, chapter 593<\/a>; in 2004, chapter 295<\/a>; in 2005, chapter 571<\/a>; in 2008, chapters 849<\/a> and 876<\/a>; in 2010, chapter 794<\/a>; in 2016, chapter 501<\/a>; in 2020, chapters 1215<\/a> and 1258<\/a>; in 2023, chapter 287<\/a>.<\/p>","references":false,"refers_to":[{"id":66519,"section_number":"6.2-1800","catch_line":"Definitions","order_by":null,"url":"\/6.2-1800\/"},{"id":56654,"section_number":"6.2-1818.1","catch_line":"Refinancing of short-term loans","order_by":null,"url":"\/6.2-1818.1\/"},{"id":76041,"section_number":"6.2-2200","catch_line":"Definitions","order_by":null,"url":"\/6.2-2200\/"},{"id":56516,"section_number":"8.01-226.10","catch_line":"Civil immunity for causing the arrest of a person for a bad check","order_by":null,"url":"\/8.01-226.10\/"}],"permalink":{"id":266301,"object_type":"law","relational_id":68051,"identifier":"6.2-1816","token":"6.2\/III\/18\/6.2-1816","url":"\/6.2-1816\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-1816\/","token":"6.2\/III\/18\/6.2-1816","dublin_core":{"Title":"Required and prohibited business methods","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-1816","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

Each licensee<\/span> shall comply with the following requirements and prohibitions:<\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> A licensee<\/span> shall not make a loan that does not comply with § 6.2-1816.1<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A licensee<\/span> shall not charge, collect, or receive, directly or indirectly, credit insurance premiums, charges for any ancillary product sold, charges for disbursing loan proceeds or refunds including check<\/span>-cashing charges and any other charges for negotiating forms of payment other than cash, charges for brokering or obtaining a loan, or any fees, interest<\/span>, or charges in connection with a loan, other than fees and charges permitted by § 6.2-1817<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> A licensee<\/span> shall not obtain any agreement from the borrower (i) giving the licensee<\/span> or any third person<\/span> power of attorney<\/span> or authority to confess judgment<\/span> for the borrower; (ii) authorizing the licensee<\/span> or any third party<\/span> to bring suit against the borrower in a court<\/span> outside the Commonwealth; or (iii) waiving the borrower’s right to legal recourse or any other right the borrower has under any otherwise applicable provision of state or federal law<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> A licensee<\/span> shall not make a loan to a person<\/span> if that person<\/span> is obligated upon any loan to a person<\/span> licensed under Chapter 22 (§ 6.2-2200<\/a> et seq.). Prior to making a loan, a licensee<\/span> shall make a reasonable attempt to verify the borrower’s eligibility under this subsection that includes reviewing the files of any affiliate<\/span> that is licensed under Chapter 22. Unless the Commission<\/span> requires otherwise by administrative rule or policy statement, a licensee<\/span> may rely on the loan applicant’s written representations with respect to the applicant’s obligations to lenders that are licensed under Chapter 22 (§ 6.2-2200<\/a> et seq.) but are not affiliates<\/span> of the licensee<\/span>, and a licensee<\/span> is not subject to any administrative penalty<\/span> or civil liability if such representations are later determined to be inaccurate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> A licensee<\/span> shall not cause any person<\/span> to be obligated to the licensee<\/span> in any capacity at any time in the principal<\/span> amount of more than $2,500. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Except as provided in § 6.2-1818.1<\/a>, a licensee<\/span> shall not refinance, renew, or extend any short-term loan<\/span> or make a loan to a person<\/span> if the loan would cause the person<\/span> to have more than one short-term loan<\/span> from any licensee<\/span> outstanding at the same time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> A licensee<\/span> shall not cause a borrower to be obligated upon more than one loan at any time. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> A check<\/span> accepted by a licensee<\/span> as security for any loan shall be dated no earlier than the date of the first required loan payment shown in the loan agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Notwithstanding any provision of § 8.01-226.10<\/a> to the contrary, a licensee<\/span> shall not threaten, or cause to be instigated, criminal proceedings against a borrower if a check<\/span> given as security for a loan is dishonored or for any reason related to the borrower’s failure to pay any sum due under a loan agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

10.<\/span> A licensee<\/span> shall not (i) accept the title or registration of a vehicle, real or personal property, or any interest<\/span> in any property other than a check<\/span> payable to the licensee<\/span> as security for a loan; (ii) create or accept any remotely created check<\/span>, as defined in 12 C.F.R. § 229.2(fff), in connection with a loan; (iii) draft funds electronically from a borrower’s account without express written authorization from the borrower; or (iv) fail to stop attempts to draft funds electronically from a borrower’s account upon request from the borrower or his agent. Nothing in this section shall prohibit the conversion of a negotiable instrument into an electronic form for processing through the automated clearing house system. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

11.<\/span> A licensee<\/span> shall not present a check<\/span>, negotiable order<\/span> of withdrawal, share draft, or other negotiable instrument that has been previously presented by the licensee<\/span> and subsequently returned dishonored for any reason, unless the licensee<\/span> obtains new written authorization from the borrower to present the previously returned item. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

12.<\/span> A licensee<\/span> shall not attempt to draft funds electronically from a borrower’s account after two consecutive attempts have failed, unless the licensee<\/span> obtains new written authorization from the borrower to transfer or withdraw funds electronically from the borrower’s account. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

13.<\/span> A licensee<\/span> shall not make a loan to a borrower to enable the borrower to (i) pay for any other product or service sold at the licensee<\/span>’s office location or (ii) repay any amount owed to the licensee<\/span> or an affiliate<\/span> of the licensee<\/span> in connection with another credit transaction. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

14.<\/span> Loan proceeds shall be disbursed in cash or by the licensee<\/span>’s business check<\/span>. No fee shall be charged by the licensee<\/span> or an affiliate<\/span> for cashing a loan proceeds check<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

15.<\/span> A check<\/span> given as security for a loan shall not be negotiated to a third party<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

16.<\/span> Upon receipt of a check<\/span> given as security for a loan, the licensee<\/span> shall stamp the check<\/span> with an endorsement stating: “This check<\/span> is being negotiated as part of a short-term loan<\/span> pursuant to Chapter 18 (§ 6.2-1800<\/a> et seq.) of Title 6.2 of the Code of Virginia, and any holder of this check<\/span> takes it subject to all claims and defenses of the maker.” <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

17.<\/span> Before entering into a short-term loan<\/span>, the licensee<\/span> shall provide each borrower with a pamphlet, in form consistent with regulations adopted by the Commission<\/span>, explaining in plain language the rights and responsibilities of the borrower and providing a toll-free number at the Commission<\/span> for assistance with complaints. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

18.<\/span> Each licensee<\/span> shall conspicuously post in each approved office (i) a schedule of fees and interest<\/span> charges, which shall include examples using a $300 loan repaid in three months, a $500 loan repaid in five months, and a $1,000 loan repaid in 10 months, and (ii) a notice containing the following statement: “If you wish to file a complaint against us, you may contact the Bureau<\/span> of Financial Institutions<\/span> at [insert contact information].” The Commission<\/span> shall furnish licensees<\/span> with the appropriate contact information. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

19.<\/span> A licensee<\/span> shall not knowingly make a short-term loan<\/span> to a person<\/span> who is 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. Prior to making a short-term loan<\/span>, every licensee<\/span> shall inquire of every prospective borrower if he is 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. The loan documents shall include verification that the borrower is not 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. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

20.<\/span> In collecting or attempting to collect a short-term loan<\/span>, a licensee<\/span> shall comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.) regarding harassment or abuse, false or misleading misrepresentations, and unfair practices in collections. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

21.<\/span> A licensee<\/span> shall not contact a borrower for any reason other than (i) for the borrower’s benefit regarding upcoming payments, options for obtaining loans, payment options, payment due dates, the effect of default<\/span>, or, after default<\/span>, receiving payments or other actions permitted by the licensee<\/span>; (ii) to advise the borrower of missed payments or dishonored checks<\/span>; or (iii) to assist the transmittal of payments via a third-party<\/span> mechanism. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

22.<\/span> A short-term loan<\/span> agreement shall not be sold or otherwise assigned to any other person<\/span> who is not also a licensee<\/span>, and if a loan agreement or its servicing is sold or assigned to another licensee<\/span>, the buyer or assignee of the loan agreement shall be subject to the same obligations under this chapter that apply to the selling or assigning licensee<\/span>. If a licensee<\/span> sells or assigns a short-term loan<\/span> or its servicing, the licensee<\/span> shall provide to the borrower written notice and the information needed to make future payments no later than 10 days before the borrower’s next payment due date. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

23.<\/span> A licensee<\/span> shall not make a loan to a borrower that includes an acceleration clause or demand feature that permits the licensee<\/span>, in the event the borrower fails to meet the repayment terms for any outstanding balance, to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance, unless both of the following conditions are met: (i) not earlier than 10 days after the borrower’s payment was due, the licensee<\/span> provides written notice to the borrower of the termination of the loan and (ii) in addition to the outstanding balance, the licensee<\/span> collects only prorated interest<\/span> and the fees earned up to termination of the loan. For purposes of this subdivision, the outstanding balance and prorated interest<\/span> and fees shall be calculated as if the borrower had voluntarily prepaid the loan in full on the date of termination. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

24.<\/span> A licensee<\/span> may not file or initiate a legal proceeding of any kind against a borrower until 60 days after the date of default<\/span> on a short-term loan<\/span>, during which period the licensee<\/span> and borrower may voluntarily enter into a repayment arrangement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

25.<\/span> A licensee<\/span> shall not recommend to a borrower that the borrower obtain a loan for a dollar amount that is higher than the borrower has requested. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

26.<\/span> A licensee<\/span> may not engage in any unfair, misleading, deceptive, or fraudulent acts or practices in the conduct of its business. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

27.<\/span> A licensee<\/span> shall include as part of every loan application a question regarding whether the potential borrower has been approached, including via telephone or electronic means, by any person<\/span> to send money in consideration of receiving money via a government or lottery organization. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nREQUIRED AND PROHIBITED BUSINESS METHODS (\u00a7 6.2-1816)\n\nEach licensee shall comply with the following requirements and prohibitions:\n\n1. A licensee shall not make a loan that does not comply with § 6.2-1816.1.\n\n2. A licensee shall not charge, collect, or receive, directly or indirectly,\ncredit insurance premiums, charges for any ancillary product sold, charges for\ndisbursing loan proceeds or refunds including check-cashing charges and any\nother charges for negotiating forms of payment other than cash, charges for\nbrokering or obtaining a loan, or any fees, interest, or charges in connection\nwith a loan, other than fees and charges permitted by § 6.2-1817.\n\n3. A licensee shall not obtain any agreement from the borrower (i) giving the\nlicensee or any third person power of attorney or authority to confess judgment\nfor the borrower; (ii) authorizing the licensee or any third party to bring suit\nagainst the borrower in a court outside the Commonwealth; or (iii) waiving the\nborrower’s right to legal recourse or any other right the borrower has\nunder any otherwise applicable provision of state or federal law.\n\n4. A licensee shall not make a loan to a person if that person is obligated upon\nany loan to a person licensed under Chapter 22 (§ 6.2-2200 et seq.). Prior\nto making a loan, a licensee shall make a reasonable attempt to verify the\nborrower’s eligibility under this subsection that includes reviewing the\nfiles of any affiliate that is licensed under Chapter 22. Unless the Commission\nrequires otherwise by administrative rule or policy statement, a licensee may\nrely on the loan applicant’s written representations with respect to the\napplicant’s obligations to lenders that are licensed under Chapter 22\n(§ 6.2-2200 et seq.) but are not affiliates of the licensee, and a licensee\nis not subject to any administrative penalty or civil liability if such\nrepresentations are later determined to be inaccurate.\n\n5. A licensee shall not cause any person to be obligated to the licensee in any\ncapacity at any time in the principal amount of more than $2,500.\n\n6. Except as provided in § 6.2-1818.1, a licensee shall not refinance,\nrenew, or extend any short-term loan or make a loan to a person if the loan\nwould cause the person to have more than one short-term loan from any licensee\noutstanding at the same time.\n\n7. A licensee shall not cause a borrower to be obligated upon more than one loan\nat any time.\n\n8. A check accepted by a licensee as security for any loan shall be dated no\nearlier than the date of the first required loan payment shown in the loan\nagreement.\n\n9. Notwithstanding any provision of § 8.01-226.10 to the contrary, a\nlicensee shall not threaten, or cause to be instigated, criminal proceedings\nagainst a borrower if a check given as security for a loan is dishonored or for\nany reason related to the borrower’s failure to pay any sum due under a\nloan agreement.\n\n10. A licensee shall not (i) accept the title or registration of a vehicle, real\nor personal property, or any interest in any property other than a check payable\nto the licensee as security for a loan; (ii) create or accept any remotely\ncreated check, as defined in 12 C.F.R. § 229.2(fff), in connection with a\nloan; (iii) draft funds electronically from a borrower’s account without\nexpress written authorization from the borrower; or (iv) fail to stop attempts\nto draft funds electronically from a borrower’s account upon request from\nthe borrower or his agent. Nothing in this section shall prohibit the conversion\nof a negotiable instrument into an electronic form for processing through the\nautomated clearing house system.\n\n11. A licensee shall not present a check, negotiable order of withdrawal, share\ndraft, or other negotiable instrument that has been previously presented by the\nlicensee and subsequently returned dishonored for any reason, unless the\nlicensee obtains new written authorization from the borrower to present the\npreviously returned item.\n\n12. A licensee shall not attempt to draft funds electronically from a\nborrower’s account after two consecutive attempts have failed, unless the\nlicensee obtains new written authorization from the borrower to transfer or\nwithdraw funds electronically from the borrower’s account.\n\n13. A licensee shall not make a loan to a borrower to enable the borrower to (i)\npay for any other product or service sold at the licensee’s office\nlocation or (ii) repay any amount owed to the licensee or an affiliate of the\nlicensee in connection with another credit transaction.\n\n14. Loan proceeds shall be disbursed in cash or by the licensee’s business\ncheck. No fee shall be charged by the licensee or an affiliate for cashing a\nloan proceeds check.\n\n15. A check given as security for a loan shall not be negotiated to a third\nparty.\n\n16. Upon receipt of a check given as security for a loan, the licensee shall\nstamp the check with an endorsement stating: “This check is being\nnegotiated as part of a short-term loan pursuant to Chapter 18 (§ 6.2-1800\net seq.) of Title 6.2 of the Code of Virginia, and any holder of this check\ntakes it subject to all claims and defenses of the maker.”\n\n17. Before entering into a short-term loan, the licensee shall provide each\nborrower with a pamphlet, in form consistent with regulations adopted by the\nCommission, explaining in plain language the rights and responsibilities of the\nborrower and providing a toll-free number at the Commission for assistance with\ncomplaints.\n\n18. Each licensee shall conspicuously post in each approved office (i) a\nschedule of fees and interest charges, which shall include examples using a $300\nloan repaid in three months, a $500 loan repaid in five months, and a $1,000\nloan repaid in 10 months, and (ii) a notice containing the following statement:\n“If you wish to file a complaint against us, you may contact the Bureau of\nFinancial Institutions at [insert contact information].” The Commission\nshall furnish licensees with the appropriate contact information.\n\n19. A licensee shall not knowingly make a short-term loan to a person who is a\nmember of the military services of the United States or the spouse or other\ndependent of a member of the military services of the United States. Prior to\nmaking a short-term loan, every licensee shall inquire of every prospective\nborrower if he is a member of the military services of the United States or the\nspouse or other dependent of a member of the military services of the United\nStates. The loan documents shall include verification that the borrower is not a\nmember of the military services of the United States or the spouse or other\ndependent of a member of the military services of the United States.\n\n20. In collecting or attempting to collect a short-term loan, a licensee shall\ncomply with the restrictions and prohibitions applicable to debt collectors\ncontained in the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et\nseq.) regarding harassment or abuse, false or misleading misrepresentations, and\nunfair practices in collections.\n\n21. A licensee shall not contact a borrower for any reason other than (i) for\nthe borrower’s benefit regarding upcoming payments, options for obtaining\nloans, payment options, payment due dates, the effect of default, or, after\ndefault, receiving payments or other actions permitted by the licensee; (ii) to\nadvise the borrower of missed payments or dishonored checks; or (iii) to assist\nthe transmittal of payments via a third-party mechanism.\n\n22. A short-term loan agreement shall not be sold or otherwise assigned to any\nother person who is not also a licensee, and if a loan agreement or its\nservicing is sold or assigned to another licensee, the buyer or assignee of the\nloan agreement shall be subject to the same obligations under this chapter that\napply to the selling or assigning licensee. If a licensee sells or assigns a\nshort-term loan or its servicing, the licensee shall provide to the borrower\nwritten notice and the information needed to make future payments no later than\n10 days before the borrower’s next payment due date.\n\n23. A licensee shall not make a loan to a borrower that includes an acceleration\nclause or demand feature that permits the licensee, in the event the borrower\nfails to meet the repayment terms for any outstanding balance, to terminate the\nloan in advance of the original maturity date and to demand repayment of the\nentire outstanding balance, unless both of the following conditions are met: (i)\nnot earlier than 10 days after the borrower’s payment was due, the\nlicensee provides written notice to the borrower of the termination of the loan\nand (ii) in addition to the outstanding balance, the licensee collects only\nprorated interest and the fees earned up to termination of the loan. For\npurposes of this subdivision, the outstanding balance and prorated interest and\nfees shall be calculated as if the borrower had voluntarily prepaid the loan in\nfull on the date of termination.\n\n24. A licensee may not file or initiate a legal proceeding of any kind against a\nborrower until 60 days after the date of default on a short-term loan, during\nwhich period the licensee and borrower may voluntarily enter into a repayment\narrangement.\n\n25. A licensee shall not recommend to a borrower that the borrower obtain a loan\nfor a dollar amount that is higher than the borrower has requested.\n\n26. A licensee may not engage in any unfair, misleading, deceptive, or\nfraudulent acts or practices in the conduct of its business.\n\n27. A licensee shall include as part of every loan application a question\nregarding whether the potential borrower has been approached, including via\ntelephone or electronic means, by any person to send money in consideration of\nreceiving money via a government or lottery organization.\n\nHISTORY: 2002, c. 897, \u00a7 6.1-459; 2003, c. 593; 2004, c. 295; 2005, c. 571;\n2008, cc. 849, 876; 2010, c. 794; 2016, c. 501; 2020, cc. 1215, 1258; 2023, c.\n287.","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}}