                                 CODE OF VIRGINIA

REQUIRED AND PROHIBITED BUSINESS METHODS (§ 6.2-2215)

Each licensee shall comply with the following requirements and prohibitions:

1. A licensee shall not make a loan that does not comply with &#xA7; 6.2-2215.1;

2. 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 &#xA7; 6.2-2216;

3. A licensee shall not make a loan to a person if that person is obligated upon
any loan to a person licensed under Chapter 18 (&#xA7; 6.2-1800 et seq.). Prior
to making a loan, a licensee shall make a reasonable attempt to verify the
prospective borrower&#8217;s eligibility under this section which shall include
reviewing the files of any affiliate that is licensed under Chapter 18. Unless
the Commission requires otherwise by administrative rule or policy statement, a
licensee may rely on the loan applicant&#8217;s written representations with
respect to the applicant&#8217;s obligations to lenders that are licensed under
Chapter 18 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;

4. Except as provided in &#xA7; 6.2-2216.2, a licensee shall not refinance,
renew, or extend any title loan or make a loan to a person if the loan would
cause the person to have more than one title loan from any licensee outstanding
at the same time;

5. Before entering into a motor vehicle title loan, a licensee shall provide
each borrower with a pamphlet, in a 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;

6. 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;

7. 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&#8217;s right to legal recourse or any other right the borrower has
under any otherwise applicable provision of state or federal law;

8. A motor vehicle title loan agreement shall not (i) contain a provision by
which a person acting on behalf of the licensee is treated as an agent of the
borrower in connection with its formation or execution other than for purposes
of filing or releasing a lien with the state where the motor vehicle is
registered or (ii) be sold or otherwise assigned to any other person who is not
also a licensee, and if a loan agreement 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 motor vehicle title loan or its servicing is sold or assigned, a
licensee shall provide to the borrower written notice and the information needed
to make future payments no later than 10 days before the borrower&#8217;s next
payment due date;

9. Loan proceeds shall be disbursed (i) in cash, (ii) by the licensee&#8217;s
business check, or (iii) by debit card provided that the borrower will not be
directly charged a fee by the licensee in connection with the withdrawal of the
funds. No fee shall be charged by the licensee or affiliate for cashing a title
loan proceeds check;

10. A licensee shall not (i) accept a check, real or personal property, or any
interest in any property other than the title of one motor vehicle owned by the
borrower as security for a title loan; (ii) create or accept any remotely
created check, as defined in 12 C.F.R. &#xA7; 229.2(fff), in connection with a
loan; (iii) draft funds electronically from a borrower&#8217;s account without
express written authorization from the borrower; (iv) fail to stop attempts to
draft funds electronically from a borrower&#8217;s account upon request from the
borrower or his agent; or (v) require or accept from a borrower a set of keys to
a motor vehicle that secures a loan. Nothing in this subdivision shall prohibit
the conversion of a negotiable instrument into an electronic form for processing
through the automated clearing house system. For purposes of this subdivision,
&#8220;motor vehicle&#8221; includes any accessories or accessions to a motor
vehicle that are affixed thereto;

11. A licensee shall not attempt to draft funds electronically from a
borrower&#8217;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&#8217;s account;

12. A licensee shall not make a motor vehicle title loan if, on the date the
loan agreement is signed by the borrower, the motor vehicle&#8217;s certificate
of title evidences that the motor vehicle is security for another loan or
otherwise is encumbered by a lien;

13. A licensee shall (i) hold the certificate of title to the motor vehicle
throughout the period that the loan agreement is in effect and (ii) within seven
days following the date of the motor vehicle title loan agreement, file to have
its security interest in the motor vehicle added to its certificate of title by
complying with the requirements of &#xA7; 46.2-637, or in the case of a motor
vehicle registered in a state other than the Commonwealth by complying with that
state&#8217;s requirements for perfecting a security interest in a motor
vehicle;

14. A licensee shall not knowingly make a title loan to a borrower to enable the
borrower to (i) pay for any other product or service sold at the
licensee&#8217;s business location or by an affiliate or (ii) repay any amount
owed to the licensee or an affiliate of the licensee in connection with another
credit transaction;

15. A licensee shall conspicuously post in each licensed location (i) a schedule
of finance charges on a title loan, using as an example a $1,000 loan that is
repaid over a 12-month period and (ii) a notice containing the following
statement: &#8220;Should you wish to file a complaint against us, you may
contact the Bureau of Financial Institutions at [insert contact
information].&#8221; The Commission shall furnish licensees with the appropriate
contact information;

16. A licensee or affiliate shall not knowingly make a motor vehicle title loan
to a covered member of the armed forces or a dependent of such member. Prior to
making a motor vehicle title loan, every licensee or affiliate shall inquire of
every prospective borrower if the individual is a covered member of the armed
forces or a dependent of a covered member. The prospective borrower shall affirm
in writing to the licensee or affiliate if he is not a covered member of the
armed forces or a dependent of a covered member. For purposes of this section,
&#8220;covered member of the armed forces&#8221; means a person on active duty
under a call or order that does not specify a period of 30 days or less or on
active guard and reserve duty. For purposes of this section, &#8220;dependent of
a covered member of the armed forces&#8221; means the member&#8217;s spouse, the
member&#8217;s child as defined by 38 U.S.C. &#xA7; 101 (4), or an individual
for whom the member provided more than one-half of the individual&#8217;s
support for 180 days immediately preceding the date the motor vehicle title loan
is sought;

17. In collecting or attempting to collect a motor vehicle title 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. &#xA7;
1692 et seq.) regarding harassment or abuse, false, misleading or deceptive
statements or representations, and unfair practices in collections;

18. A licensee shall not contact a borrower for any reason other than (i) for
the borrower&#8217;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; (iii) to advise the
borrower regarding a repossessed or surrendered vehicle; or (iv) to assist the
transmittal of payments via a third-party mechanism;

19. A licensee shall not make a loan to a borrower that includes an acceleration
clause or a 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&#8217;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 the date the loan was terminated or
the borrower&#8217;s vehicle was repossessed or surrendered, whichever is
earlier. For purposes of this subsection, 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, repossession, or surrender;

20. 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;

21. A licensee shall not (i) engage in any unfair, misleading, deceptive, or
fraudulent acts or practices in the conduct of its business or (ii) threaten, or
cause to be instigated, criminal proceedings against a borrower arising from the
borrower&#8217;s failure to pay any sum due under a loan agreement;

22. A licensee shall provide a safe place for the keeping of all certificates of
title while they are in its possession;

23. A licensee may require a borrower to purchase or maintain property insurance
upon a motor vehicle securing a title loan made pursuant to this chapter. A
licensee may not require the borrower to obtain such insurance from a particular
provider; and

24. If a licensee or any person acting at its direction takes possession of a
motor vehicle securing a title loan, the vehicle and any personal items in it
shall be stored in a secure location.

HISTORY: 2010, c. 477, § 6.1-495; 2011, c. 418; 2016, c. 501; 2020, cc. 1215,
1258.