                                 CODE OF VIRGINIA

OPEN-END CREDIT PLANS (§ 6.2-312)

A. The provisions of this section shall apply to any person that makes,
arranges, or negotiates a loan or otherwise extends credit under an open-end
credit plan, whether or not the person maintains a physical presence in the
Commonwealth. However, the provisions of this section shall not apply to any
bank, savings institution, or credit union as such terms are defined in &#xA7;
6.2-300.

B. Notwithstanding any provision of this chapter other than &#xA7; 6.2-327, and
except as provided in subsections D, E, and F, a seller or lender engaged in
extending credit under an open-end credit plan may impose, on credit extended
under the plan, finance charges and other charges and fees at such rates and in
such amounts and manner as may be agreed upon by the creditor and the obligor,
if under the plan a finance charge is imposed upon the obligor if payment in
full of the unpaid balance is not received at the place designated by the
creditor prior to the next billing date, which shall be at least 25 days later
than the prior billing date.

C. Notwithstanding the provisions of &#xA7; 6.2-327 and subject to the
provisions of &#xA7; 8.9A-204.1, any loan made under this section may be secured
in whole or in part by a subordinate mortgage or deed of trust on residential
real estate improved by the construction thereon of housing consisting of one-
to four-family dwelling units.

D. The following persons are prohibited from engaging in the extension of credit
under an open-end credit plan described in this section: (i) any person licensed
under Chapter 18 (&#xA7; 6.2-1800 et seq.), any person affiliated through common
ownership with such licensed person, and any person that is a subsidiary of such
licensed person; (ii) any person licensed under Chapter 22 (&#xA7; 6.2-2200 et
seq.), any person affiliated through common ownership with such licensed person,
and any person that is a subsidiary of such licensed person; and (iii) any
person conducting business at any office, suite, room, or place of business
where a person described in clause (i) or (ii) is conducting business.

E. No person shall make a loan or otherwise extend credit under an open-end
credit plan or any other lending arrangement that is secured by a non-purchase
money security interest in a motor vehicle, as such term is defined in &#xA7;
6.2-2200, unless such loan or extension of credit is made in accordance with, or
is exempt from, the provisions of Chapter 22 (&#xA7; 6.2-2200 et seq.).

F. A seller or lender engaged in extending credit under an open-end credit plan
to a resident of the Commonwealth or to any individual in the Commonwealth shall
not charge, collect, or receive, directly or indirectly, credit insurance
premiums, charges for any ancillary product sold, charges for negotiating forms
of loan proceeds or refunds other than cash, charges for brokering or obtaining
an extension of credit, or any fees, interest, or charges in connection with
credit extended under the plan, other than (i) interest at a simple annual rate
not to exceed 36 percent and (ii) a participation fee not to exceed $50 per
year. Any extension of credit made in violation of this subsection is void and
no person shall have the right to collect, receive, or retain any principal,
interest, fees, or other charges in connection with the extension of credit.

G. Any violation of the provisions of this section shall constitute a prohibited
practice in accordance with &#xA7; 59.1-200 and shall be subject to any and all
of the enforcement provisions of the Virginia Consumer Protection Act (&#xA7;
59.1-196 et seq.).

H. A third party shall not engage in the extension of credit under an open-end
credit plan described in this section.

HISTORY: 1987, cc. 622, 639, 714, § 6.1-330.78; 1992, Sp. Sess., c. 4; 1997, c.
112; 2009, cc. 784, 860; 2010, cc. 477, 794; 2020, cc. 1215, 1258.