On July 12, the Virginia State Corporation Commission (Commission) issued an order amending regulations for short-term lending licensees under Va. Code § 6.2-1800, et seq. (Chapter 18). This licensing regime stems from the Virginia General Assembly’s passage of the Fairness in Lending Act that took effect on January 1.
The Commission’s Bureau of Financial Institutions proposed amendments because Chapters 1215 and 1258 of the 2020 Virginia Acts of Assembly (Chapters 1215 and 1258) made extensive revisions to Chapter 18, which became effective on January 1. The proposed amendments primarily align the Commission’s existing regulations governing short-term lenders with the revisions imposed by Chapters 1215 and 1258, eliminate obsolete provisions and references, and clarify certain aspects of the legislation. The amended regulations become effective on August 1.
Among other things, the amended regulations modify: (1) the pamphlet language licensees must provide applicants for a short-term loan; (2) information posting requirements on a licensee’s website and at a licensee’s physical location(s); and (3) licensees’ annual reporting requirements. The Commission elected not to raise the database inquiry fee, a fee that licensees must pay for every short-term loan consummated. This fee will remain at $1.98 per loan, and Commission regulations will be updated to state that the fee will be “set by the Commission.”
Troutman Pepper has experience advising short-term lending licensees on compliance with the Commission’s regulations and the Virginia office of attorney general’s authority to investigate and enforce compliance under the Fairness in Lending Act. Please contact Andy Flavin or Chris Carlson with questions.