Virginia Payday Loan Regulations
Payday loans have the following regulations as laid forth by the Commonwealth of Virginia. It is important for the lender to be aware of these regulations to avoid fines, license suspension, and up to license revocation.
Borrowers need to be aware of their rights under these same regulations, so that they can protect themselves from undue financial harm.
Requirements for Licensees
- Licensees must have at least $25,000 in liquid assets per location
- Licensees must keep documentation for a borrower's pay cycle. This documentation may be a written loan application, or a copy of a borrower's pay stub (or similar documentation) that demonstrates the pay cycle.
- Electronic debits of any kind are not allowed, such as the Automated Clearing House network.
- The amount of the check given by a borrower to a licensee as security for a payday loan cannot exceed the sum of the principal, interest, and fees of the payday loan
- It is illegal to make a payday loan to a member of the US military, their spouse, or other dependent.
- Licensees are subject to annual fees and reporting.
- Requests for information from the bureau must be returned within 30 days of the request
- Borrowers can cancel a loan, by end of the next business day after a loan is obtained, without being subject to any fees or interest.
- Borrowers have the right to prepay their loan in full. The interest accrued will be calculated at a pro-rata rate.
- Borrowers may prepay in increments of $5 or more, without charge. Unless prepaid in full, the payment schedule, interest charges, and any fees will not be changed.
These are only some regulations of payday loans in Virginia. Those listed are intended to highlight some of the more important rules and rights, for licensees and borrowers, respectively. For more information and full regulation, please visit: http://www.scc.virginia.gov/bfi/reg_inst/pay.aspx.