Virginia payday loan industry is regulated by House Bill No. 1990 – a document depicting normative acts and containing links to regulation sections. The legislation of Virginia allows providing up to $500 cash advance loans. Each loan borrowed can be subjected up to 20% fee, meaning you will have to return $20 per each one hundred borrowed. The local regulations do not allow having more than 1 outstanding loan, so an additional $5 fee can be charged to verify you don’t have active cash advance loans.
Apart from up to 20% possible fee, you will be expected to cover the interest rate that shall not exceed a 36% mark.
The lenders are obliged to provide comprehensive information on loan solutions they offer, written in a plain language. Thus, each offer must indicate the amount issued within the loan, a breakdown of interest rate and any additional charges and the APR rate. Virginia lenders are required to focus the attention of the users on the short-term nature of payday loan solutions – this information should be clear and visible.
To conduct the business on a legal basis a lending enterprise should be registered in the state of Virginia and complete the licensing procedure. The businesses are required to have authorized locations that can be either used as pawn shops or company offices.
In aspiration to protect citizens of Virginia from handcuffing terms, a number of regulations and rules are adopted. Thus, if the repayment due date is missed, the interest rate is decreased to 6% annually. The client reserves an opportunity to cancel the loan no longer than the next business day; in this case the amount borrowed must be returned fully before the end of the working day of the lending agency.
Virginia lenders are prohibited to use criminal proceedings threats in case the borrower fails to repay the loan before the due date according to the contract. No collaterals are allowed to be taken. Lending agencies are obliged to meet guidelines and recommendations of Fair Debt Collection Practices Act, so the clients are empowered to report of abuses from the lenders; and if the fact is confirmed, legal action is taken against the lender (from exemption from repaying the loan to lender’s license cessation).
No legal action can be taken unless 60 days from the loan’s repayment due date has passed; getting the permission to withdraw loan amount by the means of electronic banking instruments is excluded.
If the borrower fails to repay the loan on time, an extended repayment option can be requested. The opportunity, implying repayment in 25% parts within a 60 days period, can be used no more than once a year. The option doesn’t allow collecting an interest rate and setting timeframes. However, if the extended repayment plan deadline is missed, the lending agency is empowered to request repaying the loan immediately. Taking advantage of this option also implies a temporary 90 days prohibition on taking another cash advance loan.