1 

                                                           

Present: Kinser, C.J., Lemons, Millette, and Mims, JJ., and 

Lacy and Koontz, S.JJ. 

WILMA L. RUBY 

 OPINION BY 

v. Record No. 100287 JUSTICE LEROY F. MILLETTE, JR. 

 APRIL 21, 2011 

CASHNET, INC., 

D/B/A CASH ADVANCE CENTERS 

FROM THE CIRCUIT COURT OF SHENANDOAH COUNTY 

Dennis L. Hupp, Judge 

 Under former Code § 6.1-459(6)(i) (which is now codified at 

Code § 6.2-1816(6)(i)), a payday lender is prohibited from 

“refinanc[ing], renew[ing] or extend[ing] any payday loan.”1 In 

this case, we must decide whether a payday lender violates this 

provision when it makes a loan to a borrower immediately after 

the borrower repays in full a previous loan. We hold that it 

does. 

I. BACKGROUND 

 On a monthly basis from March 2005 through November 2007, 

Wilma A. Ruby entered into a total of 33 payday-loan agreements 

with Cashnet, Inc., d/b/a Cash Advance Centers (Cashnet). The 

1

 Effective October 1, 2010, this and the other provisions 

of the Payday Loan Act (Act), former Code §§ 6.1-444 through -

471, were repealed and recodified in Chapter 18 of Title 6.2, 

which is entitled “Payday Lenders.” See 2010 Acts ch. 794. As 

applied to the issues raised in this case, the recodification 

did not materially alter any relevant provision of the Act and, 

accordingly, we will refer to the current Code sections in this 

opinion. 
2 

amount of each loan increased over time, starting at $200 and 

reaching $500, the maximum amount allowed under the Act. Code 

§ 6.2-1816(5). A typical loan/repayment cycle occurred as 

follows: 

On April 3, 2007, Wilma Ruby paid $575.00 in cash 

to Cashnet. 

 Immediately thereafter on April 3, 2007, Wilma 

Ruby and Cashnet entered into another Payday Loan 

Agreement . . . . Under the agreement Cashnet loaned 

$500.00 to Wilma Ruby. Wilma Ruby was to repay the 

$500.00 plus a 15% finance charge of $75.00 (for a 

total of $575.00) to Cashnet by May 3, 2007. 

 On May 3, 2007, Wilma Ruby paid $575.00 in cash 

to Cashnet. 

 Immediately thereafter on May 3, 2007, Wilma Ruby 

and Cashnet entered into another Payday Loan Agreement 

. . . . Under the agreement Cashnet loaned $500.00 to 

Wilma Ruby. Wilma Ruby was to repay the $500.00 plus 

a 15% finance charge of $75.00 (for a total of 

$575.00) to Cashnet by June 29, 2007. 

This cycle continued until November 2, 2007, when Ruby entered 

into her final payday-loan agreement with Cashnet for $500. She 

did not repay the loan. 

 In 2008, Ruby sued Cashnet, claiming that its lending 

practices ran afoul of the Act. Specifically, she alleged that 

each loan Cashnet made to her from October 2006 to November 2007 

was a refinancing, renewal or extension of a previous loan, in 

violation of Code § 6.2-1816(6)(i). She further alleged that 

her refinanced, renewed or extended loan with Cashnet carried an 
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annual percentage rate (approximately 180%) that exceeded the 

15% finance fee allowed under former Code § 6.1-460.2 She sought 

the return of interest paid, actual or statutory damages, 

whichever was greater, and attorney’s fees. 

 A bench trial was held on Ruby’s claims. The circuit court 

ruled in favor of Cashnet, holding that “the loans at issue 

[did] not constitute a refinance, renewal or extension” and, 

therefore, did not violate the Act. In so concluding, the 

circuit court relied on amendments that the General Assembly 

made to former Code § 6.1-459(6) in 2008.3 Among other things, 

those amendments added a provision prohibiting a lender from 

“mak[ing] a loan to a borrower on the same day that a borrower 

paid or otherwise satisfied in full a previous payday loan.” 

Code § 6.2-1816(6)(iii). The circuit court reasoned that, in 

adding this provision, “the General Assembly was recognizing 

that [the] practice [of making such a loan] was not previously 

prohibited.” The circuit court also noted that “the way [former 

Code § 6.1-459(6)] is written and the way the amendment is 

2

 A lender may now charge a finance fee of 20%. See 2008 

Acts chs. 849, 876 (amending former Code § 6.1-460 effective 

January 1, 2009); see also Code § 6.2-1817(B). 

3

 The amendments by 2008 Acts chs. 849 and 876 were 

identical. 
4 

written really suggests more that it is an amendment to the law, 

a change in the law as opposed to simply a mere clarification.” 

 On appeal, Ruby contends that the circuit court erred in 

ruling in favor of Cashnet because its “practice of making a 

payday loan to [her] immediately after the preceding payday loan 

was paid in full [was] a renewal and/or refinancing of the loan 

as those terms are plainly understood.”4 She further argues that 

the circuit court erred in construing the 2008 amendments to 

former Code § 6.1-459(6) “as creating a new substantive 

restriction,” rather than “a clarification of the prohibition of 

refinance, renewal, and extension as it existed in 2002.” 

II. DISCUSSION 

Whether Cashnet’s practice of making a loan to Ruby 

immediately after she repaid in full a previous loan was a 

refinancing or renewal within the meaning of Code § 6.2-

1816(6)(i) is a question of statutory interpretation. “As such, 

‘it presents a pure question of law and is accordingly subject 

to de novo review by this Court.’ ” Commonwealth v. Amerson, 

281 Va. 414, 418, ___ S.E.2d ___, ___ (2011) (quoting Warrington 

                                                            4

 Since Ruby urges that “refinancing” and “renewal” 

“directly describe the transactions at issue” here, we focus our 

discussion on those terms. In so doing, we express no opinion 

as to whether the transactions were an “extension” under Code 

§ 6.2-1816(6). 
5 

v. Commonwealth, 280 Va. 365, 370, 699 S.E.2d 233, 235 (2010) 

(some internal quotation marks omitted)). 

 As with any question of statutory interpretation, our 

primary objective is “‘to ascertain and give effect to 

legislative intent,’” as expressed by the language used in the 

statute. Id. (quoting Conger v. Barrett, 280 Va. 627, 630, 702 

S.E.2d 117, 118 (2010)). “‘When the language of a statute is 

unambiguous, we are bound by the plain meaning of that 

language.’” Kozmina v. Commonwealth, 281 Va. 347, 349, ___ 

S.E.2d ___, ___ (2011) (quoting Conyers v. Martial Arts World of 

Richmond, Inc., 273 Va. 96, 104, 639 S.E.2d 174, 178 (2007)). 

And if the language of the “ ‘statute is subject to more than 

one interpretation, we must apply the interpretation that will 

carry out the legislative intent behind the statute.’ ” Id. at 

349-50, ___ S.E.2d ___ (quoting Conyers, 273 Va. at 104, 639 

S.E.2d at 178). 

With these principles in mind, we turn to the terms of Code 

§ 6.2-1816(6)(i) at issue: “refinance” and “renew.” Since 

these terms are not defined in the Act, we accord them their 

“ordinary meaning.” James v. City of Falls Church, 280 Va. 31, 

43, 694 S.E.2d 568, 575 (2010); see also Hubbard v. Henrico, 255 

Va. 335, 340, 497 S.E.2d 335, 338 (1998) (“When . . . a statute 

contains no express definition of a term, the general rule of 
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statutory construction is to infer the legislature’s intent from 

the plain meaning of the language used.”). 

“Refinancing” is “[a]n exchange of an old debt for a new 

debt, as by negotiating a different interest rate or term or by 

repaying the existing loan with money acquired from a new loan.” 

 Black’s Law Dictionary 1394 (9th ed. 2009). And “renewal” is 

“[t]he re-creation of a legal relationship or the replacement of 

an old contract with a new contract, as opposed to the mere 

extension of a previous relationship or contract.” Id. at 1410. 

With a fixed income of only $624.00 per month, Ruby could 

not afford to repay in full her loan with Cashnet and meet her 

monthly expenses. Thus, each time she repaid in full one loan, 

she immediately had to obtain another, usually for the same or a 

greater amount. So if she had borrowed $500, for example, she 

would take her payment of $575.00 (the principal plus the 15% 

finance fee) to Cashnet, and a Cashnet employee would “fill out 

the papers and then give [her] $500.00 back.” 

At trial, Cashnet’s owner described this practice as making 

a “new loan” or “redo[ing] another loan.” By looking at the 

substance of the transactions between Cashnet and Ruby, however, 

it is plain that the proceeds from each new loan were being used 

to repay the previous loan. “Refinancing . . . results in the 

substitution of one debt for another”; “[a]n actual exchange of 
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money is . . . a mere formality if the obligation remains with 

the same creditor.” In re Biondo, 180 F.3d 126, 132-33, (4th 

Cir. 1999) (citations omitted). We therefore believe that each 

transaction between Cashnet and Ruby may aptly be described as a 

“refinancing,” as there was “[a]n exchange of an old debt for a 

new debt.” Black’s Law Dictionary, at 1394. 

We further believe that each transaction between Cashnet 

and Ruby may aptly be described as a “renewal.” This is so 

because each time Cashnet made a loan to Ruby after she repaid 

in full a previous loan there was a “re-establishment of a preexisting debtor-creditor relationship employing similar, if not 

identical, terms” – which is “[t]he hallmark of credit 

‘renewal.’ ” In re Biondo, 180 F.3d at 132. 

 Unlike the circuit court, we do not think that construing 

the terms “refinancing” or “renewal” to prohibit the practice at 

issue in this case renders the 2008 amendments to former Code 

§ 6.1-459(6) redundant. Those amendments, as Ruby contends, go 

beyond the circumstances of this case. In addition to more 

clearly prohibiting the practice at issue here, the amendments 

extended limitations upon a borrower’s ability to obtain payday 

loans with other lenders and limitations upon the total number 

of payday loans a borrower may obtain over various periods of 

time. Code § 6.2-1816(6)(iii)-(vi). 
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Before the amendments, for instance, a lender could make a 

loan to a borrower on the same day that the borrower repaid in 

full a previous loan with a different lender. Now, after the 

amendments, a lender may not engage in such a practice. That 

additional prohibition — while perhaps not directly addressing 

the availability of a refinancing, renewal or extension — 

provides another layer of protection for those borrowers who 

(like Ruby) are most susceptible to being trapped in a vicious 

cycle of debt. We therefore conclude that the 2008 amendments 

were both a clarification of previously prohibited practices of 

refinancing, renewal or extension, as well as an additional 

prohibition against other lending practices. 

III. CONCLUSION 

 For these reasons, we hold that Cashnet’s practice of 

making a loan to Ruby immediately after she repaid a previous 

loan was a refinancing or renewal under Code § 6.2-1816(6)(i) 

and, therefore, in violation of the Act. Consequently, we 

reverse the circuit court’s judgment in favor of Cashnet and 

remand the case for further proceedings consistent with this 

opinion. 

Reversed and remanded.