Virginia Administrative Code › Title 10 - FINANCE AND FINANCIAL INSTITUTIONS › Agency 5 - STATE CORPORATION COMMISSION › Chapter 210 - MOTOR VEHICLE TITLE LENDING › Section 10VAC5-210-30 - Motor vehicle title lending pamphlet

Current through Register Vol. 40, No. 24, July 15, 2024
A. A licensee shall provide each applicant
				for a motor vehicle title loan with a pamphlet that complies with subsections C
				and D of this section.
B. The end
				of each application form shall contain a separate acknowledgment stating the
				following: "I acknowledge that I have received the pamphlet entitled "Motor
				Vehicle Title Lending in the Commonwealth of Virginia - Borrower Rights and
				Responsibilities." The acknowledgment shall be initialed and dated by each
				applicant for a motor vehicle title loan.
C. The pamphlet shall be printed in at least
				12-point type and be separate from all other papers, documents, or notices
				obtained or furnished by the licensee. The pamphlet shall contain the exact
				language prescribed in subsection D of this section. A licensee shall not
				modify or supplement the required text of the pamphlet. The title of the
				pamphlet ("Motor Vehicle Title Lending in the Commonwealth of Virginia -
				Borrower Rights and Responsibilities") and the headings for the individual
				sections of the pamphlet (e.g., "In General," " Information from Lender," etc.)
				shall be in bold type.
D. The
				required text of the pamphlet shall be as follows:
MOTOR VEHICLE TITLE LENDING IN THE COMMONWEALTH OF
				  VIRGINIA
BORROWER RIGHTS AND RESPONSIBILITIES
Please take the time to carefully review the information
				  contained in this pamphlet. It is designed to advise you of your rights and
				  responsibilities in connection with obtaining a motor vehicle title loan under
				  Chapter 22 (§
										6.2-2200 et seq.) of
				  Title 6.2 of the Code of Virginia.
If you have any questions about motor vehicle title lending
				  or want additional information, you may contact the Virginia State Corporation
				  Commission's Bureau of Financial Institutions toll-free at (800) 552-7945 or at
				  scc.virginia.gov.
In General:
You are responsible for evaluating
				  whether a motor vehicle title loan is right for you. Alternatives may include
				  among other things less expensive short-term financing from another financial
				  institution, family, friends, or a cash advance on a credit card.
Information from Lender:
Virginia law prohibits
				  a motor vehicle title lender from providing you with any false, misleading, or
				  deceptive information.
Prohibition on Obtaining Loan if Motor Vehicle has
				  Existing Lien / One Loan at a Time:
Virginia law prohibits a motor
				  vehicle title lender from making a motor vehicle title loan to you if (i) your
				  certificate of title indicates that your motor vehicle is security for another
				  loan or has an existing lien; (ii) you currently have another motor vehicle
				  title loan from any other motor vehicle title lender conducting a motor vehicle
				  title lending business; or (iii) you currently have a short-term loan from any
				  lender that is licensed to make this type of loan under Chapter 18 (§
										6.2-1800 et seq.) of
				  Title 6.2 of the Code of Virginia.
Verification of Income:
Before making a motor
				  vehicle title loan to you, a lender must make a reasonable attempt to verify
				  and document your income.
Prohibition on Loans to Covered Members of the Armed
				  Forces and their Dependents:
Virginia law prohibits a motor vehicle
				  title lender from making motor vehicle title loans to covered members of the
				  armed forces and their dependents. If you are (i) on active duty under a call
				  or order that does not specify a period of 30 days or less; or (ii) on active
				  guard and reserve duty, then you are a covered member of the armed forces and a
				  motor vehicle title lender is prohibited from making a motor vehicle title loan
				  to you. A motor vehicle title lender is also prohibited from making a motor
				  vehicle title loan to you if (i) you are married to a covered member of the
				  armed forces; (ii) you are the child, as defined in
				  38
				  USC §
											101(4), of a
				  covered member of the armed forces; or (iii) more than one-half of your support
				  during the past 180 days was provided by a covered member of the armed
				  forces.
Certificate of Title / Other Security Interests:
Prior to obtaining a motor vehicle title loan, you will be required to
				  give a motor vehicle title lender the certificate of title for your motor
				  vehicle. The motor vehicle title lender is required to record its lien with the
				  motor vehicle department in the state where your motor vehicle is registered
				  and hold the certificate of title until your loan is repaid or satisfied in
				  full. The motor vehicle title lender cannot take an interest in more than one
				  motor vehicle as security for a motor vehicle title loan. Apart from your motor
				  vehicle and any accessories that are attached to it, the motor vehicle title
				  lender cannot take an interest in any other property you own as security for a
				  motor vehicle title loan.
Maximum Loan Amount:
A motor vehicle title
				  lender cannot loan you more than $2,500.
Minimum and Maximum Loan Term / Monthly
				  Payments:
Under Virginia law, your loan term cannot be more than 24
				  months. Your loan term also cannot be less than six months unless your total
				  monthly payment will not exceed the greater of (i) 5.0% of your verified gross
				  monthly income or (ii) 6.0% of your verified net monthly income. Your motor
				  vehicle title loan will be repayable in substantially equal monthly
				  installments of principal, fees, and interest combined.
Interest, Fees, and Charges:
A motor vehicle
				  title lender is permitted to charge you (i) interest at a simple annual rate
				  not to exceed 36%; and (ii) a monthly maintenance fee that does not exceed the
				  lesser of $15 or 8.0% of your originally contracted loan amount, provided that
				  the maintenance fee is not added to your loan balance on which interest is
				  charged. In addition to interest and the monthly maintenance fee, a motor
				  vehicle title lender may charge you a deposit item return fee for the actual
				  amount incurred by the motor vehicle title lender, not to exceed $25, if your
				  check or electronic payment is returned unpaid because the account on which it
				  was drawn was closed by you or contained insufficient funds, or you stopped
				  payment on the check or electronic payment.
If you make a payment more than seven calendar days after its
				  due date, a motor vehicle title lender may impose a late charge of up to 5.0%
				  of the amount of the payment, but not to exceed $20.
Note that if your originally contracted loan amount is $1,500
				  or less, a motor vehicle title lender cannot charge or receive from you a total
				  amount of fees and charges greater than 50% of your loan amount. If your loan
				  amount is more than $1,500, the total amount of fees and charges cannot exceed
				  60% of your loan amount.
A motor vehicle title lender is prohibited from accruing or
				  charging you interest on or after (i) the date the motor vehicle title lender
				  or a person acting on behalf of the lender repossesses your motor vehicle; or
				  (ii) 60 days after you fail to make a monthly payment on your loan, unless you
				  are hiding your motor vehicle.
Other than interest and the costs specifically mentioned in
				  this section and the section below ("Costs of Repossession and Sale"), no
				  additional amounts may be charged, collected, or received by a motor vehicle
				  title lender.
The interest, fees, and charges mentioned in this section may
				  not be charged, collected, or received unless they are included in your written
				  loan agreement.
Costs of Repossession and Sale:
A motor vehicle
				  title lender may charge you for any reasonable costs that it incurs in
				  repossessing and selling your motor vehicle if (i) you default on your motor
				  vehicle title loan; (ii) the motor vehicle title lender sends you a written
				  notice at least 10 days prior to repossession advising you that your motor
				  vehicle title loan is in default and that your motor vehicle may be repossessed
				  unless you pay the outstanding principal and interest; and (iii) you fail to
				  pay the amount owed prior to the date of repossession. However, the total
				  amount charged to you for the repossession and sale of your motor vehicle
				  cannot exceed 5.0% of your originally contracted loan amount. A motor vehicle
				  title lender is prohibited from charging you for any storage costs if the motor
				  vehicle title lender takes possession of your motor vehicle.
Written Loan Agreement:
A motor vehicle title
				  lender must provide you with a written loan agreement, which must be signed by
				  both you and an authorized representative of the motor vehicle title lender.
				  Your motor vehicle title loan agreement is a binding, legal document that
				  requires you to repay your loan. Make sure you read the entire loan agreement
				  carefully before signing and dating it. A motor vehicle title lender must
				  provide you with a copy of your signed loan agreement. If any provision of your
				  loan agreement violates Chapter 22 (§
										6.2-2200 et seq.) of
				  Title 6.2 of the Code of Virginia, the provision will not be enforceable
				  against you.
Property Insurance:
A motor vehicle title lender
				  may require you to purchase or maintain property insurance for your motor
				  vehicle. However, a motor vehicle title lender cannot require you to purchase
				  or maintain property insurance from or through a particular provider or list of
				  providers.
Authority to Prepare Checks / Electronic Payments /
				  Obtaining PINs:
A motor vehicle title lender is prohibited from
				  obtaining any agreement from you that gives the lender or a third party the
				  authority to prepare a check that is drawn upon your deposit account. If the
				  motor vehicle title lender is equipped to handle and willing to accept such
				  payments, you may make a payment on your loan by using a credit card, prepaid
				  card, debit card, or the Automated Clearing House system. However, the lender
				  is prohibited from obtaining or receiving a personal identification number
				  (PIN) for a credit card, prepaid card, debit card, or any other type of card in
				  connection with your loan. If you have authorized electronic payments for your
				  loan, you have the right to remove your authorization at any time.
Loan Proceeds:
You will receive your loan
				  proceeds in the form of (i) cash; (ii) a check from the motor vehicle title
				  lender; or (iii) a debit card. If you receive a check, the motor vehicle title
				  lender or an affiliate of the lender is prohibited from charging you a fee for
				  cashing the check. Similarly, a check casher located in the same office as the
				  motor vehicle title lender is prohibited from charging you a fee for cashing
				  the motor vehicle title lender's check. If you receive a debit card, the motor
				  vehicle title lender is prohibited from charging you an additional fee when you
				  withdraw or use the loan proceeds.
Using Motor Vehicle Title Loan to Purchase Products or
				  Services:
You are prohibited from using any of the money from your motor
				  vehicle title loan to purchase another product or service sold (i) at the motor
				  vehicle title lender's business location, or (ii) on or through the motor
				  vehicle title lender's website or mobile application.
Right to Cancel or Rescind:
You have the right
				  to cancel or rescind your motor vehicle title loan at any time prior to 5 p.m.
				  of the third business day immediately following the day you entered into the
				  loan agreement by either returning the loan proceeds check or paying the motor
				  vehicle title lender the amount advanced to you in cash or by certified check,
				  cashier's check, money order or, if the motor vehicle title lender is equipped
				  to handle and willing to accept such payments, by using a credit card, prepaid
				  card, debit card, or the Automated Clearing House system. If you timely cancel
				  or rescind your motor vehicle title loan, the motor vehicle title lender must
				  mark your original loan agreement with the word "canceled" and return it to you
				  along with your certificate of title.
Payments / Partial Payments / Prepayments /
				  Refinancing:
You are permitted to make payments on your motor vehicle
				  title loan by cash, certified check, cashier's check, money order, or if the
				  motor vehicle title lender is equipped to handle and willing to accept such
				  payments, by using a credit card, prepaid card, debit card, or the Automated
				  Clearing House system. You have the right to receive a dated receipt for each
				  payment made along with a statement of the balance remaining on your motor
				  vehicle title loan.
Additionally, you have the right to make a partial payment on
				  your motor vehicle title loan at any time prior to the maturity date of the
				  loan without penalty. However, a motor vehicle title lender may apply a partial
				  payment first to any amounts that are due and unpaid at the time of such
				  payment. If your motor vehicle title loan is current, a partial payment will
				  reduce your outstanding balance.
You also have the right to prepay your motor vehicle title
				  loan in full before its specified maturity date without penalty by paying the
				  motor vehicle title lender the total outstanding balance on your loan,
				  including any interest and fees that you may owe on your motor vehicle title
				  loan. If you prepay your loan in full or your loan is refinanced with another
				  motor vehicle title loan, the motor vehicle title lender must refund to you a
				  prorated portion of loan charges, except for any deposit item return fees and
				  late charges, based on a ratio of the number of days the loan was outstanding
				  and the number of days for which the loan was originally contracted. The lender
				  must provide you with the refund in the form of cash or a check as soon as
				  reasonably possible and no later than two business days after you prepay your
				  loan in full or your loan is refinanced. Your loan may be refinanced with
				  another motor vehicle title loan only if the new loan is made by the same motor
				  vehicle title lender (i.e., the lender who made the loan that you are currently
				  obligated to repay).
Lender to Return Original Loan Agreement and
				  Certificate of Title:
Within 10 days after the date that you repay your
				  motor vehicle title loan in full, the motor vehicle title lender must (i) mark
				  your original loan agreement with the word "paid" or "canceled" and return it
				  to you; (ii) take any action necessary to terminate its lien on your motor
				  vehicle's certificate of title; and (iii) return the certificate of title to
				  you. If you have any questions or concerns regarding your certificate of title,
				  you should contact the motor vehicle department in the state where your motor
				  vehicle is registered.
Failure to Repay:
Pay back your motor vehicle
				  title loan! Know when your payments are due and be sure to repay your motor
				  vehicle title loan on time and in full. IF YOU DO NOT REPAY YOUR MOTOR VEHICLE
				  TITLE LOAN IN ACCORDANCE WITH YOUR LOAN AGREEMENT, THE MOTOR VEHICLE TITLE
				  LENDER MAY REPOSSESS AND SELL YOUR MOTOR VEHICLE (see section below on
				  "Repossession and Sale of your Motor Vehicle").
In general, a motor vehicle title lender cannot seek a
				  personal money judgment against you if you fail to pay any amount owed in
				  accordance with your loan agreement. However, a motor vehicle title lender may
				  seek a personal money judgment against you if you impair the motor vehicle
				  title lender's security interest by (i) intentionally damaging or destroying
				  your motor vehicle; (ii) intentionally hiding your motor vehicle; (iii) giving
				  the motor vehicle title lender a lien on a motor vehicle that has an
				  undisclosed prior lien; (iv) selling your motor vehicle without the motor
				  vehicle title lender's written consent; or (v) securing another loan or
				  obligation with a security interest in your motor vehicle without the motor
				  vehicle title lender's written consent.
In collecting or attempting to collect a motor vehicle title
				  loan, a motor vehicle title lender is required to comply with the restrictions
				  and prohibitions applicable to debt collectors contained in the Fair Debt
				  Collection Practices Act,
				  15 USC §
											1692 et seq., regarding harassment or abuse;
				  false, misleading or deceptive statements or representations; and unfair
				  practices in collections. A motor vehicle title lender is also prohibited from
				  threatening or beginning criminal proceedings against you if you fail to pay
				  any amount owed in accordance with your loan agreement.
Repossession and Sale of your Motor Vehicle:
If
				  you do not repay your motor vehicle title loan in accordance with your loan
				  agreement, the motor vehicle title lender may repossess and sell your motor
				  vehicle in order to recover any outstanding amounts that you owe.
If a motor vehicle title lender repossesses your motor
				  vehicle, the motor vehicle title lender must (i) allow you to recover any
				  personal items from your motor vehicle promptly and at no cost, and (ii) send
				  you a written notice at least 15 days prior to the sale of your motor vehicle.
				  The notice will contain (i) the date and time after which your motor vehicle
				  may be sold; and (ii) a written accounting of the redemption amount, which is
				  the sum of the outstanding balance on your motor vehicle title loan, the amount
				  of interest accrued through the date the motor vehicle title lender took
				  possession of your motor vehicle, and any reasonable costs incurred to date by
				  the motor vehicle title lender in connection with repossessing and selling your
				  motor vehicle. At any time prior to the sale of your motor vehicle, you may
				  obtain your motor vehicle by paying the motor vehicle title lender the total
				  amount specified in the notice. Payment must be made in cash or by certified
				  check, cashier's check, money order or, if the motor vehicle title lender is
				  equipped to handle and willing to accept such payments, by using a credit card,
				  prepaid card, debit card, or the Automated Clearing House system.
Within 10 days of a motor vehicle title lender receiving
				  funds from the sale of your motor vehicle, you are entitled to receive all
				  proceeds from the sale in excess of the redemption amount specified in the
				  notice that the motor vehicle title lender sent you prior to selling your motor
				  vehicle. However, the motor vehicle title lender may reduce the amount that you
				  receive by any additional reasonable costs incurred by the motor vehicle title
				  lender in repossessing and selling your motor vehicle that were not included in
				  the redemption amount.
See section above on "Costs of Repossession and Sale" for
				  additional information regarding the conditions that must be met for a motor
				  vehicle title lender to collect the reasonable costs of repossessing and
				  selling your motor vehicle.
Legal Action Against Lender:
You have the right
				  to bring a civil action against a motor vehicle lender if you suffer a loss as
				  a result of the motor vehicle title lender violating any provision of Chapter
				  22 (§
										6.2-2200 et seq.) of
				  Title 6.2 of the Code of Virginia. If you are successful in your civil action,
				  you have the right to be reimbursed for reasonable attorney fees, expert
				  witness fees, and court costs you have incurred in connection with your civil
				  action. Losses suffered as the result of a motor vehicle title lender's
				  violation of Chapter 22 of Title 6.2 of the Code of Virginia may also be
				  pursued under the Virginia Consumer Protection Act (§
										59.1-196 et seq. of the
				  Code of Virginia), which in some cases permits consumers to recover actual and
				  punitive damages.
Complaints and Contacting the Bureau of Financial
				  Institutions:
For assistance with any complaints you may have against a
				  motor vehicle title lender, please contact the Bureau of Financial Institutions
				  toll-free at (800) 552-7945 or at scc.virginia.gov. Complaints must be filed in
				  writing with the Bureau of Financial Institutions and include copies of
				  supporting documentation.
Statutory Authority: §§
											6.2-2214 and
					 12.1-13
					 of the Code of Virginia.