Virginia Administrative Code › Title 10 - FINANCE AND FINANCIAL INSTITUTIONS › Agency 5 - STATE CORPORATION COMMISSION › Chapter 60 - CONSUMER FINANCE COMPANIES › Section 10VAC5-60-30 - Repayment of loans through payroll deductions

Current through Register Vol. 40, No. 24, July 15, 2024
A. This section governs when a borrower
				authorizes the borrower's employer to deduct funds from the borrower's payroll
				(i.e., wages or other compensation for services rendered) and remit such funds,
				directly or indirectly, to a licensee for the purpose of repaying, in whole or
				in part, the borrower's consumer finance loan.
B. A licensee may offer a borrower the option
				of making payments on a consumer finance loan through deductions from the
				borrower's payroll. However, a licensee shall not require a borrower to (i)
				repay a consumer finance loan, in whole or in part, through one or more
				deductions from the borrower's payroll or (ii) execute a payroll deduction
				authorization or the Payroll Deduction Disclosure Form prescribed in subsection
				G of this section, as a condition to making a loan under the Act. For purposes
				of this subsection, a payroll deduction authorization includes a loan agreement
				or other document that contains a payroll deduction authorization.
C. If a borrower voluntarily elects to repay
				a consumer finance loan, in whole or in part, through payroll deductions, the
				licensee shall bear all costs and expenses arising from or related to the
				establishment or administration of such deductions.
D. When giving a borrower the option of
				making payments on a consumer finance loan through payroll deductions, a
				licensee shall furnish the borrower with the Payroll Deduction Disclosure Form
				prescribed in subsection G of this section. The form shall be a single document
				printed or typed without alteration in at least 12-point type separate from all
				other documents obtained by the licensee. All blanks on the form other than
				those blanks to be filled in with the name of the licensee shall be filled in
				by the borrower, and the filled-in form shall be signed and dated by the
				borrower. The completed form shall be kept in the separate loan file maintained
				with respect to the loan for the period specified in §
									6.2-1533
				of the Code of Virginia.
E. No
				licensee making a loan that will be repaid, in whole or in part, through
				payroll deductions shall withhold any part of the proceeds of the loan to be
				applied to any payment required under the loan.
F. Automatic payroll deductions that are
				established and administered in accordance with the provisions of this section
				are not subject to §
									6.2-1526 of the
				Code of Virginia.
G. The required
				text of the Payroll Deduction Disclosure Form shall be as follows:
PAYROLL DEDUCTION DISCLOSURE FORM
1. I, (APPLICANT'S NAME), intend to authorize
				my employer to deduct funds from my (WEEKLY / BIWEEKLY / MONTHLY) paycheck in
				the amount of $(AMOUNT) for the purpose of making monthly payments on my loan
				with (CONSUMER FINANCE COMPANY). I understand that my employer will be sending
				this amount to (CONSUMER FINANCE COMPANY) each payroll period.
2. I am authorizing the payroll deductions
				voluntarily and solely for my own convenience, and I acknowledge that (CONSUMER
				FINANCE COMPANY) has not required me to authorize the payroll deductions, or to
				sign this form, as a condition to making me a loan.
3. I understand that I can cancel the payroll
				deductions at any time, and I understand that I am not obligated to pay any fee
				or charge to any person or company, directly or indirectly, for the payroll
				deductions.
____________________________________
___________________
Applicant's Signature
Date
Statutory Authority: §§
											6.2-1535
					 and
					 12.1-13
					 of the Code of Virginia.