Current through Register Vol. 41, No. 3, September 23, 2024
A.
This section sets forth the rules applicable to the short-term lending database
referred to in §
6.2-1810
of the Code of Virginia.
B. Except
as otherwise provided in this section, a licensee shall transmit all
information to the database via the Internet. In order to maintain the
confidentiality and security of the information, a licensee shall not transmit
information to the database using publicly accessible computers, computers that
are not under the licensee's control, unsecured wireless (Wi-Fi) connections,
or other connections that are not secure. A licensee shall maintain generally
accepted security safeguards to protect the confidentiality of the information
transmitted to the database, including but not limited to installing and
regularly updating malware protection (antivirus and antispyware) software and
a firewall.
C. After receiving a
completed written loan application but prior to making a short-term loan, a
licensee shall transmit the following information to the database for purposes
of determining whether an applicant is eligible for a short-term loan. The
licensee shall obtain the applicant information required by this subsection in
accordance with the provisions of subsection D of this section.
1. Name of licensee and license
number.
2. Office location of
licensee.
3. First and last name or
identification number of employee entering information into the
database.
4. Applicant's first and
last name.
5. Last four digits of
applicant's driver's license number or identification card number.
6. Applicant's address.
7. Applicant's date of birth.
8. Type of card (e.g., driver's license or
identification card issued by a state driver's licensing authority) provided by
the applicant pursuant to subdivision D 1 of this section.
D.
1. A
licensee shall obtain the information required by subdivisions C 4, 5, 6, 7,
and 8 of this section from the applicant's unexpired driver's license or
identification card issued by a state driver's licensing authority (e.g.,
Department of Motor Vehicles for the Commonwealth of Virginia), regardless of
whether the information on the driver's license or identification card is still
accurate. A licensee may accept photocopies, facsimiles, or other reproductions
of a driver's license or identification card.
2. A licensee shall retain a copy of the
applicant's driver's license or identification card in its records. The
driver's license number or identification card number shall be partially
redacted by the licensee so that only the last four digits of the number remain
visible.
3. A licensee shall not
accept a driver's license or identification card from an applicant when there
is reason to believe that (i) it belongs to an individual other than the
applicant or (ii) it is fake, counterfeit, or has been altered, fraudulently
obtained, forged, or is otherwise nongenuine or illegitimate.
E. If the database advises a
licensee that an applicant is ineligible for a short-term loan, then the
licensee shall inform the applicant of his ineligibility, instruct the
applicant to contact the database provider for information about the specific
reason for his ineligibility, and provide the applicant with the toll-free
telephone number of the database provider.
F. Except as otherwise provided in subsection
O of this section, if the database advises a licensee that an applicant is
eligible for a short-term loan, then the licensee shall transmit the following
additional information to the database prior to making a short-term loan:
1. Application date.
2. Loan number.
3. Date of loan.
4. Principal amount of loan.
5. Interest rate.
6. Dollar amount of precomputed interest to
be charged until date of loan maturity.
7. Dollar amount of monthly maintenance fee
to be charged.
8. Dollar amount of
each payment.
9. Dollar amount of
total fees and charges.
10. Annual
Percentage Rate (APR) of loan.
11.
Total number of payments.
12. Date
of loan maturity.
13. If applicable,
dollar amount of check given by applicant to secure the loan (i.e., at the time
the loan is made).
G. A
licensee shall generate a separate printout from the database showing the
results of each loan eligibility query and retain the printout in its loan
records.
H. Except as otherwise
provided in subsection O of this section and subdivisions 3, 7, and 8 of this
subsection, a licensee shall transmit the following additional information
relating to loans made under the Act, as applicable, to the database no later
than the end of the business day on the date of the event:
1. If a borrower cancels or rescinds a loan,
the date of the cancellation or rescission.
2. If a loan is repaid or otherwise satisfied
in full, (i) the date of repayment or satisfaction, and (ii) the total net
dollar amount ultimately paid by the borrower in connection with the loan
(i.e., principal amount of loan plus all fees and charges received or collected
pursuant to §
6.2-1817
of the Code of Virginia, less any amount refunded to the borrower).
3. If a borrower's check or electronic draft
is returned unpaid because the account on which it was drawn was closed by the
borrower or contained insufficient funds, (i) the date the check or electronic
draft is returned unpaid, and (ii) the dollar amount of the check or electronic
draft. A licensee shall transmit such information to the database no later than
five days after the date the check or electronic draft is returned
unpaid.
4. If a licensee collects a
deposit item return fee from a borrower, the dollar amount of the deposit item
return fee.
5. If a licensee brings
a civil action against a borrower for nonpayment of a loan, the date the
proceeding is initiated and the total dollar amount sought to be
recovered.
6. If a licensee obtains
a judgment against a borrower, the date and total dollar amount of the
judgment.
7. If a judgment obtained
by a licensee against a borrower is satisfied, the date of satisfaction. A
licensee shall transmit such information to the database on the date the
licensee learns that the judgment has been satisfied.
8. If a licensee obtains a judgment against a
borrower and collects any damages or costs from the borrower, the dollar amount
of the damages or costs. A licensee shall transmit such information to the
database on the date the licensee learns that the damages or costs have been
paid.
9. If a licensee charges off
a loan as uncollectible, the date the loan is charged off and the total dollar
amount charged off.
I.
1. If any information required to be
transmitted by a licensee to the database is automatically populated or
calculated by the database provider, the licensee shall verify the information
and immediately correct any inaccuracies or other errors.
2. If a licensee becomes aware of any
changes, inaccuracies, or other errors in the information previously verified
or transmitted by the licensee to the database, the licensee shall immediately
update or correct the database.
J. The following provisions address a
licensee's inability to access the database via the Internet at the time of
loan application:
1. If at the time a licensee
receives a loan application the licensee is unable to access the database via
the Internet due to technical problems beyond the licensee's control, then the
licensee shall to the extent possible use the database provider's alternative
means of database access, such as a telephone interactive voice response
system, for purposes of transmitting the information required by this section
and obtaining applicant eligibility information from the database.
2. If a licensee makes a short-term loan
based on applicant eligibility information obtained from the database
provider's alternative means of database access, then the licensee shall
transmit to the database any remaining information required by this section no
later than the date that the database becomes accessible to the licensee via
the Internet.
3. If at the time a
licensee receives a loan application the licensee is unable to access the
database via the Internet due to technical problems beyond the licensee's
control and the database provider's alternative means of database access is
unavailable or otherwise unable to provide the licensee with applicant
eligibility information, then the licensee may make a short-term loan to an
applicant if the applicant signs and dates a separate document containing all
of the representations and responses to the questions set forth below and the
prospective loan otherwise complies with the provisions of the Act and this
chapter. The document shall be in a type size of not less than 14 point and
contain a statement that the representations and questions relate to loans
obtained from either the licensee or another short-term lender. The licensee
shall retain the original document in its loan file and provide the applicant
with a duplicate original.
a. The
representations to be made by an applicant are as follows:
(1) I do not currently have any outstanding
payday loans or short-term loans under Chapter 18 of Title 6.2 of the Code of
Virginia.
(2) I am not a regular or
reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast
Guard, or National Guard serving on active duty under a call or order that does
not specify a period of 30 days or fewer.
(3) I am not married to a regular or reserve
member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard,
or National Guard serving on active duty under a call or order that does not
specify a period of 30 days or fewer.
(4) I am not under the age of 18 and the son
or daughter of a regular or reserve member of the United States Army, Navy,
Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty
under a call or order that does not specify a period of 30 days or
fewer.
(5) One-half or less
(including none) of my financial support for the past 180 days was provided by
a regular or reserve member of the United States Army, Navy, Marine Corps, Air
Force, Coast Guard, or National Guard serving on active duty under a call or
order that does not specify a period of 30 days or fewer.
b. If a licensee makes a short-term loan
pursuant to subdivision 3 of this subsection, then the licensee shall transmit
to the database the information required by this section no later than the date
that the database becomes accessible to the licensee, via either the Internet
or the database provider's alternative means of database access.
4. If at the time a licensee
receives a loan application the licensee is unable to access the database via
the Internet due to technical problems beyond the licensee's control, then the
licensee shall document in its records the technical problems it experienced
and the date and time that it sought to access the database.
K. The following provisions
address a licensee's inability to access the database via the Internet
subsequent to making a loan:
1. If a licensee
is required to transmit to the database information regarding a loan that has
already been made, but the licensee is unable to access the database via the
Internet due to technical problems beyond the licensee's control, then the
licensee shall to the extent possible use the database provider's alternative
means of database access, such as a telephone interactive voice response
system, for purposes of transmitting the information required by this section
to the database. If the database provider's alternative means of database
access is unavailable or otherwise unable to accept the information, then the
licensee shall transmit to the database the information required by this
section no later than the date that the database becomes accessible to the
licensee, via either the Internet or the database provider's alternative means
of database access.
2. If a
licensee is required to transmit to the database information regarding a loan
that has already been made, but the licensee is unable to access the database
via the Internet due to technical problems beyond the licensee's control, then
the licensee shall document in its records the technical problems it
experienced and the date and time that it sought to transmit the information to
the database.
L. A
licensee shall have limited access to the information contained in the
database. The database shall only provide a licensee with the following
information:
(i) whether an applicant is
eligible for a new short-term loan; and
(ii) if an applicant is ineligible for a new
short-term loan, the general reason for the ineligibility (e.g., the database
may state that the applicant has an outstanding short-term loan but it shall
not furnish any details regarding the outstanding loan). The database shall
also permit a licensee to access information that the licensee is required to
transmit to the database provided that such access is for the sole purpose of
verifying, updating, or correcting the information. Except as otherwise
provided in this subsection or
10VAC5-200-113,
a licensee shall be prohibited from accessing or otherwise obtaining any
information contained in or derived from the database.
M. If the commissioner determines that a
licensee or former licensee has ceased business but still has one or more
outstanding payday loans or short-term loans that cannot be repaid due to the
licensee's or former licensee's closure, the commissioner may authorize the
database provider to close the outstanding loans in the database in order to
enable the affected borrowers to obtain short-term loans in the future. A
licensee or former licensee shall be deemed by the commissioner to have ceased
business if it (i) fails to respond to the bureau after two written requests
mailed to the address on file with the bureau or (ii) fails to maintain its
contact information in accordance with subsection K of
10VAC5-200-20.
N. Payday loans made prior to January 1,
2021, that remain outstanding on January 1, 2021, shall be considered for
purposes of determining a borrower's eligibility for a short-term
loan.
O. If the database provider
is unable to complete the modifications to the database that are needed to
accommodate the transmission of certain information required by this section,
then the commissioner shall notify all licensees of this in writing and
identify the specific information that they are not required to transmit until
the commissioner further notifies them that the database provider has completed
the modifications. Once the modifications have been completed, licensees shall
not be required to transmit any information that they were previously unable to
transmit due to the database being unable to accommodate it. The database
provider shall complete all of the modifications no later than January 1,
2022.
Statutory Authority: §§
6.2-1815 and
12.1-13
of the Code of Virginia.
