Current through Register Vol. 41, No. 3, September 23, 2024
A.
This section governs the conduct of any business other than motor vehicle title
lending where a licensed motor vehicle title lending business is conducted. As
used in this section, the term "other business operator" refers to a licensee
or third party, including an affiliate or subsidiary of the licensee, who
conducts or wants to conduct other business from one or more motor vehicle
title lending offices.
1. Pursuant to §
6.2-2218.1 of the
Code of Virginia, a licensee shall not conduct the business of making motor
vehicle title loans at any office, suite, room, or place of business where any
other business is solicited or conducted, except a check cashing business
registered under Chapter 21 (§
6.2-2100 et seq.) of
Title 6.2 of the Code of Virginia, a short-term lending business licensed under
Chapter 18 (§
6.2-1800 et seq.) of
Title 6.2 of the Code of Virginia, or such other business as the commission
determines should be permitted, and subject to such conditions as the
commission deems necessary and in the public interest.
2. No person shall engage in the business of
selling insurance or enrolling borrowers under group insurance policies from
any office, suite, room, or place of business where a licensed motor vehicle
title lending business is conducted.
3. This section shall not apply to any other
business that is transacted solely with persons residing outside of
Virginia.
4. Notwithstanding any
provision of this section or order entered by the commission prior to January
1, 2021, the business of making loans under an open-end credit plan as
described in §
6.2-312 of
the Code of Virginia shall not be conducted from any office, suite, room, or
place of business where a licensed motor vehicle title lending business is
conducted. However, if prior to January 1, 2021, a licensee received commission
authority for an other business operator to conduct open-end credit business
from the licensee's motor vehicle title lending offices, the other business
operator may continue collecting payments on any outstanding open-end loans (i)
in accordance with the preexisting terms of the open-end credit agreements
provided that such terms were permitted by law when the agreements were made,
and (ii) subject to the conditions that were imposed by the commission in its
approval order.
5. Notwithstanding
any provision of this section or order entered by the commission prior to
January 1, 2021, a licensee shall not make motor vehicle title loans at the
same location at which the licensee, or any affiliate or owner of the licensee,
conducts business under Chapter 15 (§
6.2-1500 et seq.) of
Title 6.2 of the Code of Virginia. However, if prior to January 1, 2021, a
licensee received commission authority for the licensee or its affiliate or
owner to make consumer finance loans from the licensee's motor vehicle title
lending offices, then the licensee or its affiliate or owner may continue
collecting payments on any outstanding consumer finance loans (i) in accordance
with the preexisting terms of the loan contracts provided that such terms were
permitted by law when the loans were made, and (ii) subject to the general
conditions set forth in subsection D of this section.
6. If a licensee accepts loan applications,
sends or receives loan-related information or documents, disburses loan funds,
or accepts loan payments on or through the licensee's website or mobile
application, and any other products or services are or will be offered or sold
to Virginia residents on or through such website or mobile application, then
the offer or sale of such other products or services shall constitute the
conduct of other business and shall be subject to all of the provisions of this
section to the same extent as if such other business was conducted by an other
business operator from the licensee's motor vehicle title lending
offices.
B. No other
business shall be conducted in a location where a licensee conducts a motor
vehicle title lending business unless the proposed other business is financial
in nature and the licensee obtains prior approval from the commission.
Applications for approval shall be made in writing on a form provided by the
commissioner, and shall be accompanied by payment of a $300 fee and any
information relating to the application that the commissioner may require. In
acting upon an application, the commission shall consider (i) whether the other
business operator has the general fitness to warrant belief that the business
will be operated in accordance with law; (ii) whether the applicant has been
operating its motor vehicle title lending business in accordance with the Act
and this chapter; and (iii) any other factors that the commission deems
relevant.
1. The commission shall in its
discretion determine whether a proposed other business is "financial in
nature," and shall not be obliged to consider the meaning of this term under
federal law. A business is financial in nature if it primarily deals with the
offering of debt, money or credit, or services directly related
thereto.
2. Prior approval from the
commission shall not be required for a licensee to conduct a motor vehicle
title lending business from one or more locations where an other business
operator will conduct (i) a registered check cashing business under Chapter 21
(§
6.2-2100 et seq.) of
Title 6.2 of the Code of Virginia, or (ii) a licensed short-term lending
business under Chapter 18 (§
6.2-1800 et seq.) of
Title 6.2 of the Code of Virginia. However, the conduct of these other
businesses from a licensee's motor vehicle title lending offices shall
otherwise be governed by this section, including the conditions prescribed in
subsections D, E, and K of this section.
C. Except as provided in subdivision B 2 of
this section, written evidence of commission approval of each other business
conducted by an other business operator should be maintained at each approved
location.
D. All other businesses
in motor vehicle title lending offices shall be conducted in accordance with
the following conditions:
1. The licensee
shall not make a motor vehicle title loan to a borrower to enable the borrower
to purchase or pay any amount owed in connection with the (i) goods or services
sold, or (ii) loans offered, facilitated, or made, by the other business
operator at the licensee's motor vehicle title lending offices.
2. The other business operator shall comply
with all federal and state laws and regulations applicable to its other
business, including any applicable licensing or registration
requirements.
3. The other business
operator shall not use or cause to be published any advertisement or other
information that contains any false, misleading, or deceptive statement or
representation concerning its other business, including the rates, terms, or
conditions of the products, services, or loans that it offers. The other
business operator shall not make or cause to be made any misrepresentation as
to (i) its being licensed to conduct the other business or (ii) the extent to
which it is subject to supervision or regulation.
4. The licensee shall not make a motor
vehicle title loan or vary the terms of a motor vehicle title loan on the
condition or requirement that a person also (i) purchase a good or service
from, or (ii) obtain a loan from or through, the other business operator. The
other business operator shall not (a) sell its goods or services, (b) offer,
facilitate, or make loans, or (c) vary the terms of its goods, services, or
loans, on the condition or requirement that a person also obtain a motor
vehicle title loan from the licensee.
5. The other business operator shall maintain
books and records for its other business separate and apart from the licensee's
motor vehicle title lending business and in a different location within the
licensee's motor vehicle title lending offices. The bureau shall be given
access to all such books and records and be furnished with any information and
records that it may require in order to determine compliance with all
applicable conditions, laws, and regulations.
E. If an other business operator conducts a
short-term lending business from the licensee's motor vehicle title lending
offices, the following additional conditions shall be applicable:
1. The licensee shall not make a motor
vehicle title loan to a person if (i) the person has an outstanding short-term
loan from the other business operator or (ii) on the same day the person repaid
or satisfied in full a short-term loan from the other business
operator.
2. The other business
operator shall not make a short-term loan to a person if (i) the person has an
outstanding motor vehicle title loan from the licensee or (ii) on the same day
the person repaid or satisfied in full a motor vehicle title loan from the
licensee.
3. The other business
operator and the licensee shall not make a short-term loan and a motor vehicle
title loan contemporaneously or in response to a single request for a loan or
credit.
4. The licensee and other
business operator shall provide each applicant for a motor vehicle title loan
or short-term loan with a separate disclosure, signed by the applicant, that
clearly identifies all of the loan products available in the licensee's motor
vehicle title lending offices along with the corresponding Annual Percentage
Rate, interest rate, and other costs associated with each loan product. The
disclosure shall also identify the collateral, if any, that will be used to
secure repayment of each loan product.
5. The other business operator shall be
licensed or exempt from licensing under Chapter 18 (§
6.2-1800 et seq.) of
Title 6.2 of the Code of Virginia.
F. If a licensee received or receives
commission authority for an other business operator to conduct business as an
authorized delegate or agent of a money order seller or money transmitter from
the licensee's motor vehicle title lending offices, the other business operator
shall be and remain a party to a written agreement to act as an authorized
delegate or agent of a person licensed or exempt from licensing as a money
order seller or money transmitter under Chapter 19 (§
6.2-1900 et seq.) of
Title 6.2 of the Code of Virginia. The other business operator shall not engage
in money order sales or money transmission services on its own behalf or on
behalf of any person other than a licensed or exempt money order seller or
money transmitter with whom it has a written agreement.
G. If a licensee received or receives
commission authority for an other business operator to conduct the business of
(i) tax preparation or electronic tax filing services, or (ii) facilitating
third party tax preparation or electronic tax filing services, from the
licensee's motor vehicle title lending offices, the following additional
conditions shall be applicable:
1. The
licensee shall not make a motor vehicle title loan that is secured by an
interest in a borrower's tax refund.
2. The other business operator shall not
engage in the business of (i) accepting funds for transmission to the Internal
Revenue Service or other government instrumentalities, or (ii) receiving tax
refunds for delivery to individuals, unless licensed or exempt from licensing
under Chapter 19 (§
6.2-1900 et seq.) of
Title 6.2 of the Code of Virginia.
H. If a licensee received or receives
commission authority for an other business operator to conduct the business of
facilitating or arranging tax refund anticipation loans or tax refund payments
from the licensee's motor vehicle title lending offices, the following
additional conditions shall be applicable:
1.
The other business operator shall not facilitate or arrange a tax refund
anticipation loan or tax refund payment to enable a person to pay any amount
owed to the licensee as a result of a motor vehicle title loan
transaction.
2. The other business
operator and the licensee shall not facilitate or arrange a tax refund
anticipation loan or tax refund payment and make a motor vehicle title loan
contemporaneously or in response to a single request for a loan or
credit.
3. The licensee shall not
make a motor vehicle title loan that is secured by an interest in a borrower's
tax refund.
4. The other business
operator shall not engage in the business of receiving tax refunds or tax
refund payments for delivery to individuals unless licensed or exempt from
licensing under Chapter 19 (§
6.2-1900 et seq.) of
Title 6.2 of the Code of Virginia.
5. The licensee and other business operator
shall provide each applicant for a motor vehicle title loan or tax refund
anticipation loan with a separate disclosure, signed by the applicant, that
clearly identifies all of the loan products available in the licensee's motor
vehicle title lending offices along with the corresponding Annual Percentage
Rate, interest rate, and other costs associated with each loan product. The
disclosure shall also identify the collateral, if any, that will be used to
secure repayment of each loan product.
I. If a licensee received or receives
commission authority for an other business operator to conduct a consumer
finance business from the licensee's motor vehicle title lending offices, the
following additional conditions shall be applicable:
1. The other business operator shall be
licensed or exempt from licensing under Chapter 15 (§
6.2-1500 et seq.) of
Title 6.2 of the Code of Virginia.
2. Pursuant to subdivision A 5 of this
section, the other business shall be conducted by a person other than the
licensee or an affiliate or owner of the licensee.
3. The licensee shall not make a motor
vehicle title loan to a person if (i) the person has an outstanding consumer
finance loan from the other business operator, or (ii) on the same day the
person repaid or satisfied in full a consumer finance loan from the other
business operator.
4. The other
business operator shall not make a consumer finance loan to a person if (i) the
person has an outstanding motor vehicle title loan from the licensee, or (ii)
on the same day the person repaid or satisfied in full a motor vehicle title
loan from the licensee.
5. The
licensee and other business operator shall not make a motor vehicle title loan
and a consumer finance loan contemporaneously or in response to a single
request for a loan or credit.
6.
The licensee and other business operator shall provide each applicant for a
motor vehicle title loan or consumer finance loan with a separate disclosure,
signed by the applicant, that clearly identifies all of the loan products
available in the licensee's motor vehicle title lending offices along with the
corresponding Annual Percentage Rate, interest rate, and other costs associated
with each loan product. The disclosure shall also identify the collateral, if
any, that will be used to secure repayment of each loan product.
J. If a licensee received or
receives commission authority for an other business operator to conduct the
business of operating an automated teller machine from the licensee's motor
vehicle title lending offices, the other business operator shall not charge a
fee or receive other compensation in connection with the use of its automated
teller machine by a person when the person is withdrawing funds in order to
make a payment on a loan that was made by the licensee or any other lender
conducting business from the licensee's motor vehicle title lending
offices.
K. If an other business
operator conducts a check cashing business from the licensee's motor vehicle
title lending offices, the following additional conditions shall be applicable:
1. The other business operator shall be
registered or exempt from registration under Chapter 21 (§
6.2-2100 et seq.) of
Title 6.2 of the Code of Virginia.
2. If the other business operator is
registered under Chapter 21 (§
6.2-2100 et seq.) of
Title 6.2 of the Code of Virginia, then the other business operator shall not
make any loans unless the other business operator is licensed under, and the
loans are made in accordance with, Chapter 18 (§
6.2-1800 et seq.) of
Title 6.2 of the Code of Virginia.
3. The other business operator shall not
charge a fee to cash a check issued by the licensee or any other person
operating in the licensee's motor vehicle title lending offices.
L. The commission may impose any
additional conditions upon the conduct of other business in motor vehicle title
lending offices that it deems necessary and in the public interest.
M. Except as otherwise provided in
subdivision A 4 of this section, the conditions set forth or referred to in
subsections D through L of this section shall supersede the conditions set
forth in the commission's approval orders entered prior to January 1,
2021.
N. Failure by a licensee or
other business operator to comply with any provision of this section or any
condition imposed by the commission, or failure by a licensee to comply with
the Act, this chapter, or any other law or regulation applicable to the conduct
of the licensee's business, may result in revocation of the authority to
conduct other business or any form of enforcement action specified in
10VAC5-210-100.
Statutory Authority: §§
6.2-2214 and
12.1-13
of the Code of Virginia.
