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

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.