Current through Register Vol. 41, No. 3, September 23, 2024
A.
This section governs the conduct of any business other than consumer finance
lending where a licensed consumer finance lending business is conducted. As
used in this section, the term "other business operator" refers to a licensed
consumer finance company or third party, including an affiliate or subsidiary
of the licensed consumer finance company, that conducts or wants to conduct
other business from one or more consumer finance offices.
1. This section shall not apply to any other
business that is transacted solely with persons residing outside of the
Commonwealth.
2. 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
consumer finance offices.
B. Notwithstanding any provision of this
section or authority obtained under § 6.2-1518 of the Code of Virginia or
a predecessor statute prior to January 1, 2021, a licensee shall not make
consumer finance loans at the same location at which the licensee, or any
affiliate or subsidiary of the licensee, conducts business under Chapter 18
(§ 6.2-1800 et seq.) or Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2
of the Code of Virginia. However, if prior to January 1, 2021, a licensee
obtained authority under § 6.2-1518 or a predecessor statute for the
licensee or its affiliate or subsidiary to make payday loans or motor vehicle
title loans from the licensee's consumer finance offices, then the licensee or
its affiliate or subsidiary may continue collecting payments on any outstanding
payday loans or motor vehicle title 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 F of this section.
C. The sale of insurance or enrolling of
borrowers under a group insurance policy by a licensee shall not constitute
other business for purposes of § 6.2-1518 of the Code of Virginia or this
section when such insurance covers potential risks or losses associated with
consumer finance loans made by the licensee. This subsection shall be
applicable only to (i) credit life insurance, credit accident and sickness
insurance, credit involuntary unemployment insurance, non-filing insurance, and
property insurance; and (ii) other types of insurance that the commissioner
determines meet the condition prescribed in this subsection.
D. If prior to January 1, 2021, a licensee
obtained authority under § 6.2-1518 of the Code of Virginia or a
predecessor statute for an other business operator to conduct other business in
its consumer finance offices, then the following rules shall govern:
1. If the other business is identified in
subsections G through R of this section, then the other business shall be
conducted in accordance with (i) the general conditions set forth in subsection
F of this section and (ii) the specific conditions prescribed for such business
in subsections G through R of this section. These conditions shall supersede
the conditions that were prescribed by regulation or established by the
commissioner at the time the authority was obtained. Subject to the conditions
referenced in this subsection, the other business may be conducted in any or
all of the licensee's consumer finance offices.
2. If the other business is not identified in
subsections G through R of this section, then the other business shall be
conducted in accordance with (i) the general conditions set forth in subsection
F of this section and (ii) the most recent set of conditions that were
established by the commissioner. Subject to these conditions, the other
business may be conducted in any or all of the licensee's consumer finance
offices.
E. Beginning
January 1, 2021, if a licensee seeks to conduct the business of making consumer
finance loans from one or more of its consumer finance offices in which an
other business operator will conduct other business, then the licensee shall
give the commissioner written notice at least 30 days prior to the conduct of
the other business, pay a fee of $300, and provide the commissioner with any
additional information pertaining to the other business that the commissioner
may require.
1. If the other business
specified in the licensee's written notice is identified in subsections G
through R of this section, then the other business shall be conducted in
accordance with (i) the general conditions set forth in subsection F of this
section and (ii) the specific conditions prescribed for such business in
subsections G through R of this section.
2. If the other business specified in the
licensee's written notice is not identified in subsections G through R of this
section, then the following rules shall govern:
a. The commissioner may, after providing
notice to the licensee and offering the licensee an opportunity to request a
hearing before the commission, prohibit or establish additional conditions for
the conduct of such other business in the licensee's consumer finance offices
if the commissioner finds that the other business is or would otherwise be (i)
of such a nature or conducted in such a manner as to conceal or facilitate a
violation or evasion of the provisions of the Act or this chapter; (ii)
contrary to the public interest; or (iii) conducted in an unlawful
manner.
b. Unless the conduct of
such other business is prohibited, the other business shall be conducted in
accordance with (i) the general conditions set forth in subsection F of this
section and (ii) any specific conditions established by the commissioner
pursuant to this subdivision.
3. Subject to the other provisions in this
subsection and except as otherwise provided in subdivision E 2 of this section,
the other business may be conducted in any or all of the licensee's consumer
finance offices beginning on the earlier of (i) 30 days after the licensee
furnishes the commissioner with the written notice, payment, and any additional
information required by the commissioner, or (ii) the date the commissioner
notifies the licensee that the other business may be conducted in the
licensee's offices.
F.
All other businesses conducted from a licensee's consumer finance offices shall
be conducted in accordance with the following conditions:
1. 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.
2. 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.
3. The licensee shall not make a consumer
finance loan or vary the terms of a consumer finance 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 consumer finance loan from
the licensee.
4. The other business
operator shall maintain books and records for its other business separate and
apart from the licensee's consumer finance lending business and in a different
location within the licensee's consumer finance 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.
G. The following additional conditions shall
be applicable to conducting open-end credit business from a licensee's consumer
finance offices, which, for purposes of this section, includes a line of credit
business, a revolving loan business, and the servicing of open-end loans, lines
of credit, and revolving loans:
1. The
open-end credit business shall be conducted by a separate legal entity and not
by the licensee.
2. The licensee
shall not make a consumer finance loan to a person if (i) the person has an
outstanding open-end loan from the other business operator or (ii) on the same
day the person repaid or satisfied in full an open-end loan from the other
business operator.
3. The other
business operator shall not make an open-end loan to a person if (i) the person
has an outstanding consumer finance loan from the licensee or (ii) on the same
day the person repaid or satisfied in full a consumer finance loan from the
licensee.
4. The licensee and other
business operator shall not make a consumer finance loan and an open-end loan
contemporaneously or in response to a single request for a loan or
credit.
5. The licensee and other
business operator shall provide each applicant for a consumer finance loan or
open-end loan with a separate disclosure, signed by the applicant, that clearly
identifies all of the loan products available in the licensee's consumer
finance 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.
H.
The following additional conditions shall be applicable to conducting business
under Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia
from a licensee's consumer finance offices:
1.
Pursuant to § 6.2-1507 A 4 of the Code of Virginia, the other business
shall be conducted by a person other than the licensee or an affiliate or
subsidiary of the licensee.
2. The
licensee shall not make a consumer finance 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.
3. The
other business operator shall not make a short-term loan to a person if (i) the
person has an outstanding consumer finance loan from the licensee or (ii) on
the same day the person repaid or satisfied in full a consumer finance loan
from the licensee.
4. The licensee
and other business operator shall not make a consumer finance loan and a
short-term loan contemporaneously or in response to a single request for a loan
or credit.
5. The licensee and
other business operator shall provide each applicant for a consumer finance
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
consumer finance 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. The following additional conditions shall
be applicable to conducting business under Chapter 22 (§ 6.2-2200 et seq.)
of Title 6.2 of the Code of Virginia from a licensee's consumer finance
offices:
1. Pursuant to § 6.2-1507 A 4 of
the Code of Virginia, the other business shall be conducted by a person other
than the licensee or an affiliate or subsidiary of the licensee.
2. The licensee shall not make a consumer
finance loan to a person if (i) the person has an outstanding motor vehicle
title loan from the other business operator or (ii) on the same day the person
repaid or satisfied in full a motor vehicle title loan from the other business
operator.
3. The other business
operator shall not make a motor vehicle title loan to a person if (i) the
person has an outstanding consumer finance loan from the licensee or (ii) on
the same day the person repaid or satisfied in full a consumer finance loan
from the licensee.
4. The licensee
and other business operator shall not make a consumer finance loan and a motor
vehicle title loan contemporaneously or in response to a single request for a
loan or credit.
5. The licensee and
other business operator shall provide each applicant for a consumer finance
loan or motor vehicle title loan with a separate disclosure, signed by the
applicant, that clearly identifies all of the loan products available in the
licensee's consumer finance 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. The following additional condition shall
be applicable to conducting a mortgage lender or mortgage broker business from
a licensee's consumer finance offices: the licensee and other business operator
shall not make a consumer finance loan and make or broker a mortgage loan
contemporaneously or in response to a single request for a loan or
credit.
K. The following additional
conditions shall be applicable to conducting an auto club membership business
from a licensee's consumer finance offices:
1.
A membership shall not be sold to any person who does not own or lease an
automobile, motorcycle, mobile home, truck, van, or other vehicle operated on
public highways and streets.
2. A
renewal membership shall not be offered or sold more than one month prior to
the expiration of a current membership term.
3. A membership shall not be offered or sold
for more than a three-year term.
L. The following additional conditions shall
be applicable to conducting business as an authorized delegate or agent of a
money order seller or money transmitter from a licensee's consumer finance
offices:
1. 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.
2. 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.
M. The
following additional conditions shall be applicable to conducting the business
of (i) tax preparation or electronic tax filing services, or (ii) facilitating
third party tax preparation or electronic tax filing services, from a
licensee's consumer finance offices:
1. 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.
2. The licensee shall not make a consumer
finance loan that is secured by an interest in a borrower's tax
refund.
N. The following
additional conditions shall be applicable to conducting the business of
facilitating or arranging tax refund anticipation loans or tax refund payments
from a licensee's consumer finance offices:
1.
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.
2. 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 consumer finance loan
transaction.
3. The other business
operator and the licensee shall not facilitate or arrange a tax refund
anticipation loan or tax refund payment and make a consumer finance loan
contemporaneously or in response to a single request for a loan or
credit.
4. The licensee shall not
make a consumer finance loan that is secured by an interest in a borrower's tax
refund.
5. The licensee and other
business operator shall provide each applicant for a consumer finance 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 consumer finance 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.
O. The following additional conditions shall
be applicable to conducting business as a check casher from a licensee's
consumer finance offices:
1. Pursuant to
§ 6.2-2107 of the Code of Virginia, the check casher business shall be
conducted by a person other than the licensee unless the licensee would not be
required to be registered under Chapter 21 (§ 6.2-2100 et seq.) of Title
6.2 of the Code of Virginia.
2. 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 consumer finance
offices.
P. The
following additional condition shall be applicable to conducting the business
of operating an automated teller machine from a licensee's consumer finance
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 consumer finance offices.
Q. The following additional condition shall
be applicable to conducting the business of selling noncredit-related life
insurance from a licensee's consumer finance offices: the licensee and other
business operator shall comply with 10VAC5-70, Sale of Noncredit-Related Life
Insurance in Consumer Finance Offices.
R. The conduct of the following businesses
from a licensee's consumer finance offices shall have no conditions other than
the conditions prescribed in subsection F of this section:
1. Mortgage servicing business.
2. Sales finance business.
S. Notwithstanding any other
provision of this section, the commissioner may, after providing notice to
affected licensees and offering them an opportunity to request a hearing before
the commission, establish additional conditions for the conduct of any other
business in consumer finance offices if the commissioner finds that the other
business is or would otherwise be (i) of such a nature or conducted in such a
manner as to conceal or facilitate a violation or evasion of the provisions of
the Act or this chapter; (ii) contrary to the public interest; or (iii)
conducted in an unlawful manner.
T.
Failure by a licensee or other business operator to comply with any provision
of this section or any condition established by the commissioner, or failure by
a licensee to comply with the Act or this chapter, may result in revocation of
the authority to conduct other business or any form of enforcement action
specified in
10VAC5-60-65.
Statutory Authority: §§ 6.2-1535 and 12.1-13 of
the Code of Virginia.
