Virginia HB 184: Open-end credit plans; prohibits creditor from extending credit at an annual rate that exceeds 36%.

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2020 SESSION

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20101005D

HOUSE BILL NO. 184 

Offered January 8, 2020 

Prefiled December 26, 2019 

A BILL to amend and reenact � 6.2-312 of the Code of Virginia, 
 relating to open-end credit plans. 
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Patrons-- Levine, Kory and Samirah 

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Referred to Committee on Labor and Commerce 

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Be it enacted by the General Assembly of Virginia:

1. That � 6.2-312 of the Code of Virginia is amended and 
 reenacted as follows:

� 6.2-312. Open-end credit plans.

A. Notwithstanding any provision of this chapter other than � 
 6.2-327, and except as provided in subsection C, a seller or lender engaged in 
 extending credit under an open-end credit plan may impose, on credit extended 
 under the plan, finance:

1. Finance 
 charges and other charges and fees at such rates and in such amounts and manner 
 as may be agreed upon by the creditor and the obligor, if the credit 
 is extended to the purchaser of goods to be 
 used for personal, family, or household purposes by the seller of such goods for the 
 sole purpose of financing the bona fide purchase price of such goods; or

2. Interest at an annual 
 rate not to exceed 36 percent, if the 
 credit is extended for any purpose not described in subdivision 1.

With respect to any extension 
 of credit under the a plan described 
 in subdivision 1, a finance charge is shall not be imposed upon the 
 obligor if payment in full of the unpaid balance is not 
 received at the place designated by the creditor prior to the next billing 
 date, which shall be at least 25 days later than the prior billing date.

With respect to any extension 
 of credit under a plan described in subdivision 2, the creditor 
 may impose a late charge for failure to make timely 
 payment of any amount due under the loan agreement, provided 
 that such late charge does not exceed the amount permitted by � 6.2-400. No additional charges or 
 fees shall be charged or collected with respect thereto. 

B. Notwithstanding the provisions of � 6.2-327 and subject to 
 the provisions of � 8.9A-204.1, any loan made under this section may be secured 
 in whole or in part by a subordinate mortgage or deed of trust on residential real 
 estate improved by the construction thereon of housing consisting of one- to 
 four-family dwelling units.

C. (i) A licensee, as defined in � 6.2-1800, shall not engage 
 in the extension of credit under an open-end credit plan described in this 
 section and, (ii) a third party shall not engage in the extension of credit 
 under an open-end credit plan described in this section at any office, suite, 
 room, or place of business where a licensee conducts the business of making 
 payday loans. In addition to any other remedies or penalties provided for a 
 violation of this section, any such extension of credit made by a licensee or 
 third party in violation of this subsection shall be unenforceable against the 
 borrower.

D. No p