Signed by Governor Tim Kaine

Vote Smart's Synopsis:

Vote to pass a bill that limits the terms of payday loans. Limits the allowable interest rate, fees, and the number of loans made to an individual borrower.

Highlights:

- Caps annual interest rates on payday loans at 36 percent (sec. 1). - Prohibits lending to a borrower the same day as the borrower pays a prior payday loan in full, within 90 days of a borrower paying a previous payday loan in full using an extended payment plan, within 120 days of a borrower entering into an extended payment plan, or within 45 days of of a borrower's 5th loan in a 180 day period (sec. 1). - Limits payday loan fees to 20 percent of the total payday loan and verification fees to $5.00 (sec 1). - Increases the period of time in which a borrower can pay off a loan from one week to at least two times the borrower's pay cycle (sec. 1). Allows borrowers to enter into an extended payment plan to pay off a loan in equal installments over 60 days or more without accruing interest (sec. 1). - Prohibits lenders from filing legal proceedings against a borrower unless 60 days have passed since the borrower defaulted on a payday loan (sec. 1). - Prohibits lenders from making a loan to a member of the armed services, their spouse, or any dependents (sec. 1). - Applies to any lender making loans to Virginia residents over the Internet regardless of the lender's physical location (sec. 1). - Requires that the State Corporation Commission implement an Internet database no later than January 1, 2009 that contains a record of all payday loans made in the state and requires lenders to refer to the database prior to making a payday loan (sec. 1). - Substitute offered by House Committee on Commerce and Labor.

Full Bill Text