Bill Text: VA HB974 | 2016 | Regular Session | Prefiled
Bill Title: Open-end credit; allows only a seller of goods to extend credit under agreement.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2016-02-16 - Left in Commerce and Labor [HB974 Detail]
Download: Virginia-2016-HB974-Prefiled.html
16101300D
Be it enacted by the General Assembly of Virginia: 1. That §§6.2-301, 6.2-312 and 6.2-1501 of the Code of Virginia are amended and reenacted as follows: §6.2-301. Legal rate of interest; when legal rate implied. A. The legal rate of interest shall be an annual rate of six percent. B. Except as provided in subsection (b) of §8.3A-112 and § 6.2-302, the legal rate of interest shall be implied when there is an obligation to pay interest and no express contract to pay interest at a specified rate. C. The seller or provider of goods sold or services provided
on an open account shall be entitled to, and may collect, interest at the legal
rate upon the unpaid balance if (i) there exists no written agreement for
closed-end credit under §6.2-311 or open-end credit §6.2-312. Open-end credit agreements. A. Notwithstanding any provision of this chapter other than §
6.2-327, and except as provided in subsection C, a seller 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. D. In
addition to any other remedies or penalties provided for a violation of this
section, any such extension of credit made by a
§6.2-1501. Compliance with chapter; license required; attempts to evade application of chapter. A. No person shall engage in the business of making loans to individuals for personal, family, household, or other nonbusiness purposes, and charge, contract for, or receive, directly or indirectly, on or in connection with any loan interest, charges, compensation, consideration, or expense that in the aggregate is greater than the interest permitted by §6.2-303, except as provided in and authorized by this chapter or Chapter 22 (§6.2-2200 et seq.) and without first having obtained a license from the Commission. B. Subject to subdivision C 3 and subsection C of §6.2-1524, the prohibition in subsection A shall not be construed to prevent any person, other than a licensee, from: 1. Making a loan in accordance with Chapter 18 (§6.2-1800 et seq.); or 2. Making a mortgage loan pursuant to §§6.2-325 and 6.2-326
or §§6.2-327 and 6.2-328 in any principal amount
C. The provisions of subsection A shall apply to any person who seeks to evade its application by any device, subterfuge, or pretense whatsoever, including: 1. The loan, forbearance, use, or sale of (i) credit, as guarantor, surety, endorser, comaker, or otherwise; (ii) money; (iii) goods; or (iv) things in action; 2. The use of collateral or related sales or purchases of goods or services, or agreements to sell or purchase, whether real or pretended; receiving or charging compensation for goods or services, whether or not sold, delivered, or provided; and 3. The real or pretended negotiation, arrangement, or procurement of a loan through any use or activity of a third person, whether real or fictitious. 2. That nothing contained in this act shall prohibit the collection of any outstanding loan or extension of credit made under §6.2-312 of the Code of Virginia in accordance with the terms of a loan agreement made prior to the effective date of this act; however, no additional extensions of credit or advances shall be made on or after the effective date of this act under such a loan agreement that violates the provisions of this act. |