10 Va. Admin. Code § 5-210-30
MOTOR VEHICLE TITLE LENDING IN THE COMMONWEALTH OF VIRGINIA
BORROWER RIGHTS AND RESPONSIBILITIES
Please take the time to carefully review the information contained in this pamphlet. It is designed to advise you of your rights and responsibilities in connection with obtaining a motor vehicle title loan under Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia.
If you have any questions about motor vehicle title lending or want additional information, you may contact the Virginia State Corporation Commission's Bureau of Financial Institutions toll-free at (800) 552-7945 or at scc.virginia.gov.
In General: You are responsible for evaluating whether a motor vehicle title loan is right for you. Alternatives may include among other things less expensive short-term financing from another financial institution, family, friends, or a cash advance on a credit card.
Information from Lender: Virginia law prohibits a motor vehicle title lender from providing you with any false, misleading, or deceptive information.
Prohibition on Obtaining Loan if Motor Vehicle has Existing Lien / One Loan at a Time: Virginia law prohibits a motor vehicle title lender from making a motor vehicle title loan to you if (i) your certificate of title indicates that your motor vehicle is security for another loan or has an existing lien; (ii) you currently have another motor vehicle title loan from any other motor vehicle title lender conducting a motor vehicle title lending business; or (iii) you currently have a short-term loan from any lender that is licensed to make this type of loan under Chapter 18 (§ 6.2-1800 et seq.) of Title 6.2 of the Code of Virginia.
Verification of Income: Before making a motor vehicle title loan to you, a lender must make a reasonable attempt to verify and document your income.
Prohibition on Loans to Covered Members of the Armed Forces and their Dependents: Virginia law prohibits a motor vehicle title lender from making motor vehicle title loans to covered members of the armed forces and their dependents. If you are (i) on active duty under a call or order that does not specify a period of 30 days or less; or (ii) on active guard and reserve duty, then you are a covered member of the armed forces and a motor vehicle title lender is prohibited from making a motor vehicle title loan to you. A motor vehicle title lender is also prohibited from making a motor vehicle title loan to you if (i) you are married to a covered member of the armed forces; (ii) you are the child, as defined in 38 USC § 101(4), of a covered member of the armed forces; or (iii) more than one-half of your support during the past 180 days was provided by a covered member of the armed forces.
Certificate of Title / Other Security Interests: Prior to obtaining a motor vehicle title loan, you will be required to give a motor vehicle title lender the certificate of title for your motor vehicle. The motor vehicle title lender is required to record its lien with the motor vehicle department in the state where your motor vehicle is registered and hold the certificate of title until your loan is repaid or satisfied in full. The motor vehicle title lender cannot take an interest in more than one motor vehicle as security for a motor vehicle title loan. Apart from your motor vehicle and any accessories that are attached to it, the motor vehicle title lender cannot take an interest in any other property you own as security for a motor vehicle title loan.
Maximum Loan Amount: A motor vehicle title lender cannot loan you more than $2,500.
Minimum and Maximum Loan Term / Monthly Payments: Under Virginia law, your loan term cannot be more than 24 months. Your loan term also cannot be less than six months unless your total monthly payment will not exceed the greater of (i) 5.0% of your verified gross monthly income or (ii) 6.0% of your verified net monthly income. Your motor vehicle title loan will be repayable in substantially equal monthly installments of principal, fees, and interest combined.
Interest, Fees, and Charges: A motor vehicle title lender is permitted to charge you (i) interest at a simple annual rate not to exceed 36%; and (ii) a monthly maintenance fee that does not exceed the lesser of $15 or 8.0% of your originally contracted loan amount, provided that the maintenance fee is not added to your loan balance on which interest is charged. In addition to interest and the monthly maintenance fee, a motor vehicle title lender may charge you a deposit item return fee for the actual amount incurred by the motor vehicle title lender, not to exceed $25, if your check or electronic payment is returned unpaid because the account on which it was drawn was closed by you or contained insufficient funds, or you stopped payment on the check or electronic payment.
If you make a payment more than seven calendar days after its due date, a motor vehicle title lender may impose a late charge of up to 5.0% of the amount of the payment, but not to exceed $20.
Note that if your originally contracted loan amount is $1,500 or less, a motor vehicle title lender cannot charge or receive from you a total amount of fees and charges greater than 50% of your loan amount. If your loan amount is more than $1,500, the total amount of fees and charges cannot exceed 60% of your loan amount.
A motor vehicle title lender is prohibited from accruing or charging you interest on or after (i) the date the motor vehicle title lender or a person acting on behalf of the lender repossesses your motor vehicle; or (ii) 60 days after you fail to make a monthly payment on your loan, unless you are hiding your motor vehicle.
Other than interest and the costs specifically mentioned in this section and the section below ("Costs of Repossession and Sale"), no additional amounts may be charged, collected, or received by a motor vehicle title lender.
The interest, fees, and charges mentioned in this section may not be charged, collected, or received unless they are included in your written loan agreement.
Costs of Repossession and Sale: A motor vehicle title lender may charge you for any reasonable costs that it incurs in repossessing and selling your motor vehicle if (i) you default on your motor vehicle title loan; (ii) the motor vehicle title lender sends you a written notice at least 10 days prior to repossession advising you that your motor vehicle title loan is in default and that your motor vehicle may be repossessed unless you pay the outstanding principal and interest; and (iii) you fail to pay the amount owed prior to the date of repossession. However, the total amount charged to you for the repossession and sale of your motor vehicle cannot exceed 5.0% of your originally contracted loan amount. A motor vehicle title lender is prohibited from charging you for any storage costs if the motor vehicle title lender takes possession of your motor vehicle.
Written Loan Agreement: A motor vehicle title lender must provide you with a written loan agreement, which must be signed by both you and an authorized representative of the motor vehicle title lender. Your motor vehicle title loan agreement is a binding, legal document that requires you to repay your loan. Make sure you read the entire loan agreement carefully before signing and dating it. A motor vehicle title lender must provide you with a copy of your signed loan agreement. If any provision of your loan agreement violates Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia, the provision will not be enforceable against you.
Property Insurance: A motor vehicle title lender may require you to purchase or maintain property insurance for your motor vehicle. However, a motor vehicle title lender cannot require you to purchase or maintain property insurance from or through a particular provider or list of providers.
Authority to Prepare Checks / Electronic Payments / Obtaining PINs: A motor vehicle title lender is prohibited from obtaining any agreement from you that gives the lender or a third party the authority to prepare a check that is drawn upon your deposit account. If the motor vehicle title lender is equipped to handle and willing to accept such payments, you may make a payment on your loan by using a credit card, prepaid card, debit card, or the Automated Clearing House system. However, the lender is prohibited from obtaining or receiving a personal identification number (PIN) for a credit card, prepaid card, debit card, or any other type of card in connection with your loan. If you have authorized electronic payments for your loan, you have the right to remove your authorization at any time.
Loan Proceeds: You will receive your loan proceeds in the form of (i) cash; (ii) a check from the motor vehicle title lender; or (iii) a debit card. If you receive a check, the motor vehicle title lender or an affiliate of the lender is prohibited from charging you a fee for cashing the check. Similarly, a check casher located in the same office as the motor vehicle title lender is prohibited from charging you a fee for cashing the motor vehicle title lender's check. If you receive a debit card, the motor vehicle title lender is prohibited from charging you an additional fee when you withdraw or use the loan proceeds.
Using Motor Vehicle Title Loan to Purchase Products or Services: You are prohibited from using any of the money from your motor vehicle title loan to purchase another product or service sold (i) at the motor vehicle title lender's business location, or (ii) on or through the motor vehicle title lender's website or mobile application.
Right to Cancel or Rescind: You have the right to cancel or rescind your motor vehicle title loan at any time prior to 5 p.m. of the third business day immediately following the day you entered into the loan agreement by either returning the loan proceeds check or paying the motor vehicle title lender the amount advanced to you in cash or by certified check, cashier's check, money order or, if the motor vehicle title lender is equipped to handle and willing to accept such payments, by using a credit card, prepaid card, debit card, or the Automated Clearing House system. If you timely cancel or rescind your motor vehicle title loan, the motor vehicle title lender must mark your original loan agreement with the word "canceled" and return it to you along with your certificate of title.
Payments / Partial Payments / Prepayments / Refinancing: You are permitted to make payments on your motor vehicle title loan by cash, certified check, cashier's check, money order, or if the motor vehicle title lender is equipped to handle and willing to accept such payments, by using a credit card, prepaid card, debit card, or the Automated Clearing House system. You have the right to receive a dated receipt for each payment made along with a statement of the balance remaining on your motor vehicle title loan.
Additionally, you have the right to make a partial payment on your motor vehicle title loan at any time prior to the maturity date of the loan without penalty. However, a motor vehicle title lender may apply a partial payment first to any amounts that are due and unpaid at the time of such payment. If your motor vehicle title loan is current, a partial payment will reduce your outstanding balance.
You also have the right to prepay your motor vehicle title loan in full before its specified maturity date without penalty by paying the motor vehicle title lender the total outstanding balance on your loan, including any interest and fees that you may owe on your motor vehicle title loan. If you prepay your loan in full or your loan is refinanced with another motor vehicle title loan, the motor vehicle title lender must refund to you a prorated portion of loan charges, except for any deposit item return fees and late charges, based on a ratio of the number of days the loan was outstanding and the number of days for which the loan was originally contracted. The lender must provide you with the refund in the form of cash or a check as soon as reasonably possible and no later than two business days after you prepay your loan in full or your loan is refinanced. Your loan may be refinanced with another motor vehicle title loan only if the new loan is made by the same motor vehicle title lender (i.e., the lender who made the loan that you are currently obligated to repay).
Lender to Return Original Loan Agreement and Certificate of Title: Within 10 days after the date that you repay your motor vehicle title loan in full, the motor vehicle title lender must (i) mark your original loan agreement with the word "paid" or "canceled" and return it to you; (ii) take any action necessary to terminate its lien on your motor vehicle's certificate of title; and (iii) return the certificate of title to you. If you have any questions or concerns regarding your certificate of title, you should contact the motor vehicle department in the state where your motor vehicle is registered.
Failure to Repay: Pay back your motor vehicle title loan! Know when your payments are due and be sure to repay your motor vehicle title loan on time and in full. IF YOU DO NOT REPAY YOUR MOTOR VEHICLE TITLE LOAN IN ACCORDANCE WITH YOUR LOAN AGREEMENT, THE MOTOR VEHICLE TITLE LENDER MAY REPOSSESS AND SELL YOUR MOTOR VEHICLE (see section below on "Repossession and Sale of your Motor Vehicle").
In general, a motor vehicle title lender cannot seek a personal money judgment against you if you fail to pay any amount owed in accordance with your loan agreement. However, a motor vehicle title lender may seek a personal money judgment against you if you impair the motor vehicle title lender's security interest by (i) intentionally damaging or destroying your motor vehicle; (ii) intentionally hiding your motor vehicle; (iii) giving the motor vehicle title lender a lien on a motor vehicle that has an undisclosed prior lien; (iv) selling your motor vehicle without the motor vehicle title lender's written consent; or (v) securing another loan or obligation with a security interest in your motor vehicle without the motor vehicle title lender's written consent.
In collecting or attempting to collect a motor vehicle title loan, a motor vehicle title lender is required to comply with the restrictions and prohibitions applicable to debt collectors contained in the Fair Debt Collection Practices Act, 15 USC § 1692 et seq., regarding harassment or abuse; false, misleading or deceptive statements or representations; and unfair practices in collections. A motor vehicle title lender is also prohibited from threatening or beginning criminal proceedings against you if you fail to pay any amount owed in accordance with your loan agreement.
Repossession and Sale of your Motor Vehicle: If you do not repay your motor vehicle title loan in accordance with your loan agreement, the motor vehicle title lender may repossess and sell your motor vehicle in order to recover any outstanding amounts that you owe.
If a motor vehicle title lender repossesses your motor vehicle, the motor vehicle title lender must (i) allow you to recover any personal items from your motor vehicle promptly and at no cost, and (ii) send you a written notice at least 15 days prior to the sale of your motor vehicle. The notice will contain (i) the date and time after which your motor vehicle may be sold; and (ii) a written accounting of the redemption amount, which is the sum of the outstanding balance on your motor vehicle title loan, the amount of interest accrued through the date the motor vehicle title lender took possession of your motor vehicle, and any reasonable costs incurred to date by the motor vehicle title lender in connection with repossessing and selling your motor vehicle. At any time prior to the sale of your motor vehicle, you may obtain your motor vehicle by paying the motor vehicle title lender the total amount specified in the notice. Payment must be made in cash or by certified check, cashier's check, money order or, if the motor vehicle title lender is equipped to handle and willing to accept such payments, by using a credit card, prepaid card, debit card, or the Automated Clearing House system.
Within 10 days of a motor vehicle title lender receiving funds from the sale of your motor vehicle, you are entitled to receive all proceeds from the sale in excess of the redemption amount specified in the notice that the motor vehicle title lender sent you prior to selling your motor vehicle. However, the motor vehicle title lender may reduce the amount that you receive by any additional reasonable costs incurred by the motor vehicle title lender in repossessing and selling your motor vehicle that were not included in the redemption amount.
See section above on "Costs of Repossession and Sale" for additional information regarding the conditions that must be met for a motor vehicle title lender to collect the reasonable costs of repossessing and selling your motor vehicle.
Legal Action Against Lender: You have the right to bring a civil action against a motor vehicle lender if you suffer a loss as a result of the motor vehicle title lender violating any provision of Chapter 22 (§ 6.2-2200 et seq.) of Title 6.2 of the Code of Virginia. If you are successful in your civil action, you have the right to be reimbursed for reasonable attorney fees, expert witness fees, and court costs you have incurred in connection with your civil action. Losses suffered as the result of a motor vehicle title lender's violation of Chapter 22 of Title 6.2 of the Code of Virginia may also be pursued under the Virginia Consumer Protection Act (§ 59.1-196 et seq. of the Code of Virginia), which in some cases permits consumers to recover actual and punitive damages.
Complaints and Contacting the Bureau of Financial Institutions: For assistance with any complaints you may have against a motor vehicle title lender, please contact the Bureau of Financial Institutions toll-free at (800) 552-7945 or at scc.virginia.gov. Complaints must be filed in writing with the Bureau of Financial Institutions and include copies of supporting documentation.
10 Va. Admin. Code § 5-210-30
Statutory Authority: §§ 6.2-2214 and 12.1-13 of the Code of Virginia.