A. A licensee may charge and collect interest on a motor vehicle title loan at rates not to exceed the following:
1. Twenty-two percent per month on the portion of the principal that does not exceed $ 700;
2. Eighteen percent per month on the portion of the principal that exceeds $ 700 but does not exceed $ 1,400; and
3. Fifteen percent per month on the portion of the principal that exceeds $ 1,400.
B. The annual rate of interest shall be charged only upon principal balances outstanding from time to time. Interest shall not be charged on an add-on basis and shall not be compounded or paid, deducted or received in advance. On motor vehicle title loans in excess of $ 700, a licensee may accrue interest utilizing a single blended interest rate provided the maximum charge allowed pursuant to subsection A is not exceeded.
C. Notwithstanding anything set forth in subsection A, other provisions of this chapter, or in a motor vehicle title loan agreement, interest shall not accrue on the principal balance of a motor vehicle title loan from and after:
1. The date that the motor vehicle securing the title loan is repossessed by the licensee making the loan; or
2. Sixty days after the borrower has failed to make a monthly payment on a motor vehicle title loan as required by the loan agreement unless the borrower has not surrendered the motor vehicle and the borrower is concealing the motor vehicle.
D. In addition to the loan principal and interest permitted under subsection A, a licensee shall not directly or indirectly charge, contract for, collect, receive, recover, or require a borrower to pay any further or other fee, charge, or amount whatsoever except for (i) a licensee’s actual cost of perfecting its security interest in a motor vehicle securing the borrower’s obligations under a loan agreement and (ii) reasonable costs of repossession and sale of the motor vehicle in accordance with § 6.2-2217. A licensee shall not be entitled to collect or recover from a borrower any sum otherwise permitted pursuant to § 6.2-302, 8.01-27.2, or 8.01-382. In no event shall the borrower be liable for fees incurred in connection with the storage of a motor vehicle securing a title loan following the motor vehicle’s repossession by the licensee or its agent, or the voluntary surrender of possession of the motor vehicle by the borrower to the licensee.
E. Every title loan shall be a term loan providing for repayment of the principal and interest in substantially equal monthly installments of principal and interest; however, nothing in this chapter shall prohibit a loan agreement from providing for an odd first payment period and an odd first payment greater than other monthly payments because of such odd first payment period.
F. A title loan agreement may not be extended, renewed, or refinanced.
G. A licensee 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.
H. Payments shall be credited by the licensee on the date received.
History
2010, c. 477, § 6.1-496.
