Banking and Finance

Passed

P HB471

Nonprofit credit counseling. Requires credit counseling agencies to obtain a license from the State Corporation Commission in order to provide or offer to provide to consumers debt management plans. Under consumer debt management plans, an agency agrees to engage in debt settlement or debt pooling and distribution services on behalf of a consumer with the consumer's creditors, and the consumer gives money or control of his funds to the agency for distribution to the consumer's creditors. Licensees shall provide to consumers a statement that providing debt management plan services on behalf of the consumer may have a derogatory effect upon the consumer's credit report. The SCC's Bureau of Financial Institutions may investigate and examine the affairs, business, premises, and records of any person licensed or required to be licensed. The SCC may impose a fine or penalty on violators not exceeding $1,000. Any person operating without a license shall be guilty of a Class 1 misdemeanor. Any person who suffers loss by reason of a violation may bring a civil action. The SCC may request the Attorney General to investigate a suspected violation. Any violation constitutes a prohibited practice under the Virginia Consumer Protection Act. The bill does not apply to a person licensed to practice law in the Commonwealth. An agency that had been licensed under the current statutes regulating non-profit debt counseling agencies, which laws are repealed by this bill, is required to reapply for the new license by October 1, 2004.
Patron - Nixon

P HB688

Payday Loan Act; requirements; charges. Requires payday lenders to retain their borrowers' checks. The bill prohibits application of post-maturity interest to loan fees and limits borrowers' right to make partial payments to the period prior to loan maturity. Payday lenders are required to return paid loan agreements to borrowers marked "paid" or "canceled" and to keep copies of such agreements. The bill also provides that the Payday Loan Act's provisions exclusively control the post-judgment interest and other charges and expenses payday lenders may recover from borrowers.
Patron - Morgan

P HB1269

Banks; loans and other extensions of credit to executive officers and directors. Requires that Federal Reserve Board Regulations govern the maximum amount of loans and other extensions of credit a bank may make to any of its executive officers or directors, and the conditions and procedures for approval of such extensions of credit, regardless of whether the bank is a member of the Federal Reserve System.
Patron - Drake

P HB1460

Rates of interest. Provides that the legal and judgment rates of interest both are lowered from the current rate of eight and nine percent respectively to six percent, to reflect current market realities. Clarifies that where the relevant contract or instrument is silent and the court or jury has not set the interest rate, the same rate is applied for prejudgment and post-judgment interest. This bill incorporates HB 260.
Patron - Reese

P SB163

Banking and finance; confidentiality of information. Authorizes the State Corporation Commission or its employees to release examination reports regarding financial institution and personal financial information to other persons as required by grand jury subpoenas.
Patron - Colgan

P SB509

Consumer Real Estate Settlement Protection Act; summonses and subpoenas; orders have force and effect of circuit court decrees. Authorizes licensing authorities to issue summonses and subpoenas and to issue orders restraining a person from engaging in an act or practice. The bill also gives orders of the licensing authorities imposing penalties or requiring restitution the force and effect of circuit court decrees.
Patron - Mims

P SB536

Asset-Backed Securities Facilitation Act. Provides that any property, assets, or rights purported to be transferred in a securitization transaction shall be deemed to no longer be the property, assets, or rights of the transferor. A transferor in a securitization transaction, its creditors or a bankruptcy trustee, receiver, debtor, debtor in possession, or similar person shall have no rights to reacquire, reclaim, recover, repudiate, disaffirm, redeem, or recharacterize as property of the transferor any property, assets, or rights purported to be transferred by the transferor. In a bankruptcy, receivership, or other insolvency proceeding governed by the laws of the Commonwealth, the property, assets, and rights shall not be deemed to be part of the transferor's property, assets, rights, or estate.
Patron - Stosch

P SB542

Banking and finance; subsidiary trust companies and trust company holding companies. Permits companies other than banks and bank holding companies to own nonvoting stock of trust subsidiaries. The requirement that a trust company holding company also control a securities-related company is eliminated. "Control" is defined as ownership of 25 percent or more of the voting stock of a trust company. The bill also authorizes acquisition of a Virginia trust company by any bank holding company or any company having a trust subsidiary as permitted by federal law or the law of another state.
Patron - Stosch

Failed

F HB48

F HB260

Judgment rate of interest. Clarifies that the judgment rate of interest, where the relevant contract or instrument is silent and the court or jury has not set the interest rate, is the same for pre- and post-judgment interest. The judgment rate is lowered from its current rate of nine percent to six percent, to reflect current market realities. This rate of interest applies in civil actions, and is used to calculate child support arrearages pursuant to § 20-78.2. This bill is incorporated into HB 1460.
Patron - Jones, D.C.

F HB518

Payday loans. Prohibits a person from making a payday loan unless such person is a financial institution. Payday lenders are also required to explain to borrowers the information in the pamphlet that lenders are required to provide to borrowers.
Patron - Jones, D.C.

Carried Over

C HB1066

Exceptions to legal rate of interest; exercising options for the purchase of real estate. Excludes loans that fund the exercise of options for the purchase of real estate from the general prohibition on contracts that require the payment of interest at rates exceeding 12 percent annually. The bill also excludes financing by a landlord of delinquent rent provided a promissory note has been executed by the tenant and the landlord and the note clearly states the annual percentage interest rate.
Patron - Armstrong

C HB1156

Payday lending; creation of Internet database; specific power of attorney required for unemployed military spouses. Requires the State Corporation Commission on or before July 1, 2005, to implement a common database with real-time access through an Internet connection for payday lenders that would allow payday lenders to determine if a prospective borrower already has a loan outstanding or has closed a loan within the previous 24 hours. The Commission is authorized to charge a $1 fee per transaction. The bill prohibits a payday lender from entering into a payday loan (i) with a person who has an outstanding payday loan with that licensee or affiliate or with any other payday lender, or (ii) with a person whose previous payday loan has been terminated for less than 24 hours. The bill also requires a payday lender to maintain an internal common database and check the Commission's database to verify compliance with this prohibition, and prohibits a licensee from entering into a loan with a spouse of a member of the armed forces when the loan is secured against that member's pay unless a special power of attorney signed by the member of the armed forces is provided authorizing the loan.
Patron - Morgan

C SB144

Judgment rate of interest. Makes the judgment rate of interest for judgments not relating to a contract the prime rate plus two percent set as of the July 1 immediately prior to the date of judgment. Under current law, the judgment rate of interest is nine percent. A money judgment entered in an action arising from a contract shall carry interest at the rate lawfully charged on such contract, or the prime rate plus two percent set as of the July 1 immediately prior to the date of judgment, whichever is higher. Under current law, the judgment rate is the rate lawfully charged on such contract, or nine percent, whichever is higher.
Patron - Cuccinelli

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