10 Va. Admin. Code § 5-200-110

Current through Register Vol. 41, No. 8, December 2, 2024

Section 10VAC5-200-110 - Short-term lending database

A. This section sets forth the rules applicable to the short-term lending database referred to in § 6.2-1810 of the Code of Virginia.

B. Except as otherwise provided in this section, a licensee shall transmit all information to the database via the Internet. In order to maintain the confidentiality and security of the information, a licensee shall not transmit information to the database using publicly accessible computers, computers that are not under the licensee's control, unsecured wireless (Wi-Fi) connections, or other connections that are not secure. A licensee shall maintain generally accepted security safeguards to protect the confidentiality of the information transmitted to the database, including but not limited to installing and regularly updating malware protection (antivirus and antispyware) software and a firewall.

C. After receiving a completed written loan application but prior to making a short-term loan, a licensee shall transmit the following information to the database for purposes of determining whether an applicant is eligible for a short-term loan. The licensee shall obtain the applicant information required by this subsection in accordance with the provisions of subsection D of this section.

1. Name of licensee and license number.

2. Office location of licensee.

3. First and last name or identification number of employee entering information into the database.

4. Applicant's first and last name.

5. Last four digits of applicant's driver's license number or identification card number.

6. Applicant's address.

7. Applicant's date of birth.

8. Type of card (e.g., driver's license or identification card issued by a state driver's licensing authority) provided by the applicant pursuant to subdivision D 1 of this section.

1. A licensee shall obtain the information required by subdivisions C 4, 5, 6, 7, and 8 of this section from the applicant's unexpired driver's license or identification card issued by a state driver's licensing authority (e.g., Department of Motor Vehicles for the Commonwealth of Virginia), regardless of whether the information on the driver's license or identification card is still accurate. A licensee may accept photocopies, facsimiles, or other reproductions of a driver's license or identification card.

2. A licensee shall retain a copy of the applicant's driver's license or identification card in its records. The driver's license number or identification card number shall be partially redacted by the licensee so that only the last four digits of the number remain visible.

3. A licensee shall not accept a driver's license or identification card from an applicant when there is reason to believe that (i) it belongs to an individual other than the applicant or (ii) it is fake, counterfeit, or has been altered, fraudulently obtained, forged, or is otherwise nongenuine or illegitimate.

E. If the database advises a licensee that an applicant is ineligible for a short-term loan, then the licensee shall inform the applicant of his ineligibility, instruct the applicant to contact the database provider for information about the specific reason for his ineligibility, and provide the applicant with the toll-free telephone number of the database provider.

F. Except as otherwise provided in subsection O of this section, if the database advises a licensee that an applicant is eligible for a short-term loan, then the licensee shall transmit the following additional information to the database prior to making a short-term loan:

1. Application date.

2. Loan number.

3. Date of loan.

4. Principal amount of loan.

5. Interest rate.

6. Dollar amount of precomputed interest to be charged until date of loan maturity.

7. Dollar amount of monthly maintenance fee to be charged.

8. Dollar amount of each payment.

9. Dollar amount of total fees and charges.

10. Annual Percentage Rate (APR) of loan.

11. Total number of payments.

12. Date of loan maturity.

13. If applicable, dollar amount of check given by applicant to secure the loan (i.e., at the time the loan is made).

G. A licensee shall generate a separate printout from the database showing the results of each loan eligibility query and retain the printout in its loan records.

H. Except as otherwise provided in subsection O of this section and subdivisions 3, 7, and 8 of this subsection, a licensee shall transmit the following additional information relating to loans made under the Act, as applicable, to the database no later than the end of the business day on the date of the event:

1. If a borrower cancels or rescinds a loan, the date of the cancellation or rescission.

2. If a loan is repaid or otherwise satisfied in full, (i) the date of repayment or satisfaction, and (ii) the total net dollar amount ultimately paid by the borrower in connection with the loan (i.e., principal amount of loan plus all fees and charges received or collected pursuant to § 6.2-1817 of the Code of Virginia, less any amount refunded to the borrower).

3. If a borrower's check or electronic draft is returned unpaid because the account on which it was drawn was closed by the borrower or contained insufficient funds, (i) the date the check or electronic draft is returned unpaid, and (ii) the dollar amount of the check or electronic draft. A licensee shall transmit such information to the database no later than five days after the date the check or electronic draft is returned unpaid.

4. If a licensee collects a deposit item return fee from a borrower, the dollar amount of the deposit item return fee.

5. If a licensee brings a civil action against a borrower for nonpayment of a loan, the date the proceeding is initiated and the total dollar amount sought to be recovered.

6. If a licensee obtains a judgment against a borrower, the date and total dollar amount of the judgment.

7. If a judgment obtained by a licensee against a borrower is satisfied, the date of satisfaction. A licensee shall transmit such information to the database on the date the licensee learns that the judgment has been satisfied.

8. If a licensee obtains a judgment against a borrower and collects any damages or costs from the borrower, the dollar amount of the damages or costs. A licensee shall transmit such information to the database on the date the licensee learns that the damages or costs have been paid.

9. If a licensee charges off a loan as uncollectible, the date the loan is charged off and the total dollar amount charged off.

1. If any information required to be transmitted by a licensee to the database is automatically populated or calculated by the database provider, the licensee shall verify the information and immediately correct any inaccuracies or other errors.

2. If a licensee becomes aware of any changes, inaccuracies, or other errors in the information previously verified or transmitted by the licensee to the database, the licensee shall immediately update or correct the database.

J. The following provisions address a licensee's inability to access the database via the Internet at the time of loan application:

1. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall to the extent possible use the database provider's alternative means of database access, such as a telephone interactive voice response system, for purposes of transmitting the information required by this section and obtaining applicant eligibility information from the database.

2. If a licensee makes a short-term loan based on applicant eligibility information obtained from the database provider's alternative means of database access, then the licensee shall transmit to the database any remaining information required by this section no later than the date that the database becomes accessible to the licensee via the Internet.

3. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control and the database provider's alternative means of database access is unavailable or otherwise unable to provide the licensee with applicant eligibility information, then the licensee may make a short-term loan to an applicant if the applicant signs and dates a separate document containing all of the representations and responses to the questions set forth below and the prospective loan otherwise complies with the provisions of the Act and this chapter. The document shall be in a type size of not less than 14 point and contain a statement that the representations and questions relate to loans obtained from either the licensee or another short-term lender. The licensee shall retain the original document in its loan file and provide the applicant with a duplicate original.

a. The representations to be made by an applicant are as follows:

(1) I do not currently have any outstanding payday loans or short-term loans under Chapter 18 of Title 6.2 of the Code of Virginia.

(2) I am not a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(3) I am not married to a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(4) I am not under the age of 18 and the son or daughter of a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

(5) One-half or less (including none) of my financial support for the past 180 days was provided by a regular or reserve member of the United States Army, Navy, Marine Corps, Air Force, Coast Guard, or National Guard serving on active duty under a call or order that does not specify a period of 30 days or fewer.

b. If a licensee makes a short-term loan pursuant to subdivision 3 of this subsection, then the licensee shall transmit to the database the information required by this section no later than the date that the database becomes accessible to the licensee, via either the Internet or the database provider's alternative means of database access.

4. If at the time a licensee receives a loan application the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall document in its records the technical problems it experienced and the date and time that it sought to access the database.

K. The following provisions address a licensee's inability to access the database via the Internet subsequent to making a loan:

1. If a licensee is required to transmit to the database information regarding a loan that has already been made, but the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall to the extent possible use the database provider's alternative means of database access, such as a telephone interactive voice response system, for purposes of transmitting the information required by this section to the database. If the database provider's alternative means of database access is unavailable or otherwise unable to accept the information, then the licensee shall transmit to the database the information required by this section no later than the date that the database becomes accessible to the licensee, via either the Internet or the database provider's alternative means of database access.

2. If a licensee is required to transmit to the database information regarding a loan that has already been made, but the licensee is unable to access the database via the Internet due to technical problems beyond the licensee's control, then the licensee shall document in its records the technical problems it experienced and the date and time that it sought to transmit the information to the database.

L. A licensee shall have limited access to the information contained in the database. The database shall only provide a licensee with the following information:

(i) whether an applicant is eligible for a new short-term loan; and

(ii) if an applicant is ineligible for a new short-term loan, the general reason for the ineligibility (e.g., the database may state that the applicant has an outstanding short-term loan but it shall not furnish any details regarding the outstanding loan). The database shall also permit a licensee to access information that the licensee is required to transmit to the database provided that such access is for the sole purpose of verifying, updating, or correcting the information. Except as otherwise provided in this subsection or 10VAC5-200-113, a licensee shall be prohibited from accessing or otherwise obtaining any information contained in or derived from the database.

M. If the commissioner determines that a licensee or former licensee has ceased business but still has one or more outstanding payday loans or short-term loans that cannot be repaid due to the licensee's or former licensee's closure, the commissioner may authorize the database provider to close the outstanding loans in the database in order to enable the affected borrowers to obtain short-term loans in the future. A licensee or former licensee shall be deemed by the commissioner to have ceased business if it (i) fails to respond to the bureau after two written requests mailed to the address on file with the bureau or (ii) fails to maintain its contact information in accordance with subsection K of 10VAC5-200-20.

N. Payday loans made prior to January 1, 2021, that remain outstanding on January 1, 2021, shall be considered for purposes of determining a borrower's eligibility for a short-term loan.

O. If the database provider is unable to complete the modifications to the database that are needed to accommodate the transmission of certain information required by this section, then the commissioner shall notify all licensees of this in writing and identify the specific information that they are not required to transmit until the commissioner further notifies them that the database provider has completed the modifications. Once the modifications have been completed, licensees shall not be required to transmit any information that they were previously unable to transmit due to the database being unable to accommodate it. The database provider shall complete all of the modifications no later than January 1, 2022.

10 Va. Admin. Code § 5-200-110

Derived from Virginia Register Volume 25, Issue 4, eff. January 1, 2009; amended, Virginia Register Volume 25, Issue 14, eff. March 1, 2009; Volume 28, Issue 20, eff. June 1, 2012; Amended, Virginia Register Volume 30, Issue 17, eff. May 1, 2014; Amended, Virginia Register Volume 37, Issue 25, eff. 8/1/2021.

Statutory Authority: §§ 6.2-1815 and 12.1-13 of the Code of Virginia.