- Payday loans are permitted as a means of meeting short term emergency type obligations. Check cashing services are required by Virginia law to inform borrowers that a payday loan is not an appropriate method of dealing with long term financial obligations.
- Check cashing services in Virginia are required to provide the borrower with a written agreement that conspicuously discloses all fees as well as the annual percentage rate being charged. The agreement must be signed by both the borrower and the lender. The borrower must be provided with a copy of the signed agreement. Borrowers may not use proceeds from the loan to pay for any goods or services offered by the lending establishment.
- According to the Virginia Partnership to Encourage Responsible Lending, check cashing services are required to give borrowers a minimum of two pay periods in which to repay their loan, but in no case may the time frame be less than 14 days. Check cashing services may not extend a new loan to a customer who already has an outstanding payday loan from another check cashing service.
- According to PayDayLoanLaws.com, check cashing services in Virginia may not loan an individual more than $500 at one time. Rollovers of payday loans is prohibited in Virginia. Interest on a payday loan may be charged in the form of a fee which may not exceed 15 percent of the face amount of the loan.
- The state of Virginia requires all check cashing services, also referred to as payday lenders, to be licensed by the state. According to the Virginia State Corporation Commission, applicants must have sufficient financial responsibility, experience, character and reputation to operate the business efficiently, fairly and in the public interest. Chapter 18 of Title 6.1 of the Code of Virginia requires applicants to post a surety bond of $10,000 per business location and show unencumbered assets of $25,000 per location.
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