December 13, 2008
Virginia Payday Lenders Face New Restrictions January 1
Filed under: News
Vision Payroll

In conjunction with recent amendments to the Payday Loan Act (Code of Virginia §§6.1-444 et seq.) that take effect January 1, 2009, the Virginia State Corporation Commission has adopted conforming regulations (Case Number BFI-2008-00295) on licensed payday lenders. In addition to requiring development of an internet database for licensed lenders to access and transmit loan information to, the new law made significant changes in interest rates and fees allowed, and placed restrictions on the frequency of such loans. Payday loans can be an expensive form of borrowing for employees; a two-week loan with a 15% fee works out to an Annual Percentage Rate (APR) of 391%. With the increased restrictions and higher fees allowed under the new law, employers may face more requests from employees for payday advances. Vision Payroll highly recommends consulting with your labor law attorney to ensure that any loans are properly documented and that deductions from pay checks comply with federal and state laws.


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