Chap. 370.—An ACT to amend the Code of Virginia by adding a new title num-
bered 37A, entitled “Loan and Financing Organizations”, and a new chapter
therein numbered 166A 1, entitled “Virginia Small Loan Law”, consisting of
sixty-one new sections, numbered 4168-a 1 through 4168-a 61, to provide for
the regulation of the business of making loans not in excess of a certain small
amount: and to such end, to provide for the licensing of persons as prerequisite
to engaging therein; to prescribe the maximum rates of compensation that may
be charged upon loans made in its conduct, including assignments of wages
earned or to be earned; to provide for the administration of the provisions for
regulation thereof; to provide for certain investigations and certain exami-
nations to be conducted and made; to provide for the prescription and promulga-
tion of rules and regulations, within certain guiding principles and in further-
ance of the administration of the law; to provide for the enforcement of the
provisions of the law and of the rules and regulations so made; to provide
for review of, and appeal from, all rules, regulations, orders, and actions made,
entered, or taken under the law; to provide for cease and desist, or injunctive
orders, with incidental receivership, in certain cases, for prevention of viola-
tions of the provisions of the law on the part of persons other than licensees;
to provide for disciplinary measures for violations by licensees; to prescribe
penalties, in addition to other measures, for certain violations of the law; to
repeal certain designated acts; and to repeal all other acts or parts of acts
in so far as inconsistent. [S 55]

Approved March 31, 1944

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia of nineteen hundred and nineteen be
2nded by adding a new title numbered thirty-seven A, entitled ‘Loan
| Financing Organizations’, and a new chapter numbered one hundred
| sixty-six A one, entitled “Virginia Small Loan Law”, consisting of
ty-one new sections numbered forty-one hundred and sixty-eight-a one
ough forty-one hundred and sixty-eight-a sixty-one, as follows:

Title 37A
LOAN AND FINANCING ORGANIZATIONS
Chapter 166A-1

Virginia Small Loan Law

Section 4168-a 1. Short Title-—The short title of the law embraced
his chapter of the Code is Virginia Small Loan Law.

Section 4168-a 2. Definitions—As used in this chapter, unless a
‘erent meaning or construction is clearly required by the context, (1)
expressions “the law”, “this law” mean the Virginia Small Loan Law
now or hereafter embraced in this chapter of the Code; (2) “person”
ludes individuals, co-partnerships, associations, trusts, corporations,
d all other legal and commercial entities; (3) “license”? means a

cle license issued hereunder with respect to a single place of business:

y “licensee” means a person to whom one or more licenses have been
1ed; (5) “Commission” means the State Corporation Commission:
) “Commissioner” means the Commissioner of Banking as defined
the law as of the particular time; (7) the meaning ascribed to the
ngular”’ form applies also to the “plural”, and the “masculine” includes
“feminine” and “neuter”.
Section 4168-a 3. Administration—All powers and duties of regula-
ion and supervision conferred and imposed by this law are, except as
otherwise specifically stated, vested in and imposed upon the Commission,
but it may delegate to the Commissioner the exercise of such of these
powers and the performance of such of these duties as it deems proper,
subject to its supervision and control.

Section 4168-a 4. License fees—Collection ; Disposition—-The Com-
mission shall collect and turn into the State treasury all license and other
fees and all amounts so collected and the unexpended balances thereof
may be used only for the payment of the expenses of the administration
of this law and of the performance of other functions of the Bureau of
Banking of the Commission. The Commission may employ such ex-
aminers or clerks to assist it and the Commissioner as it from time to
time deems necessary and may fix their compensation, and all salaries
and expenses necessarily incurred in the administration of this law shall
be paid out of the license and other fees collected and turned into the
State treasury under the provisions of this law, upon the basis of duly
verified itemized vouchers, approved by the Commission. The Comp-
troller shall issue his warrant on the State Treasurer for, and the State
Treasurer shall pay, the salaries and expenses out of the proceeds in the
State treasury from these fees, in accordance with appropriations as from
time to time made. .

Section 4168-a 5. Scope.—No person shall engage in the business of
lending in amounts of three hundred dollars or less, and charge, contract
for, or receive, directly or indirectly, on or in connection with any loan,
any interest, charges, compensation, consideration or expense which in
the aggregate are greater than the rate otherwise permitted by law except
as provided in and authorized by this law and without first having ob-
tained a license from the Commission.

Section 4168-a 6. Exemptions.—No persons doing business under
the authority of any law of this State or of the United States relating to
banks, savings banks, trust companies, building and loan associations, in-
dustrial loan associations, or credit unions shall be eligible to become a
licensee under this law nor shall this law apply to any business transacted
by any person under the authority of and as permitted by any such law,
nor to any bona fide pawnbroking business transacted under the pawn-
broker’s license, nor to anyone operating in accordance with the specific
provisions of any other law heretofore or hereafter enacted.

Section 4168-a 7. Evasions.——The provisions of section forty-one
hundred sixty-eight-a five shall apply to any person who seeks to evade
its application by any device, subterfuge, or pretense whatsoever includ-
ing, but not thereby limiting the generality of the foregoing: the loan.
forbearance, use, or sale of credit (as guarantor, surety, endorser, co-
maker, or otherwise), money, goods, or things in action; the use of
collateral or related sales or purchases of goods or services, or agree-
ments to sell or purchase, whether real or pretended; receiving or charg-
ing compensation for goods or services, whether or not sold, delivered,
or provided; and the real or pretended negotiation, arrangement, or
procurement of a loan through any use or activity of a third person,
whether real or fictitious.

Section 4168-a 8. Penalty——Any person and the several members,
officers, directors, agents, and employees thereof, who violates or partici-
pates in the violation of any provision of section forty-one hundred sixty-
eight-a five is guilty of a misdemeanor and upon conviction is punishable
by fine of not more than five hundred dollars and not less than fifty dollars,
or by imprisonment of not more than six months, or by both fine and im-
prisonment, in the discretion of the jury or court. Any contract of loan
in the making or collection of which any act has been done which violates
section forty-one hundred sixty-eight-a five is void and the lender shall
not collect, receive, or retain any principal, interest, or charges whatso-
ever, and any amount paid on account of principal or interest shall be
recoverable by the person by or for whom payment was made.

Section 4168-a 9. Application and Fee.—Application for a license to
make loans under this law shall be in writing, under oath, and in the form
prescribed by the Commission, and shall contain the name, residence and
business addresses of the applicant, and if the applicant is a co-partner-
ship or association of every member, and if a corporation of each ofhcer
and director; also the county or municipality, with street and number, 11
any, where the business is to be conducted, all other information required
by this law, and such further relevant information as required by the
Commission ; and the application shall be accompanied by payment of the
sum of fifty dollars as a fee for investigating the application and by the
additional sum of one hundred and fifty dollars as a license fee for the
period ending on the last day of the current calendar year, except that
when the application is filed after June thirtieth in any year the license
fee shall be seventy-five dollars.

Section 4168-a 10. Investigation of Application. —Upon the filing of
the application and the payment of the fees, the Commission shall make an
investigation of the facts concerning the application and the requirements
provided for in section forty-one hundred and sixty-eight-a eleven. The
Commission may make such investigations relative to the application and
the requirements as it deems fit, and it shall grant or deny each application
for a license within sixty days from date it is filed together with all
required information and fees.

Section 4168-a 11. Issuance of License.—If the Commission finds
(1) that the financial responsibility, experience, character, and general
fitness of the applicant, or of the members if the applicant be a co-partner-
ship or association, or of the officers and directors if the applicant be a
corporation, are such as calculated to command the confidence of the
public and to warrant belief that the business will be operated lawfully.
honestly, fairly, and efficiently within the purpose of this law, (2) that
the applicant has available, for the operation of the business at the speci-
fied location, liquid assets of at least twenty thousand dollars if the speci-
fied location is in a political subdivision with a population of more than
fifteen thousand, or of at least ten thousand dollars if the location is ina
political subdivision of fifteen thousand or less population, and (3) __ that
all of the prerequisites to obtaining the license prescribed by section
forty-one hundred sixty-eight-a nine have been complied with, (the fore-
going facts being conditions precedent to the issuance of a license under
this law), it shall issue and deliver to the applicant a license to make loans
in accordance with the provisions of this law at the location specified
in the application.

Section 4168-a 12. Denial of License.—If the Commission does not
so find it shall thereupon deny the application and notify the applicant of
the denial, returning the license fee but retaining the investigation fee.

Section 4168-a 13. Posting of License—The license shall contain
the address at which the business is to be conducted, the full name of the
licensee, or if the licensee is a co-partnership or association the names of
the members, and if a corporation the date and place of incorporation,
it must be kept conspicuously posted in the place of business of the
licensee, and it shall not be transferable or assignable. A copy of sections
forty-one hundred and sixty-eight-a thirty-seven through forty-one hun-
dred sixty-eight-a forty-three, or so much as is designated by the Com-
mission, must also be kept conspicuously posted in the place of business.

Section 4168-a 14. Continuing License; Annual Fee.—Each license
shall remain in full force and effect until surrendered, revoked, or sus-
pended as provided by this law. Every licensee shall, on or before the
tenth day of each December, pay to the Commission the sum of one
hundred and fifty dollars for each license held by him, as an annual license
fee for the succeeding calendar year.

Section 4168-a 15. Minimum Assets.—Every licensee shall main-
tain at all times the minimum assets prescribed by this law for each license,
either in liquid form available for the operation of or actually used in the
conduct of the business at the location specified in each license.

Section 4168-a 16. Place of Business.—Not more than one place of
business shall be maintained under the same license, but the Commission
may issue more than one license to the same licensee upon compliance, as
to each additional license, with all applicable provisions of this law govern-
ing issuance of a single license.

Section 4168-a 17. Removal.—No change in the place of business
of a licensee to a location outside of the original county, city, or town
shall be permitted under the same license. When a licensee wishes to
change his place of business to a new location or street address within the
same county, city, or town, he shall give written notice to the Commis-
sion which shall investigate the facts, and, if it shall find that the proposed
location is reasonably accessible to borrowers under existing loan con-
tracts, it shall permit the change, and shall issue and deliver to the licensee
an amended license covering the new location or address, which shall be
authority for operation at the new location. If the Commission does not
so find it shall deny the licensee permission to make the change.

Section 4168-a 18. Residence of Borrower.—Nothing in this law
shall be construed to limit the loans of any licensee to residents of the
community in which the licensed place of business is situated.

Section 4168-a 19. Restrictions on Name.—No licensee shall use a
firm, corporate, or assumed name which contains any of the following
words: “savings”, “trust”, “trustee”, “bank”, “banker”, “banking”, “in-
vestment”, “thrift”, “building”, or “industrial”, unless such name shall
have been authorized and in use by the licensee on or before January
first, nineteen hundred and forty-four.

Section 4168-a 20. Revocation of License—The Commission, upon
ten days written notice to the licensee stating the contemplated action and
in general the grounds therefor, and upon reasonable opportunity to be
heard, may revoke any license issued hereunder if it finds that, (1) the
licensee has failed to pay the annual license fee or to comply with any
order of the Commission or of the Commissioner lawfully made pursuant
to and within the authority of this law; or (2) the licensee, either know-
ingly or without the exercise of due care to prevent same, has violated
any provision of this law or any regulation lawfully made by the Com-
mission under section forty-one hundred sixty-eight-a thirty; or (3) any
fact or condition exists which clearly would have warranted the Com-
mission in refusing originally to issue the license.

Section 4168-a 21. Suspension of License —If the Commission finds
that probable cause for revocation of any license exists and that enforce-
ment of the law requires immediate suspension of the license pending in-
vestigation, it may, upon three days written notice and a hearing, by the
Commission or by the Commissioner, enter an order suspending the
license for a period not exceeding thirty days.

Section 4168-a 22. Record and Notice—Whenever the Commission
revokes or suspends a license issued pursuant to this law it shall forth-
with enter its findings and an order to that effect and shall compile a
record containing, (1) a summary of the evidence, (2) the findings
with respect thereto, (3) the order, (4) the reasons supporting the
revocation or suspension, and serve a copy upon the licensee.

Section 4168-a 23. Surrender of License-——Any licensee may sur-
render any license by delivering it to the Commission with written notice
of its surrender, but the surrender shall not affect his civil or criminal
liability for acts previously committed.

Section 4168-a 24. Preexisting Contracts—No revocation, suspen-
sion, or surrender of any license shall impair or affect the obligation of
any preexisting lawful contract between the licensee and any borrower.

Section 4168-a 25.. Reinstatement of License-——The Commission
may reinstate any suspended license or issue a new license to a person any
license of whom has been revoked if no fact or condition then exists
which clearly would have warranted the Commission in refusing origi-
nally to issue a license under this law.

Section 4168-a 26. Investigations—(a) For the purpose of dis-
covering violations of this law or securing information lawfully required
under it, the Commission or its duly authorized representative may at any
time investigate the loans, books and records of any person who Is en-
gaged or appears to the Commission to be engaged in the business of mak-
ing small loans as defined and described in, and required to be licensed
and supervised under, this law, particularly in section forty-one hundred
s1xty-eight-a five, or who advertises for, solicits, or holds himself as will-
ing to make, loans in amounts of three hundred dollars or less, or who the
Commission has reason to believe is violating any provision of this law,
whether such person shall act or claim to act under or without the
authority of this law, or as principal, agent, broker or otherwise. In
furtherance of the investigation the Commission through its duly author-
ized representatives shall have and be given free access to the offices,
places of business, books, papers, accounts, records, files, safes, and vaults
of all such persons, and shall have authority to require attendance of wit-
nesses and to examine under oath any person whose testimony may be
required relative to any such loans or business or to the subject matter
of the investigation, examination or hearing.

(b) Before making an investigation as provided for in this section
as to any person not licensed nor an applicant for a license under this
law a formal order must be entered by the Commission specifically direct-
ing the investigation to be made, commanding submission by the person
whose business is to be investigated, and setting forth all other details
necessary to clearness and certainty, and no such order may be entered
except upon at least one affidavit, which may be given by any member of
the personnel of the Commission or by any other person, or upon docu-
mentary data, or upon admissions of the person to be investigated, or upon
any combination of the foregoing, satisfactorily establishing, prima facie,
facts sufficient to warrant the investigation provided for by this section,
but if the person involved consents to the investigation being made the
foregoing requirements may be dispensed with and the investigation may
be made upon formal or informal direction of the Commission or by, or
upon the direction of, the Commissioner.

(c) In any case of compulsory investigation, as provided for in this
section, of the business of a person not a licensee nor an applicant for a
license under this law, no prosecution of the person so investigated for
any crime, penalty, or forfeiture provided for by this law may be main-
tained, but nothing herein shall prevent prosecution for the violation of
any other criminal law or of any other law providing for penalty or
forfeiture, nor does the immunity from prosecution provided for hereby
extend to any officer, agent or employee of the person whose business
is being investigated, except that in so far as the Commission requires,
as it may do, verbal testimony to be given by any one not a licensee or an
applicant under this law there can be no prosecution of nor proceeding
against the person so compellea to testify for conviction of any crime
committed or for imposition of any penalty or any forfeiture incurred in
connection with the subject. matter as to which such testimony was com-
pelled to be given.

(d) Notwithstanding any such compulsory investigation or verbal
testimony, civil rights, not involving penalty or forfeiture, on the part of
any one and the right to injunctive relief as provided for in section forty-
one hundred sixty-eight-a thirty-one of this law may be enforced and
facts discovered and disclosures made in the course of the investigation
shall be available against the person so investigated or so compelled to
testify in any proceeding involving any ordinary civil right or for ob-
taining injunction under this law.

Section 4168-a 27. Annual Examinations.—(a) At least once each
year, and at such other times as deemed necessary, the Commission.
through the Commissioner or his duly authorized representative, shall
make an examination of the affairs, business, office and records of each
licensee in so far as they pertain to any business licensed under this law.
It shall be the duty of the licensee to furnish promptly by mail or other-
wise such facts and statements in connection with his business trans-
acted in Virginia as the Commission deems proper to require at any time.

(b) At the time of examination, the Commissioner of Banking shall
charge an examination fee of twenty dollars ($20.00), but if the loan
balance of such licensee exceeds fifty thousand dollars ($50,000.00), the
examination fee shall be twenty dollars ($20.00) for the first fifty thou-
sand dollars ($50,000.00) of loan balance and forty cents (40c) for each
thousand dollars ($1,000.00), or fraction thereof, of loan balance in
excess of fifty thousand dollars ($50,000.00).

Section 4168-a 28. Books and Records.—The licensee shall keep and
use in his licensed place of business such books, accounts and records as
in the opinion of the Commission will enable it to determine whether the
licensee is complying with the provisions of this law and with rules
and regulations lawfully made under the provisions of this law. Every
licensee shall preserve the books, accounts, and records, including cards
used in the card system, if any, for at least two years after making the
final entry on any loan recorded therein. No note or security taken
under this law shall be hypothecated or deposited outside this State, nor
within the State except under an agreement permitting the Commis-
sion or its duly authorized representatives to examine the papers so
hypothecated or deposited.

Section 4168-a 29. Annual Reports.—Each licensee shall annually
on or before the first day of March file a report with the Commission
giving such relevant information as reasonably required concerning the
business and operations during the preceding calendar year as to each
licensed place of busines conducted by any licensee within the State. Re-
ports shall be made under oath and shall be in the form prescribed by
the Commission which shall make and publish annually an analysis and
recapitulation of the reports. |

Section 4168-a 30. Regulations and Orders—-The Commission is
empowered to promulgate rules and regulations for the enforcement of
this law, in addition thereto and consistent therewith, in the manner re-
quired by law. Every regulation, every administrative ruling, and every
requirement of general application shall be in writing and be entered and
maintained as a public record in an indexed permanent book with the
date of each suitably indicated. A copy of every regulation and order
promulgating it shall be mailed to all licensees at least ten days before
the effective date thereof, and a copy of every other order affecting per-
sons other than licensees shall be mailed to the person or persons im-
mediately affected thereby but without a required period of notice except
as and when other procedure is required by this or any other law.
Section 4168-a 31. Injunctions; Receivers—(a) In addition to all
other powers granted under this law, the Commission may, whenever it
has reasonable cause to believe that any person, not licensed under this
law, is violating or is threatening to or intends to violate any provision of
this law or any order or regulation lawfully made pursuant to the au-
thority of this law, ‘certify the facts to the Attorney General and request
him to examine the same, and if in his judgment the facts justify it shall
be his duty to institute and prosecute injunction proceedings in the Circuit
Court of the City of Richmond, in the name of the Commonwealth at
the relation of the Commission, and that court is empowered, and clothed
and vested with full and complete equity jurisdiction, to enjoin and re-
strain any such person from engaging in or continuing any such viola-
tion or from doing any act or acts in furtherance thereof. In any such
suit a decree or order may be entered awarding such preliminary or
final injunction as deemed proper. In addition to all other means pro-
vided by law for the enforcement of a temporary restraining order, tem-
porary injunction, or final injunction, the court has the power and juris-
diction to impound, and to appoint a receiver for, the property and busi-
ness of the defendant, including books, papers, documents, and records
pertaining thereto or so much thereof as the court deems reasonably
necessary to prevent further violations of this law through or by means
of the use of such property and business. The receiver, when appointed
and qualified, shall have such powers and duties as to custody, collection,
administration and liquidation of the property and business as from time
to time conferred upon him by the court.

(b) No person shall be entitled to refuse to testify because his
testimony would tend to incriminate himself or subject him to penalty or
forfeiture but if called to testify by the Commonwealth or by the court
trying the case he may not thereafter be prosecuted for any crime or
subjected to any penalty or forfeiture growing out of the transaction con-
cerning which he testifies.

Section 4168-a 32. Copies of Orders.—On application of any person,
and payment of the costs, the Commission shall furnish a certified copy
of any order or regulation made or any license issued by it or by the
Commissioner under its authority. Such copy shall be prima facie evi-
dence in any court or proceeding of the fact of the making of the order
or of the issuance of the license or regulation.

Section 4168-a 33. Advertising—No licensee or other person
subject to this law shall advertise, display, distribute or broadcast, or
cause or permit to be advertised, displayed, distributed or broadcast, in
any manner whatsoever, any false, misleading or deceptive statement or
representation with regard to the rates, terms or conditions for loans in
the amount or of the value of three hundred dollars ($300.00) or less.
The Commission may require that charges or rates of charge, if stated by
a licensee, be stated fully and clearly in such manner as it deems neces-
sary to prevent misunderstanding by prospective borrowers, and it may
permit or require licensees to refer in their advertising to the fact that
their business is under State supervision, subject to conditions imposed by
it to prevent false, misleading or deceptive impression as to the scope or
degree of protection provided by this law.

Section 4168-a 34. Other Business in Same Office.—No licensee
shall conduct the business of making loans under this law within any
office, suite, room, or place of business in which any other business is
solicited or engaged in, or in association or conjunction with any other
business, unless authority to do so is first given by the Commission or
by the Commissioner. Upon receipt of written application for such
authority the Commission or the Commissioner shall investigate the facts
and, if it be found that the character of the licensee and the nature of the
other business warrant belief that the conduct of the other business would
not conceal or facilitate violation or evasion of this law or of regulations
lawfully made thereunder, it or he shall grant authority in writing. If it
is not so found it or he shall deny such authority in writing.

Section 4168-a 35. Business Confined to Licensed Office—No
licensee shall conduct the business of making loans provided for by this
law under any other name or at any place of business within this State
other than those designated in the license.

Section 4168-a 36. Liens on Real Estate.—No licensee shall take a
lien upon real estate as security for any loan under this law, except a lien
arising upon rendition of a judgment, and any such lien shall be void.

Section 4168-a 37. Maximum Rate of Charge.—Every licensee may
contract for and receive on any loan of money not exceeding three hun-
dred dollars ($300.00) in amount charges at a rate not exceeding two and
one-half per centum (2!2%) a month on the unpaid principal balance.

Section 4168-a 38. Limitation of Interest after Judgment.—If judg-
ment be obtained against any party on any loan made under the provisions
of this law neither the judgment nor the loan shall carry, from the date of
the judgment, any charges against any party to the loan other than court
costs and interest on the amount of the judgment at six per centum per
annum.

Section 4168-a 39. Limitation of Interest in Bankruptcy.—Any loan
made under the provisions of this law which is properly scheduled in a
bankruptcy proceeding shall bear interest against any party to the loan
from ninety (90) days after the date of adjudication, whether there is
an ultimate discharge or an extension, if any interest be allowable at all,
at six per centum per annum only; but this limitation shall not apply
either when the bankrupt is not entitled to a discharge, or the particular
obligation is not dischargeable under the provisions of the Bankruptcy
Act as now or hereafter amended.

Section 4168-a 40. Limitation of Interest upon Death of Borrower.
—After ninety (90) days from the date of the death of the borrower
no further charges than interest at six per centum per annum shall be
computed or collected from any party to the loan upon the unpaid princi-
pal balance of the loan.

Section 4168-a 41. Limitation of Interest after Maturity of Loan.—
For the period beginning twenty-three months after the date of making
any loan contract under the provisions of this law, no further charges than
interest at six per centum per annum shall be computed or collected from
any party to the loan upon the unpaid principal balance of the loan.

Section 4168-a 42. Method of Computing Charges.—Charges on
loans made under this law shall not be paid, deducted, or received in ad-
vance, nor compounded. If part or all of the consideration for a loan
contract is the unpaid principal balance of a prior loan, then the princi-
pal amount payable under the loan contract may include any unpaid
charges on the prior loan which have accrued within sixty days before
the making of the new loan contract. The inclusion of these charges shall
not be made oftener than once each six months, the six months period to
be computed from the date of entering into the new loan contract, and the
foregoing privilege is intended for the convenience of the borrower and
is not to be construed or applied to validate a general course of dealings
by a licensee with the intent and for the purpose of profit. Charges on
loans shall (1) be computed and paid only as a percentage per month
of the unpaid principal balance or portion thereof, (2) be so expressed
in every obligation signed by the borrower, and (3) be computed on the
basis of the number of days actually elapsed. For the purpose of com-
puting charges, whether at the maximum rate or less, a month shall be any
period of thirty consecutive days and the rate of charge for each day shall
be one thirtieth (1/30th) of the monthly rate.

Section 4168-a 43. No further Charges.—In addition to the charges
herein provided for no further or other amount whatsoever for any
examination service, brokerage, commission, fine, notarial fee, recorda-
tion fee or other thing or otherwise shall be directly or indirectly charged,
contracted for or received. If any amount other than or in excess of the
charges permitted by this law is charged, contracted for, or received,
except as the result of an accidental and bona fide error of computation
which was not made pursuant to a regular course of dealing, the contract
of loan shall be void, and the licensee shall have no right to collect or
receive or retain any principal, or charges whatsoever and any amounts
paid on account of principal or interest shall be recoverable by the person
by or for whom payment was made; and the licensee and the several
members, officers, directors, agents and employees thereof who partici-
pated in the violation shall be guilty of a misdemeanor and upon con-
viction shall be punishable by a fine of not more than five hundred dollars
($500.00) and not less than fifty dollars ($50.00), or by imprisonment
of not more than six months, or by both, in the discretion of the court or
jury.
Section 4168-a 44. Requirements for Making and Payment of Loans.
—Every licensee shall (1) at the time any loan is made, deliver to the
borrower, or if there are two or more borrowers to one of them, a pass-
book or statement on which shall be printed in the English language a
copy of sections forty-one hundred sixty-eight-a thirty-seven through
forty-one hundred sixty-eight-a forty-three, or so much as is designated
by the Commission, in type not smaller than eight point, which statement
or passbook shall disclose in clear and distinct terms the amount and date
of the loan, a clear description of the payments required, the type of
security, if any, for the loan, the names and addresses of the licensee anc
of the principal debtor on the loan contract, and the agreed rate o
charge, (2) when each payment is made on account of any loan, enter:
the payment on the statement or on the passbook, specifying the amoum
applied to charges and the amount, if any, applied to principal. and stat.
ing the unpaid principal balance, if any, and, if neither the statement o:
the passbook be produced, and only in such case, receipt, containing the
foregoing items, must be given, but the requisite entries must be made or
the statement or passbook at the first opportunity, (3) permit payment!
to be made in advance in any amount on any contract of loan at any
time, but the licensee may apply the payment first to all charges in full
at the agreed rate up to the date of the payment, (4) upon repayment
of the loan in full, mark plainly every obligation and security signed by an
obligor with the word “Paid” or “Cancelled”, release any mortgage, mari
satished any judgment, restore any pledge, and cancel and return anv
note and any assignment given to the licensee, (5) in the event of
collection by foreclosure sale or otherwise, pay and return to the borrower
or to whomsoever entitled any surplus arising after the payment of the
expenses of collection, sale or foreclosure and satisfaction of the debt.

Section 4168-a 45. Confession of Judgment, etc—No licensee shall
take any confession of judgment or any power of attorney running to him-
self or to any third person to confess judgment or to appear for the ber-
rower in a judicial proceeding, and any such confession of judgment or
power of attorney to confess judgment shall be void.

Section 4168-a 46. Clear Description.—No licensee shall take anv
note, promise to pay, or instrument of security that does not give the
amount of the loan, a clear description of the installment payments re-
quired, and the agreed rate of charge, nor any instrument in which blanks
are left to be filled in after execution. No written financial statement
given by any applicant for a loan, or by any borrower, to a licensee
under this law, shall be received in evidence, or otherwise used, against
such applicant, or borrower, in any proceeding to recover the :ndebted-
ness incurred in connection with which the statement was given and shall
not be used in opposition to the granting of a discharge in bankruptcv.

Section 4168-a 47. Installment Payments.—No licensee shall enter
into any contract of loan under this law providing for installment payments
extending more than twenty-one calendar months from the date of mak-
ing the contract, and every contract shall provide for repayment of the
amount loaned in substantially equal installments, either of principal or
of principal and charges in the aggregate, at approximately equal periodic
intervals of time. But nothing contained in this law shall prevent a loan
heing considered a new loan because the proceeds of the loan are used
to pav an existing contract.

Section 4168-a 48. Penalty.—If in the making or collection of anv
contract of loan the lender violates, either knowingly or without the
exercise of due care to prevent the violation, any provision of section-
forty-one hundred sixty-eight-a forty-four through forty-one hundre?
sixty-eight-a forty-seven, he shall be subject to a fine. to be imposed by
the Commission, of not less than ten dollars ($10.00) nor more than one
hundred dollars ($100.00), and he may recover or retain only the princi-
pal amount of the loan and any interest paid shall be recoverable.

Section 4168-a 49. Restrictions of Borrower’s Indebtedness.—No
licensee shall, directly or indirectly, engage in the business of making
loans of more than three hundred dollars ($300.00) to or on account
of any one person. The foregoing prohibition shall also apply to any
licensee who permits any person, as borrower or as endorser, guarantor,
or surety for any borrower, or otherwise, or any husband and wife
jointly or severally, to owe directly or contingently or both to the licensee
at any time a sum of more than three hundred dollars ($300.00) of
principal.

Section 4168-a 50. Wage Purchases.—The payment of three hun-
dred dollars ($300.00) or less in money, credit, goods or things in action,
as consideration for any sale or assignment of, or order for, the payment
of wages, salary, commission, or other compensation for services, whether
earned or to be earned, shall for the purposes of this law be deemed a
loan of money secured by the sale, assignment, or order, and the amount
by which the compensation so sold, assigned or ordered paid exceeds the
amount of consideration actually paid shall for the purpose of this law
be deemed interest or charges upon the loan from the date of the payment
to the date the compensation is payable, which amount shall not, in any
case, be more than is sufficient to yield, to the licensee making the loan,
interest on his investment at the rate of ten per centum per annum. Such
transactions shall in all other respects be governed by and subject to the
provisions of this law.

Section 4168-a 51. Validity and Payment of Assignments.—No as-
signment of or order for payment of any salary, wages, commissions, or
other compensation for services, earned or to be earned, given to secure
any loan made by any licensee, shall be valid unless the amount of the
loan is paid to the borrower simultaneously with its execution; nor shall
any such assignment or order, or any chattel mortgage or other hen on
household furniture then in the possession and use of the borrower be
valid unless it is in writing, signed in person by the borrower, and not by
an attorney, or if the borrower is married unless it is signed in person by
both husband and wife, and not by an attorney, provided nothing in this
law shall have the effect of impairing in any manner any rights on the
part of any one as to exemptions under the poor debtors law or under any
other applicable exemption law as now or hereafter enacted: but written
assent of a spouse shall not be required when husband and wife have been
living separate and apart for a period of at least five months prior to the
making of the assignment, order, mortgage, or lien; and the provisions
of this section are in addition to, and not in derogation of, the general
statutes pertaining to the subject.

Section 4168-a 52. Amounts Collectible Under Assignment.—A
valid assignment or order for the payment of future salary, wages, com-
missions, or other compensation for services, may be given as security for
a loan made by any licensee, notwithstanding the provisions of any other
law to the contrary, and under the assignment or order, not to exceed ten
per centum of the borrower’s salary, wages, commissions, or other com-
pensation for services shall be collectible from the employer of the bor-
rower by the licensee at the time of each payment to the borrower of the
salary, wages, commission, or other compensation for services, from the
time that a copy of the assignment, verified by the oath of the licensee or
his agent, together with a similarly verified statement of the amount un-
paid upon the loan and a printed copy of section forty-one hundred sixty-
eight-a fifty-one and this section, is served upon the employer.

Section 4168-a 53. Loans Made Elsewhere.—No loan made outside
this State in the amount of three hundred dollars ($300.00) or less for
which a greater rate of interest, consideration or charge, than is per-
mitted by the law applicable to such loan in the state in which the loan
was made, has been charged, contracted for, or received shall be collected
in this State and every person in any wise participating in an effort to
enforce the collection of such loan in this State shall be subject to the
provisions of this law.

Section 4168-a 54. Review—In addition to any other remedy he
may have any licensee or any other person considering himself aggrieved
by any action of the Commissioner hereunder pursuant to authority con-
ferred upon him or delegated to him by the Commission may, within
thirty days of the action complained of, file a petition as a matter of right
with the Commission to review the action. The proceeding on review
shall be de novo and the record and summary of the evidence before, and
findings of, the Commissioner shall be admissible as evidence before the
Commission.

Section 4168-a 55. Appeal—From any action taken by the Commis-
sion hereunder, whether upon petition from action taken by the Com-
missioner, or otherwise, any licensee, or any other person in interest
considering himself aggrieved, may, as a matter of right, appeal to the
Supreme Court of Appeals in the manner provided by law.

Section 4168-a 56. Preexisting Contracts—This law or any part
of it may be modied, amended, or repealed so as to effect a cancellation
or alteration of any license or right of a licensee thereunder provided
that the cancellation or alteration shall not impair or affect the obligation
of any preexisting lawful contract between any licensee and any borrower.

Section 4168-a 57. Status of Preexisting Licenses——Any person
having a license under chapter four hundred and two of the Acts of the
General Assembly of nineteen hundred and eighteen, as amended, in
force when this act becomes effective, shall, notwithstanding the repeal
of that act, be deemed to have a license under this law for a period ex-
piring six months after the effective date, if not sooner revoked, provided
that the person shall have paid or shall pay to the Commission as a license
fee for the six months period the sum of seventy-five dollars ($75.00).
Any license so continued in effect under the provisions of this law shall
be subject to revocation or suspension during the six months period as
provided in sections forty-one hundred sixty-eight-a twenty through
forty-one hundred sixty-eight-a twenty-five, except that it may not be
revoked during the six months period upon the ground that the licensee
has not maintained the minimum amount of assets required in section
forty-one hundred sixty-eight-a fifteen.

Section 4168-a 58. Status of Preexisting Obligations —Nothing
herein contained shall be so construed as to impair or affect the obligation
of any contract of loan between any licensee and any borrower which was
lawfully entered into prior to the effective date of this law.

Section 4168-a 59. Reservations.—All provisions of this law are
cumulative to all consistent provisions and requirements of existing laws
relevant to the subject matter of this law and the operation and effect of
all such provisions and requirements are hereby reserved except as re-
pealed expressly or by implication because of irreconcilable inconsistency.

Section 4168-a 60. Severability —If any provision of this law or its
application to any person or circumstance is held invalid such invalidity
shall not affect any other provisions or applications of this law which can
be given effect without the invalid provision or application and to this
end the provisions of this law are declared to be severable.

Section 4168-a 61. General Repealer.—All acts and parts of acts
irreconcilably inconsistent with any of the provisions of this law are
repealed to the extent only of such inconsistency.

2. Chapter four hundred two of the Acts of the General Assembly
of nineteen hundred eighteen, known as the “uniform small loan law”.
and all amendments thereof, are repealed.

3. This law is effective July first, nineteen hundred forty-four.

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