Chap. 299.—An ACT to amend and re-enact sections 14, 16, 17 and 18 of an
act entitled an act to regulate the business of making small loans, by re-
quiring persons charging directly or indirectly a greater rate of compen-
sation than the conventional legal interest rate per annum on loans not
exceeding three hundred ($300) dollars, to any person, to obtain a license;
by prescribing the maximum amount of compensation which licensees may
charge; by regulating assignments to licensees of salaries or wages earned,
or to be earned by prohibiting false or deceptive advertising concerning
such loans; by fixing penalties for violation of certain provisions of this
act; by prescribing certain duties of the chief examiners of banking
division of the corporation commission in respect to licensees; repealing
section 81 of the revenue act and all other acts and parts of acts incon-
sistent with the provisions of this act, approved March 23, 1918. [H B 343]

Approved. March 19, 1920.

1. Be it enacted by the general assembly of Virginia, That sec-
tions fourteen, sixteen, seventeen and eighteen of an act entitled an
act to regulate the business of making small loans, by requiring
persons charging directly or indirectly a greater rate of compensa-
tion than the conventional legal interest rate per annum on loans not
exceeding three hundred ($300.00) dollars, to any person, to obtain a
license; by prescribing the maximum amount of compensation which
licensees may charge; by regulating assignments to licensees of
salaries or wages earned, or to be earned; by prohibiting false or de-
ceptive advertising concerning such loans; by fixing penalties for
violation of certain provisions of this act; by prescribing certain
duties of the chief examiner of banking division of the corporation
commission in respect to licensees ; repealing section eighty-one of the
revenue act, and all other acts and parts of acts inconsistent with the
provisions of this act, approved March twenty-third, nineteen hun-
dred and eighteen, be amended and re-enacted so as to read as follows:

Sec. 14. Maximum compensation, reimbursement of expenses and
contribution to losses allowed licensees——It shall be lawful for any
licensee hereunder to charge, contract for, or receive for or in con-
nection with the making of loans of not exceeding three hundred dol-
lars, a unit charge not exceeding three and one-half per centum per
month, on unpaid balances, which rate shall include (1) interest, or
compensation for the use or forbearance of money, (2) reimbursement
of expenses, approximately, incurred or expended in the service and
accommodation of borrowers, such as preparing their applications for
loans, investigating the employment and responsibility of applicants,
appraising property, where a lien upon such is offered, and searching
the public records for liens and encumbrances, or otherwise verifying
any claim of title to property offered as security, accepting repayment
in weekly or monthly instalments or principal, with interest, and (3)
indemnity contribution to a fund for offsetting and sustaining losses
arising from bad loans, or insufficient security, such as are usually
sustained by small loan companies and brokers...

(a) Higher charge authorized for loans not exceeding fifty dol-
lars; splitting or dividing loans prohibited——On loans of not exceed-
ing fifty dollars it shall, however, be lawful for any licensee here-
under to charge, contract for, or receive for or in connection with
the making of such loan, a unit charge of not exceeding five per
centum per month on unpaid balances, which rate shall include in-
terest, reimbursement and indemnity as set forth in the preceding
section. It shall be unlawful to divide or split loans so as to obtain
a higher rate of charges than authorized by the preceding section
under any pretext whatsoever, and no additional loan made to the
same person or persons shall be charged for at the maximum rate
authorized by this sub-section within one month thereafter, if the
total of such loans shall exceed fifty dollars.

(b) Collecting of compensation regulated—What charges pro-
hibited and what may be reimbursed.—The charges authorized by this
act shall not be payable in advance or compounded and shall be com-
puted on unpaid balances. In addition to the charges herein pro-
vided for, no further or other charge, or amount whatsoever for any
examination, service, brokerage, commission, fine or other thing, or
‘otherwise shall be directly or indirectly charged, contracted for or re-
ceived, except the lawful fees, if any, actually and necessarily paid
out by the licensee to any public officer, for filing, or recording in any
public office any instrument securing the loan, which fees may be
collected when the loan is made or at any time thereafter.

(c) Loan void for excess charges.—If interest and charges in
excess of those permitted by this act, shall be charged, contracted for,
or received, the contract of loan shall be void and the licensee shall
have no right to collect, or receive any principal, interest or charges
whatsoever. .

(d) Debt limited to three hundred dollars principal—No person
shall owe any licensee at any time more than three hundred dollars
for principal.

Sec. 16. Restrictions of obligations to be taken; shall contain no
unfilled blanks.—No licensee shall take any confession of judgment, or
any power of attorney. Nor shall any licensee take any note, promise
to pay, or security or any instrument in which blanks are left to be
filled after execution.

Sec. 17. Restrictions of assignments of salary or wages; power
of attorney forbidden; when written assent of wife required.—No as-
signment of, or order for, the payment of any salary or wages, earned
or to be earned, given to a licensee to secure a loan, shall be valid
unless such loan is contracted simultaneously with its execution ; nor
unless in writing signed in person by the assignor, and not by attor-
ney ; nor when made by a married person, unless the written assent
of his or her spouse to the making of such assignment or order is
endorsed or attached; provided, that 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 such assignment.

(a) Assignment of salary or wages restricted to ten per centum
of amount; regulations; notice to empower.—Every such assignment
or order for the payment of salary or wages earned, or to be earned
in the future, if given as security for a loan under this act, shall be
valid for not exceeding ten per centum of the assignor’s salary or
wages under any existing or future employment, which ten per centum
shall be collectible therefrom from the employer, by the licensee, at
the time each payment of salary or wages becomes due, from the time
that a copy thereof, verified by the oath of the licensee or his agent,
together with a verified statement of the amount unpaid upon such
loan is served upon the employer, who may demand to have the origi-
nal ot such assignment exhibited to him at the time such copy is
served.

Sec. 18. Penalties for violation of this act.——Any person, co-
partnership, or corporation, who shall violate any of the provisions
of this act shall be guilty of a misdemeanor and upon conviction there-
of shall be punishable by a fine of not more than five hundred dollars,
or by imprisonment of not more than six months, or by both such fine
and imprisonment, in the discretion of the court.

(a) Loans made at compensation in excess of act not to be en-
forced; persons participating in unlawful charges subject to act—No
loan for which a greater compensation for interest, fees, expenses or
losses, at a greater rate than is allowed by this act, has been charged,
contracted for or received, wherever made, shall be enforced in this
State, and any person in any wise participating therein in this State
shall be subject to the provisions of sections one and eighteen of
this act.