summary
Introduced
01/13/2026
01/13/2026
In Committee
01/13/2026
01/13/2026
Crossed Over
Passed
Dead
Introduced Session
2026 Regular Regular Session
Bill Summary
Financial institutions; loans and legal rate of interest. Provides that for the purposes of provisions governing usury and the legal rate of interest, "making," when used in reference to a loan, means advancing, offering to advance, or making a commitment to advance funds to a borrower for a loan. The bill provides that the prohibition against a contract for the payment of interest on a loan at a rate that exceeds 12 percent per year applies to any person who seeks to evade its application by any device, subterfuge, or pretense whatsoever, including (i) making loans disguised as personal property sale and leaseback transactions; (ii) disguising loan proceeds as a cash rebate for the pretextual installment sale of goods or services; and (iii) making, offering, assisting, or arranging a debtor to obtain a loan with a greater rate of interest, consideration, or charge than permitted through any method, including mail, telephone, internet, or any electronic means, regardless of whether the person has a physical location in the Commonwealth.
AI Summary
This bill clarifies the definition of "making" a loan to include advancing, offering to advance, or committing to advance funds, and strengthens prohibitions against exceeding the legal interest rate of 12 percent per year. It explicitly states that this prohibition applies to anyone attempting to evade it through any means, including disguising loans as personal property sale and leaseback transactions, hiding loan proceeds as cash rebates for installment sales, or arranging loans with excessive interest rates or charges through any method, such as mail, phone, or the internet, even if the person has no physical presence in the Commonwealth. This aims to close loopholes that allow lenders to charge more than the legally allowed interest.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Stricken at request of Patron in Commerce and Labor (14-Y 0-N) (on 01/26/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://lis.virginia.gov/bill-details/20261/SB432 |
| Fiscal Note/Analysis - Fiscal Impact Statement from State Corporation Commission (SB432) | https://lis.blob.core.windows.net/files/1096322.PDF |
| BillText | https://lis.virginia.gov/bill-details/20261/SB432/text/SB432 |
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