Virginia Attorney General Action Against an Internet Lender
Recently, the Virginia Attorney General filed a complaint in the Circuit Court of Arlington County against an internet lender for allegedly violating Virginia’s payday lending regulatory framework. The Virginia Attorney General alleges that the company has violated both the Virginia Payday Loan Act and the Virginia Consumer Protection Act.
Interestingly, the case started with a referral from the State Corporation Commission. Even though the Commission’s Bureau of Financial Institutions can bring its own enforcement action at the Commission, it chose in this case to refer the matter to the Virginia Attorney General, who has brought the action in circuit court, presumably due to the stronger remedial provisions of the VCPA. The Virginia Attorney General claims that the lender made payday loans over the internet without being licensed and that the interest charged borrowers greatly exceeded that permitted by Virginia law. The Virginia Attorney General seeks an injunction, restitution, civil penalties, and costs, expenses and attorneys’ fees for the alleged violations of Virginia law.
Companies lending to Virginia residents should understand Virginia’s regulatory requirements, including the provisions of the Payday Loan Act, as well as the ability of both the Virginia State Corporation Commission and Virginia Attorney General to bring enforcement actions under Virginia’s regulatory framework, before lending to Virginia residents.