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this open-end loophole, effective April 8, 2009, to provide payday lenders continued access to it only if they gave up their payday lend- ing licenses or were making auto-title loans.68 Furthermore, the latter option will no longer be available as of October 1, 2010.69 On that date, a bill reforming title lending (S.B. 606) signed by the governor on April 11, 2010, becomes effective. S.B. 606 also includes limits on interest rates and imposes a minimum loan term of 120 days; these and other new require- ments will be imposed on out-of-state lenders making loans to Virginia residents as well as Virginia title lenders.70 There is currently no cap on interest or fees for title lending, so the bill is a positive development. Unfortunately,

68 Va. Code Ann. § 6.1-330.78; 10 Va. Admin. Code § 5-200-100 (effective February 1, 2010). See Jay Speer, Fool Me Once . . . Will the Loophole Lender Lobbyists Get Their Way Again?, Augusta Free Press (Feb. 22, 2010), available at http://augustafreepres.com/ 2010/02/15/fool-me-once-will-the-loophole-lender- lobbyists-get-their-way-again/.

69 Va. Code Ann. § 6.1-330.78(E), as amended by S.B. 606, Gen. Assem., 2010 Sess. (Va. Apr. 11, 2010). See also Virginia Lawmakers Pass Car Title Lending Reform, N.Y. Times (Mar. 11, 2010).

70 Va. Code Ann. §§ 6.1-496, 6.1-495 & 6.1-481, as added by S.B. 606, Gen. Assem., 2010 Sess. (Va. Apr. 11, 2010).


the limits it sets will continue to permit triple digit APRs.71 However, it will ban the one- month auto-title product evaluated by this Scorecard, thus Virginia will earn a P for title lending as of October 1, 2010. Virginia contin- ues to rate an F for payday lending.


As these recent state law developments demonstrate, there continues to be signiÓĀõcant action at the state level to combat abusive small dollar loan products. However, the need for additional reforms in many states as well as at the federal level also remains urgent.

71 Virginia Poverty Law Center, Restrictions on Car Title Lending Signed into Law (Apr. 14, 2010), avail- able at http://www.vplc.org/restrictionsPR.html.

Updated Small Dollar Loan Products 5 13

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