Consumer Finance Insights
September 18, 2017

VA AG Sues Open-End Credit Plan Lender

On September 13, 2017, Virginia Attorney General (“Virginia AG”) Mark R. Herring announced that it had filed suit in Virginia state court against an open-end credit plan lender for allegedly violating the Virginia Consumer Protection Act (“VCPA”), Virginia Code §§ 59.1-196 to 59.1-207, through its lending practices.

The defendant lender allegedly made illegal, unlicensed loans at a 273.75% annual interest, in violation of Virginia’s open-end credit plan lending laws.  Defendant also allegedly charged borrowers an illegal $100 origination fee, in violation of the Virginia law prohibiting open-end lenders from charging such fees during finance charge-free grace periods.

The Virginia AG’s Office notified the defendant in February 2017 that it was likely in violation of the VCPA and other consumer finance laws.  During the course of its investigation, the Virginia AG provided defendant with an opportunity to correct its practices.  As of the date of the complaint, the Virginia AG’s Office had been unable to confirm whether defendant had amended its practices or was in compliance.

Virginia is seeking restitution, civil penalties, attorneys’ fees and costs, as well as injunctive relief to end the challenged lending practices.