TITLE 10. FINANCE AND FINANCIAL INSTITUTIONS

STATE CORPORATION COMMISSION

Proposed Regulation

Title of Regulation: 10VAC5-60. Consumer Finance Companies (amending 10VAC5-60-60).

Statutory Authority: §§ 6.2-1535 and 12.1-13 of the Code of Virginia.

Public Hearing Information: A public hearing will be held upon request.

Public Comment Deadline: February 9, 2024.

Agency Contact: Dustin Physioc, Deputy Commissioner, Bureau of Financial Institutions, State Corporation Commission, P.O. Box 640, Richmond, VA 23218, telephone (804) 786-0831, or email dustin.physioc@scc.virginia.gov.

Summary:

The proposed amendments realign the schedule of annual fees to be paid by all licensed consumer finance companies to defray the costs of examination, supervision, and regulation with the costs incurred by the Bureau of Financial Institutions and reduce the total amount of annual fees paid by licensees that are based on net loans receivable, other licensee assets, and the total assets of affiliates that conduct business in any of the licensee's authorized offices.

AT RICHMOND, JANUARY 9, 2024

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. BFI-2024-00001

Ex Parte: In the Matter of Adopting

Amendments to the Regulation

Governing Annual Fees Paid by

Consumer Finance Companies

ORDER TO TAKE NOTICE

Section 6.2-1532 of the Code of Virginia ("Code") requires all licensed consumer finance companies ("licensees") to pay an annual fee that is to be calculated in accordance with a schedule set by the State Corporation Commission ("Commission"). The annual fees defray the costs of examination, supervision, and regulation of licensees by the Bureau of Financial Institutions ("Bureau"), and the Commission's schedule of annual fees is set forth in 10VAC5-60-60 of the Commission's rules governing consumer finance companies, 10VAC5-60-5 et seq.

The Bureau has asserted that as a result of various changes to Chapter 15 of Title 6.2 of the Code that became effective on January 1, 2021, the schedule of annual fees in 10VAC5-60-60 now produces more revenue than is necessary to defray the Bureau's costs of examination, supervision, and regulation of licensees. Accordingly, the Bureau has submitted to the Commission proposed amendments to 10VAC5-60-60 that the Bureau states are designed to realign the schedule with the Bureau's costs and reduce the total amount of annual fees paid by licensees.

NOW THE COMMISSION, having considered the Bureau's proposal and the applicable law, is of the opinion and finds that reasonable notice of the proposed amendments to 10VAC5-60-60 should be given, interested parties should be afforded an opportunity to be heard in accordance with the Commission's Rules of Practice and Procedure, 5VAC5-20-10 et seq., and the proposed amended regulation should be considered for adoption with a proposed effective date of April 1, 2024.

Accordingly, IT IS ORDERED THAT:

(1) The proposed amendments to 10VAC5-60-60 are attached hereto and made a part hereof.

(2) Comments or requests for a hearing on the proposed amended regulation must be submitted in writing to the Clerk of the Commission, State Corporation Commission, c/o Document Control Center, P.O. Box 2118, Richmond, Virginia 23218, on or before February 9, 2024. Requests for a hearing shall state why a hearing is necessary and why the issues cannot be adequately addressed in written comments. All correspondence shall contain a reference to Case No. BFI-2024-00001. Interested persons desiring to submit comments or request a hearing electronically may do so by following the instructions available at the Commission's website: scc.virginia.gov/casecomments/Submit-Public-Comments.

(3) The Bureau shall file its response to any comments filed pursuant to Ordering Paragraph 2 on or before February 29, 2024.

(4) This Order, along with the attached proposal, shall be made available on the Commission's website: scc.virginia.gov/pages/Case-Information.

(5) The Commission's Office of General Counsel shall provide a copy of this Order and the proposed amended regulation to the Virginia Registrar of Regulations for appropriate publication in the Virginia Register of Regulations.

Commissioner James C. Dimitri participated in this matter.

A COPY of this Order, including the proposed amended regulation, shall be sent by the Clerk of the Commission to the Commission's Office of General Counsel and to the Commissioner of Financial Institutions, who shall send by e-mail or U.S. mail a copy of this Order, along with the proposed amended regulation, to all licensed consumer finance companies and such other interested persons as he may designate.

10VAC5-60-60. Schedule prescribing annual fees paid for examination, supervision, and regulation of consumer finance companies.

Pursuant to § 6.2-1532 of the Code of Virginia, the commission sets the following schedule sets the of annual fees to be paid annually by licensees under the Act to defray the costs of examination, supervision, and regulation of licensees by the bureau:.

Minimum Each licensee shall be assessed a minimum annual fee - $300 per of $150 plus $150 for each office open January 1 of the current where the licensee was authorized to engage in business under the Act as of December 31 of the calendar year preceding the date of the assessment. For example, the minimum annual fee due June 1, 2025, for a licensee who maintained a single authorized office as of December 31, 2024, would be $300 ($150 flat fee + $150 office fee) and the minimum annual fee due June 1, 2025, for a licensee who maintained three authorized offices as of December 31, 2024, would be $600 ($150 flat fee + $450 office fee).

In addition to the minimum fee, each licensee shall be assessed the following fee based on total assets fees:

The annual fee for each licensee will be computed on the basis of its total assets combined with the total assets of its affiliates conducting business in any of its authorized offices as of the close of business December 31 of the preceding calendar year.

Fee for net loans receivable:

Fee for other licensee assets (total assets of licensee minus net loans receivable):

Fee for total assets of affiliates that conduct business in any of the licensee's authorized offices:

**The amounts of such total assets Net Loans Receivable, Other Licensee Assets, and Affiliate Assets will be derived obtained from the annual reports that § 6.2-1534 of the Code of Virginia requires licensees to file with the bureau on or before the first day of April of each year. Accordingly, fees will be calculated based on Net Loans Receivable, Other Licensee Assets, and Affiliate Assets as of December 31 of the calendar year preceding the date of the assessment. For purposes of this section, "Net Loans Receivable" means the total outstanding principal balance of all loans made under the Act.

In accordance with § 6.2-1532 of the Code of Virginia, annual fees for any given calendar year will be assessed on or before May 1 of that year and must be paid on or before June 1 of that year.

Notwithstanding any provision of this section, if a licensee was not licensed under the Act as of December 31 of the calendar year preceding the date of the assessment, the annual fee shall be $0.

Fees prescribed and assessed pursuant to this schedule are apart from and do not include the reimbursement for costs authorized by subsection C of § 6.2-1533 of the Code of Virginia.

Sample Annual Fee Calculation: