On April 7, the Virginia General Assembly passed, and the governor signed HB 1553 – outlining new licensing and regulatory requirements for debt settlement services providers doing business in Virginia.
The newly enacted regulations require debt settlement service providers to apply directly with Virginia’s Commissioner for a license via the Commonwealth’s application form and the payment of an application fee of $500. Additionally, there are record retention, reporting, examination, and bond requirements; the surety bond ranges from $25,000 but nor more than $350,000.
Prohibited conduct is also outlined, including preventing false, misleading, or deceptive advertisements in connection with the offered services. It is also important to note that this new law also provides for cease and desist orders, civil penalties, and criminal penalties to be issued against licensees that violate the prohibition requirements.
Additionally, it expressly grants consumers a private right of action against licensees and makes a violation of a prohibited practice under the Virginia Consumer Protection Act. As to when the law goes into effect, The Virginia Commonwealth Corporation Commission will establish a procedure to be in effect by March 1, 2021, for any person to apply, before July 1, 2021, for a license.
Therefore, meaning this new licensing process and all of its requirements become effective in Virginia on July 1, 2021.
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