Virginia § 6.2-1409 Prepayment by borrower from association; rebates for unearned interest; prepayment penalty

Virginia Statutes

§ 6.2-1409 — Prepayment by borrower from association; rebates for unearned interest; prepayment penalty

Virginia § 6.2-1409

Title 6.2FINANCIAL INSTITUTIONS AND SERVICES

Subtitle IIIOTHER REGULATED PROVIDERS OF FINANCIAL SERVICES

Ch. 14INDUSTRIAL LOAN ASSOCIATIONS

This text of Virginia § 6.2-1409 (Prepayment by borrower from association; rebates for unearned interest; prepayment penalty) is published on Counsel Stack Legal Research, covering Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Va. Code Ann. § 6.2-1409 (2026).

Text

A.Any individual borrowing from an association shall have the right to anticipate payment of his debt at any time.

B.If interest has been added to the face amount of the note, the borrower shall have the right, upon prepayment of the debt, to receive a rebate by way of credit for any unearned interest. The rebate shall be computed:

1.On loans (i) with an initial maturity and corresponding amortization period of 61 months or less and (ii) payable in equal periodic installments, in accordance with the Rule of 78 as illustrated in § 6.2-403 or by using any other method that is at least as favorable to such borrower; and

2.On other loans, under a method at least as favorable to the borrower as the actuarial method.

C.An association may charge a prepayment penalty not to exceed two per

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A. Any individual borrowing from an association shall have the right to anticipate payment of his debt at any time.

B. If interest has been added to the face amount of the note, the borrower shall have the right, upon prepayment of the debt, to receive a rebate by way of credit for any unearned interest. The rebate shall be computed:

1. On loans (i) with an initial maturity and corresponding amortization period of 61 months or less and (ii) payable in equal periodic installments, in accordance with the Rule of 78 as illustrated in § 6.2-403 or by using any other method that is at least as favorable to such borrower; and

2. On other loans, under a method at least as favorable to the borrower as the actuarial method.

C. An association may charge a prepayment penalty not to exceed two percent of the amount of the prepayment, provided such prepayment penalty, including the percent thereof, is set forth in the contract of indebtedness and is disclosed to the borrower pursuant to applicable federal interest disclosure laws.