A BILL to amend the Code of Virginia by adding in Article 4 of Chapter 4 of Title 6.2 a section numbered 6.2-435.1, relating to financial services; open-end credit plans; promotional annual percentage rates.
HB725 adds a new section to the Virginia Code governing promotional annual percentage rates on open-end credit plans, such as revolving credit accounts. The bill defines key terms including promotional annual percentage rate, promotional period, promotional balance, and expiration date, using the federal Truth in Lending Act as the baseline for the meaning of annual percentage rate.
The core rule in the bill requires a creditor that offers more than one promotional APR on the same open-end credit plan to apply consumer payments to the promotional balance with the earliest expiration date first, unless the consumer and creditor expressly agree otherwise in writing. In practice, this is a payment-allocation rule intended to determine how payments are credited when multiple promotional offers overlap on one account.
The bill would amend Title 6.2 of the Code of Virginia by creating a new consumer-credit provision applicable to creditors offering open-end credit plans with multiple promotional APRs. It would affect how payments are applied on revolving accounts, potentially changing billing practices for credit card issuers and other lenders that use promotional interest-rate offers. Consumers with overlapping promotional balances would gain a default payment-ordering protection unless they waive it by written agreement.
The available record shows no committee debate, recorded votes, or amendments, so there is no documented opposition or support in the provided materials. Based on the bill text alone, the measure appears consumer-protective and administratively straightforward, suggesting a neutral-to-positive policy posture focused on clarifying payment application rules in credit agreements.
No specific points of contention are reflected in the provided transcripts or voting history because none are available. If concerns were raised, they would likely center on creditor compliance burdens, flexibility in account servicing, and whether the default payment-allocation rule could limit contractual arrangements between lenders and consumers. The bill’s written-agreement exception partially addresses that issue by allowing parties to opt out of the default rule.