On April 17, 2024, Virginia enacted HB 1519 taking a significant step towards amending the Virginia Consumer Protection Act (VCPA) to prohibit creditors from charging fees for accepting electronic payments in connection with credit transactions in Virginia. However, this amendment will not become effective unless the Virginia General Assembly reenacts the bill in 2025. Between now and then, the Virginia State Corporation Commission will assess this change and report its findings to the General Assembly by December of this year.
If HB 1519 becomes effective in 2025, a new provision would be added to the VCPA that prohibits “a supplier in connection with a consumer transaction” from:
“Charging any transaction or processing fee or similar surcharge to a consumer for the use of an electronic fund transfer, as that term is defined in 12 C.F.R. § 1005.3, for payment for the purchase of a good or service.”
This new provision is expressly not applicable to “the withdrawal of funds from an automated teller machine” or “where the service is to expedite an electronic fund transfer.”
Currently, the VCPA contains a provision that courts generally read as excluding credit transactions from its scope (see Va. Code § 59.1-199(3)). But importantly, HB 1519 changes this by expressly making the exclusion inapplicable to the new provision. Therefore, the legislature appears to intend that credit transactions be subject to this fee prohibition if the person making the charge meets the definition of a “supplier” (as detailed in Va. Code § 59.1-198) and the transaction falls within the scope of a broadly defined “electronic fund transfer” (12 C.F.R. § 1005.3(b)(1)). The available legislative history does not provide further insight into what this provision was intended to cover.
A violation of the new provision would be subject to the VCPA’s private right of action, which provides for the recovery of the greater of actual damages or a statutory penalty of $500 and an award of reasonable attorneys’ fees (Va. Code § 59.1-204(A), (B)). If the violations are willful, the greater of trebled damages or a statutory penalty of $1,000 may be awarded (Va. Code § 59.1-204(A)). This provision, in conjunction with the legislature’s recent consideration of a proposed Virginia class action statute, should be closely monitored by creditors.