Small Estates/Checks (H.B. 1594)

This legislation permits a designated successor on a small non-probate estate (i.e., assets totaling no more than $50,000) to treat a check payable to the decedent as a "small asset," and to collect payment on such check. Financial institutions, however, will need to consider § 8.4–405 of Virginia’s Uniform Commercial Code ("UCC") in responding to requests by designated successors who present checks under this new authority. That section indicates that if a bank has knowledge of a customer’s death, and has a reasonable opportunity to act on it, the bank’s authority to accept, pay, collect, or account for a check in the name of such deceased customer is revoked. The commentary to the section states that the rule applies to "customers" who own items, as well as "customers" who draw them. Thus, the UCC rule appears to apply to situations where the decedent is the payee on the check.

Non-Waiver Provisions (H.B. 1573 and S.B. 917)

This legislation will make it more difficult for a customer of a financial institution to argue that a temporary adjustment to a term in a loan agreement for the customer’s benefit, such as through a workout arrangement, effects a permanent waiver of such term when a non-waiver provision is in the agreement. The legislation provides that if a written contract to which a financial institution is a party contains a provision that no amendment or waiver of the terms of such contract shall be effective unless in writing, then any amendment or waiver of a term by conduct, course of practice or dealing, or otherwise, shall not apply to future rights and obligations under the contract unless in writing. Under existing Virginia law, short-term payment adjustments benefitting a customer may result in a permanent waiver of a contract term, even though a non-waiver provision is in such contract. In this regard, rights under a non-waiver clause are themselves subject to waiver, and a "course of dealing" can cause a waiver of the non-waiver provision. The legislation is intended to ensure that financial institutions have the ability to offer one-time or temporary modifications to payment terms for customers’ benefit without fear that such accommodations will be used against them. Financial institutions should review their customer agreements to ensure that the appropriate non-waiver language is included, such that they get the benefit of this legislation.

Joint Accounts (H.B. 1610)

This legislation eliminates the requirement that depository institutions offering joint accounts give customers the option to establish a joint account with survivorship or without survivorship. A depository institution may now choose to offer all of its joint accounts with the same survivorship feature (e.g., with survivorship). The legislation provides the opportunity for operational efficiencies for financial institutions offering joint accounts.

Date of Account Opening on Check (H.B. 2157 and S.B. 1249)

This legislation repeals the requirement that checks and similar instruments drawn on financial institutions located in Virginia display the month and year in which the account was opened.

Definition of "Mortgage Loan Originator" (H.B. 1803 and S.B. 994)

This legislation expands the definition of "mortgage loan originator" consistent with federal regulations under the Secure and Fair Enforcement for Mortgage Licensing Act. The new definition of "mortgage loan originator" includes an individual who represents to the public through advertising or other means of communicating or providing information, that he or she can take an application for or offer or negotiate the terms of a residential mortgage loan. The advertising or communication may be through the use of business cards, stationery, brochures, signs, rate lists, or other promotional items.

NOTE: All bills described above take effect July 1, 2013.