The Virginia Small Loan Act was originally adopted in 1918. Some 36 years later, in 1954, the then Governor, Thos. B. Stanley requested the Virginia Advisory Legislative Council to study and report on the laws relating to the operation and supervision of small loan companies in Virginia. After a very thorough study, the Council recommended an increase in the maximum. loan limit from $300 to $600; an increase in the required minimum capital for engaging in the small loan business; that licenses should be issued only on the basis of convenience and advantage to the community; and that combinations of loans by any individual licensee totaling more than the single loan maximum to secure higher interest rates be prohibited. All of the above recommendations were adopted by the General Assembly in 1956. Experience since that time has proven these amendments to be a substantial improvement in the overall operation of the Small Loan Act.

The primary objective of the General Assembly in adopting legislation for the supervision and control of any segment of the business community is to provide a balanced means for meeting essential socioeconomic needs in a wholesome and dignified atmosphere. A balanced approach requires that the interests of the individuals providing the service are balanced against the need of and protection required by the consumer of that service.

As with all self-sustaining services in a burgeoning industrial society, the small loan industry exists to fill an essential public need. Any legislation which is intended for supervision and control of such an important financial segment of society influences both the cost of providing the services and the quantity and quality of the services rendered.

Many of Virginia's socioeconomic characteristics which bear directly upon the consumer finance industry are undergoing ever accelerating changes. Since the last study of the Small Loan Industry in 1955, Virginia's population has increased some 27 percent, from 3.6 million in 1955 to approximately 4.6 million in 1966. The cost of living index has increased from 93.3 in 1955 to nearly 115 in mid-1966. The average weekly earnings of factory workers has increased from $59.30 in 1955 to $90.45 in 1966.

An increase in these characteristics in turn reflects the increasing financial needs of the segments of our society dependent upon small loan companies for consumer finance services, as well as the increasing cost of providing these services to the public. A continuing study of the effects of such changes on the industry is essential if we are to maintain an adequate balance of interests and protection.

Recognizing the impact of these factor?? Governor Mills E. Godwin, Jr., on April 20, 1966, requested the Virginia Advisory Legislative Council to study and report on the Small Loan Act.

The Council assigned the study to the Honorable Charles R. Fenwick, member of the Senate of Virginia and member of the Council, as Chairman of the Committee to make the initial study and report to the Council. Selected to serve with Senator Fenwick as members of the Committee were the following: Mrs. Leonard Beck, Housewife, Arlington; Joseph E. Blackburn, General Attorney, Chesapeake and Potomac Telephone Company, Richmond; W. E. Cundiff, Building Contractor and Realtor, Vinton; R. Crockett Gwyn, Jr., Member of the House of Delegates, Marion; Leon C. Hall, President, Norfolk Savings and Loan Corporation, Norfolk; Shirley T. Holland, Banker, former member of the House of Delegates, Windsor; H. H. Mitchell, Dean, School of Business, Virginia Polytechnic Institute, Blacksburg; William F. Parkerson, Jr., member of the Senate of Virginia and Attorney at Law, Henrico County; and Joseph M. Tusing, President, Tusing Finance Company, Portsmouth. Just prior to the completion of the study Mr. Tusing became ill and was thereby forced to resign from the Committee. Mr. John E. McDonald, President, Thrift Small Loan Corporation, and member of the City Council, Petersburg, was selected to serve in Mr. Tusing's stead.

The Committee met and organized and elected R. Crockett Gwyn, Jr., as Vice-Chairman of the Committee. G. M. Lapsley served as secretary and Robert L. Masden served as Staff Attorney to the Committee.

The Committee held several executive sessions and carefully considered all aspects of the Small Loan Act. The Committee also consulted with representatives of the State Corporation Commission and of the Bureau of Banking thereof, which supervises the operation of small loan companies. After due publicity the Committee held a public hearing at which time all interested individuals, groups and organizations throughout the State were afforded an opportunity to present any suggestions or recommendations which they had concerning the matters under study.

After considering the many suggestions and recommendations made to it, the Committee completed its deliberations and made its report to the Council. The Council has reviewed the Report of the Committee and now presents its findings and recommendations with reasons therefor.