Unless it is a federally or state chartered entity, such as a bank or credit union, or a federal or state agency, a lender operating in Vermont should be licensed with the Department of Financial Regulation.* Additionally, companies soliciting loans on behalf of a lender should be licensed with the Department. You can check the licensure status of a lender or a loan solicitor online at NMLS Consumer Access.
If the lender or loan solicitor is unlicensed, you may file a complaint with the Department of Financial Regulation. Call 802-828-3307, 888-568-4547, or email DFR.BnkConsumer@vermont.gov (for security reasons, please specify "Unlicensed Lender complaints" in the subject line).
*For additional exemptions from the lender licensing statute, see 8 V.S.A. §2201 (d), (h).
Under Vermont law, commercial loans are not subject to Vermont’s interest rate caps, and a commercial loan may charge any rate of interest that is negotiated between the parties. See 9 V.S.A. § 46.
However, the rate of charge must be clearly and fully disclosed. See 8 V.S.A. § 2225.
A commercial lender also cannot mislead or deceive you about the rates, terms or conditions of the loan. Misleading or deceptive advertising around a loan is illegal. See 8 V.S.A. § 2226.
How to assure you're getting a legal commercial loan
- Consider using local banks and credit unions first, and check out the U.S. Small Business Administration's Lender Match website.
- Make sure the lender is:
- a chartered bank or credit union,
- a state or federal agency,
- or otherwise exempt from licensing under 8 V.S.A. § 2201 (d), (h).
- Make sure the interest rate, terms, and conditions are clearly disclosed.
- Avoid potential predatory practices. Beware of:
- "Fast," "Pre-approved," "Easy" Loans
- "Affordable Payments"
- Unclear pricing and terms
- Additional fees incorporated into the payment structure
- Terms less than 90 days
- Lenders that want you to wire money prior to receiving your loan
- Lenders that guarantee loan approval but charge a fee in advance
- Consulting fees
- If you’ve been harmed by an unlicensed commercial lender, submit a complaint to CAP or to the Department of Financial Regulation at 888 568-4547 or DFR.BnkConsumer@vermont.gov.