H. B. 3150
(By Delegates G. White and H. White)
[Introduced March 22, 2005; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §32A-3-1 and §32A-3-3 of the Code of
West Virginia, 1931, as amended; and to amend said code by
adding thereto a new article, designated §32A-4-1, §32A-4-2,
§32A-4-3, §32A-4-4, §32A-4-5, §32A-4-6, §32A-4-7, §32A-4-8,
§32A-4-9, §32A-4-10, §32A-4-11, §32A-4-12, §32A-4-13,
§32A-4-14, §32A-4-15, §32A-4-16, §32A-4-17, §32A-4-18,
§32A-4-19, §32A-4-20, §32A-4-21, §32A-4-22, §32A-4-23,
§32A-4-24, §32A-4-25, §32A-4-26, §32A-4-27, §32A-4-28,
§32A-4-29, §32A-4-30 and §32A-4-31, all relating to
establishing the deferred deposit loan act; short title;
Be it enacted by the Legislature of West Virginia:
That §32A-3-1 and §32A-3-3 of the Code of West Virginia, 1931,
as amended, be amended and reenacted; and to amend said code by
adding thereto a new article, designated §32A-4-1, §32A-4-2, §32A-4-3, §32A-4-4, §32A-4-5, §32A-4-6, §32A-4-7, §32A-4-8,
§32A-4-9, §32A-4-10, §32A-4-11, §32A-4-12, §32A-4-13, §32A-4-14,
§32A-4-15, §32A-4-16, §32A-4-17, §32A-4-18, §32A-4-19, §32A-4-20,
§32A-4-21, §32A-4-22, §32A-4-23, §32A-4-24, §32A-4-25, §32A-4-26,
§32A-4-27, §32A-4-28, §32A-4-29, §32A-4-30 and §32A-4-31, all to
read as follows:
ARTICLE 3. CHECK CASHING.
§32A-3-1. Check cashing permitted.
(a) A merchant primarily in the business of making retail
consumer sales may offer check cashing services at its stores to
accommodate its customers in the course of said business, and may
collect a fee for the service, if the check cashing service and any
fees charged are incidental to the main business of the merchant.
Except as set forth in subsection (b) of this section, the term
"check cashing services" does not include a transaction where a
customer presents a check for the exact amount of a purchase. Fees
charged in connection with check cashing services may not exceed
the greater of one dollar, or one percent of the face value of the
(b) Merchants may not, in connection with providing check
cashing services, agree to hold checks submitted to them for
deposit at a later date for the purpose of providing a loan of
money and deriving profit therefrom, unless the merchant obtains a
deferred deposit lender licensee under the provisions of article four of this chapter.
(c) No license is required as a condition for a merchant
providing check cashing services in conformity with subsections (a)
and (b) of this section.
(d) Where a merchant derives more than five percent of his or
her gross revenues from cashing checks, the check cashing services
are not considered incidental to the main business of the merchant,
and the merchant is required to be licensed under article two of
(e) Persons holding a license pursuant to article two of this
chapter may in conjunction with their licensed business, or other
lawful business, engage in the business of check cashing in West
Virginia. Fees charged for check cashing services by a licensee
under article two of this chapter shall be posted and conform to
those permitted merchants under this section. No licensee may in
connection with providing check cashing services agree to hold
checks submitted to it for deposit at a later date for the purpose
of providing a loan of money and deriving profit therefrom, unless
the person also holds a deferred deposit lender licensee under
article four of this chapter.
(f) Federally-insured depository institutions, foreign bank
agencies, and governmental entities exempt from licensure as money
transmitters under this chapter are exempt from the provisions of
this article. Other financial institutions licensed by and under the jurisdiction of the Commissioner of Banking may upon written
approval engage in the check cashing business permitted merchants
under this article.
(g) Except as provided or allowed by this article, no person
may engage in the check cashing business. As used in this article
the term "check cashing business" means any person who engages in
the business of cashing checks, including drafts, money orders or
other instruments for the transmission or payment of money for a
fee. However, the term "check" as used in this article does not
include a travelers check or a foreign denomination check.
§32A-3-3. Violations and penalties.
(a) The charging of fees for check cashing services in excess
of those permitted under this article gives rise to a cause of
action by the injured party to recover twice the actual damages
suffered by reason of the violation.
(b) The charging of fees for check cashing services in
violation of the provisions of subsections (b) or (e), section one
of this article, prohibiting lending through a check cashing
transaction without first obtaining a deferred deposit lender
license under article four of this chapter,
finance charges, and gives rise to a cause of action by the party
upon whom the charge was imposed to recover all fees paid and all
actual damages suffered by reason of the violation. Where the
transaction is of an amount and for purposes that would constitute a consumer loan, the conduct of impermissible check cashing
services is considered an unfair and deceptive act and may be
subject to provisions and penalties set forth in chapter
forty-six-a of this code.
(c) Engaging in the check cashing business without the license
required by this article or article four of this chapter
to a cause of action by the injured party to recover all fees paid
and all actual damages suffered by reason of the violation.
(d) Actions brought under this article by customers for
recovery of actual damages shall be brought within one year of the
occurrence of the transaction.
ARTICLE 4. DEFERRED DEPOSIT LOANS.
§32A-4-1. Short title.
This article may be cited as the "Deferred Deposit Loan Act."
As used in this article:
(1) "Commissioner" means the Commissioner of Banking of West
Virginia or his or her designated representative.
(2) "Consumer" means a person other than an organization who
is the buyer, lessee, or debtor to whom credit is granted in a
consumer credit transaction.
(3) "Deferred deposit loan" means a consumer loan whereby the
lender, for a fee, finance charge or other consideration, does the
(a) Accepts a dated instrument from the consumer;
(b) Agrees to hold the instrument for a period of time prior
to negotiation or deposit of the instrument; and
(c) Pays to the consumer, credits to the consumer's account,
or pays to another person on the consumer's behalf the amount of
the instrument, less finance charges permitted by section five of
(4) "Instrument" means a personal check or authorization to
transfer or withdraw funds from an account signed by the consumer
and made payable to a person subject to this article.
(5) "Lender" means a person licensed to engage in the business
of providing deferred deposit loan services under this article.
(6) "Loan amount" means the amount financed as defined in
regulation Z of the federal "Truth In Lending Act," 12 C.F.R.
32A-4-3. Authority to make loans.
(a) No person shall engage in the business of making deferred
deposit loans except in accordance with the provisions of this
article and without having first obtained a license under this
article from the Commissioner.
(b) This article may not apply to a bank, savings institution,
credit union or farm credit system organized under the laws of the
United States or any state; in the event a bank, savings
institution, credit union or farm credit system uses an agent, marketer, or servicer to offer or make deferred deposit
transactions, as defined in G.S. 53-275(4a), the agent shall also
be exempt, provided the bank, savings institution, credit union or
farm credit system is in compliance with all guidelines, rules and
directives issued by its appropriate federal regulator in
connection with these transactions and third party relationships.
§32A-4-4. Application for license; form; content; fee.
(a) An application for a license under this article shall
submitted in writing, under oath and on a form as prescribed by the
(b) The application shall set forth:
(1) The full name and address of the applicant, and if the
applicant is a partnership, limited liability company or
association, of each member with an ownership interest of ten
percent or more thereof, and if a corporation, of each officer,
director, and owner of ten percent or more of the capital stock
(2) The addresses of the locations of the business to be
Any other information concerning the financial
responsibility, background and experience of the applicant and its
members, officers, directors and principals as the
(c) At the time of making application for a deferred
deposit lender license, the applicant shall:
(1) If a foreign corporation, submit a certificate from the
Secretary of State certifying that the applicant is registered
with the Secretary of State to transact business in this state;
(2) Submit proof that he or she has available for the
operation of the business at the locations specified in the
application a minimum net worth of at least twenty-five thousand
dollars per licensed location, up to a maximum of two hundred fifty
thousand dollars, computed according to
accounting principles as shown by the most recent audited financial
statement filed with and satisfactory to the Commissioner;
(3) File with the Commissioner a bond in favor of the state
for the benefit of consumers in the amount of twenty-five thousand
dollars per licensed location, up to a maximum of two hundred fifty
thousand dollars, in a form and
with conditions as the Commissioner
may prescribe, and executed
by a surety company authorized to do
business in this state; and
(4) Pay to the Commissioner a license fee of one thousand
§32A-4-5. Refusal or issuance of license.
(a) Upon the filing of an application for a deferred deposit
lender license and full compliance with section two of this
article, the Commissioner shall investigate the applicant and
relevant facts regarding the application. Upon the basis of the application and all other information before the Commissioner, he
or she shall make and enter an order denying the application and
refusing the license sought if the Commissioner finds that:
(1) The financial responsibility, character, reputation,
experience and general fitness of the applicant and its members,
senior officers, directors, principals and employees reasonably
warrants the belief that the business will not be operated
lawfully and properly, in the public interest and in accordance
(2) The applicant does not have available the net worth
computed according to generally accepted accounting principles
required for each licensed location by the provisions of section
two of this article; and
(3) The applicant has done any act or has failed or refused
to perform any duty or obligation for which the license sought
could be suspended or revoked were it then issued and outstanding.
Otherwise, the Commissioner shall issue to the applicant a
deferred deposit lender license which shall entitle the
to engage in the business of deferred deposit lending
period, unless sooner revoked, for which the license is issued.
(b) Every application for a deferred deposit lender license
shall be passed upon and the license issued or refused within
ninety days after the applicant has fully complied with the
provisions of section two of this article. Whenever an
application for a license under this article is denied and the
is refused, which refusal has become final, the
retain all fees to cover administrative costs
of processing the
§32A-4-6. Licenses; place of business; changes.
(a) Each license shall state the location at which the
business is to be conducted and the full name of the licensee.
Each license shall be prominently displayed in each place of
business of the licensee. The licensee's master license number
shall be displayed on all advertising and any printed documents or
disclosures created by the applicant for distribution to a
consumer. No license shall be transferable or assignable. No
licensee may offer a franchise under that license to another
(b) No licensee shall open an additional office or relocate
any place of business without prior approval of the
Applications for approval shall be made in
writing thirty days
prior to any change on a form provided by the Commissioner and
shall be accompanied by a payment of a one hundred fifty
nonrefundable application fee.
(c) Every license issued under this article shall, unless
sooner suspended or revoked, expire on the thirtieth day of June
of each odd numbered year and any license may be renewed in the
same manner, for the same license fee or fees specified above
and upon the same basis as an original license is issued in
with the provisions of section two of this article.
applications for the renewal of licenses shall be filed with
Commissioner at least ninety days before the expiration
§32A-4-7. Records and annual reports; examination of records;
(a) Every licensee shall maintain at each branch location
at a central location known to the Commissioner the books,
and records of that branch relating to all transactions
article as are necessary to enable the Commissioner
to enforce the
provisions of this article. A licensee shall keep its business
books, accounts, and records in accordance with generally accepted
accounting principles and maintain business records for thirty-six
months after the date of final entry.
(b) Each licensee shall file with the Commissioner on or
before the fifteenth day of August of each year a report under oath
or affirmation concerning his or her business and operations in
this state for the preceding fiscal year in the form prescribed by
(c) The Commissioner may, at his or her discretion, make or
cause to be made an examination of the books, accounts and records
of every location licensed under this article for the purpose of
determining whether each licensee is complying with these
provisions and for the purpose of verifying each licensee's annual report. The licensee shall bear the cost together with all
reasonable and necessary travel expenses incurred in connection
with any on-site examination made pursuant to this article at a
rate authorized by rules established pursuant to section seven,
article two of this chapter.
(d) The Commissioner may enter into cooperative, coordinating
and information-sharing agreements with any other agency
supervising deferred deposit lenders.
§32A-4-8. Advertising requirements.
It is unlawful and an unfair trade practice for any
cause to be placed before the public in this state,
indirectly, any false, misleading or deceptive
pertaining to a deferred deposit lending
That this section may not apply to the owner, publisher, operator
or employees of any publication or radio or television station
which disseminates the advertising
matter without actual knowledge
of the false or misleading
§32A-4-9. Written agreement requirements.
Eachdeferred deposit loan transaction and renewal shall be
documented by a written agreement signed by both the lender and
consumer. The written agreement shall contain the name of the
consumer, the transaction date, the amount of the instrument, the
annual percentage rate charged, and a statement of the total amount
of finance charges charged expressed both as a dollar
amount and an annual percentage rate. In addition, the written
include all disclosures required by federal and state law. The
written agreement shall set a date, not more than
after the loan transaction date, upon which
the instrument may be
deposited or negotiated.
§32A-4-10. Notice to consumers.
A lender shall provide the following notice in a prominent
on each loan agreement in at least ten-point type:
"A deferred deposit loan is not intended to meet long-term
financial needs. A deferred deposit loan should be used only to
meet short-term cash needs. Renewing the deferred deposit loan
rather than paying the debt in full will require additional
§32A-4-11. Authorized finance charge.
A lender may charge a financecharge for each deferred deposit
loan that may not
exceed eighteen percent of the amount loaned.
is considered fully earned as of the date of the
The lender shall charge only those charges authorized
in this article in connection with a deferred deposit loan.
§32A-4-12. Maximum loan amount - right to rescind.
A lender may not lend an amount greater than one thousand
dollars nor shall the amount financed exceed one thousand dollars
at any time to a
consumer. No instrument held as a result of a
loan shall exceed one thousand one hundred eighty dollars.
consumer shall have the right to rescind the
deposit loan on or before theclose of the next
following the loan transaction by prepaying to the lender the
amount financed in cash.
§32A-4-13. Multiple outstanding transactions.
(a) No deferred deposit loan shall be for a term in excess of
forty-five days or less than seven days.
(b) A lender may not allow any consumer to have multiple
transactions involving more than two checks outstanding at any time
from the lender, including the current transaction. The aggregate
amount of all deferred deposit loans outstanding from
for a particular consumer at any given time, may not
thousand dollars, exclusive of the fees allowed by this article.
(c) A deferred deposit lender may not enter into a deferred
deposit transaction with a consumer if the deferred deposit loan
will cause the consumer to exceed the limits set forth in this
(d)(1) A deferred deposit loan may not be renewed more
once. After this renewal, the consumer shall pay the debt in
or its equivalent.If the consumer does not pay the debt in
by the due date, then the lender may deposit or negotiate the
(2) Upon renewal of a deferred deposit loan, the lender may
assess additional finance charges not to exceed eighteen percent
the loan amount. A deferred deposit lender may not redeem,
or otherwise consolidate a deferred deposit agreement with the
proceeds of another deferred deposit transaction made by the same
or an affiliated deferred deposit lender. However, this section
may not prohibit a deferred deposit lender from providing an
additional advance to a consumer so long as the advance does not
cause the consumer to exceed the limits set forth in this article.
(3) A transaction is completed when the lender presents the
instrument for payment, debits the consumer's checking account
the consumer redeems the instrument by paying the full amount
the instrument to the holder. Once the consumer has completed the
deferred deposit transaction, the consumer may enter into a new
deferred deposit agreement with the lender.
§32A-4-14. Multiple outstanding transactions notice.
A lender shall provide the following notice in a prominent
place on each deferred deposit loan agreement in at least
"State law prohibits deferred deposit loans exceeding one
thousand one hundred eighty
dollars total debt from a
deposit lender. Exceeding this amount may create financial
hardships for you and your family. You have the right to rescind
this transaction on or before the close of the next business day
following this transaction."
§32A-4-15. Form of loan proceeds.
A lender may pay the proceeds from a deferred deposit loan to
the consumer in the form of a business instrument, money order, or
cash, or by way of an electronic transfer of the proceeds to
customer's checking account or to a stored value card or
card. The consumer may not be charged an additional
charge or fee for cashing the lender's business
§32A-4-16. Endorsement of instrument.
A lender may not negotiate or present an instrument for
payment unlessthe instrument is endorsed with the actual business
name of the lender.
§32A-4-17. Redemption of instrument.
Prior to the lender negotiating or presenting the instrument,
the consumer has the right to redeem any instrument held
lender as a result of a deferred deposit loan if the
pays the full amount of the instrument to the lender in
other immediately available funds.
§32A-4-18. Authorized dishonored instrument charge.
If an instrument held by a lender as a result of a deferred
deposit loan is returned to the lender from a payor financial
institution because of insufficient funds, a closed account, or a
stop-payment order, the lender has the right to exercise all civil
means authorized by law to collect the face value of the
instrument, except that the provisions and remedies of article three of chapter sixty-one are not applicable to any deferred
deposit loan. In addition, the lender may contract for and collect
a returned instrument charge, not to exceed fifteen
court costs and reasonable attorney fees as
awarded by a court and
incurred as a result of the default. However, attorney fees may
not exceed the loan amount. The lender may not collect any other
fees as a result of default. A returned instrument charge may not
be allowed if the loan proceeds instrument is dishonored by the
financial institution or the consumer places a stop-payment order
because of forgery or theft.
§32A-4-19. Posting of charges.
Any lender offering
deferred deposit loan shall post at any
place of business where deferred deposit loans are made a notice
the charges imposed for deferred deposit loans.
§32A-4-20. Notice on assignment or sale of instruments.
Prior to sale or assignment of instruments held by the lender
result of a deferred deposit loan, the lender shall place a
notice on the instrument in at least ten-point type to read: "This
is a deferred deposit loan instrument."
§32A-4-21. Licensees duties with respect to military personnel.
(a) A licensee may not garnish the wages or salaries of a
(b) A licensee shall defer collection activity against:
(1) A military borrower that has been deployed to combat or combat support posting, for the duration of the posting, or
(2) Reserve or National Guard member called to active duty;
(c) A licensee may not contact the military chain of command
of a military borrower in an effort to collect a loan;
(d) A licensee must honor the terms of any repayment agreement
that they have entered into with a military borrower, including any
repayment agreement negotiated through military counselors or third
party credit counselors.
§32A-4-22. Grounds for suspension or revocation of license;
reinstatement of license; penalties.
(a) The Commissioner may suspend or revoke any license
under this article if the Commissioner finds that the licensee
any owner, director, officer, member, partner, stockholder,
employee or agent of the licensee:
(1) Has knowingly violated any provision of this article or
any order, decision or rule of the Commissioner lawfully made
pursuant to the authority of this article;
(2) Has knowingly made any material misstatement in the
application for the license;
(3) Does not have available or has not continuously maintained
the net worth required by the provisions of section four of this
article, calculated according to generally accepted accounting
(4) Has failed or refused to keep the bond required by section twoof this article in full force and effect, if
(5) In the case of a foreign corporation, does not remain
qualified to do business in this state;
(6) Has committed any fraud or engaged in any dishonest
activities with respect to the deferred deposit loan business in
this state or failed to disclose any of the material particulars of
any loan transaction in this state to anyone entitled to the
(7) This section may not limit any right the consumer may
to bring an action for a violation of section one hundred four,
article six, chapter forty-six-a of this code in an individual
The Commissioner may also suspend or revoke the license of
licensee if the Commissioner finds the existence of any ground upon
which the license could have been refused or any ground which
would be cause for refusing a license to the licensee were he or
shethen applying for the same. The Commissioner may also suspend
or revoke the license of a licensee pursuant to his or her
authorityunder section thirteen, article two, chapter thirty-one-a
of this code.
(b) The suspension or revocation of the license of any
licensee may not impair or affect the obligation of any preexisting
lawful loan between the licensee and any obligor.
(c) The Commissioner shall reinstate a suspended license,
or issue a new license to a licensee whose license has been
if the grounds upon which any license was suspended or revoked have
been eliminated or corrected and the Commissioner is satisfied that
the grounds are not likely to recur, unless the licensee's license
has been revoked on more than one occasion and in such event, the
Commissioner may reinstate the suspended license or issue a new
license in his or her reasonable
(d) In addition to the authority conferred under this
the Commissioner may impose a fine or penalty not
thousand dollars upon any licensee required to be
this article who the Commissioner determines has
violated any of
the provisionsof this chapter. For the
purposes of this section,
each separate violation is subject to the fine or penalty herein
prescribed and each day after the
date of notification, excluding
Sundays and holidays, that an unlicensed person engages in the
business or holds himself or herself out to the general public as
a deferred deposit lender constitutes a separate violation.
(e) Notwithstanding the forgoing, this section may not apply
to a bank, savings institution, credit union or farm credit system
organized under the laws of the United States or any state. In the
event a bank, savings institution, credit
union or farm credit
system uses an agent, marketer, or servicer to offer or make
deferred deposit transactions, as defined in subsection three,
section three, article four, chapter thirty-two-a, the
agent, marketer or servicer shall also be exempt, provided the bank,
savings institution, credit union or farm credit system is in
compliance with all guidelines, rules and directives issued by its
appropriate federal regulator in connection with these transactions
and third party relationships.
§32A-4-23. Notice of refusal, or suspension or revocation of
license; relinquishing license.
(a) Whenever the Commissioner shall refuse to issue a license,
or shall suspend or revoke a license, the Commissioner shall make
and enter an order to that effect and shall cause a copy of the
order to be served in person or by certified mail, return
requested, or in any other manner in which process in a
action in this state may be served, on the applicant or licensee,
as the case may be.
(b) Whenever a license is suspended or revoked, the
Commissioner shall in the order of suspension or revocation direct
the licensee to return to the Commissioner its license. It is the
duty of the licensee to comply with any such order: (i)
Immediately for failure to keep the bond required by the provisions
of section two of this article in full force and effect orif the
license was suspended following a non
appealable final order issued
by the hearing examiner; or
otherwise; and (ii) following
expiration of the period provided in section nine of this article
in which the licensee, if not previously provided the opportunity to a hearing on the matter, may demand a hearing before the
Commissioner without the demand having been timely made.
§32A-4-24. Hearing before Commissioner; provisions pertaining to
(a) Any applicant or licensee, as the case may be, adversely
affectedby an order made and entered by the Commissioner in
accordance with the provisions of this article, if not previously
provided the opportunity to a hearing on the matter, may in writing
demand a hearing before
the Commissioner. The Commissioner shall
appoint a hearing
examiner to conduct the hearing and prepare a
recommended decision. The written demand for a hearing must be
filed with the Commissioner within thirty days after the date upon
which the applicant or licensee was served with a copy of the
order. The timely filing of a written demand for hearing shall
stay or suspend execution of the order in question, pending a final
determination, except for an order suspending a license for failure
of the licensee to maintain the bond required by this article in
full force and effect. If a written demand
is timely filed, the
aggrieved party is entitled to
a hearing as a matter of right.
(b) All of the pertinent provisions of article five, chapter
twenty-nine-a of this code shall apply to and govern the hearing
and the administrative procedures in connection with and following
a hearing, with like effect as if the provisions of the article
were set forth in extenso in this subsection.
(c) For the purposeof conducting any hearing
appointed hearing examiner has the power
and authority to issue
subpoenas and subpoenas duces tecum in
accordance with the
provisions of section one, article
chapter twenty-nine-a of
this code. All subpoenas and subpoenas
duces tecum are issued and
served in the same manner, within the same time
and for the same
fees and shall be enforced, as specified in section one, article
five, chapter twenty-nine-a, and all of section one, article five,
chapter twenty-nine-a provisions dealing with subpoenas and
subpoenas duces tecum shall apply to subpoenas and subpoenas duces
tecum issued for the purpose of a hearing hereunder.
(d) Any hearing shall be held within thirty days after the
date upon which the Commissioner received the timely written demand
unless there is a postponement or continuance. The hearing
examiner may postpone or continue any hearing on his or her own
motion or for good cause shown upon the application of the
aggrieved party. At any hearing, the aggrieved party may represent
himself or herself or be represented by any attorney-at-law
admitted to practice before any circuit court of this state.
(e) After the hearing and consideration of all the testimony,
evidence and record in the case, the hearing examiner shall make
and enter an order affirming, modifying or vacating the
Commissioner's earlier order, or shall make and enter an order as
is considered appropriate and proper. The order shall be accompanied by findings of fact and conclusions of law as
specified in section three, article five, chapter twenty-nine-a of
this code. A copy of the order and a copy of the findings and
conclusions shall be served upon the aggrieved party and his or her
attorney of record, if any, in person or by
certified mail, return
receipt requested, or in any other manner
in which process in a
civil action in this state may be served. The order of the hearing
examiner is final unless vacated or modified on judicial review
thereof in accordance with the provisions of section ten of this
§32A-4-25. Judicial review.
(a) Any person adversely affected by a final order made and
entered by the hearing examiner after hearing held in accordance
with the provisions of section nine of this article is entitled to
judicial review thereof. All of the pertinent provisions of
section four, article five, chapter twenty-nine-a of this code
shall apply to and govern such review with like effect as if the
provisions of said section were set forth in extenso in this
(b) The judgment of the circuit court is final unless
reversed, vacated or modified on appeal to the Supreme Court of
Appeals in accordance with the provisions of section one, article
six, chapter twenty-nine-a of this code.
§32A-4-26. Actions to enjoin violations.
(a) Whenever it appears to the Commissioner that any
has been or is violating or is about to violate any
this article, any rules of the Commissioner or any
final order of
the Commissioner, the Commissioner may apply in
the name of the
state, to the circuit court of the county in
which the violation
or violations, or any part thereof, has
occurred, is occurring or
is about to occur, or the judge thereof in vacation, for an
injunction against a person and
any other persons who have been,
are or are about to be, involved in, or in any way participating
in, any practices, acts or omissions, so in violation, enjoining a
person or persons from any violation or violations.
(b) Upon application by the Commissioner as aforesaid and upon
a showing by the Commissioner that the practice, act or
to be enjoined will result in irreparable harm and that
at law is available, the circuit courts of this state
mandatory or prohibitory injunction compel compliance with the
provisions of this article, any rules of the
Commissioner and all
final orders of the Commissioner. The court may issue a temporary
injunction in any case pending a decision on the merits of any
(c) The judgment of the circuit court upon any application
permitted by the provisions of this section are final
reversed, vacated or modified on appeal to the Supreme
Court of Appeals. Any appeal shall be sought in the manner
and within the
time provided by law for appeals from circuit
courts in other civil
§32A-4-27. Loans made in violation of this article voidable;
agreements to waive article void.
(a) If any deferreddeposit loan is made in willful violation
of the provisions of this article, except as a result of a bona
fide error, the loan may be canceled by a court of
(b) Subject to the provisions of subsection (c) of this
section in which a licensed lender and consumer may enter into an
arbitration agreement, any other agreement whereby the consumer
waives the benefits of this article are considered to
public policy and void.
(c) Any loan transaction in violation of this article
subject to an action, which may be brought in a circuit court
having jurisdiction, by the consumer seeking damages, reasonable
attorneys fees and costs: Provided, That nothing
in this section
shall prohibit a licensed lender from entering into an arbitration
agreement whereby the lender and consumer agree to waive their
right to file a lawsuit and proceed in
courtto have ajurytrial
to resolve their disputes, and
instead agree to submit their
dispute to an arbitrator for a
§32A-4-28. Applicability of other provisions of this article.
provisions of this article apply to a lender unless these
are inconsistent with other provisions of state law.
§32A-4-29. Criminal culpability.
A consumer may not be subject to any criminal penalty for
entering into a deferred deposit loan agreement. A consumer may
not be subject to any criminal penalty in the event the instrument
is dishonored, unless the consumer had no account with the drawee
at the time the instrument was made, drawn,
delivered, subject to the provisions of article three of chapter
§32A-4-30. Unfair or deceptive practices.
No person shall engage in unfair or deceptive acts, practices,
or advertising in connection with a deferred deposit loan.
§32A-4-31. Separability; repealer.
If any provision, clause or phrase of this chapter or the
application thereof to any person or situation be held invalid, the
invalidity shall not affect other provisions, clauses, phrases or
applications of the chapter which can be given effect
invalid provision, clause, phrase or application, and to this end
the provisions hereof are declared to be
chapter shall be considered to be repealed by subsequent
not specifically repealing it if such construction can
NOTE: The purpose of this bill is to establish the deferred
deposit loan act.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
§32A-4 is new; therefore, strike-throughs and underscoring
have been omitted.