H. B. 3182
(By Delegates Miley and Kominar)
[Introduced March 17, 2009; referred to the
Committee on the Judiciary then Finance.]
A BILL to amend and reenact §46A-4-110 of the Code of West
Virginia, 1931, as amended, relating to the sale of membership
plans by consumer lenders; defining membership plans;
specifying conditions for sale of plans by licensees; and
requiring enrollment authorizations to be filed with the
commissioner.
Be it enacted by the Legislature of West Virginia:
That §46A-4-110 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-110. Conduct of business other than making loans.
(1) (a) No licensee shall conduct the business of making loans
under the provisions of this article within any office, room or
place of business in which any other business is solicited or
engaged in, or in association or conjunction therewith, except as may be authorized in writing by the commissioner upon his
or her
finding that the character of such other business is sufficiently
related to that of a financial institution and is such that the
granting of such authority would not facilitate evasions of this
article or of the rules lawfully made hereunder, except nothing
herein shall prohibit the licensee from purchasing installment
sales contracts or the sale or provision of insurance authorized by
section one hundred nine, article three of this chapter, or from
making loans authorized under the provisions of the West Virginia
secondary mortgage loan act as set forth in article seventeen,
chapter thirty-one of this code,
or from soliciting or selling, and
if authorized by the customer, membership plans and health related
discount plans, subject to requirements of subsection (d) of this
section, or from engaging in any business previously approved by
the commissioner prior to September 1, 1996.
(2) (b) A licensee may purchase, hold and convey real property
as follows:
(a) (1) As shall be necessary for the convenient transaction
of its business;
(b) (2) As is mortgaged to it in good faith by way of security
for loans made by or money due to such regulated consumer lender;
(c) (3) As is conveyed to it in satisfaction of debts
previously contracted in the course of its dealings;
(d) (4) As is acquired by the sale on execution or judgment or decree of any court in its favor.
(3) (c) A licensee shall not purchase, hold or convey any real
property in any other case or for any other purpose whatsoever.
Real property shall be conveyed only by authority of the board of
directors of any such regulated consumer lender. No real property
acquired upon foreclosure in the cases contemplated in subdivision
(b) (2), or acquired under subdivisions
(c) (3) and
(d) (4),
subsection (b) of this section shall be held for a longer time than
ten years, unless such period shall be extended by the commissioner
of banking.
(d) A licensee may sell membership plans subject to the
following conditions:
(1) The purchase of the plan by the customer is strictly
voluntary and never made a condition to the extension of credit or
granting of the loan;
(2) The customer may pay for the plan either by currency,
personal check, bank draft, money order, credit card or with a
check made payable from the proceeds of the loan to the customer
and endorsed by the customer to the plan;
(3) The customer shall receive and sign a copy of the
enrollment authorization;
(4) The customer may cancel the plan for a full refund paid
directly to the customer within thirty days from the effective date
of enrollment in the plan; thereafter, the member shall receive a prorated refund of the remaining portion of the membership in the
plan;
(5) No claims or other benefits derived from the plan shall be
paid to the licensee; and
(6) Copies of the plans' enrollment authorization shall be
submitted to the commissioner by the licensee prior to the sale and
solicitation of the plans within this state.
(e) A membership plan is a plan that offers security for the
property interests of the licensee's customers. Components of
these plans may include insurance deductible coverages; extended
warranties for items of personalty, excluding motor vehicles;
security services; security information; ambulance and paramedic
expense; emergency care reimbursement; travel services; legal
consultation and referral services; emergency towing and road
services; and other services and benefits reasonably related to
property ownership.
(f) A health related discount membership plan has the same
meaning as that contained in article fifteen-e, chapter
thirty-three of this code.
(g) Nothing contained in this section abrogates the
requirements of chapter thirty-three of this code.
NOTE: The purpose of this bill is to allow consumer lenders to
sell membership plans to their customers. The bill defines
membership plans, specifies conditions for sale of plans by licensees and requires enrollment authorizations to be filed with
the commissioner.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.