H. B. 3289
(By Delegate R. M. Thompson (By Request))
[Introduced March 25, 2005; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §46A-2-115 of the Code of West
Virginia, 1931, as amended, relating to removing language that
will make the restrictions regarding default charges
applicable to all lenders.
Be it enacted by the Legislature of West Virginia:
That §46A-2-115 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 2. CONSUMER CREDIT PROTECTION.
§46A-2-115. Limitation on default charges.
(a) Except for reasonable expenses including costs and fees
authorized by statute incurred in realizing on a security interest,
the agreement with respect to a consumer credit sale or a consumer
loan may not provide for charges as a result of default by the
consumer other than those authorized by this chapter.
(b) A consumer loan secured by real property: (1) Originated by a bank or savings and loan association, or an affiliate, and not
solicited by an unaffiliated broker; (2) held by a federal home
loan bank, the federal national mortgage association, the federal
home loan mortgage corporation, the government national mortgage
association, the West Virginia Housing Development Fund; or (3)
insured or guaranteed by the farmers home administration, the
Veteran's Administration, Department of Housing and Urban
Development, which includes in the loan agreement a reinstatement
period beginning with the trustee notice of foreclosure and ending
prior to foreclosure sale, may, in addition to those authorized by
this chapter, permit the recovery of the following actual
reasonable reinstatement period expenses paid or owed to
third-parties: (i) Publication costs paid to the publisher of the
notice; (ii) appraisal fee when required by the circumstances or by
a regulatory authority and only after the loan has been referred to
a trustee for foreclosure; (iii) title check and lienholder
notification fee not to exceed two hundred dollars, as adjusted
from time to time by the increase in the consumer price index for
all consumers published by the United States Department of Labor;
and (iv) certified mailing costs. The amendment to this section
made during the regular session of the West Virginia Legislature,
two thousand five, shall apply retroactively to the first day of
January, two thousand two.
(c) All amounts paid to a creditor arising out of any consumer credit sale or consumer loan shall be credited upon receipt against
payments due: Provided, That amounts received and applied during
a cure period will not result in a duty to provide a new notice of
right to cure; and provided further that partial amounts received
during the reinstatement period set forth in subsection (b) of this
section do not create an automatic duty to reinstate and may be
returned by the creditor. Default charges shall be accounted for
separately; those set forth in subsection (b) arising during such
a reinstatement period may be added to principal.
(d) At least once every twelve months, the holder or servicer
of each consumer loan secured by real property against which the
creditor assesses any default charge, and: (1) Not serviced by the
originating lender or its affiliate or their successors by merger;
(2) not held by a federal home loan bank, the federal national
mortgage association, the federal home loan mortgage corporation,
the government national mortgage association, the West Virginia
Housing Development Fund; or (3) not insured or guaranteed by the
farmers home administration, the Veteran's Administration,
Department of Housing and Urban Development, shall transmit to the
consumer an accounting of every default charge assessed within the
previous twelve months, including the date, amount and nature of
the cost.
For purposes of this subsection, this notice requirement does
not apply to delinquency charges permitted under sections one hundred twelve and one hundred thirteen, article three of this
chapter; credit line over-the-limit fees; deferral charges
permitted under section one hundred fourteen, article three of this
chapter; collateral protection insurance permitted under section
one hundred nine-a, article three of this chapter; and advances to
pay taxes.
(e) A provision in violation of this section is unenforceable.
The amendments to this section by acts of the Legislature in the
regular session of two thousand three are a clarification of
existing law and shall be retroactively applied to all agreements
in effect on the date of passage of the amendments, except where
controversies arising under those agreements are pending prior to
the date of passage of the amendments.
NOTE: The purpose of this bill is to remove language that will
make the restrictions regarding default charges applicable to all
lenders; and making it retroactive to January 1, 2002.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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