ENROLLED
Senate Bill No. 425
(By Senators Minard, Jenkins and Deem)
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[Passed April 11, 2009; in effect ninety days from passage.]
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AN ACT
to amend and reenact §46A-4-111 of the Code of West
Virginia, 1931, as amended, relating to refinancing or
consolidation of certain loans or consumer credit sales by
regulated consumer lenders; requiring disclosure of a higher
annual percentage rate in any refinancing or consolidation of
a nonrevolving consumer loan or consumer credit sale; and
requiring documentation of a reasonable, net tangible benefit
to the borrower of any refinancing or consolidation of a
nonrevolving consumer loan or consumer credit sale secured by
residential real estate.
Be it enacted by the Legislature of West Virginia:
That §46A-4-111 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-111. Disclosure of higher annual percentage rate upon refinancing of a loan not secured by real estate
at higher rate; requiring documentation of a
reasonable net tangible benefit to the borrower of
any refinancing of a real estate secured loan.
(1) Any nonrevolving consumer loan or consumer credit sale
that is not secured by residential real estate that is refinanced
or consolidated with a new loan under this article after September
1, 2009, at a higher annual percentage rate than the consumer loan
or consumer credit sale being refinanced must provide the consumer
the following disclosures:
"If you do agree to refinance or consolidate your existing
obligation, you will be paying an annual percentage rate of _____%
on the existing balance of $_____, instead of the annual percentage
rate of ______% which you are now paying.
I acknowledge receipt of this information __________ (initials
of borrower)."
Nothing in this subsection shall prohibit the receipt of goods
or services by the borrower at the time the consolidated loan
agreement is made, nor shall this subsection prohibit or pertain to
any loan where the refinancing or consolidation results in the
consumer paying the same or a lower annual percentage rate.
(2) No nonrevolving consumer loan or consumer credit sale that
is secured by residential real estate may be refinanced or
consolidated with a new loan secured by residential real estate and made under this article unless the new loan has a reasonable,
tangible net benefit to the borrower considering all of the
circumstances, including the terms of both the new and the
refinanced loans, the cost of the new loan and the borrower's
circumstances. The reasonable, tangible net benefit shall be
documented in writing on a form prescribed by the commissioner and
maintained in the loan file.
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