H. B. 2820
(By Delegate White)
[Introduced February 5, 2007; referred to the
Committee on Banking and Insurance then Finance.]
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-4-7a,
§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 and §32A-4-30, all relating to regulating
deferred deposit loans by establishing the Deferred Deposit
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-4-7a,
§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 and §32A-4-30, 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 license under the provisions of article four of this chapter.
(c) No check cashing 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 license 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, constitutes prohibited
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 gives rise
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. Authority to make loans.
(a) No person may 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 does 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 the transactions and third party relationships.
§32A-4-2. Short title.
This article may be cited as the "Deferred Deposit Loan
Consumer Protection 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 eleven of
(4) "Gross monthly income" means income derived monthly from any source as demonstrated by official documentation of said
income, including, but not limited to, a pay stub or a receipt
evidencing payment of money to a consumer, for a period of thirty
days prior to the date on which the loan is made.
(5)"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.
(6) "Lender" means a person licensed to engage in the business
of providing deferred deposit loan services under this article.
(7) "Loan Amount" means the amount financed as defined in
regulation Z of the federal "Truth In Lending Act," 12 C.F.R.
226.18 (b), as amended.
§32A-4-4. Application for license; form; content; fee.
(a) An application for a license under this article shall be
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 licensed; and
(3) Such other information concerning the financial
responsibility, background and experience of the applicant and its
members, officers, directors and principals as the commissioner may
(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 generally accepted
accounting principles as shown by the most recent audited financial
statement filed with and satisfactory to the commissioner;
(3) Submit proof that applicant's computer operating system is
compatible with the computer operating system utilized by the
office of the commissioner for purposes of complying with the
requirements of section seven of this article.
(4) 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;
(5) Pay to the commissioner a license fee in the amount of one
hundred dollars per licensed location.
§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 four 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 with law;
(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
(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.
(4) The applicant has failed to provide adequate proof of the
compatibility of its computer operating system with the computer
operating system utilized by the office of the commissioner
pursuant to the requirements of section seven of this article.
Otherwise, the commissioner shall issue to the applicant a
deferred deposit lender license which shall entitle the applicant
to engage in the business of deferred deposit lending during the
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 four of this article. Whenever an
application for a license under this article is denied and the
license sought is refused, which refusal has become final, the
commissioner shall retain all fees to cover administrative costs of
processing the application.
§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 is transferable or assignable. No licensee
may offer a franchise under that license to another person.
(b) No licensee may open an additional office or relocate any
place of business without prior approval of the commissioner.
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 dollar
nonrefundable application fee.
(c) Every license issued under this article, 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 accordance with
the provisions of section four of this article. All applications
for the renewal of licenses shall be filed with the commissioner at
least ninety days before the expiration thereof.
§32A-4-7. Records and annual reports; examination of records;
(a) Every licensee shall maintain at each branch location or
at a central location known to the commissioner the books, accounts
and records of that branch relating to all transactions within this
article as are necessary to enable the commissioner to enforce the
provisions of this article. Every licensee shall further maintain
books, accounts and records in an electronic format which shall be readily accessible to the commissioner through compatible interface
with the computer operating system utilized by the office of the
commissioner. The commissioner shall have real time access to the
data for the purpose of determining whether each licensee is
complying with the provisions hereof and for the purpose of
verifying each licensee's annual report. 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 the provisions
hereof 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 proposed by the commissioner for
legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code.
(d) The commissioner may enter into cooperative, coordinating
and information-sharing agreements with any other agency
supervising deferred deposit lenders.
§32A-4-7a. License renewal fees.
On an annual basis, the commissioner shall assess a license
renewal fee to each licensee for each licensed location in an
amount equal to the actual total cost of supervising all licensees
under this article for the prior one-year period divided by the
total number of licensed locations existing on the renewal date.
The licensing fee shall be assessed on the annual license renewal
date and shall be paid by each licensee as a condition for renewal
of a license. The commissioner shall adjust the license renewal
fee on an annual basis to reflect the actual cost attributable to
supervision of all licensees. Upon request, the commissioner shall
provide a licensee with a summary showing the actual cost
attributable to supervision of all licensees for any given year.
§32A-4-8. Advertising requirements.
It is unlawful and an unfair trade practice for any person to
cause to be placed before the public in this state, directly or
indirectly, any false, misleading or deceptive advertising matter
pertaining to a deferred deposit lending transaction. This section
does 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 character thereof.
§32A-4-9. Written agreement requirements.
Each deferred 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 agreement shall
include all disclosures required by federal and state law. The
written agreement shall set a date, not more than forty-five days
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
place on each loan agreement in at least 10-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 finance
§32A-4-11. Authorized finance charge.
A lender may charge a finance charge for each deferred deposit loan that may not exceed one percent of the amount loaned for each
day of the term of the loan up to a maximum of twenty days, even
though the term of said loan may be for a period of greater length.
In addition to the finance charge, the lender may charge a one-time
administrative fee of five dollars for each transaction. The
charges shall be considered fully earned as of the date of the
transaction. The lender may charge only those charges authorized
in this article in connection with a deferred deposit loan.
§32A-4-12. Maximum loan amount - Right to rescind.
(1) No lender may make a deferred deposit loan to a consumer
if the total amount of the principal of the loan, when combined
with the principal of all of the consumer's other outstanding loans
with the lender, exceeds one thousand dollars or twenty-five
percent of the consumer's monthly gross income, whichever is less.
(2) A consumer may rescind the deferred deposit loan on or
before the close of the next business day 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 may 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 the lender for a particular consumer at any given time, may not exceed one
thousand dollars, or twenty-five percent of the consumer's monthly
gross income, whichever is less, exclusive of the fees allowed by
(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 than
once. After renewal, the consumer shall pay the debt in cash or
its equivalent. If the consumer does not pay the debt in full 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 the finance charge
allowed in section eleven of this article. The lender is allowed
to charge the administrative fee upon renewal of a deferred deposit
loan. A deferred deposit lender may not redeem, extend, 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
does 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 or
the consumer redeems the instrument by paying the full amount of
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 10-point
"State law prohibits deferred deposit loans exceeding one
thousand dollars or twenty-five percent of the consumer's monthly
gross income, whichever is less, exclusive of the fees allowed by
this article. 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 proceeds to the
customer's checking account or to a stored value card or debit
card. The consumer may not be charged an additional finance charge
or fee for cashing the lender's business instrument.
§32A-4-16. Endorsement of instrument.
A lender may not negotiate or present an instrument for
payment unless the 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 by a
lender as a result of a deferred deposit loan if the consumer pays
the full amount of the instrument to the lender in cash or 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 due to insufficient funds, a closed account, or a
stop-payment order, the lender shall have 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 dollars, plus
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 is not allowed if the loan proceeds instrument is dishonored by the
financial institution or the consumer places a stop-payment order
due to forgery or theft.
§32A-4-19. Posting of charges.
Any lender offering a deferred deposit loan shall post at any
place of business where deferred deposit loans are made a notice of
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
as a result of a deferred deposit loan, the lender shall place a
notice on the instrument in at least 10-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.
A licensee may not contact the military chain of command of a
military borrower in an effort to collect a loan.
(c) 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 issued
under this article if he or she finds that the licensee or 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; or
(2) Has knowingly made any material misstatement in the
application for the license; or
(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
four of this article in full force and effect, if applicable; or
(5) In the case of a foreign corporation, does not remain
qualified to do business in this state; or
(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 information.
This section does not limit any right the consumer may have 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 a
licensee if he or she 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 she then
applying for a license. The commissioner may also suspend or
revoke the license of a licensee pursuant to his or her authority
under section thirteen, article two, chapter thirty-one-a of this
(b) The suspension or revocation of the license of any
licensee does 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 revoked,
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 that event, the
commissioner may reinstate the suspended license or issue a new
license in his or her reasonable discretion.
(d) In addition to the authority conferred under this section,
the commissioner may impose a fine or penalty not exceeding one
thousand dollars upon any licensee required to be licensed under
this article who the commissioner determines has violated any of
the provisions of this article. 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 does 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 section three of this
article, the agent, marketer or servicer is also 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 refuses to issue a license, or suspends or revokes a license, he 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 receipt requested, or in any
other manner in which process in a civil 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. The
licensee shall comply with any order: (I) Immediately for failure
to keep the bond required by the provisions of section two of this
article in full force and effect or if the license was suspended
following a nonappealable final order issued by the hearing
examiner; or otherwise; and (ii) following expiration of the period
provided in section twenty-four 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
a 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
affected by an order made and entered by the commissioner in
accordance with the provisions of section twenty-two 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 stays or suspends 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 section four of this article in full force and
effect. If a written demand is timely filed as aforesaid, 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 apply to and govern the hearing and the
administrative procedures in connection with and following the
hearing, with like effect as if the provisions of the article were
set forth in extenso in this subsection.
(c) For the purpose of conducting any hearing hereunder, the
appointed hearing examiner may issue subpoenas and subpoenas duces
tecum in accordance with the provisions of section one, article
five, chapter twenty-nine-a of this code. All subpoenas and
subpoenas duces tecum are issued and served in the manner, within
the time and for the fees and shall be enforced, as specified in
that section, and all of the section provisions dealing with
subpoenas and subpoenas duces tecum apply to subpoenas and subpoenas duces tecum issued for the purpose of a hearing
(d) Any hearing shall be held within thirty days after the
date upon which the commissioner received the timely written demand
therefor 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 of 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, meet 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
and a copy of the order and accompanying 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 twenty-five of this article.
§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 twenty-four 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 apply to and govern a review with like effect as if the
provisions of that 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 person
has been or is violating or is about to violate any provision of
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 the 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 the 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 omission to
be enjoined will result in irreparable harm and that no remedy at
law is available, the circuit courts of this state may by 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 application filed.
(c) The judgment of the circuit court upon any application
permitted by the provisions of this section is final unless
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 void;
agreements to waive article void.
(a) If any deferred deposit 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 competent
(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 is against public policy and
(c) Any loan transaction in violation of this article is
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
prohibits 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 court to have a jury trial
to resolve their disputes, and instead agree to submit their
dispute to an arbitrator for a decision.
§32A-4-28. Criminal culpability.
A consumer is not subject to any criminal penalty for entering
into a deferred deposit loan agreement. A consumer is not subject
to any criminal penalty in the event the instrument is dishonored,
unless the consumer had no account with drawee at the time the
instrument was made, drawn, negotiated or delivered, subject to the
provisions of article three of chapter sixty-one of this code.
§32A-4-29. Unfair or deceptive practices.
No person may engage in unfair or deceptive acts, practices,
or advertising in connection with a deferred deposit loan.
§32A-4-30. 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 does not affect other provisions, clauses, phrases or
applications of the chapter which can be given effect without the
invalid provision, clause, phrase or application, and to this end
the provisions hereof are declared to be separable. All laws or
parts of laws plainly inconsistent with the provisions hereof are
hereby repealed. No provision of this chapter may be considered to
be repealed by subsequent legislation not specifically repealing it
if that construction can be avoided.
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