HOUSE CONCURRENT RESOLUTION NO. 87
(By Delegates Moore, Anderson, Argento, Azinger, Barker, Blair,
Boggs, Border, Brown, Browning, Burdiss, Campbell, Canterbury,
Carmichael, Crosier, DeLong, Doyle, Eldridge, Ellem, Ellis,
Evans, Fleischauer, Guthrie, Hamilton, Hartman, Hatfield,
Hrutkay, Hutchins, Iaquinta, Ireland, Kessler, Klempa, Long,
Longstreth, Mahan, Manchin, Marshall, Martin, Michael, Miley,
Morgan, Moye, Palumbo, Paxton, Perdue, Perry, Pino, D. Poling, M.
Poling, Porter, Proudfoot, Rodighiero, Romine, Rowan, Schadler,
Schoen, Shaver, Shook, Staggers, Stemple, Stephens, Sumner,
Swartzmiller, Tabb, Talbott, Tansill, Tucker, Webster, Williams,
Wells and Wysong)
Requesting the Joint Committee on Government and Finance to study
consumer lending practices and mortgage lending practices.
Whereas, Various financial institutions are offering and
marketing mortgage and loan refinancing and debt consolidation
offerings, which are being increasingly utilized by consumers to
provide additional access to capital and monetary resources; and
Whereas, While most of the refinancing and lending alternatives
extended in this state are made available by financial institutions
to provide West Virginians with reasonable access to their available homeowner's equity, there is concern that there are some
practices in the consumer lending and mortgage lending industry
which have resulted in the issuance of loans or the incurrence of
obligations which, at the time they were executed, encumbered
consumers and mortgage holders with an unreasonable amount of debt
in relation to the actual market value of their home or property,
or otherwise contained unreasonable and unfair terms and conditions
which resulted in unreasonable and excessive costs and financial
obligations to the consumers and mortgage holders; and
Whereas, There is concern that some consumers have also been
provided with multiple loans or obligations against the same
property, without a reasonable ability to pay for the multiple
debts; and
Whereas, There is concern that some of the loan and financial
opportunities which are actively marketed in this state may contain
terms and conditions which may be deemed unreasonable, and could be
construed as unfair trade practices in violation of existing laws;
and
Whereas, Some of these practices may have contributed to the
unreasonable and unfair foreclosure upon outstanding mortgage
obligations which were issued to West Virginians; and
Whereas, While the State of West Virginia has extended the
Banking Commissioner and other oversight and enforcement bodies
with the power to investigate and monitor the records and activities of regulated consumer lenders and mortgage lenders
enforcement, to enforce the laws of this state, there is a
question as to whether the existing oversight and regulatory
methods are sufficient to allow for the identification and
monitoring of excesses and abuses that may exist in some portions
of the industry; and
Whereas, There is some question as to what information may be
legitimately required from all regulated lenders through the annual
financial reporting process under existing statutes, to allow for
a broad examination of specific indicators for all lenders, with
the intent of helping to identify a need for further examination an
individual lenders' practices; and
Whereas, Approximately one half of states have adopted specific
legislation to address and regulate predatory mortgage lending
practices; and
Whereas, To determine the most effective means of the state's
existing regulation of this industry, to examine the methods and
the effectiveness of existing laws and methods used to monitor and
respond to potential abuses and unfair practices, to examine the
need for additional regulatory oversight, enforcement or
investigatory tools, as well as to determine the impact of such
action upon West Virginia citizens, it is necessary to study the
practices and regulatory oversight of consumer lending practices
and mortgage lending practices; therefore, be it
Resolved by the Legislature of West Virginia:
That the Joint Committee on Government and Finance is hereby
requested to study consumer lending and mortgage lending practices;
and, be it
Further Resolved, That the Joint Committee on Government and
Finance report to the regular session of the Legislature, 2008, on
its findings, conclusions and recommendations, together with drafts
of any legislation necessary to effectuate its recommendations;
and, be it
Further Resolved, That the expenses necessary to conduct this
study, to prepare a report and to draft necessary legislation be
paid from legislative appropriations to the Joint Committee on
Government and Finance.