H. B. 2505
(By Delegates White and Kominar)
[Introduced January 24, 2007; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact §46A-4-110 of the Code of West
Virginia, 1931, as amended, relating to the sale of home and
automobile membership plans by consumer lenders.
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) 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
automobile and home membership plans, subject to requirements of
subsection (4) of this section, or from engaging in any business
previously approved by the commissioner prior to the first day of
September, one thousand nine hundred ninety-six.
(2) A licensee may purchase, hold and convey real property as
follows:
(a) As shall be necessary for the convenient transaction of
its business;
(b) 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) As is conveyed to it in satisfaction of debts previously
contracted in the course of its dealings;
(d) As is acquired by the sale on execution or judgment or
decree of any court in its favor.
(3) 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), or acquired under subdivisions (c) and (d) of this section
shall be held for a longer time than ten years, unless such period
shall be extended by the Commissioner of Banking.
(4) A licensee may sell automobile or home membership plans
subject to the following conditions:
(A) 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;
(B) The customer may pay for the plan either by currency,
personal check or draft, money order, credit card, or with a
proceeds check made payable to the customer and endorsed by the
customer to the plan;
(C) The customer shall receive and sign a copy of the
enrollment authorization;
(D) 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;
(E) No claims or other benefits derived from the plan shall be
paid to the licensee; and
(F) 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.
(5) An automobile or home membership plan is a membership plan
that offers security for home and automobile ownership,
respectively. Components of these plans may include, but not be
limited to, health insurance deductible coverage, extended
warranties, home security services, property insurance deductibles
coverage, home security information, ambulance and paramedic
expense, emergency care reimbursement, automobile security
services, travel services, and prepaid legal services.
NOTE: The purpose of this bill is to allow consumer lenders
to sell home and automobile membership plans to their customers.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.