Senate Bill No. 457
(By Senators Manchin and Helmick)
____________
[Introduced February 20, 1995; referred to the Committee
Banking and Insurance; and then to the Committee on
Finance.]
____________
A BILL to repeal article seven, chapter thirty-one of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended; to amend and reenact sections two, five and six,
article one, chapter thirty-one-a of said code; to amend and
reenact sections four, five and eight, article two of said
chapter; to amend and reenact sections fourteen and
twenty-two, article four of said chapter; to amend and
reenact section two, article seven of said chapter; to amend
article eight of said chapter by adding thereto a new
section, designated section eight-a; to amend and reenact
section twelve-a of said article; to amend and reenact
sections one hundred two and one hundred three, article one,
chapter forty-six-a of said code; to amend and reenact
sections one hundred four and one hundred eleven, article
three of said chapter; to further amend said article by
adding thereto a new section, designated section one hundred
thirteen-a; to amend and reenact article four of said chapter; to amend and reenact sections one hundred one and
one hundred three, article five of said chapter; to amend
and reenact sections one hundred three and one hundred
fifteen, article seven of said chapter; and to amend and
reenact section one hundred one, article eight of said
chapter; to amend and reenact section five-d, article six,
chapter forty-seven of said code, all relating to the
elimination of separate licensing requirements for
supervised lenders and industrial loan companies; limiting
the charging points, loan origination fees, loan
investigation fees and similar charges on certain loans and
consumer credit transactions and the calculation for
rebating such charges upon prepayment; and clarifying the
treatment of confidential banking records.
Be it enacted by the Legislature of West Virginia:
That article seven, chapter thirty-one of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
repealed; that sections two, five and six, article one, chapter
thirty-one-a of said code be amended and reenacted; that sections
four, five and eight, article two of said chapter be amended and
reenacted; that sections fourteen and twenty-two, article four of
said chapter be amended and reenacted; that section two, article
seven of said chapter be amended and reenacted; that article
eight of said chapter be amended by adding thereto a new section,
designated section eight-a; that section twelve-a of said article
be amended and reenacted; that sections one hundred two, and one hundred three, article one, chapter forty-six-a of said code be
amended and reenacted; that sections one hundred four and one
hundred eleven, article three of said chapter be amended and
reenacted; that said article be further amended by adding thereto
a new section, designated section one hundred thirteen-a; that
article four of said chapter be amended and reenacted; that
sections one hundred one and one hundred three, article five of
said chapter be amended and reenacted; that sections one hundred
three and one hundred fifteen, article seven of said chapter be
amended and reenacted; and that section one hundred one, article
eight of said chapter forty-six-a be amended and reenacted; that
section five-d, article six, chapter forty-seven of said code be
amended and reenacted, all to read as follows:
CHAPTER 31A. BANKS AND BANKING.
ARTICLE 1. GENERAL PROVISIONS AND DEFINITIONS.
§31A-1-2. Definitions.
As used in this chapter, unless the context in which used
plainly requires a different meaning:
(a) The word "action," in the sense of a judicial
proceeding, means any proceeding in a court of competent
jurisdiction in which rights are adjudicated and determined and
shall embrace and include recoupment, counterclaim, setoff and
other related, similar and summary proceedings;
(b) The words "bank" and "banking institution" mean a
corporation heretofore or hereafter chartered to conduct a
banking business under the laws of West Virginia or an association heretofore or hereafter authorized to conduct a
banking business in West Virginia under the laws of the United
States and having its principal office in this state and shall
embrace and include a
savings bank, savings and loan association,
trust company or an institution combining banking and trust
company facilities, functions and services so chartered or
authorized to conduct such business in this state;
and shall
include industrial banks authorized by article seven, chapter
thirty-one of this code, subject to the limitations therein
imposed on such industrial banks and further subject to the
limitations imposed thereon in this article
(c) The words "bankers' bank" mean a banking institution,
insured by the Federal Deposit Insurance Corporation, the stock
of which is owned exclusively by banks and other depository
institutions, and such banking institution and all subsidiaries
thereof are engaged exclusively in providing services for banks
and other depository institutions and their officers, directors
and employees;
(d) The term "banking business" means the functions,
services and activities contained, detailed and embraced in
sections thirteen and fourteen, article four of this chapter, and
as elsewhere defined by law;
(e) The word "board" means the West Virginia board of
banking and financial institutions;
(f) The words "branch bank" mean an office or other place at
which a bank performs any or all banking business. For purposes of this chapter, a branch bank does not include:
(1) A bank's principal place of business;
(2) Any customer bank communication terminals installed and
operated pursuant to section twelve-b, article eight of this
chapter; and
(3) Any loan origination office authorized by section
twelve-c, article eight of this chapter;
(g) The words "commissioner" or "commissioner of banking"
mean the commissioner of banking of West Virginia;
(h) The word "community" means a city, town or other
incorporated area, or, where not so incorporated, a trading area;
(i) The word "department" means the department of banking of
West Virginia;
(j) The words "deputy commissioner" or "deputy commissioner
of banking" mean the deputy commissioner of banking of West
Virginia;
(k) The word "fiduciary" means any trustee, agent, executor,
administrator, curator, committee, guardian or conservator,
special commissioner, receiver, trustee in bankruptcy, assignee
for creditors, or any holder of a similar position of trust or
responsibility;
(l) The words "financial institutions" mean banks, building
and loan associations,
industrial banks, industrial loan
companies, supervised lenders regulated consumer lenders, credit
unions and all other similar institutions, whether persons, firms
or corporations, which are by law under the jurisdiction and supervision of the commissioner of banking;
(m) The word "officer" when referring to any financial
institution, means any person designated as such in the bylaws
and includes, whether or not so designated, any executive
officer, the chairman of the board of directors, the chairman of
the executive committee, and any trust officer, assistant vice
president, assistant treasurer, assistant secretary, assistant
trust officer, assistant cashier, assistant comptroller, or any
other person who performs the duties appropriate to those
offices, and the terms "executive officer" as herein used, when
referring to banking institutions, mean an officer of a bank
whose duties involve regular, active and substantial
participation in the daily operations of such institution and
who, by virtue of his position, has both a voice in the
formulation of the policy of the bank and responsibility for
implementation of the policy, such responsibility of and
functions performed by the individual, and not his title or
office, being determinative of whether he is an "executive
officer";
(n) The words "person" or "persons" mean any individual,
partnership, society, association, firm, institution, company,
public or private corporation, state, governmental agency,
bureau, department, division or instrumentality, political
subdivision, county commission, municipality, trust, syndicate,
estate or any other legal entity whatsoever, formed, created or
existing under the laws of this state or any other jurisdiction;
(o) The words "safe-deposit box" mean a safe-deposit box,
vault or other safe-deposit receptacle maintained by a lessor
bank, and the rules relating thereto apply to property or
documents kept therein in the bank's vault under the joint
control of lessor and lessee;
(p) The words "state bank" or "state banking institution"
mean a bank chartered under the laws of West Virginia, as
distinguished from a national banking association; and
(q) The words "trust business" mean the functions, services
and activities contained, detailed and embraced in section
fourteen, article four of this chapter, and as elsewhere defined
by law and as may be included within the meaning of the term
"banking business."
§31A-1-5. Lending and investing powers and authority of
fiduciaries, financial institutions, governmental entities
and other persons.
The state of West Virginia, counties, municipalities,
political subdivisions and agencies and instrumentalities of any
of them, fiduciaries, building and loan associations,
industrial
loan companies regulated consumer lenders, insurance companies,
fraternal benefit societies, and other persons lawfully engaging
in the lending and investing business and services shall have and
are hereby authorized and empowered to exercise the same lawful
rights and privileges as are banking institutions under
provisions of sections twenty- seven, twenty-eight and
twenty-nine of article four of this chapter.
§31A-1-6. Deposit insurance required for banking and other
depository institutions.
All
building and loan associations established pursuant to
article six, chapter thirty-one, industrial banks established
pursuant to article seven, chapter thirty-one, credit unions
established pursuant to article ten, chapter thirty-one
members
of the savings and loan association of the state of West Virginia
established pursuant to article eleven, chapter thirty-one and
all banking institutions governed by the provisions of this
chapter shall qualify for and obtain federal deposit insurance,
or shall obtain insurance as approved by the commissioner of
banking in an amount equal to that provided by the federal
deposit insurance corporation for eligible institutions.
Each such institution which fails to obtain deposit
insurance as required herein by the first day of July, one
thousand nine hundred seventy-eight shall be prohibited from
conducting any business as a lending institution until such
insurance is obtained, except that the commissioner may grant
continuances for compliance with this section for any institution
showing good cause for such a continuance.
ARTICLE 2. DIVISION OF BANKING.
§31A-2-4. Jurisdiction of commissioner; powers, etc., of
department transferred to commissioner; powers and duties
of commissioner.
(a) Subject to the powers vested in the board by article
three of this chapter, the commissioner shall have supervision and jurisdiction over state banks (other than those banks
excepted by the provisions of section eleven of this article),
regulated consumer lenders, industrial loan companies, building
and loan associations,
supervised lenders, credit unions, and all
other persons now or hereafter made subject to his supervision or
jurisdiction. All powers, duties, rights and privileges vested
in the department are hereby vested in the commissioner. He
shall be the chief executive officer of the department of banking
and shall be responsible for the department's organization,
services and personnel, and for the orderly and efficient
administration, enforcement and execution of the provisions of
this chapter and all laws vesting authority or powers in or
prescribing duties or functions for the department or the
commissioner.
(b) The commissioner shall:
(1) Maintain the office for the department at the state
capitol, and there keep a complete record of all the department's
transactions, of the financial conditions of all financial
institutions and such records of the activities of other persons
as the commissioner may deem important. Notwithstanding any
other provision of the code of West Virginia, heretofore or
hereafter enacted, the records relating to the financial
condition of any financial institution and any information
contained therein shall be confidential for the use of the
commissioner and authorized personnel of the department of
banking. No person shall divulge any information contained in any such records except
as hereafter authorized in response to a
valid subpoena or subpoena duces tecum issued pursuant to law.
Subpoenas shall first be directed to the commissioner, who shall
authorize disclosure of relevant records and information
therefrom for good cause, upon imposing terms and conditions as
are deemed necessary to protect the confidential nature of the
records, the financial integrity of the financial institution or
the person to which the records relate, and the legitimate
privacy interests of any individual named in such records.
Conformity with federal procedures shall be sought where the
institution maintains federal deposit insurance. The
commissioner shall have and may exercise reasonable discretion as
to the time, manner and extent the other records in his office
and the information contained therein shall be available for
public examination.
(2) Require all financial institutions to comply with all
the provisions of this chapter and other applicable laws, or any
rule
and regulation promulgated or order issued thereunder.
(3) Investigate all alleged violations of this chapter and
all other laws which he is required to enforce and of any rule
and regulation promulgated or order issued thereunder.
(c) In addition to all other authority and powers vested in
the commissioner by provisions of this chapter and other
applicable laws, the commissioner is authorized and empowered:
(1) To provide for the organization of the department and
the procedures and practices thereof and implement the same by the promulgation of rules
and regulations and forms as
appropriate, which rules
and regulations shall be promulgated in
accordance with article three, chapter twenty-nine-a of this
code;
(2) Employ, direct, discipline, discharge and establish
qualifications and duties for all personnel for the department,
including, but not limited to, examiners, assistant examiners,
conservators and receivers, to establish the amount and condition
of bonds for such thereof as he deems appropriate and to pay the
premiums thereon, and if he so elects, to have all such personnel
subject to and under the classified service of the state
personnel department;
(3) To cooperate with organizations, agencies, committees
and other representatives of financial institutions of the state
in connection with schools, seminars, conferences and other
meetings to improve the responsibilities, services and stability
of the financial institutions;
(4) In addition to the examinations required by section six
of this article, to inspect, examine and audit the books,
records, accounts and papers of all financial institutions at
such times as circumstances in his opinion may warrant;
(5) To call for and require all such data, reports and
information from financial institutions under his jurisdiction,
at such times and in such form, content and detail, deemed
necessary by him in the faithful discharge of his duties and
responsibilities in the supervision of the financial institutions;
(6) Subject to the powers vested in the board by article
three of this chapter, to supervise the location, organization,
practices and procedures of financial institutions and, without
limitation on the general powers of supervision thereof, to
require financial institutions to:
(A) Maintain their accounts consistent with such regulations
as he may prescribe and in accordance with generally accepted
accounting practices;
(B) Observe methods and standards which he may prescribe for
determining the value of various types of assets;
(C) Charge off the whole or any part of an asset which at
the time of his action could not lawfully be acquired;
(D) Write down an asset to its market value;
(E) Record or file writings creating or evidencing liens or
other interests in property;
(F) Obtain financial statements from prospective and
existing borrowers;
(G) Obtain insurance against damage and loss to real estate
and personal property taken as security;
(H) Maintain adequate insurance against such other risks as
he may deem and determine to be necessary and appropriate for the
protection of depositors and the public;
(I) Maintain an adequate fidelity bond or bonds on its
officers and employees;
(J) Take such other action as may in his judgment be required of the institution in order to maintain its stability,
integrity and security as required by law and all rules
and
regulations promulgated by him; and
(K) Verify any or all asset or liability accounts.
(7) Subject to the powers vested in the board by article
three of this chapter, to receive from any person or persons and
to consider any request, petition or application relating to the
organization, location, conduct, services, policies and
procedures of any financial institution and to act thereupon in
accordance with any provisions of law applicable thereto;
(8) In connection with the investigations required by
subdivision (3), subsection (b) of this section, to issue
subpoenas and subpoenas duces tecum, administer oaths, examine
persons under oath, and hold and conduct hearings, any such
subpoenas or subpoenas duces tecum to be issued, served and
enforced in the manner provided in section one, article five,
chapter twenty-nine-a of this code. Any person appearing and
testifying at such a hearing may be accompanied by an attorney
employed by him;
(9) To issue declaratory rulings in accordance with the
provisions of section one, article four, chapter twenty-nine-a of
this code;
(10) To study and survey the location, size and services of
financial institutions, the geographic, industrial, economic and
population factors affecting the agricultural, commercial and
social life of the state, and the needs for reducing, expanding or otherwise modifying the services and facilities of financial
institutions in the various parts of the state, and to compile
and keep current data thereon to aid and guide him in the
administration of the duties of his office;
(11) To implement all of the provisions of this chapter
(except the provisions of article three) and all other laws which
he is empowered to administer and enforce by the promulgation of
rules
and regulations in accordance with the provisions of
article three, chapter twenty-nine-a of this code;
(12) To implement the provisions of chapter forty-six-a of
this code applicable to consumer loans and consumer credit sales
by the promulgation of rules
and regulations in accordance with
the provisions of article three, chapter twenty-nine-a of this
code so long as said rules
and regulations do not conflict with
any rules
and regulations promulgated by the state's attorney
general;
(13) To foster and encourage a working relationship between
the department of banking and financial institutions, credit,
consumer, mercantile and other commercial and finance groups and
interests in the state in order to make current appraisals of the
quality, stability and availability of the services and
facilities of financial institutions;
(14) To provide to financial institutions and the public
copies of the West Virginia statutes relating to financial
institutions, suggested drafts of bylaws commonly used by
financial institutions, and such other forms and printed materials as may be found by him to be helpful to financial
institutions, their shareholders, depositors and patrons, and to
make reasonable charges therefor;
(15) To delegate the powers and duties of his office, other
than the powers and duties in this subsection hereinafter
excepted, to qualified department personnel, who shall act under
the direction and supervision of the commissioner and for whose
acts he shall be responsible, but the commissioner may delegate
to the deputy commissioner of banking and to no other department
personnel the following powers, duties and responsibilities, all
of which are hereby granted to and vested in the commissioner and
for all of which the commissioner shall likewise be responsible:
(A) To order any person to cease violating any provision or
provisions of this chapter or other applicable law or any rule
and regulation promulgated or order issued thereunder;
(B) To order any person to cease engaging in any unsound
practice or procedure which may detrimentally affect any
financial institution or depositor thereof; and
(C) To revoke the certificate of authority, permit or
license of any financial institution except a banking institution
in accordance with the provisions of section thirteen of this
article;
(16) To receive from state banking institutions applications
to change the locations of their principal offices and to approve
or disapprove such applications; and
(17) To take such other action as he may deem necessary to enforce and administer the provisions of this chapter (except the
provisions of article three) and all other laws which he is
empowered to administer and enforce, and to apply to any court of
competent jurisdiction for appropriate orders, writs, processes
and remedies.
§31A-2-5. Certificate or license to engage in business; filing
of amendments to charter, bylaws and foreign
statutes.
(a) No person shall engage or continue in the business of
a financial institution in this state without a license or
certificate to do so issued in accordance with this section, or
other applicable law, which license or certificate remains
unsuspended, unexpired and unrevoked except that a corporation
which proposes to apply for such license or certificate may
secure its charter, adopt bylaws, elect its directors and
officers and perfect its organization.
(b) Application for such license or certificate shall be
upon such forms and contain such information as the commissioner
may prescribe. In connection with such applications every
corporate financial institution shall file a certified copy of
its charter and bylaws, a statement as to the amount of capital
that has been subscribed and paid in and a statement of its
financial condition duly verified under oath by its president or
vice president and its cashier or secretary as the case may be
and every financial institution other than a corporation shall
file a verified statement of its financial condition.
(c) If the application be that of a banking institution, the
commissioner of banking shall examine the information, documents
and statements submitted and, if he finds that such banking
institution has adopted bylaws which provide practical, safe,
just and equitable rules and methods for the management of its
business and it has complied in all respects with the provisions
of this chapter and other applicable laws, he shall issue to it
a certificate or license permitting it to engage in business. If
the application be that of a financial institution other than a
banking institution, the commissioner of banking shall examine
the information, documents and statements submitted, and, if he
finds that such financial institution has adequate resources for
the proposed business and has provided practical, safe, just and
equitable rules and methods for the management of its business,
and it has complied in all respects with the provisions of this
chapter and other applicable laws, and that the public
convenience and advantage will be promoted by the issuance of a
certificate or license thereto, he shall issue to it a
certificate or license permitting it to engage in business.
Provided, That any supervised lender which is operating in good
standing in accordance with the provisions of article four,
chapter forty-six-a shall be presumed to have established that
the public convenience and advantage will be promoted in regard
to its application for a certificate of authority to operate as
an industrial loan company as defined in article seven, chapter
thirty-one of this code in the same location for which it is licensed as a supervised lender Such certificate or license
shall be preserved and
the original or copy thereof displayed in
all the
West Virginia place places of business of such banking or
other financial institution.
(d) In addition to the requirements of subsection (b) of
this section, every foreign corporation applying for a license or
certificate to engage in the business of a financial institution
in this state shall file with the commissioner of banking a copy
of the laws of the jurisdiction under which it is organized which
pertain to its organization and powers and the conduct of its
business. The commissioner shall examine the information,
documents and statements submitted by such foreign corporation
and if he finds that they provide practical, safe, just and
equitable rules and methods for the management of the business of
the corporation, that it has adequate resources for the proposed
business and it has complied in all respects with the provisions
of this chapter and other applicable laws, and that the public
convenience and advantage will be promoted by the issuance of a
license or certificate thereto, he shall issue to such
corporation a certificate or license permitting it to engage in
business in this state, which certificate or license shall
authorize such corporation to engage in the business of the type
of financial institution specified therein, until the thirtieth
day of the following June. Thereafter a new certificate or
license shall be secured annually by any such foreign
corporation. The fee for the original and each additional license or certificate issued to a foreign corporation shall be
one hundred dollars, unless otherwise provided by statute. A
verified statement of the financial condition of every such
foreign corporation shall be filed with the commissioner before
the issuance of each annual certificate or license. Such
certificate or license shall be preserved and displayed in the
place of business of such corporation.
(e) No amendment of the charter or bylaws of any domestic
or foreign corporation engaging in business in this state as a
financial institution shall become effective until the proposed
change shall have been submitted to and approved by the
commissioner of banking; but, if the commissioner does not
disapprove such proposed change within twenty days after it is
received by him, it shall be deemed to have been approved.
A
certified copy of the amendment of any statute of another state
governing such a foreign corporation shall be filed with the
commissioner of banking by such foreign corporation within thirty
days after such amendment becomes effective in such other state.
(f) Nothing contained in this code shall authorize any
person to engage in the banking business in this state except
corporations chartered to conduct a banking business under the
laws of West Virginia and which hold a license or certificate to
do so issued under this section or associations authorized to
conduct a banking business in West Virginia under the laws of the
United States and having their principal place of business in
this state.
§31A-2-8. Commissioner's assessments and examination fund;
assessments, costs and expenses of examinations; collection.
(a) All moneys collected by the commissioner from financial
institutions and bank holding companies for assessments,
examination fees, investigation fees or other necessary expenses
incurred by the commissioner in administering such duties shall
be paid to the commissioner and paid by the commissioner to the
treasurer of the state to the credit of a special revenue account
to be known as the "Commissioner's Assessment and Examination
Fund" which is hereby established. The assessments and fees paid
into this account shall be appropriated by law and used to pay
the costs and expenses of the division of banking and all
incidental costs and expenses necessary for its operations. At
the end of each fiscal year, if the fund contains a sum of money
in excess of twenty percent of the appropriated budget of the
division of banking, the amount of the excess shall be
transferred to the general revenue fund of the state. The
Legislature may appropriate money to start the special revenue
account.
(b) The commissioner of banking shall charge and collect
from each state banking institution or other financial
institution or bank holding company and pay into a special
revenue account in the state treasury for the division of banking
assessments as follows:
(1) For each state banking institution, a semiannual
assessment payable on the first day of January and the first day of July, each year, computed upon the total assets of the banking
institution shown on the report of condition of the banking
institution filed as of the preceding thirtieth day of June and
the thirty-first day of December respectively as follows:
Total As
sets
But Not Of Excess
Over Over This Over
Million Million Amount Plus Million
$ 0 $ 2 $ 0 .001645020 0
2 20 3,290 .000205628 2
20 100 6,991 .000164502 20
100 200 20,151 .000106926 100
200 1,000 30,844 .000090476 200
1,000 2,000 103,225 .000074026 1,000
2,000 6,000 177,251 .000065801 2,000
6,000 20,000 440,454 .000055988 6,000
20,000 40,000 1,224,292 .000052670 20,000
(2) F
or each
regulated consumer lender industrial loan
company an annual assessment
payable on the first day of July
each year, computed upon the total assets of the regulated
consumer lender shown on the report of condition of the regulated
consumer lender as of the preceding thirty-first day of December
respectively as follows: as provided for in section thirteen,
article seven, chapter thirty-one of this code, as follows
Total Assets
But Not This Of Excess
Over Over Amount Plus Over
$ 0 $ 1,000,000 800 - -
1,000,000 5,000,000 800 .000400 1,000,000
5,000,000 10,000,000 2,400 .000200 5,000,000
10,000,000 - 4,200 .000100 10,000,000
If
an industrial loan company's a regulated consumer
lender's records or documents are maintained in more than one
location in this state, then eight hundred dollars may be added
to the assessment for each additional location.
(3) For each credit union, an annual assessment as provided
for in section six, article ten, chapter thirty-one of this code
as follows:
Total Assets
But Not This Of Excess
Over Over Amount Plus Over
$ 0 $ 100,000 100 - -
100,000 500,000 300 - -
500,000 1,000,000 500 - -
1,000,000 5,000,000 500 .000400 1,000,000
5,000,000 10,000,000 2,100 .000200 5,000,000
10,000,000 - 3,100 .000100 10,000,000
(4) For each bank holding company, an annual assessment as
provided for in section five, article eight-a of this chapter.
The annual assessment shall not exceed ten dollars per million
dollars in deposits rounded off to the nearest million dollars.
(5) For each supervised lender, an annual assessment as
provided for in section one hundred five, article four, chapter
forty-six-a of this code. Such annual assessment shall not
exceed one hundred dollars on the first twenty-five thousand
dollars of total outstanding loan balances and installment sales
contract balances less unearned finance charges plus forty cents
per thousand dollars on the remaining outstanding balances as of
the preceding calendar year-end.
(c) The commissioner shall each December and each June
prepare and send to each state banking institution a statement of
the amount of the assessment due. The commissioner shall,
further, each June, prepare and send to each
regulated consumer
lender and industrial loan company, each state credit union
and
each supervised lender a statement of the amount of the assessment due. The commissioner shall, annually, during the
month of January, prepare and send to each bank holding company
a statement of the amount of the assessment due.
Assessments shall be prescribed annually, not later than the
fifteenth day of June, by written order of the commissioner, but
shall not exceed the maximums as set forth in subsection (b) of
this section. In setting the assessments the primary
consideration shall be the amount appropriated by the Legislature
for the division of banking for the corresponding annual period.
Reasonable notice of the assessments shall be made to all
interested parties. All orders of the commissioner for the
purpose of setting assessments are not subject to the provisions
of the West Virginia administrative procedures act, under chapter
twenty-nine-a of this code.
(d) For making an examination within the state of any other
financial institution for which assessments are not provided by
this code, the commissioner of banking shall charge and collect
from such other financial institution and pay into the special
revenue account for the division of banking the actual and
necessary costs and expenses incurred in connection therewith, as
fixed and determined by the commissioner.
(e) If the records of an institution are located outside
this state, the institution at its option shall make them
available to the commissioner at a convenient location within the
state, or pay the reasonable and necessary expenses for the
commissioner or his or her representatives to examine them at the place where they are maintained. The commissioner may designate
representatives, including comparable officials of the state in
which the records are located, to inspect them on his or her
behalf.
(f) The commissioner of banking may maintain an action for
the recovery of all assessments, costs and expenses in any court
of competent jurisdiction.
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-14. Trust powers of banking institutions.
Every state banking institution
except industrial banks
created and organized pursuant to the provisions of article
seven, chapter thirty-one of this code, which files the reports
required in the following section and which is not otherwise
prohibited by the commissioner or federal bank regulators from
doing so, shall have and exercise the following powers:
(a) All the powers, rights and privileges of any state
banking institution;
(b) To act as trustee, assignee, special commissioner,
general or special receiver, guardian, executor, administrator,
committee, agent, curator, or in any other fiduciary capacity,
and to take, assume, accept and execute trusts of every
description not inconsistent with the constitution and laws of
the United States of America or of this state; and to receive,
hold, manage and apply any sinking fund on the terms and for the
purposes specified in the instrument creating such fund;
(c) To act as registrar, transfer agent or dividend or coupon paying agent for any corporation;
(d) To make, hold and dispose of investments and establish
common trust funds, and account therefor, pursuant to the
provisions of chapter forty-four of this code;
(e) To purchase and sell and take charge of and receive the
rents, issues and profits of any real estate for other persons or
corporations;
(f) To act as trustee or agent in any collateral trust and
in order to secure the payment of any obligations of any person,
firm, private corporation, public corporation, public body or
public agency to receive and hold in trust any items of personal
property (including without limitation notes, bonds, debentures,
obligations and certificates for shares of stock) with the right
in case of default to sell and dispose of such personal property
and to collect, settle and adjust any obligations for the payment
of money, and at any sale of such personal property held by it,
to purchase the same for the benefit of all or any of the holders
of the obligations, to secure the payment of which such items of
personal property were pledged and delivered to the trustee or
agent. Any such sale may be made without any proceedings in any
court, and at such times and upon such terms as may be specified
in the instrument or instruments creating the trust, or, in the
absence of any specification of terms, at such time and upon such
terms as the trustee shall deem reasonable; and
(g) To do and perform any act or thing requisite or
necessary in, or incidental to, the exercise of the general powers herein set forth.
All national banks having their principal offices in this
state which have been, or hereafter may be, authorized under the
laws of the United States to act as trustee and in other
fiduciary capacities in the state of West Virginia shall have all
the rights, powers, privileges and immunities conferred
hereunder, provided they comply with the requirements hereof.
§31A-4-22. Reserves required of banking institutions; reports;
penalties.
Each state banking institution
except industrial banks
created and organized pursuant to the provisions of article
seven, chapter thirty-one of this code, shall at all times
maintain on hand as a reserve in lawful money of the United
States of America an amount equal to at least seven percent of
the aggregate of all of its deposits which are subject to
withdrawal on demand and three percent of its time deposits.
Whenever the commissioner of banking shall determine that the
maintenance of sound banking practices or the prevention of
injurious credit expansion or contraction makes such action
advisable, he may by rule or regulation from time to time change
such requirements as to reserves against demand or time deposits,
or both, but the reserves so prescribed shall in no event be less
than those specified in this section nor more than twice those
specified. Whenever such reserve shall fall below that required,
the institution shall not thereafter make any new loan or
investment until the required reserve shall be restored. For the purpose of computing such reserve, all deposits requiring notice
of thirty days or more for withdrawal and time certificates of
deposit and Christmas savings shall be deemed time deposits, and
all checking accounts, certified checks, cashier's checks, demand
certificates of deposit and balances due other banks shall be
deemed demand deposits. But in lieu of lawful money on hand,
four fifths of such reserve may consist of balances payable on
demand from any national or state bank doing business in this
state or solvent banking institutions in other states. The
reserve balances required herein shall be computed on the basis
of average daily net deposit balances and average daily currency
and coin during biweekly periods. The required reserve balance
of each bank shall be computed at the close of business each day
based upon its net deposit balances and currency and coin at the
opening of business on the same day. The biweekly period shall
end at the close of business on days to be fixed by the
commissioner in his promulgated rules.
and regulations When,
however, the reserve computation period ends with a nonbusiness
day, or two or more consecutive nonbusiness days, such
nonbusiness day or days may, at the option of the banking
institution, and whether or not it had a deficiency in reserve
balances in such computation period, be included in the next
biweekly computation period.
The commissioner shall, by rule,
and regulation require
regular reports from such banking institutions, which reports
shall be submitted at such times and contain such information as will enable the commissioner to adequately supervise the
maintenance of reserves under this section. Penalties for any
deficiencies in the required reserves of any banking institution
shall be assessed monthly by the commissioner on the basis of
average daily deficiencies during each of the computation periods
ending in the preceding calendar month. Such penalties shall be
assessed at a rate of two percent per annum above the lowest rate
applicable to borrowings by member banks from the federal reserve
bank of the district in which such deficient institution is
located on the first day of the calendar month in which the
deficiencies occurred. Such penalties shall be paid by the
commissioner into the treasury of the state of West Virginia and
credited to the general fund.
Compliance on the part of any banking institution with the
reserve requirements of the Federal Reserve Act, as amended prior
to the thirty-first day of January, one thousand nine hundred
eighty-one, shall be considered full compliance with the
provisions of this section. No such bank may be required to
carry or maintain a reserve other than such as required under
terms of the Federal Reserve Act, as amended prior to the
thirty-first day of January, one thousand nine hundred
eighty-one.
ARTICLE 7. REGULATION OF FAILING FINANCIAL INSTITUTIONS.
§31A-7-2. Definitions.
As used in this article:
(a) "Commissioner" means the commissioner of banking of West Virginia and any authorized deputy or employee thereof;
(b) "Federal law" means all the provisions of Title XII of
the United States Code and all rules and regulations promulgated
pursuant thereto;
(c) "Financial institution" means any bank, building and
loan association, industrial bank,
industrial loan company,
supervised lender regulated consumer lender, credit union and
any other person, firm or corporation doing business under the
jurisdiction and supervision of the commissioner of banking of
West Virginia;
(d) A financial institution is "about to be insolvent" when
it would be unable to meet the demands of its depositors or to
make adequate provision for the timely payment of its depositors
if it were immediately closed for the purpose of liquidation;
(e) A financial institution is "insolvent" when it is unable
to pay its debts to its depositors and other creditors in the
ordinary and usual course of business or when it is in a state of
balance sheet insolvency; and
(f) "Balance sheet insolvency" exists when the assets of a
financial institution are less than its liabilities, exclusive of
capital. For the purposes of ascertaining balance sheet
insolvency, assets shall be valued at their book value, unless
the commissioner of banking determines that the assets are
insufficient to meet liabilities within a reasonable time making
probable the liquidation of assets; and if any such determination
is made, the assets shall be valued at fair market value.
ARTICLE 8. HEARINGS; ADMINISTRATIVE PROCEDURES; JUDICIAL REVIEW;
UNLAWFUL ACTS; PENALTIES.
§31A-8-8a. Unauthorized disclosure of information from a
financial institution examination report.
Any person having a duty to the financial institution or to
a state agency to maintain the confidentiality of examination
reports by the division of banking, who
wilfully willfully and
knowingly makes an unauthorized public disclosure of confidential
information or records from a state-chartered depository
financial institution examination report shall be subject to suit
by the commissioner or attorney general for civil penalties of up
to one thousand dollars:
Provided, That no such suit shall lie
where the person was ordered to make the disclosure by a court of
competent jurisdiction, or lawfully compelled to make the
disclosure as part of a legislative or executive agency
investigation. Officials of the financial institution or the
commissioner may refer matters of possible wrongdoing discovered
by the examination which impact on the institution's soundness or
financial integrity to law-enforcement officials, or other
appropriate governmental regulatory agencies, including
appropriate state bar or ethics officials and such referral shall
not constitute public disclosure.
§31A-8-12a. Banking from mobile units prohibited; prohibition
not to include messenger services; limitation of
messenger services.
It is illegal for any banking institution, building and loan association,
industrial loan company or supervised lender or
regulated consumer lender to conduct its business in a facility
that is a mobile unit not permanently attached to the real estate
upon which it is located, except that such mobile units may be
used as temporary banking quarters pending construction of a
permanent bank building on the same or adjacent property thereto
if a charter for said bank has previously been approved. This
section shall not be construed or interpreted to prohibit a
financial institution from providing messenger services to its
customers by which items are received by mail, armored car
service or other courier or delivery service for subsequent
deposit:
Provided, That all such messenger services are confined
to the territorial boundaries of the county in which the
principal office of such financial institution is located or
within twenty-five miles of the principal office of such
financial institution.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT
AND PROTECTION ACT.
ARTICLE 1. SHORT TITLE, DEFINITIONS AND GENERAL PROVISIONS.
§46A-1-102. General definitions.
In addition to definitions appearing in subsequent articles,
in this chapter:
(1) "Actuarial method" means the method, defined by rules
adopted by the commissioner, of allocating payments made on a
debt between principal or amount financed and loan finance charge
or sales finance charge pursuant to which a payment is applied first to the accumulated loan finance charge or sales finance
charge and the balance is applied to the unpaid principal or
unpaid amount financed.
(2) "Agreement" means the bargain of the parties in fact as
found in their language or by implication from other
circumstances including course of dealing or usage of trade or
course of performance. A "consumer credit agreement" is an
agreement where credit is granted.
(3) "Agricultural purpose" means a purpose related to the
production, harvest, exhibition, marketing, transportation,
processing or manufacture of agricultural products by a natural
person who cultivates, plants, propagates or nurtures the
agricultural products. "Agricultural products" includes
agricultural, horticultural, viticultural and dairy products,
livestock, wildlife, poultry, bees, forest products, fish and
shellfish, and any products thereof, including processed and
manufactured products, and any and all products raised or
produced on farms and any processed or manufactured products
thereof.
(4) "Amount financed" means the total of the following items
to the extent that payment is deferred:
(a) The cash price of the goods, services or interest in
land, less the amount of any down payment whether made in cash or
in property traded in;
(b) The amount actually paid or to be paid by the seller
pursuant to an agreement with the buyer to discharge a security interest in or a lien on property traded in; and
(c) If not included in the cash price:
(i) Any applicable sales, use, privilege, excise or
documentary stamp taxes;
(ii) Amounts actually paid or to be paid by the seller for
registration, certificate of title or license fees; and
(iii) Additional charges permitted by this chapter.
(5) "Average daily balance" in a billing cycle for which a
sales finance charge or loan finance charge is made is the sum of
the amount unpaid each day during that cycle divided by the
number of days in that cycle. The amount unpaid on a day is
determined by adding to the balance, if any, unpaid as of the
beginning of that day all purchases and other debits and
deducting all payments and other credits made or received as of
that day.
(6) The "cash price" of goods, services or an interest in
land means the price at which the goods, services or interest in
land are offered for sale by the seller to cash buyers in the
ordinary course of business, and may include: (a) Applicable
sales, use, privilege, and excise and documentary stamp taxes;
(b) the cash price of accessories or related services such as
delivery, installation, servicing, repairs, alterations and
improvements; and (c) amounts actually paid or to be paid by the
seller for registration, certificate of title, or license fees.
(7) "Closing costs" with respect to a debt secured by an
interest in land include:
(a) Fees or premiums for title examination, title insurance
or similar purposes including surveys;
(b) Fees for preparation of a deed, deed of trust, mortgage,
settlement statement or other documents;
(c) Escrows for future payments of taxes and insurance;
(d) Official fees and fees for notarizing deeds and other
documents;
(e) Appraisal fees; and
(f) Credit reports.
(8) "Code" means the official code of West Virginia, one
thousand nine hundred thirty-one, as amended.
(9) "Commercial facsimile transmission" means the electronic
or telephonic transmission in the state to a facsimile device to
encourage a person to purchase goods, realty or services.
(10) "Commissioner" means the commissioner of banking of
West Virginia.
(11) "Conspicuous": A term or clause is conspicuous when
it is so written that a reasonable person against whom it is to
operate ought to have noticed it. Whether a term or clause is
conspicuous or not is for decision by the court.
(12) "Consumer" means a natural person who incurs debt
pursuant to a consumer credit sale or a consumer loan.
(13) (a) Except as provided in paragraph (b), "consumer
credit sale" is a sale of goods, services or an interest in land
in which:
(i) Credit is granted either by a seller who regularly engages as a seller in credit transactions of the same kind or
pursuant to a seller credit card;
(ii) The buyer is a person other than an organization;
(iii) The goods, services or interest in land are purchased
primarily for a personal, family, household or agricultural
purpose;
(iv) Either the debt is payable in installments or a sales
finance charge is made; and
(v) With respect to a sale of goods or services, the amount
financed does not exceed twenty-five thousand dollars.
(b) "Consumer credit sale" does not include a sale in which
the seller allows the buyer to purchase goods or services
pursuant to a lender credit card or similar arrangement.
(14) (a) "Consumer lease" means a lease of goods:
(i) Which a lessor regularly engaged in the business of
leasing makes to a person, other than an organization, who takes
under the lease primarily for a personal, family, household or
agricultural purpose;
(ii) In which the amount payable under the lease does not
exceed twenty-five thousand dollars; and
(iii) Which is for a term exceeding four months.
(b) "Consumer lease" does not include a lease made pursuant
to a lender credit card or similar arrangement.
(15) "Consumer loan" is a loan made by a person regularly
engaged in the business of making loans in which:
(a) The debtor is a person other than an organization;
(b) The debt is incurred primarily for a personal, family,
household or agricultural purpose;
(c) Either the debt is payable in installments or a loan
finance charge is made; and
(d) Either the principal does not exceed twenty-five
thousand dollars or the debt is secured by an interest in land.
(16) "Cosigner" means a natural person who assumes liability
for the obligation on a consumer credit sale or consumer loan
without receiving goods, services or money in return for the
obligation or, in the case of a revolving charge account or
revolving loan account of a consumer, without receiving the
contractual right to obtain extensions of credit under the
account. The term cosigner includes any person whose signature
is requested as a condition to granting credit to a consumer or
as a condition for forbearance on collection of a consumer's
obligation that is in default. The term cosigner does not
include a spouse whose signature is required to perfect a
security interest. A person who meets the definition in this
paragraph is a "cosigner" whether or not the person is designated
as such on the credit obligation.
(17) "Credit" means the privilege granted by a creditor to
a debtor to defer payment of debt or to incur debt and defer its
payment.
(18) "Earnings" means compensation paid or payable to an
individual or for his account for personal services rendered or
to be rendered by him, whether denominated as wages, salary, commission, bonus or otherwise, and includes periodic payments
pursuant to a pension, retirement or disability program.
(19) "Facsimile device" means a machine that receives and
copies reproductions or facsimiles of documents or photographs
that have been transmitted electronically or telephonically over
telecommunications lines.
(20) "Federal Consumer Credit Protection Act" means the
"Consumer Credit Protection Act" (Public Law 90-321; 82 Stat.
146), as amended, and includes regulations issued pursuant to
that act.
(21) "Goods" includes goods not in existence at the time the
transaction is entered into and gift and merchandise
certificates, but excludes money, chattel paper, documents of
title and instruments.
(22) "Home solicitation sale" means a consumer credit sale
in excess of twenty-five dollars in which the buyer receives a
solicitation of the sale at a place other than the seller's
business establishment at a fixed location and the buyer's
agreement or offer to purchase is there given to the seller or a
person acting for the seller. The term does not include a sale
made pursuant to a preexisting open-end credit account with the
seller in existence for at least three months prior to the
transaction, a sale made pursuant to prior negotiations between
the parties at the seller's business establishment at a fixed
location, a sale of motor vehicles, mobile homes or farm
equipment or a sale which may be rescinded under the Federal Truth in Lending Act (being Title I of the Federal Consumer
Credit Protection Act). A sale which would be a home
solicitation sale if credit were extended by the seller is a home
solicitation sale although the goods or services are paid for, in
whole or in part, by a consumer loan in which the creditor is
subject to claims and defenses arising from the sale.
(23) Except as otherwise provided, "lender" includes an
assignee of the lender's right to payment but use of the term
does not in itself impose on an assignee any obligation of the
lender.
(24) "Lender credit card or similar arrangement" means an
arrangement or loan agreement, other than a seller credit card,
pursuant to which a lender gives a debtor the privilege of using
a credit card, letter of credit, or other credit confirmation or
identification in transactions out of which debt arises:
(a) By the lender's honoring a draft or similar order for
the payment of money drawn or accepted by the consumer;
(b) By the lender's payment or agreement to pay the
consumer's obligations; or
(c) By the lender's purchase from the obligee of the
consumer's obligations.
(25) "Loan" includes:
(a) The creation of debt by the lender's payment of or
agreement to pay money to the consumer or to a third party for
the account of the consumer other than debts created pursuant to
a seller credit card;
(b) The creation of debt by a credit to an account with the
lender upon which the consumer is entitled to draw immediately;
(c) The creation of debt pursuant to a lender credit card
or similar arrangement; and
(d) The forbearance of debt arising from a loan.
(26) (a) "Loan finance charge" means the sum of: (i) All
charges payable directly or indirectly by the debtor and imposed
directly or indirectly by the lender as an incident to the
extension of credit, including any of the following types of
charges which are applicable: Interest or any amount payable
under a point, discount, or other system of charges, however
denominated, premium or other charge for any guarantee or
insurance protecting the lender against the consumer's default or
other credit loss; and (ii) charges incurred for investigating
the collateral or credit worthiness of the consumer or for
commissions or brokerage for obtaining the credit, irrespective
of the person to whom the charges are paid or payable, unless the
lender had no notice of the charges when the loan was made. The
term does not include charges as a result of default, additional
charges, delinquency charges or deferral charges.
(b) If a lender makes a loan to a consumer by purchasing or
satisfying obligations of the consumer pursuant to a lender
credit card or similar arrangement, and the purchase or
satisfaction is made at less than the face amount of the
obligation, the discount is not part of the loan finance charge.
(27) "Merchandise certificate" or "gift certificate" means a writing issued by a seller or issuer of a seller credit card,
not redeemable in cash and usable in its face amount in lieu of
cash in exchange for goods or services.
(28) "Official fees" means:
(a) Fees and charges prescribed by law which actually are
or will be paid to public officials for determining the existence
of or for perfecting, releasing, terminating or satisfying a
security interest related to a consumer credit sale or consumer
loan; or
(b) Premiums payable for insurance or fees escrowed in a
special account for the purpose of funding self-insurance or its
equivalent in lieu of perfecting a security interest otherwise
required by the creditor in connection with the sale, lease or
loan, if such premium or fee does not exceed the fees and charges
described in paragraph (a) which would otherwise be payable.
(29) "Organization" means a corporation, government or
governmental subdivision or agency, trust, estate, partnership,
cooperative or association.
(30) "Payable in installments" means that payment is
required or permitted by agreement to be made in: (a) Two or
more periodic payments, excluding a down payment, with respect to
a debt arising from a consumer credit sale pursuant to which a
sales finance charge is made; (b) four or more periodic payments,
excluding a down payment, with respect to a debt arising from a
consumer credit sale pursuant to which no sales finance charge is
made; or (c) two or more periodic payments with respect to a debt arising from a consumer loan. If any periodic payment other than
the down payment under an agreement requiring or permitting two
or more periodic payments is more than twice the amount of any
other periodic payment, excluding the down payment, the consumer
credit sale or consumer loan is "payable in installments."
(31) "Person" or "party" includes a natural person or an
individual, and an organization.
(32) "Person related to" with respect to an individual
means: (a) The spouse of the individual; (b) a brother,
brother-in-law, sister or sister-in-law of the individual; (c) an
ancestor or lineal descendant of the individual or his spouse;
and (d) any other relative, by blood or marriage, of the
individual or his spouse who shares the same home with the
individual. "Person related to" with respect to an organization
means: (a) A person directly or indirectly controlling,
controlled by or under common control with the organization; (b)
an officer or director of the organization or a person performing
similar functions with respect to the organization or to a person
related to the organization; (c) the spouse of a person related
to the organization; and (d) a relative by blood or marriage of
a person related to the organization who shares the same home
with him.
(33) "Precomputed loan." A loan, refinancing or
consolidation is "precomputed" if:
(A) The debt is expressed as a sum comprising the principal
and the amount of the loan finance charge computed in advance; or
(B) The loan is expressed in terms of the principal amount;
the loan installment payments are a scheduled, fixed amount
including principal and interest and assume payment on the
installment due date; and interest payments will not vary or
result in an adjustment during the term of the loan or at its
final payment as a result of the actual installment payment
dates.
(34) "Precomputed sale." A sale, refinancing or
consolidation is "precomputed" if:
(A) The debt is expressed as a sum comprising the amount
financed and the amount of the sales finance charge computed in
advance; or
(B) The debt is expressed in terms of the principal amount;
the debt installment payments are a scheduled, fixed amount
including principal and interest and assume payment on the
installment due date; and interest payments will not vary or
result in an adjustment during the term of the debt or at its
final payment as a result of the actual installment payment
dates.
(35) "Presumed" or "presumption" means that the trier of
fact must find the existence of the fact presumed unless and
until evidence is introduced which would support a finding of its
nonexistence.
(36) "Principal" of a loan means the total of:
(a) The net amount paid to, receivable by or paid or payable
for the account of the debtor;
(b) The amount of any discount excluded from the loan
finance charge; and
(c) To the extent that payment is deferred:
(i) Amounts actually paid or to be paid by the lender for
registration, certificate of title, or license fees if not
included in (a); and
(ii) Additional charges permitted by this chapter.
(37) "Regulated consumer lender" means a person authorized
to make or take assignments of regulated consumer loans.
(38) "Regulated consumer loan" means a consumer loan
including a loan made pursuant to a revolving loan account, in
which the rate of the loan finance charge exceeds eighteen
percent per year as determined according to the actuarial method,
except where the loan qualifies for federal law preemption from
state interest rate limitations.
(37) (39) "Revolving charge account" means an agreement
between a seller and a buyer by which: (a) The buyer may
purchase goods or services on credit or a seller credit card; (b)
the balances of amounts financed and the sales finance and other
appropriate charges are debited to an account; (c) a sales
finance charge if made is not precomputed but is computed
periodically on the balances of the account from time to time;
and (d) there is the privilege of paying the balances in
installments.
(38) (40) "Revolving loan account" means an arrangement
between a lender and a consumer including, but not limited to, a lender credit card or similar arrangement, pursuant to which:
(a) The lender may permit the consumer to obtain loans from time
to time; (b) the unpaid balances of principal and the loan
finance and other appropriate charges are debited to an account;
(c) a loan finance charge if made is not precomputed but is
computed periodically on the outstanding unpaid balances of the
principal of the consumer's account from time to time; and (d)
there is the privilege of paying the balances in installments.
(39) (41) "Sale of goods" includes any agreement in the form
of a bailment or lease of goods if the bailee or lessee agrees to
pay as compensation for use a sum substantially equivalent to or
in excess of the aggregate value of the goods involved and it is
agreed that the bailee or lessee will become, or for no other or
a nominal consideration has the option to become, the owner of
the goods upon full compliance with his obligations under the
agreement.
(40) (42) "Sale of an interest in land" includes a lease in
which the lessee has an option to purchase the interest and all
or a substantial part of the rental or other payments previously
made by him are applied to the purchase price.
(41) (43) "Sale of services" means furnishing or agreeing
to furnish services and includes making arrangements to have
services furnished by another.
(42) (44) "Sales finance charge" means the sum of: (a) All
charges payable directly or indirectly by the buyer and imposed
directly or indirectly by the seller or issuer of a seller credit card as an incident to the extension of credit, including any of
the following types of charges which are applicable: Time-price
differential, however denominated, including service, carrying or
other charge, premium or other charge for any guarantee or
insurance protecting the seller against the buyer's default or
other credit loss; and (b) charges incurred for investigating the
collateral or credit worthiness of the buyer or for commissions
or brokerage for obtaining the credit, irrespective of the person
to whom the charges are paid or payable; unless the seller had no
notice of the charges when the credit was granted. The term does
not include charges as a result of default, additional charges,
delinquency charges or deferral charges. If the seller or issuer
of a seller credit card purchases or satisfies obligations of the
consumer and the purchase or satisfaction is made at less than
the face amount of the obligation, the discount is not part of
the sales finance charge.
(43) (45) Except as otherwise provided, "seller" includes
an assignee of the seller's right to payment but use of the term
does not in itself impose on an assignee any obligation of the
seller.
(44) (46) "Seller credit card" means an arrangement pursuant
to which a person gives to a buyer or lessee the privilege of
using a credit card, letter of credit, or other credit
confirmation or identification primarily for the purpose of
purchasing or leasing goods or services from that person, that
person and any other person or persons, a person related to that person, or others licensed or franchised or permitted to do
business under his business name or trade name or designation or
on his behalf.
(45) (47) "Services" includes: (a) Work, labor and other
personal services; (b) privileges with respect to transportation,
use of vehicles, hotel and restaurant accommodations, education,
entertainment, recreation, physical culture, hospital
accommodations, funerals, cemetery accommodations, and the like;
and (c) insurance.
(46) (48) "Supervised financial organization" means
a any
organization, corporation, or person, other than a supervised
lender or an insurance company or other organization primarily
engaged in an insurance business,
which is required under state
law to register or obtain a license from the commissioner of
banking before conducting business in this state; or which is
authorized under federal law to make consumer loans without a
license from the state commissioner of banking, provided the
loans are subject to supervision and examination by an official
or agency of the United States.
(a) Organized, chartered or holding an authorization
certificate under the laws of this state or of the United States
which authorizes the person to make consumer loans; and
(b) Subject to supervision and examination with respect to
such loans by an official or agency of this state or of the
United States.
(47) "Supervised lender" means a person authorized to make
or take assignments of supervised loans.
(48) "Supervised loan" means a consumer loan made by other
than a supervised financial organization, including a loan made
pursuant to a revolving loan account, where the principal does
not exceed two thousand dollars, and in which the rate of the
loan finance charge exceeds eight percent per year as determined
according to the actuarial method.
§46A-1-103. Effect of chapter on powers of persons making
consumer credit sales and consumer loans, and
others; consumer protection generally.
(1) This chapter prescribes maximum charges for all
creditors, except lessors and those excluded, making consumer
credit sales and consumer loans, and sales and loans made subject
to the provisions of this chapter by agreement, and except as
otherwise provided by this chapter displaces any existing
limitations and provisions regulating maximum interest and
charges, minimum charges, additional charges, delinquency
charges, deferral charges, allocation of charges and methods of
computing rebates upon prepayment, refinancing or consolidation
with respect to consumer credit sales and consumer loans, and the
debtors' remedies and penalties provided by this chapter displace
all existing provisions relating to remedies, penalties and
forfeitures for usury and usurious contracts as to transactions
covered by this chapter.
Provided, That this chapter shall not
displace those provisions of subdivision (6), subsection (a), section eleven, article seven, chapter thirty-one of this code
relating to additional charges which may be imposed and collected
by industrial loan companies
(2) Except as provided in subsection (1) of this section or
elsewhere in this chapter, this chapter does not displace powers
or limitation on powers which supervised financial organizations
and
supervised lenders regulated consumer lenders are authorized
to exercise under the laws of the United States or other laws of
this state in effect after the operative date of this chapter.
(3) This chapter also prescribes in articles six and seven
protective measures for consumers in transactions not necessarily
involving consumer credit.
ARTICLE 3. FINANCE CHARGES AND RELATED PROVISIONS.
§46A-3-104. Finance charge for loans other than loans made
pursuant to revolving loan accounts; finance
charge on assigned contracts; exceptions.
(1) With respect to a consumer loan, other than a consumer
loan made pursuant to a revolving loan account: (a) A bank, as
defined in section two, article one, chapter thirty-one-a of
this code, may contract for and receive a loan finance charge
not exceeding the charge or interest permitted by the provisions
of section thirty, article four, chapter thirty-one-a or by the
provisions of section five, section five-a, or section five-b,
article six, chapter forty-seven of this code,
or that allowed
under section sixteen, article ten, chapter thirty-one of this
code; (b)
an industrial loan company, as defined in section three, article seven, chapter thirty-one of this code, a
regulated consumer lender may contract for and receive a loan
finance charge not exceeding the aggregate of the interest and
charges permitted by
subdivisions (5) and (6), subsection (a),
section eleven, article seven, chapter thirty-one section one
hundred seven, article four, chapter forty-six-a of this code or
by the provisions of section five,
section five-a, or section
five-b, article six, chapter forty-seven of this code;
(c) a
building and loan association, as defined in section two,
article six, chapter thirty-one of this code, may contract for
and receive a loan finance charge not exceeding the charge or
interest permitted by the provisions of section seventeen,
article six, chapter thirty-one of this code, or by the
provisions of section five, article six, chapter forty-seven of
this code; (d) (c) a credit union, as defined in section one,
article ten, chapter thirty-one of this code, may contract for
and receive a loan finance charge not exceeding the charge or
interest permitted by the provisions of section sixteen, article
ten, chapter thirty-one of this code, or by the provisions of
section five, article six, chapter forty-seven of this code; and
(e) (d) any other lender
other than a supervised lender, may
contract for and receive a loan finance charge not exceeding the
charge or interest permitted by the provisions of section five,
section five-a, or section five-b, article six, chapter
forty-seven of this code.
(2) As an alternative to the loan finance charge allowed by
subsection (1) of this section, from the effective date of this
subsection until and including the first day of July, one
thousand nine hundred eighty-two a lender, other than a
supervised lender, may contract for and receive a loan finance
charge not exceeding eighteen percent per annum calculated
according to the actuarial method.
(3) (2) This section does not limit or restrict the manner
of calculating the loan finance charge, whether by way of add-on,
discount or otherwise, so long as the rate of loan finance charge
does not exceed that permitted by this section.
(4) Notwithstanding any provision of this section to the
contrary, with respect to a consumer loan involving a motor
vehicle or a mobile home or with respect to a consumer loan to
finance the sale from one seller of both a mobile home and the
real estate upon which such mobile home is or will be located, or
with respect to a consumer loan where a security interest in real
estate owned by the borrower is given to the lender as collateral
for such loan, a lender may from the effective date of this
section and until and including the first day of July, one
thousand nine hundred eighty-two, contract for and receive a
loan finance charge not exceeding eighteen percent per year on
the unpaid balance calculated according to the actuarial method:
Provided, That the quantity of real estate involved in such
consumer loan transactions involving a mobile home and real estate where such finance charge is contracted for and received
shall not exceed one acre.
(5) (3) If the loan is precomputed:
(a) The loan finance charge may be calculated on the
assumption that all scheduled payments will be made when due, and
(b) The effect of prepayment, refinancing or consolidation
is governed by the provisions on rebate upon prepayment,
refinancing or consolidation contained in section one hundred
eleven of this article.
(6) (4) Notwithstanding subsection (1), the lender may
contract for and receive a minimum loan finance charge of not
more than five dollars when the amount loaned does not exceed
seventy-five dollars, or seven dollars and fifty cents when the
amount loaned exceeds seventy-five dollars.
(7) (5) An assignee of a consumer credit sale contract may
collect, receive or enforce the sales finance charge provided in
said contract, and any such charge so collected, received or
enforced by an assignee shall not be deemed usurious or in
violation of this chapter or any other provision of this code if
such sales finance charge does not exceed the limits permitted
to be charged by a seller under the provisions of this chapter.
(8) (6) Notwithstanding subsection
(7) (5), a resident
lender who is the assignee of a consumer credit sales contract
executed by a resident of another state with a credit grantor in
that state, may collect, receive or enforce the sales finance
charge provided in said contract under the laws of the state where executed. Such charge shall not be deemed to be usurious
or in violation of the provisions of this chapter or any other
provisions of this code.
§46A-3-111. Application of payments on account; rebate upon
prepayment, refinancing or consolidation;
judgments and interest on judgments.
(1) When a consumer credit sale or consumer loan is
precomputed all payments on account shall be applied to
installments in the order in which they fall due, except as
provided in subsection
(3) (4), section one hundred twelve of
this article. When the total amount is payable in substantially
equal consecutive monthly installments, the portion of the sales
finance charge or loan finance charge attributable to any
particular monthly installment period shall be that proportion of
the sales finance charge or loan finance charge originally
contracted for, as the balance scheduled to be outstanding on the
last day of the monthly installment period before deducting the
payment, if any, scheduled to be made on that day bears to the
sum of all the monthly installment balances under the original
schedule of payments. (This method of allocation is the sum of
the digits method, commonly referred to as the "Rule of 78.")
(2) Upon prepayment in full of a precomputed consumer credit
sale or consumer loan by cash, a new loan, refinancing,
consolidation or otherwise, the creditor shall rebate to the
consumer that portion of the sales finance charge or loan finance
charge in the manner specified in section five-d, article six, chapter forty-seven of this code:
Provided, That no rebate of
less than one dollar need be made.
(3)
Upon prepayment in full of a precomputed or
nonprecomputed consumer credit sale or consumer loan by cash, a
new loan, refinancing, consolidation, or otherwise, except where
the loan is a purchase money loan secured by a first lien
mortgage on residential property, or is made by a
federally-insured depository institution, the creditor shall
rebate to the consumer that portion of the unearned prepaid
finance charges attributable to loan or credit investigations
fees, origination fees or points in the manner specified in
subsection (c), section five-d, article six, chapter forty-seven
of this code: Provided, That no rebate of less than one dollar
need be made: Provided, however, That if the loan was made in
furtherance of aiding or abetting a person to whom the loan is
assigned, evade this rebate, then the rebate required herein
shall apply.
(3) (4) If the maturity of a precomputed consumer credit
sale or consumer loan is accelerated for any reason and judgment
is obtained, the debtor is entitled to the same rebate as if the
payment had been made on the date judgment is entered and such
judgment shall bear interest until paid at the rate of ten
percent per annum.
§46A-3-113a. Default charges on consumer sales not payable by
installments.
In a consumer sales purchase transaction where the seller
has provided the goods or services and either bills the consumer
the full amount or permits the consumer to delay payment without
any sales finance charge while maintaining the right to full
payment at the time of the transaction, and does not provide for
payment upon an installment basis, then the seller may, upon
notice to the buyer if payment is not made as requested within
ten days or such longer time as provided by the seller, impose a
default charge each month on the unpaid principal balance not to
exceed the sale finance charge monthly rate generally allowed
retail merchants under this article. Alternatively the seller
may impose a one-time late charge of one dollar or not more than
five percent of the unpaid balance up to ten dollars. This
provision does not denigrate any other right that the seller may
have under law.
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-101. Authority to make regulated consumer loans.
Unless a person has first obtained a license from the
commissioner authorizing him to make
supervised loans regulated
consumer loans, he shall not engage in the business of:
(1) Making
supervised loans regulated consumer loans; or
(2) Taking assignments of and undertaking direct collection
of payments from or enforcement of rights against consumers
arising from
supervised loans regulated consumer loans.
§46A-4-102. License to make regulated consumer loans.
(1) The commissioner shall receive and act on all
applications for licenses to make
supervised loans regulated
consumer loans under this chapter. Applications shall be under
oath, be filed in the manner prescribed by the commissioner, and
contain the information the commissioner requires
by rule to make
an evaluation of the financial responsibility, experience,
character and fitness of the applicant, and the findings required
of him before he may issue a license. At the time of the filing
of the application, the sum of
two hundred fifty seven hundred
fifty dollars shall be paid to the commissioner as an
investigation fee.
(2) No license shall be issued to a supervised financial
organization other than to one
primarily engaged in the business
of making consumer loans through offices located within the state
of West Virginia licensed under the provisions of the "West
Virginia Industrial Bank and Industrial Loan Company Act" as
contained in article seven, chapter thirty-one of this code, or
to one licensed under the provisions of the West Virginia
secondary mortgage loan act as contained in article seventeen,
chapter thirty-one of this code, or to any banking institution as
defined by the provisions of section two, article one, chapter
thirty-one-a of this code.
No person or licensee may make
regulated consumer loans through or at an office located outside
the state of West Virginia: Provided, That the limitation of
licensing contained in this subsection shall not prevent any
supervised financial organization from making
supervised loans regulated consumer loans when the applicable state or federal
statute, law, rule or regulation permits. No license shall be
issued to any person unless the commissioner, upon investigation,
finds that the financial responsibility, experience, character
and fitness of the applicant, and of the members thereof (if the
applicant is a copartnership or association) and of the officers
and directors thereof (if the applicant is a corporation), are
such as to command the confidence of the community and to warrant
belief that the business will be operated honestly, fairly and
efficiently, within the purposes of this chapter, and the
applicant has available for the operation of the business at
least ten thousand dollars in capital and in addition has for
each the specified location
of operation assets of at least two
thousand dollars, and that allowing the applicant to engage in
business will promote the convenience and advantage of the
community in which the business of the applicant is to be
conducted.
Provided, That any industrial loan company which is
operating in good standing in accordance with the provisions of
article four, chapter forty-six-a of this code shall be presumed
to have established that the public convenience and advantage
will be promoted in regard to its application for a license to
make supervised loans in the same location for which it is
licensed as an industrial loan company
(3) Upon written request, the applicant is entitled to a
hearing on the question of his qualifications for a license if:
(a) The commissioner has notified the applicant in writing that his application has been denied; or (b) the commissioner has not
issued a license within sixty days after the application for the
license was filed. A request for a hearing may not be made more
than fifteen days after the commissioner has mailed a writing to
the applicant notifying him that the application has been denied
and stating in substance the commissioner's findings supporting
denial of the application.
(4) Not more than one place of business shall be maintained
under the same license, but the commissioner may issue more than
one license to the same licensee upon compliance with all the
provisions of this article governing an original issuance of a
license, for each such new license. Each license shall remain in
full force and effect until surrendered,
forfeited, suspended or
revoked.
(5) Upon giving the commissioner at least fifteen days'
prior written notice, a licensee may: (a) Change the location of
any place of business located within a municipality to any other
location within that same municipality; or (b) change the
location of any place of business located outside of a
municipality to a location no more than five miles from the
originally licensed location, but in no case may a licensee move
any place of business located outside a municipality to a
location within a municipality. A licensee may not move the
location of any place of business located within a municipality
to any other location outside of that municipality.
(6) A licensee may conduct the business of making
supervised
loans regulated consumer loans only at or from a place of
business for which he holds a license and not under any other
name than that stated in the license. A sale or lease in which
credit is granted pursuant to a lender credit card does not
violate this subsection.
(7) A license issued under the provisions of this section
shall not be transferable or assignable.
§46A-4-103. Revocation or suspension of license.
(1) The commissioner may issue to a person licensed to make
supervised loans regulated consumer loans an order to show cause
why his license should not be revoked or
should not be suspended
for a period not in excess of six months. The order shall state
the place for a hearing and set a time for the hearing that is no
less than ten days from the date of the order. After the hearing
the commissioner shall revoke or suspend the license if he finds
that:
(a) The licensee has repeatedly and willfully violated this
chapter or any rule or order lawfully made or issued pursuant to
this article;
or
(b) The licensee has failed to remit their required annual
assessment, or to maintain their status as a business in good
standing with the office of the secretary of state,
notwithstanding notification in writing by the commissioner sent
by certified mail to the licensee's last known address providing
for thirty days to rectify such failure;
(c) The licensee has forfeited their license by failing to
remain open for regulated consumer lending business in conformity
with the rules or order of the commissioner; or
(b) (d) Facts or conditions exist which would clearly have
justified the commissioner in refusing to grant a license had
these facts or conditions been known to exist at the time the
application for the license was made.
(2) No revocation or suspension of a license
under this
article is lawful unless prior to institution of proceedings by
the commissioner notice is given to the licensee of the facts or
conduct which warrant the intended action, and the licensee is
given an opportunity to show compliance with all lawful
requirements for retention of the license.
(3) If the commissioner finds that probable cause for
revocation of a license exists and that enforcement of this
article requires immediate suspension of the license pending
investigation, he may, after a hearing upon five days' written
notice, enter an order suspending the license for not more than
thirty days.
(4) Nothing in this section limits the authority of the
commissioner to take action against a regulated consumer lender
pursuant to chapter thirty-one-a of this code.
(4) (5) Whenever the commissioner revokes or suspends a
license, he shall enter an order to that effect and forthwith
notify the licensee of the revocation or suspension. Within five
days after the entry of the order he shall mail by registered or certified mail or deliver to the licensee a copy of the order and
the findings supporting the order.
(5) (6) Any person holding a license to make
supervised
loans regulated consumer loans may relinquish the license by
notifying the commissioner in writing of its relinquishment, but
this relinquishment shall not affect his liability for acts
previously committed.
(6) (7) No revocation, suspension,
forfeiture or
relinquishment of a license shall impair or affect the obligation
of any preexisting lawful contract between the licensee and any
consumer.
(7) (8) The commissioner may reinstate a license, terminate
a suspension or grant a new license to a person whose license has
been revoked or suspended if no fact or condition then exists
which clearly would have justified the commissioner in refusing
to grant a license.
§46A-4-104. Records; annual reports.
(1) Every licensee shall maintain records in conformity with
generally accepted accounting principles and practices in a
manner which will enable the commissioner to determine whether
the licensee is complying with the provisions of this article.
The record-keeping system of a licensee shall be sufficient if he
makes the required information reasonably available. The records
need not be kept in the place of business where
supervised loans
regulated consumer loans are made, if the commissioner is given
free access to the records wherever located. The records pertaining to any loan need not be preserved for more than two
years after making the final entry relating to the loan, but in
the case of a revolving loan account such two-year period is
measured from the date of each entry.
(2) On or before the fifteenth day of
April February each
year, every licensee shall file with the commissioner a composite
annual report in the form prescribed by the commissioner relating
to all
supervised loans regulated consumer loans made by him.
The commissioner shall consult with comparable officials in other
states for the purpose of making the kinds of information
required in annual reports uniform among the states. Information
contained in annual reports shall be confidential and may be
published only in composite form.
§46A-4-105. Examinations; assessments and investigations.
(1) The commissioner shall examine
annually at least every
eighteen months the loans, business and records of every
licensee. In addition, for the purpose of discovering violations
of this article or securing information lawfully required, the
attorney general or the commissioner may at any time investigate
the loans, business and records of any
supervised lender
regulated consumer lender. For these purposes he shall have free
and reasonable access to the offices, places of business and
records of the lender.
(2) If the lender's records are located outside this state,
the lender at his option shall make them available to the
commissioner at a convenient location within this state, or pay the reasonable and necessary expenses for the commissioner or his
representatives to examine them at the place where they are
maintained. The commissioner may designate representatives,
including comparable officials of the state in which the records
are located, to inspect them on his behalf.
(3) For the purposes of this section, the commissioner may
administer oaths or affirmations, and upon his own motion or upon
request of any party, may subpoena witnesses, compel their
attendance, adduce evidence, and require the production of any
matter which is relevant to the investigation, including the
existence, description, nature, custody, condition and location
of any books, documents or other tangible things and the identity
and location of persons having knowledge of relevant facts, or
any other matter reasonably calculated to lead to the discovery
of admissible evidence.
(4) Upon failure without lawful excuse to obey a subpoena
or to give testimony and upon reasonable notice to all persons
affected thereby, the commissioner may apply to any circuit court
of this state for an order compelling compliance.
(5) The commissioner of banking shall charge and collect
from each
supervised lender regulated consumer lender and pay
into a special revenue account in the state treasury for the
department of banking an annual assessment payable on the first
day of July computed upon the total
outstanding loan balances and
installment sales contract balances less unearned finance charges as of the preceding calendar year-end assets as is set out in
section eight, article two, chapter thirty-one-a of this code.
§46A-4-106. Application of Administrative Procedures Act.
Except as otherwise provided, the provisions of chapter
twenty-nine-a of this code apply to and govern all administrative
action taken by the commissioner pursuant to the provisions of
this article.
§46A-4-107. Loan finance charge for regulated consumer lenders.
(1) With respect to a
supervised loan regulated consumer
loan, including a revolving loan account, a
supervised lender
regulated consumer lender may contract for and receive a loan
finance charge not exceeding that permitted by this section.
(2)
On a loan of two thousand dollars or less, which is
unsecured by real estate the loan finance charge, calculated
according to the actuarial method, may not exceed
the total of:
twenty-seven percent per year on the unpaid balance of the
principal amount.
(a) Thirty-six percent per year on that part of the unpaid
balances of the principal which is two hundred dollars or less;
(b) Twenty-four percent per year on that part of the unpaid
balances of the principal which is more than two hundred dollars
but does not exceed twelve hundred dollars; and
(c) Eighteen percent per year on that part of the unpaid
balances of the principal which is more than twelve hundred
dollars.
(3) On a loan of greater than two thousand dollars or which
is secured by real estate the loan finance charge, calculated
according to the actuarial method, may not exceed twenty-two
percent per year on the unpaid balance of the principal amount.
(3) (4) Where the loan is nonrevolving and is greater than
two thousand dollars, the permitted finance charge may include a
charge of not more than a total of two percent of the principal
amount loaned, for any origination fee, points or investigation
fee: Provided, That where any loan is secured by real estate the
permitted finance charge may include a charge of not more than a
total of three percent of the principal amount loaned for any
origination fee, points or investigation fee. Such charges shall
be included in the calculation of the finance charge. The
financing of such points or other charges shall be permissible
and shall not constitute charging interest on interest. Other
than herein provided, no points, origination fee, investigation
fee or other similar prepaid finance charges attributable to the
lender or its affiliates may be levied. Except as provided for
by section one hundred-nine, article three, chapter forty-six-a
of this code, no additional charges may be made; nor may any
charge permitted by this section be assessed unless the loan is
made. To the extent that this section overrides the preemption
on limiting points and other such charges on first lien
residential mortgages contained in Section 501 of the United
States Depository Institutions Deregulation and Monetary Control
Act of 1980, the state law limitations contained in this section shall apply.
This section does not limit or restrict the manner
of calculating the loan finance charge, whether by way of add-on,
discount or otherwise, so long as the rate of the loan finance
charge does not exceed that permitted by this section. If the
loan is precomputed:
(a) The loan finance charge may be calculated on the
assumption that all scheduled payments will be made when due, and
(b) The effect of prepayment, refinancing or consolidation
is governed by the provisions on rebate upon prepayment,
refinancing or consolidation contained in section one hundred
eleven, article three of this chapter.
(4) (5) For the purposes of this section, the term of a loan
commences on the date the loan is made. Differences in the
lengths of months are disregarded and a day may be counted as one
thirtieth of a month. Subject to classifications and
differentiations the licensee may reasonably establish, a part of
a month in excess of fifteen days may be treated as a full month
if periods of fifteen days or less are disregarded and if that
procedure is not consistently used to obtain a greater yield than
would otherwise be permitted.
(5) Subject to classifications and differentiations the
lender may reasonably establish, he may make the same loan
finance charge on all principal amounts within a specified range.
A loan finance charge so made does not violate subsection (2) if:
(a) When applied to the median amount within each range, it
does not exceed the maximum permitted by subsection (2), and
(b) When applied to the lowest amount within each range, it
does not produce a rate of loan finance charge exceeding the rate
calculated according to subdivision (a) of this subsection (5) by
more than eight percent of the rate calculated according to said
subdivision (a).
(6) With respect to a revolving loan account:
(a) A charge may be made by a
supervised lender regulated
consumer lender in each monthly billing cycle which is one
twelfth of the maximum annual rates permitted by this section
computed on an amount not exceeding the greatest of:
(i) The average daily balance of the debt,
or
(ii) The balance of the debt at the beginning of the first
day of the billing cycle, less all payments on and credits to
such debt during such billing cycle and excluding all additional
borrowings during such billing cycle.
or
(iii) Subject to subsection (5), the median amount within
a specified range within which the average daily balance of the
debt or the balance of the debt at the beginning of the first day
of the billing cycle, less all payments on and credits to such
debt during such billing cycle and excluding all additional
borrowings during such billing cycle, is included. For the
purpose of this subdivision (a) a billing cycle is monthly if the
billing statement dates are on the same day each month or do not
vary by more than four days therefrom.
(b) If the billing cycle is not monthly, the maximum loan
finance charge which may be made by a
supervised lender regulated consumer lender is that percentage which bears the same relation
to an applicable monthly percentage as the number of days in the
billing cycle bears to thirty.
(c) Notwithstanding subdivisions (a) and (b) of this
subsection (6), if there is an unpaid balance on the date as of
which the loan finance charge is applied, the licensee may
contract for and receive a charge not exceeding fifty cents if
the billing cycle is monthly or longer, or the pro rata part of
fifty cents which bears the same relation to fifty cents as the
number of days in the billing cycle bears to thirty if the
billing cycle is shorter than monthly, but no charge may be made
pursuant to this subdivision (c) if the lender has made an annual
charge for the same period as permitted by the provisions on
additional charges.
(7) As an alternative to the loan finance charge allowed by
section one hundred seven, subsection (2) of this article, from
the effective date of this subsection until and including the
first day of July, one thousand nine hundred eighty-two, with
respect to a supervised loan, including a revolving loan account,
a supervised lender may contract for and receive a loan finance
charge, calculated according to the actuarial method, which may
not exceed the total of:
(a) Thirty-six percent per year on that part of the unpaid
balances of the principal which is five hundred dollars or less;
(b) Twenty-four percent per year on that part of the unpaid
balances of the principal which is more than five hundred dollars
but does not exceed fifteen hundred one dollars; and
(c) Eighteen percent per year on that part of the unpaid
balances of the principal which is more than fifteen hundred one
dollars.
§46A-4-108. Use of multiple loan agreements.
A
supervised lender regulated consumer lender may not use
multiple loan agreements with intent to obtain a higher loan
finance charge than would otherwise be permitted by the
provisions of this article. A
supervised lender regulated
consumer lender uses multiple loan agreements if, with intent to
obtain a higher loan finance charge than would otherwise be
permitted, he allows any person, or husband and wife, to become
obligated in any way under more than one loan agreement with the
supervised lender regulated consumer lender for a
supervised
regulated consumer loan under this article.
The excess amount of the loan finance charge provided for
in agreements in violation of this section is an excess charge
for the purposes of the provisions on effect of violations on
rights of parties.
§46A-4-109. Restrictions on interest in land as security;
assignment of earnings to regulated consumer lender
prohibited; when security interest on household not valid;
prohibitions as to renegotiation of loan discharged in
bankruptcy.
(1)
No consumer loan of two thousand dollars or less may be
secured by an interest in land, other than a purchase money loan
for that land, unless the lender is licensed in this state as a
regulated consumer lender or as a secondary mortgage lender, or
is a federally insured depository institution permitted to
conduct lending in West Virginia. A supervised lender may not
contract for an interest in land as security. A security
interest taken in violation of this subsection is void.
Provided, That this subsection shall not be construed as
prohibiting one licensed to make loans under the provisions of
the "West Virginia Industrial Bank and Industrial Loan Company
Act" as set forth in the provisions of article seven, chapter
thirty-one of this code, or the West Virginia secondary mortgage
loan act as set forth in the provisions of article seventeen,
chapter thirty- one, from taking an interest in land as security
for loans made pursuant to either of those acts
(2) Notwithstanding the provisions of section one hundred
sixteen, article two of this chapter, no
supervised lender
regulated consumer lender shall take any assignment of or order
for payment of any earnings to secure any loan made by any
supervised lender regulated consumer lender under this article.
An assignment or order taken in violation of this subsection is
void.
(3)
Other than for a purchase money lien, no supervised
lender regulated consumer lender may take a security interest in
household
goods furniture then in the possession and use of the borrower.
Where federal law permits a security interest in
certain nonpurchase items deemed not to be household goods,
unless the security agreement creating such security interest
must be in writing, signed in person by the borrower, and if the
borrower is married, signed in person by both husband and wife:
Provided, That the signature of both husband and wife shall not
be required when they have been living separate and apart for a
period of at least five months prior to the making of such
security agreement. A security interest taken in violation of
this subsection is void.
(4) A
supervised lender regulated consumer lender may not
renegotiate the original loan, or any part thereof, or make a new
contract covering the original loan, or any part thereof, with
any borrower, who has received a discharge in bankruptcy of the
original loan or any balance due thereon at the time of said
discharge from any court of the United States of America
exercising jurisdiction in insolvency and bankruptcy matters,
unless said
supervised lender regulated consumer lender shall pay
to and deliver to the borrower the full amount of the loan shown
on said note, promise to pay, or security, less any deductions
for charges herein specifically authorized.
§46A-4-110. Conduct of business other than making loans.
(a) 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 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
and regulations 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
making loans authorized under the provisions of the "West
Virginia Industrial Bank and Industrial Loan Company Act" as set
forth in article seven, chapter thirty-one of this code
(b) A licensee may purchase, hold and convey real estate as
follows:
(1) Such as shall be necessary for the convenient
transaction of its business;
(2) Such as is mortgaged to it in good faith by way of
security for loans made by or money due to such regulated
consumer lender;
(3) Such as is conveyed to it in satisfaction of debts
previously contracted in the course of its dealings;
(4) Such as is acquired by the sale on execution or judgment
or decree of any court in its favor.
(c) A licensee shall not purchase, hold or convey any real
estate in any other case or for any other purpose whatever. Real
estate shall be conveyed only by authority of the board of
directors of any such regulated consumer lender. No real estate
acquired in the cases contemplated in subdivisions (2), (3) and
(4), subsection (b) of this section shall be held for a longer
time than ten years, unless such period shall be extended by the
commissioner of banking.
§46A-4-110a. Prohibited conduct.
A regulated consumer lender shall not: (i) Accept or
receive deposits or sell or offer for sale its secured or
unsecured evidences or certificates of indebtedness; or (ii) pay
any fees, bonuses, commissions, rewards or other consideration to
any person, firm or corporation for the privilege of using any
plan of operation, scheme or device for the organization or
carrying on of business under this article, or the use of any
name, trademark or copyright to be so used. Nothing herein,
however, prevents a regulated consumer lender from agreeing in
connection with a loan to pay a broker fee, finders fee, or
dealer participation fee, or to split the origination fee or
points paid provided the fee or fee split is disclosed to the
borrower and where proper is included in the finance charge.
§46A-4-111. Limitations on financing the purchase of insurance
in loan transactions.
In any loan transaction by a regulated consumer lender, in
which it offers to sell or provide insurance to the borrower or cosigner in conjunction with the loan, the total cost of all such
insurance which may be financed by that lender or its affiliates
may not exceed twenty-five percent of the total amount financed.
No licensee shall directly or indirectly charge, contract
for, or receive any interest, discount or consideration greater
than six percent per annum upon the loan, use or forbearance of
money, goods or things in action, or upon the loan, use or sale
of credit, when the amount or value thereof is more than sixteen
hundred dollars. The foregoing prohibition shall also apply to
any licensee who permits any person, as borrower or as endorser,
guarantor or surety for any borrower, or otherwise, to owe
directly or contingently, or both, to the licensee at any time
the sum of more than sixteen hundred dollars for principal.
§46A-4-111a. Disclosure upon refinancing of agreement at higher
rate.
Any consumer loan or credit agreement that is refinanced
under this article after the first day of September, one thousand
nine hundred ninety-five, at a higher rate than allowed merchants
by article three of this chapter must comply with the following
requirements, except where such an agreement would violate
section one hundred eight of this article:
(1) The lender must give the following disclosures in
writing to the borrower prior to the execution of the new
agreement:
"If you do agree to consolidate your existing obligation,
you will be paying an annual percentage rate of _____% on the existing balance of $_____, instead of the rate of ______% which
you are now paying.
Schedule of Monthly Payments
Separate Loan AgreementsConsolidated Loan Agreement
$______ per month for $______ per month for
the next _______ months the next _______ months
then
$______ per month for
_____ months after that
Total of Payments
Separate Agreements Consolidated Agreement
$______ total of $_______ total of payments
payments under your for your consolidated loan
existing loan,
$______ total of payments
for your new loan.
I acknowledge receipt of this information ________________
(initials of borrower)."
(2) The lender must allow the borrower the choice of
repaying his or her existing loan balance at the originally
agreed upon rate and obtaining any additional extension of credit
as a separate agreement, notwithstanding any law other than
section one hundred eight of this article which limits the
borrower's ability to have more than one agreement with the same
lender;
(3) An existing balance may be refinanced only upon the
borrower's request:
Provided, That nothing herein prohibits a
lender from soliciting a refinancing to lower a borrower's
existing finance charge rate, or noting that refinancing is
available in connection with an extension of additional credit,
or from offering to refinance consumer debt to lower the
monthly/periodic payments where the borrower has indicated to the lender or has a record known to the lender of difficulty in
timely meeting the scheduled payments under the prior agreement;
(4) The lender, where it holds the prior agreement, must
refund or credit to the borrower's account any unearned finance
charge and any returned insurance premiums upon cancellation of
the insurance sold in connection with the prior agreement;
(5) The lender must allow the borrower the right to cancel
the consolidated loan agreement within three business days and to
elect the separate loan option pursuant to subsection (2) of this
section. The lender shall provide the borrower with conspicuous
written notice of the provisions of this subsection; and
(6) Nothing in this subsection shall prohibit the receipt
of goods or services by the borrower at the time the consolidated
loan agreement is made.
§46A-4-112. Code references to supervised lenders and industrial
loan companies; authority of the commissioner.
All references in other chapters of this code to
supervised
loans, supervised lenders, industrial loans, industrial loan
companies and licensees thereof, as well as to article seven,
chapter thirty-one small loans, small loan lenders, small loan
licensees and to article seven-a, chapter forty-seven of this
code, shall, after the operative date of this chapter, and
despite the repeal of said statute, be read, construed and
understood to mean and to have reference, respectively, to
supervised loans regulated consumer loans, supervised lenders regulated consumer lenders, supervised lender regulated consumer
lender licensees and to this article four.
All authority vested by this chapter in the commissioner
shall be deemed to be in addition to, and not in limitation of,
the authority vested in the commissioner of banking by provisions
contained in other chapters of this code.
§46A-4-113. Continuation of licensing.
All persons licensed under the provisions of
article seven,
chapter thirty-one, or as supervised lenders under the prior
provisions of this article
seven- a, chapter forty-seven of this
code, on the operative date of this
chapter act, are licensed to
make
supervised loans regulated consumer loans under the
provisions of this article four, and all provisions of this
article shall after the operative date of this
chapter act apply
to the persons so previously licensed, including without
limitation the provisions governing notification contained in
article seven of this chapter.
The commissioner may, but is not required to, deliver
evidence of licensing to the persons so previously licensed.
Persons holding both supervised lender and industrial loan
company licenses, or operating such a licensed business in the
same office will be combined and provided a single regulated
lender license.
ARTICLE 5. CIVIL LIABILITY AND CRIMINAL PENALTIES.
§46A-5-101. Effect of violations on rights of parties;
limitation of actions.
(1) If a creditor has violated the provisions of this
chapter applying to collection of excess charges, security in
sales and leases, disclosure with respect to consumer leases,
receipts, statements of account and evidences of payment,
limitations on default charges, assignment of earnings,
authorizations to confess judgment, illegal, fraudulent or
unconscionable conduct, any prohibited debt collection practice,
or restrictions on interest in land as security, assignment of
earnings to
supervised lender regulated consumer lender, security
agreement on household
furniture goods for benefit of
supervised
lender regulated consumer lender, and renegotiation by
supervised
lender regulated consumer lender of loan discharged in
bankruptcy, the consumer has a cause of action to recover actual
damages and in addition a right in an action to recover from the
person violating this chapter a penalty in an amount determined
by the court not less than one hundred dollars nor more than one
thousand dollars. With respect to violations arising from
consumer credit sales or consumer loans made pursuant to
revolving charge accounts or revolving loan accounts, or from
sales as defined in article six of this chapter, no action
pursuant to this subsection may be brought more than four years
after the violations occurred. With respect to violations
arising from other consumer credit sales or consumer loans, no
action pursuant to this subsection may be brought more than one
year after the due date of the last scheduled payment of the
agreement.
(2) If a creditor has violated the provisions of this
chapter respecting authority to make
supervised loans regulated
consumer loans, the loan is void and the consumer is not
obligated to pay either the principal or the loan finance charge.
If he has paid any part of the principal or of the finance
charge, he has a right to recover in an action the payment from
the person violating this chapter or from an assignee of that
person's rights who undertakes direct collection of payments or
enforcement of rights arising from the debt. With respect to
violations arising from
supervised loans regulated consumer loans
made pursuant to revolving loan accounts, no action pursuant to
this subsection may be brought more than four years after the
violation occurred. With respect to violations arising from
other
supervised loans regulated consumer loans, no action
pursuant to this subsection may be brought more than one year
after the due date of the last scheduled payment of the agreement
pursuant to which the charge was paid.
(3) A consumer is not obligated to pay a charge in excess
of that allowed by this chapter, and if he has paid an excess
charge he has a right to a refund. A refund may be made by
reducing the consumer's obligation by the amount of the excess
charge. If the consumer has paid an amount in excess of the
lawful obligation under the agreement, the consumer may recover
in an action the excess amount from the person who made the
excess charge or from an assignee of that person's rights who undertakes direct collection of payments from or enforcement of
rights against the consumer arising from the debt.
(4) If a creditor has contracted for or received a charge
in excess of that allowed by this chapter, the consumer may, in
addition to recovering such excess charge, also recover from the
creditor or the person liable in an action a penalty in an amount
determined by the court not less than one hundred dollars nor
more than one thousand dollars. With respect to excess charges
arising from consumer credit sales or consumer loans made
pursuant to revolving charge accounts or revolving loan accounts,
no action pursuant to this subsection may be brought more than
four years after the time the excess charge was made. With
respect to excess charges arising from other consumer credit
sales or consumer loans no action pursuant to this subsection may
be brought more than one year after the due date of the last
scheduled payment of the agreement pursuant to which the charge
was made.
(5) Except as otherwise provided, a violation of this
chapter does not impair rights on a debt.
(6) If an employer discharges an employee in violation of
the provisions prohibiting discharge, the employee may within
ninety days bring a civil action for recovery of wages lost as a
result of the violation and for an order requiring the
reinstatement of the employee. Damages recoverable shall not
exceed lost wages for six weeks.
(7) A creditor has no liability for a penalty under
subsection (1) or subsection (4) if within fifteen days after
discovering an error, and prior to the institution of an action
under this section or the receipt of written notice of the error,
the creditor notifies the person concerned of the error and
corrects the error. If the violation consists of a prohibited
agreement, giving the consumer a corrected copy of the writing
containing the error is sufficient notification and correction.
If the violation consists of an excess charge, correction shall
be made by an adjustment or refund.
(8) If the creditor establishes by a preponderance of
evidence that a violation is unintentional or the result of a
bona fide error of fact notwithstanding the maintenance of
procedures reasonably adapted to avoid any such violation or
error, no liability is imposed under subsections (1), (2) and
(4), and the validity of the transaction is not affected.
§46A-5-103. Willful violations.
(1) A
supervised lender regulated consumer lender who
willfully makes charges in excess of those permitted by the
provisions of article four of this chapter, pertaining to
supervised lenders regulated consumer lenders, shall be guilty of
a misdemeanor, and, upon conviction, shall be fined not more than
five thousand dollars, or imprisoned not more than one year, or
both fined and imprisoned.
(2) A person who willfully engages in the business of making
supervised loans regulated consumer loans without a license in violation of the provisions of article four of this chapter
applying to authority to make
supervised loans regulated consumer
loans shall be guilty of a misdemeanor, and, upon conviction,
shall be fined not more than five thousand dollars, or imprisoned
not more than one year, or both fined and imprisoned.
(3) A person who willfully engages in the business of making
consumer credit sales or consumer loans, or of taking assignments
of rights against consumers arising therefrom and undertakes
direct collection of payments or enforcement of these rights,
without complying with the provisions of section one hundred
fifteen, article seven of this chapter, concerning notification,
shall be guilty of a misdemeanor, and, upon conviction, shall be
fined not more than one hundred dollars.
(4) Any person who willfully violates any of the provisions
of sections one hundred twenty-three through one hundred twenty-
eight, inclusive, article two of this chapter, by committing any
of the specifically described and enumerated acts contained
therein, shall be guilty of a misdemeanor, and, upon conviction
thereof, shall be fined not more than one thousand dollars, or
imprisoned in the county jail not more than one year, or both
fined and imprisoned.
ARTICLE 7. ADMINISTRATION.
§46A-7-103. Division of administrative powers; investigation and
administration.
(1) With respect to
regulated consumer lenders and
supervised financial organizations, the powers of examination and investigation and administrative enforcement shall be exercised
by the official or agency to whose supervision the organization
is subject. All other powers of the attorney general under this
chapter may be exercised by him with respect to a
supervised
financial organization. Notwithstanding the first sentence of
this subsection and notwithstanding subsection (3) of this
section, the attorney general may pursue any investigation,
prosecute any suit and take any other proper action relating to
the enforcement of any consumer protection provision in this
chapter.
(2) If the attorney general receives a complaint or other
information concerning noncompliance with this chapter by a
supervised financial organization, he shall inform the official
or agency having supervisory authority over the organization
concerned. The attorney general may request information about
supervised financial organizations from the officials or agencies
supervising them.
(3) The attorney general and any official or agency of this
state having supervisory authority over a
supervised financial
organization are authorized and directed to consult and assist
one another in maintaining compliance with this chapter. They
may jointly pursue investigations, prosecute actions, and take
other official actions, as they deem appropriate, if either of
them otherwise is empowered to take the action.
§46A-7-115. Notification.
(1) Every person engaged in this state in making consumer
credit sales or consumer loans
, including any person subject to
the provisions of section five-a, article twenty-three, chapter
eleven of this code as a result of their consumer lending or any
person who regularly purchases retail installment contracts or
other consumer paper from a business to which it is affiliated,
and every person having an office or place of business in this
state who takes assignments of and undertakes direct collection
of payments from or enforcement of rights against debtors arising
from such sales or loans shall file notification with the state
tax department within thirty days after commencing business in
this state, and, thereafter, on or before January thirty-first of
each year. A notification shall be deemed to be in compliance
with this section if the information hereinafter required is
given in an application for a business registration certificate
provided for in section four, article twelve, chapter eleven of
this code. The state tax commissioner shall make any information
required by this section available to the attorney general or
commissioner upon request. The notification shall state:
(a) Name of the person;
(b) Name in which business is transacted if different from
(a);
(c) Address of principal office, which may be outside this
state;
(d) Address of all
of its offices
or retail stores, if any,
in this state at which
consumer credit sales or consumer loans are made, or in the case of a
lender credit card, a description
of its affiliation to any store chain, or national or regional
card acceptance system (i.e. Visa/Mastercard), or in the case of
a person taking assignments of obligations, the offices or places
of business within this state at which business is transacted;
(e) If consumer credit sales or consumer loans
, including
mortgage loans, are made otherwise than at
a its retail store or
office in this state, a brief description of the manner in which
they are made;
(f) Address of designated agent upon whom service of process
may be made in this state; and
(g) Whether
supervised loans regulated consumer loans are
made.
(2) If information in a notification becomes inaccurate
after filing, accurate information must be filed within thirty
days.
(3) The provisions of this section are not applicable to a
seller whose credit sales consist entirely of sales made pursuant
to a seller's credit card so long as the issuer of the card has
fully complied with the provisions of this section.
Nor are the
provisions of this section applicable to a person whose consumer
lending in West Virginia is incidental and confined to access
through a nonproprietary automatic teller machine or similar
electronic communication terminal.
ARTICLE 8. OPERATIVE DATE AND PROVISIONS FOR TRANSITION.
§46A-8-101. Time of becoming operative; provisions for
transition; enforceability of prior transactions.
(1) Except as otherwise provided in this section, this
chapter shall become operative at 12:01 a. m. on September first,
one thousand nine hundred
seventy-four ninety-five.
(2) Notwithstanding the provisions of subsection (1) of this
section, in order to allow sufficient time to prepare for the
implementation and operation of this chapter and to act on
applications for licenses to make
supervised loans regulated
consumer loans under this chapter prior to the operative date of
such chapter, the provisions of article four of this chapter,
relating to
supervised lenders regulated consumer lender, and the
provisions of article seven of this chapter, relating to
administration, shall, to the extent necessary, become operative
for such purposes at 12:01 a. m. on July first, one thousand nine
hundred
seventy-four ninety-five.
(3) Transactions entered into before this chapter becomes
operative and the rights, duties and interests flowing from them
thereafter may be terminated, completed, consummated or enforced
as required or permitted by any statute, rule of law or other law
amended, repealed or modified by this chapter as though the
repeal, amendment or modification had not occurred, but this
chapter applies to:
(a) Refinancings and consolidations made after this chapter
becomes operative of consumer credit sales, consumer leases and
consumer loans whenever made;
(b) Consumer credit sales or consumer loans made after this
chapter becomes operative pursuant to revolving charge accounts
or revolving loan accounts entered into, arranged or contracted
for before this chapter becomes operative; and
(c) All consumer credit transactions made before this
chapter becomes operative insofar as this chapter limits the
remedies of creditors.
CHAPTER 47. REGULATION OF TRADE.
ARTICLE 6. MONEY AND INTEREST.
§47-6-5d. Rebate upon prepayment, refinancing, consolidation or
otherwise; liability and penalties for excess
charges.
(a) Upon prepayment in full of a precomputed loan, credit
sale or transaction, forbearance or similar transaction repayable
according to its original terms over a period of thirty-six
months or less, the creditor shall rebate that portion of the
finance charge attributable to the prepaid periodic installment
periods. When the total is payable in substantially equal
consecutive monthly installments, the portion of such finance
charge attributable to any particular monthly installment period
shall be that proportion of charge originally contracted for, as
the balance scheduled to be outstanding on the last day of the
monthly installment period before deducting the payment, if any,
scheduled to be made on that day bears to the sum of all the
monthly installment balances under the original schedule of
payments. (This method of allocation is the sum of the digits method, commonly referred to as the "Rule of 78.") For
prepayment in full of a precomputed loan, credit sale or
transaction, forbearance or similar transaction: (i) Repayable
according to its original terms over a period of thirty-six
months or less; (ii) in which unequal or irregular or other than
substantially equal consecutive monthly installments are payable,
the commissioner of banking shall prescribe by rule the method or
procedure for the allocation of charges and the calculation or
rebates consistent with the Rule of 78.
(b) Upon prepayment in full of a precomputed loan, credit
sale or transaction, forbearance or similar transaction,
repayable by its original terms over a period of greater than
thirty-six months, an amount shall be rebated of not less than
the unearned portion of the finance charge calculated by applying
the rate of finance charge which was required by applicable law
to be disclosed in the transaction according to the actuarial
method to the unpaid balance for the time remaining as originally
scheduled or as extended by deferral or otherwise for the period
following prepayment. In instances where no rate of finance
charge was required by law or otherwise to be disclosed, the
unearned portion of the finance charge shall be calculated by
applying the finance charge which was charged in the transaction
according to the actuarial method to the unpaid balance for the
time remaining as originally scheduled or as extended by deferral
or otherwise for the period following prepayment.
(c)
Unearned prepaid finance charges upon prepayment
includes all prepaid finance charges for points, loan/credit
origination fees, or loan/credit investigation fees: Provided,
That: (i) In calculating the rebate for a consumer loan or
credit sale unsecured by real property where such prepaid finance
charges have been imposed, the lender/creditor may deduct the
charges up to a maximum of two percent of the principal amount
financed; and (ii) in calculating the rebate for a consumer loan
or credit sale secured by real property where such prepaid
finance charges have been imposed, the lender/creditor may deduct
such charges up to a maximum of three percent of the principal
amount financed. Upon prepayment in full of a consumer loan or
credit sale such unearned prepaid finance charges shall be
rebated by using the Rule of 78 where the original loan term is
thirty-six months or less, otherwise by using the actuarial
method. To the extent that this section overrides the preemption
on limiting points and other charges on first lien residential
mortgages for nonpurchase money loans contained in Section 501 of
the United States Depository Institutions Deregulation and
Monetary Control Act of 1980, the state law limitations contained
in this section shall apply: Provided, however, That this
subsection does not apply to loans made by federally-insured
depository institutions.
(d) (c) For purposes of the rebate of unearned finance
charges as required by this section, a prepayment in full shall include repayment by a new loan, extension of credit,
refinancing, consolidation, forbearance or otherwise.
(e) (d) As an alternative to the Rule of 78 method of
rebate of determining the unearned finance charge required by
this section, a creditor may rebate unearned finance charges
under any other method which gives a greater rebate to the debtor
than the rebate determined by the Rule of 78.
(f) (e) The provisions governing rebates as set forth in
this section shall apply to all transactions entered in to on or
after the first day of September, one thousand nine hundred
eighty-one. For transactions entered into prior to the first day
of September, one thousand nine hundred eighty-one, the
provisions in effect prior to the effective date of this section
of the respective chapters of this code shall be utilized to
determine the rebate of unearned finance charges.
(g) (f) For consumer credit sales or consumer loans subject
to the provisions of chapter forty-six-a of this code the
provisions of article five, chapter forty-six-a, govern the
imposition of liability and penalties for charging interest or a
finance charge in excess of the maximum rate allowed under the
provisions of this section. In all other instances, the
provisions of this article govern the imposition of liability and
penalties for charging interest or a finance charge in excess of
the maximum allowed under this section.
NOTE: The purpose of this bill is to eliminate separate
licensing requirements for supervised and industrial loan companies by combining them into one new regulated consumer
lender license; eliminate step rates and simplify interest rate
ceilings for consumer loans; limit the amount of points allowed
in loans by regulated lenders except in purchase money mortgage
transactions; limit the amount of excess insurance a regulated
consumer can finance in connection with a consumer loan; provide
disclosures for consumers seeking loan consolidation at a finance
rate higher than that generally permitted consumer credit
transactions; clarify the ability of licensed lenders to collect
and pay finder fees; clarify the ability of merchants to seek
late charges for unpaid bills not payable in installments;
clarify the process for disclosing subpoenaed bank records and
examine reports; clarify the ability of banks to charge the same
finance rate as credit unions; clarify, revise and make
consistent notification filing requirements for consumer lenders
and creditors.
Strike-throughs indicate language that would be stricken
from present law, and underscoring indicates new language that
would be added.
§31A-8-8a, §46A-3-113a, §§46A-4-110a and 111a, are new;
therefore, strike-throughs and underscoring have been omitted.