H. B. 4261
(By Delegates Fleischauer, Pino, Schadler and Webb)
[Introduced February 2, 2004; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §46A-2-140, relating
to the use of checks or share drafts as security for loans or
cash advances made for personal, family or household purposes.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §46A-2-140, to read as
follows:
§46A-2-140. No use of checks or share drafts as security for cash
advances or loans.
(a) No person may engage in the business of making, arranging,
acting as a middleman or brokering a cash advance or loan to a
borrower for a personal, family or household purpose pursuant to an
agreement under which (1) a check or share draft is executed by the
borrower; (2) the check or share draft is drawn on a financial institution for the amount advanced or borrowed, plus a fee; (3)
the check or share draft is used as security or as any direct or
indirect part of the transaction for
the advance, loan or extension
of credit; and (4) the payment of the check or share draft is
deferred.
(b) Acting in violation of this section is unconscionable
conduct within the meaning of article 5 of this chapter and is an
unfair and deceptive practice under article 6 of this chapter. Any
agreement in violation of this section is void and unenforceable.
NOTE: The purpose of this bill is to prevent the taking of
checks or similar instruments to guarantee loans or cash advances.
This section is new; therefore, strike-throughs and
underscoring have been omitted.
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