House Bill 2039 History
H. B. 2039
(By Delegate Ellem)
[Introduced January 9, 2008; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact §46A-4-110a of the Code of West
Virginia, 1931, as amended, relating to the prohibition
against mandatory arbitration clauses in consumer loan
agreements by regulated consumer lenders in the state.
Be it enacted by the Legislature of West Virginia:
That §46A-4-110a of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-110a. Prohibited conduct.
(1) A regulated consumer lender shall not:
(a) Accept or receive deposits or sell or offer for sale its
secured or unsecured evidences or certificates of indebtedness;
(b) 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: Provided,
That nothing herein 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, however,
That the fee or fee split is
disclosed to the borrower and where proper is included in the
finance charge; or
(c) Fail to disclose the amount of a payoff of an existing
loan within three business days of receiving a request for such
information from either the borrower or an agent acting on behalf
of the borrower.
(2) Unless preempted by federal law, no consumer loan by a
regulated consumer lender may contain any scheduled balloon payment
as set forth in this chapter. Nor may any regulated consumer
lender loan contain terms of repayment which result in negative
That nothing herein prevents unequal
payment schedules resulting from a variable rate loan or a
revolving line of credit.
(3) A regulated consumer lender may not make revolving loans
for the retail purchase of consumer goods and services by use of a
lender credit card.
(4) Unless preempted by federal law, a consumer loan by a
regulated consumer lender may not contain any terms or any clauses requiring mandatory arbitration proceedings for disputes arising
out of the consumer loan agreement. Any mandatory arbitration
terms or clauses in a consumer loan contract are void.
NOTE: The purpose of this bill is to prohibit mandatory
arbitration clauses in consumer loan agreements by regulated
consumer lenders in the state.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would