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Introduced Version House Bill 2235 History

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Key: Green = existing Code. Red = new code to be enacted


H. B. 2235


(By Delegates Susman and Mahan)

[Introduced February 15, 2001 ; referred to the

Committee on Banking and Insurance then the Judiciary.]





A BILL to amend and reenact section thirty, article four, chapter thirty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to prohibiting banks from charging fees for payoff or balance inquiries unless the inquiries exceed three within a thirty-day period; requiring banks to provide information in response to a balance or payoff inquiry within two business days; and providing that the term "banking institution" applies to lenders who make or service loans or who hold a security interest in property located in the state.

Be it enacted by the Legislature of West Virginia:

That section thirty, article four, chapter thirty-one-a of the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.

§31A-4-30. Charges and interest allowed in certain cases; negotiability of installment notes.

(a) In addition to the interest rate provided in article six, chapter forty-seven of this code and elsewhere by law, a banking institution may charge interest together with other finance charges at a rate of eighteen percent per annum or less calculated according to the actuarial method, or one and one-half percent per month, computed on unpaid balances. Additional charges in connection with consumer loans are limited as provided in section one hundred nine, article three, chapter forty-six-a of this code. Loans may be made on a precomputed basis: Provided, That upon prepayment in full of a precomputed loan, the bank shall rebate the unearned portion of such finance charges as specified in section five-d, article six, chapter forty-seven of this code. Any note evidencing any such installment loan may provide that the entire unpaid balance thereof at the option of the holder shall become due and payable upon default in the payment of any stipulated installment without impairing the negotiability of such note if otherwise negotiable.
(b) A banking institution may not charge a borrower or the borrower's agent for a balance inquiry or payoff inquiry: Provided, That if a borrower or the borrower's agent makes in excess of three requests within a thirty-day period, the banking institution may charge a minimal fee.
(c) Upon receiving a request for a payoff on balance inquiry, the banking institution must provide the information requested within two business days.
(d) For the purposes of subsections (b) and (c) of this section, the term "banking institution," to the degree permitted under federal law, applies to any lender which makes or services loans in this state or takes or holds a security interest in property located in this state.




NOTE: The purpose of this bill is to prohibit banks from charging fees for payoff or balance inquiries unless the inquiries exceed three within a thirty-day period. The bill also requires banks to provide information in response to a balance or payoff inquiry within two business days. Finally, it provides that the term "banking institution" applies to lenders who make or service loans or who hold a security interest in property located in the state.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.
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