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Introduced Version House Bill 2529 History

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hb2529 intr
H. B. 2529


(By Delegate R. M. Thompson)
[Introduced
February 21, 2005 ; referred to the
Committee on Banking and Insurance then the Judiciary.]




A BILL to amend and reenact §32A-3-1 and §32A-3-3 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new article, designated §32A-4-1, §32A-4-2, §32A-4-3, §32A-4-4, §32A-4-5, §32A-4-6, §32A-4-7, §32A-4-8, §32A-4-9, §32A-4-10, §32A-4-11, §32A-4-12, §32A-4-13, §32A-4-14, §32A-4-15, §32A-4-16, §32A-4-17, §32A-4-18, §32A-4-19, §32A-4-20, §32A-4-21, §32A-4-22, §32A-4-23, §32A-4-24, §32A-4-25, §32A-4-26, §32A-4-27, §32A-4-28, §32A-4-29, §32A-4-30 and §32A-4-31, all relating to the deferred deposit loan act.

Be it enacted by the Legislature of West Virginia:
That §32A-3-1 and §32A-3-3 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new article, designated §32A-4-1, §32A-4-2, §32A-4-3, §32A-4-4, §32A-4-5, §32A-4-6, §32A-4-7, §32A-4-8, §32A-4-9, §32A-4-10, §32A-4-11, §32A-4-12, §32A-4-13, §32A-4-14, §32A-4-15, §32A-4-16, §32A-4-17, §32A-4-18, §32A-4-19, §32A-4-20, §32A-4-21, §32A-4-22, §32A-4-23, §32A-4-24, §32A-4-25, §32A-4-26, §32A-4-27, §32A-4-28, §32A-4-29, §32A-4-30 and §32A-4-31, all to read as follows:
ARTICLE 3. CHECK CASHING.
§32A-3-1.  Check cashing permitted.
(a) A merchant primarily in the business of making retail consumer sales may offer check cashing services at its stores to accommodate its customers in the course of said business, and may collect a fee for the service, if the check cashing service and any fees charged are incidental to the main business of the merchant. Except as set forth in subsection (b) of this section, the term "check cashing services" does not include a transaction where a customer presents a check for the exact amount of a purchase. Fees charged in connection with check cashing services may not exceed the greater of one dollar, or one percent of the face value of the check cashed.
(b) Merchants may not, in connection with providing check cashing services, agree to hold checks submitted to them for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom, unless the merchant obtains a deferred deposit lender license under the provisions of article four of this chapter.
(c) No check cashing license is required as a condition for a merchant providing check cashing services in conformity with subsections (a) and (b) of this section.
(d) Where a merchant derives more than five percent of his or her gross revenues from cashing checks, the check cashing services are not considered incidental to the main business of the merchant, and the merchant is required to be licensed under article two of this chapter.
(e) Persons holding a license pursuant to article two of this chapter may in conjunction with their licensed business, or other lawful business, engage in the business of check cashing in West Virginia. Fees charged for check cashing services by a licensee under article two of this chapter shall be posted and conform to those permitted merchants under this section. No licensee may in connection with providing check cashing services agree to hold checks submitted to it for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom, unless the person also holds a deferred deposit lender license under article four of this chapter.
(f) Federally-insured depository institutions, foreign bank agencies and governmental entities exempt from licensure as money transmitters under this chapter are exempt from the provisions of this article. Other financial institutions licensed by and under the jurisdiction of the Commissioner of Banking may upon written approval engage in the check cashing business permitted merchants under this article.
(g) Except as provided or allowed by this article, no person may engage in the check cashing business. As used in this article the term "check cashing business" means any person who engages in the business of cashing checks, including drafts, money orders or other instruments for the transmission or payment of money for a fee. However, the term "check" as used in this article does not include a travelers check or a foreign denomination check.
§32A-3-3.  Violations and penalties.
(a) The charging of fees for check cashing services in excess of those permitted under this article gives rise to a cause of action by the injured party to recover twice the actual damages suffered by reason of the violation.
(b) The charging of fees for check cashing services in violation of the provisions of subsections subsection (b) or (e), section one of this article, prohibiting lending through a check cashing transaction without first obtaining a deferred deposit lender license under article four of this chapter, constitutes prohibited finance charges, and gives rise to a cause of action by the party upon whom the charge was imposed to recover all fees paid and all actual damages suffered by reason of the violation. Where the transaction is of an amount and for purposes that would constitute a consumer loan, the conduct of impermissible check cashing services is considered an unfair and deceptive act and may be subject to provisions and penalties set forth in chapter forty-six-a of this code.
(c) Engaging in the check cashing business without the license required by this article or article four of this chapter gives rise to a cause of action by the injured party to recover all fees paid and all actual damages suffered by reason of the violation.
(d) Actions brought under this article by customers for recovery of actual damages shall be brought within one year of the occurrence of the transaction.
ARTICLE 4. DEFERRED DEPOSIT LOANS.
§32A-4-1. Authority to make loans.

No person may engage in the business of making deferred deposit loans except in accordance with the provisions of this article and without having first obtained a license under this article from the Commissioner.
§32A-4-2. Short article.
This article may be cited as the "Deferred Deposit Loan Act."
§32A-4-3. Definitions.
As used in this article:
(1) "Commissioner" means the Commissioner of Banking of West Virginia or his or her designated representative.
(2) "Consumer" means a person other than an organization who is the buyer, lessee or debtor to whom credit is granted in a consumer credit transaction.
(3) "Deferred deposit loan" means a consumer loan whereby the lender, for a fee, finance charge or other consideration, does the following:
(a) Accepts a dated instrument from the consumer;
(b) Agrees to hold the instrument for a period of time prior to negotiation or deposit of the instrument; and
(c) Pays to the consumer, credits to the consumer's account or pays to another person on the consumer's behalf the amount of the instrument, less finance charges permitted by section five of this article.
(4) "Instrument" means a personal check or authorization to transfer or withdraw funds from an account signed by the consumer and made payable to a person subject to this article.
(5) "Lender" means a person licensed to engage in the business of providing deferred deposit loan services under this article.
(6) "Loan amount" means the amount financed as defined in regulation Z of the federal "Truth In Lending Act," 12 C.F.R. 226.18 (b), as amended, or as supplemented by, if applicable.
§32A-4-4. Application for license; form; content; fee.
(a) An application for a license under this article shall be submitted in writing, under oath and on a form as prescribed by the Commissioner.
(b) The application shall set forth:
(1) The full name and address of the applicant, and if the applicant is a partnership, limited liability company or association, of each member with an ownership interest of ten percent or more thereof, and if a corporation, of each officer, director and owner of ten percent or more of the capital stock thereof;
(2) The addresses of the locations of the business to be licensed; and
(3) Any other information concerning the financial responsibility, background and experience of the applicant and its members, officers, directors and principals as the Commissioner may reasonably require.
(c) At the time of making application for a deferred deposit lender license, the applicant shall:
(1) If a foreign corporation, submit a certificate from the Secretary of State certifying that the applicant is registered with the Secretary of State to transact business in this state;
(2) Submit proof that he or she has available for the operation of the business at the locations specified in the application a minimum net worth of at least twenty-five thousand dollars per licensed location, computed according to generally accepted account principles as shown by the most recent audited financial statement filed with and satisfactory to the Commissioner;
(3) File with the Commissioner a bond in favor of the state for the benefit of consumers in the amount of twenty-five thousand dollars per licensed location, in a form and with conditions as the Commissioner may prescribe, and executed by a surety company authorized to do business in this state;
(4) Pay to the Commissioner a license fee of one thousand dollars plus the actual cost of fingerprint processing, per licensed location;
(5) Submit a full and complete disclosure of any litigation or unresolved complaint filed by a governmental authority or class action lawsuit on behalf of consumers relating to the operation of the license applicant.
§32A-4-5. Refusal or issuance of license.
(a) Upon the filing of an application for a deferred deposit lender license and full compliance with section two of this article, the Commissioner shall investigate the applicant and relevant facts regarding the application. Upon the basis of the application and all other information before the Commissioner, he or she shall make and enter an order denying the application and refusing the license sought if the Commissioner finds that:
(1) The financial responsibility, character, reputation, experience and general fitness of the applicant and its members, senior officers, directors, principals and employees reasonably warrants the belief that the business will not be operated lawfully and properly, in the public interest and in accordance with law;
(2) The applicant does not have available the net worth computed according to generally accepted accounting principles required for each licensed location by the provisions of section two of this article;
(3) The applicant has done any act or has failed or refused to perform any duty or obligation for which the license sought could be suspended or revoked were it then issued and outstanding. Otherwise, the Commissioner shall issue to the applicant a deferred deposit lender license which shall entitle the applicant to engage in the business of deferred deposit lending during the period, unless sooner revoked, for which the license is issued.
(b) Every application for a deferred deposit lender license shall be passed upon and the license issued or refused within ninety days after the applicant has fully complied with the provisions of section two of this article. Whenever an application for a license under this article is denied and the license sought is refused, which refusal has become final, the Commissioner shall retain all fees to cover administrative costs of processing the application.
§32A-4-6. Licenses; place of business; changes.
(a) Each license shall state the location at which the business is to be conducted and the full name of the licensee. Each license shall be prominently displayed in each place of business of the licensee. The licensee's master license number shall be displayed on all advertising and any printed documents or disclosures created by the applicant for distribution to a consumer. No license is transferable or assignable. No licensee may offer a franchise under that license to another person.
(b) No licensee may open an additional office or relocate any place of business without prior approval of the Commissioner. Applications for approval shall be made in writing thirty days prior to any change on a form provided by the Commissioner and shall be accompanied by a payment of a one hundred fifty dollars nonrefundable application fee.
(c) Every license issued under this article shall, unless sooner suspended or revoked, expire on the thirtieth day of June of each odd numbered year and any license may be renewed in the same manner, for the same license fee or fees specified above and upon the same basis as an original license is issued in accordance with the provisions of section five of this article. All applications for the renewal of licenses shall be filed with the Commissioner at least ninety days before the expiration thereof.
§32A-4-7. Records and annual reports; examination of records; cooperative agreements.

(a) Every licensee shall maintain at each branch location or at a central location known to the Commissioner the books, accounts and records of that branch relating to all transactions within this article as are necessary to enable the Commissioner to enforce the provisions of this article. A licensee shall keep its business books, accounts and records in accordance with generally accepted accounting principles and maintain business records for thirty-six months after the date of final entry.
(b) Each licensee shall file with the Commissioner on or before the fifteenth day of August of each year a report under oath or affirmation concerning his or her business and operations in this state for the preceding fiscal year in the form prescribed by the Commissioner.
(c) The Commissioner may, at his or her discretion, make or cause to be made an examination of the books, accounts and records of every location licensed under this article for the purpose of determining whether each licensee is complying with the provisions hereof and for the purpose of verifying each licensee's annual report. The licensee shall bear the cost of any on-site examination made pursuant to this article at a rate of fifty dollars for each examiner hour expended, together with all reasonable and necessary travel expenses incurred in connection with the examination.
(d) The Commissioner may enter into cooperative, coordinating and information-sharing agreements with any other agency supervising deferred deposit lenders.
§32A-4-8. Advertising requirements.
It shall be unlawful and an unfair trade practice for any person to cause to be placed before the public in this state, directly or indirectly, any false, misleading or deceptive advertising matter pertaining to a deferred deposit lending transaction: Provided, That this section does not apply to the owner, publisher, operator or employees of any publication or radio or television station which disseminates such advertising matter without actual knowledge of the false or misleading character thereof.
§32A-4-9. Written agreement requirements.
Each deferred deposit loan transaction and renewal shall be documented by a written agreement signed by both the lender and consumer. The written agreement shall contain the name of the consumer, the transaction date, the amount of the instrument, the annual percentage rate charged and a statement of the total amount of finance charges expressed both as a dollar amount and an annual percentage rate. In addition, the written agreement shall include all disclosures required by federal and state law. The written agreement shall set a date, not more than forty-five days after the loan transaction date, upon which the instrument may be deposited or negotiated.
§32A-4-10. Notice to consumers.
A lender shall provide the following notice in a prominent place on each loan agreement in at least ten-point type:
"A deferred deposit loan is not intended to meet long-term financial needs. A deferred deposit loan should be used only to meet short-term cash needs. Renewing the deferred deposit loan rather than paying the debt in full will require additional finance charges."
§32A-4-11. Authorized finance charge.
A lender may charge a finance charge for each deferred deposit loan that may not exceed eighteen percent of the amount loaned. This charge is considered fully earned as of the date of the transaction. The lender may charge only those charges authorized in this article in connection with a deferred deposit loan.
§32A-4-12. Maximum loan amount - Right to rescind.
(a) A lender may not lend an amount greater than five hundred dollars nor shall the amount financed exceed five hundred dollars at any time to a consumer. No instrument held as a result of a deferred deposit loan may exceed five hundred ninety dollars.
(b) A consumer has the right to rescind the deferred deposit loan on or before the close of the next business day following the loan transaction
by prepay to the lender the amount financed in cash.
§32A-4-13. Multiple outstanding transactions.
(a) No deferred deposit loan may be for a term in excess of forty-five days or less than seven days.
(b) A lender may not allow any consumer to have multiple transactions involving more than two checks outstanding at any time from the lender, including the current transaction. The aggregate amount of all deferred deposit loans outstanding from the lender for a particular consumer at any given time, may not exceed five hundred dollars, exclusive of the fees allowed by this article.
(c) A deferred deposit lender may not enter into a deferred deposit transaction with a consumer if the deferred deposit loan will cause the consumer to exceed the limits set forth in this article; or if the consumer is currently in a repayment plan, as provided in section sixteen of this article, with that lender or with any other lender, or within fourteen days of the completion of the repayment plan.
(d) (1) A deferred deposit loan may not be renewed more than once. After a renewal, the consumer shall pay the debt in cash or its equivalent. If the consumer does not pay the debt in full by the due date, then the lender may deposit or negotiate the consumers instrument.
(2) Upon renewal of a deferred deposit loan, the lender may assess additional finance charges not to exceed eighteen percent of the loan amount. A deferred deposit lender may not redeem, extend or otherwise consolidate a deferred deposit agreement with the proceeds of another deferred deposit transaction made by the same or an affiliated deferred deposit lender. However, this section does not prohibit a deferred deposit lender from providing an additional advance to a consumer so long as the advance does not cause the consumer to exceed the limits set forth in this article.
(3) A transaction is completed when the lender presents the instrument for payment, debits the consumer's checking account or the consumer redeems the instrument by paying the full amount of the instrument to the holder. Once the consumer has completed the deferred deposit transaction, the consumer may enter into a new deferred deposit agreement with the lender.
§32A-4-14. Multiple outstanding transactions notice.
A lender shall provide the following notice in a prominent place on each deferred deposit loan agreement in at least ten-point type:
"State law prohibits deferred deposit loans exceeding five hundred ninety dollars total debt from a deferred deposit lender. Exceeding this amount may create financial hardships for you and your family. You have the right to rescind this transaction on or before the close of the next business day following this transaction."
§32A-4-15. Database verification.
(1) On or before the thirty-first day of December, two thousand four, the Commissioner may contract with a third-party to develop, implement and maintain a database, with real-time access through an internet connection, in accordance with the provisions of this section. The database must be accessible to the Commissioner and the licensee to ensure compliance with this article. The Commissioner shall implement a database based on an assessment of cost of service and an ability to perform the reporting requirements of this article. The Commissioner shall give strong consideration to the database's ability to provide access to additional credit information relevant to the borrower's ability to pay. The Commissioner may adopt procedures to administer and enforce the provisions of this section and to ensure that the database is used by licensees in accordance with this section. The database shall be available to the Commissioner at all times.
(2) The database must be able to do the following:
(a) Check the borrower's social security number and report to the licensee if any social security number is invalid, has been issued within the past five years prior to the date of submission, represents a deceased person or if the social security number was issued to someone other than the borrower.
(b) Validate whether a new deferred presentment transaction may be extended to the borrower based on this article, including whether a customer is presently in a repayment plan with any licensed lender or has concluded a repayment plan within the last fourteen days.
(c)Provide information necessary to ensure licensee compliance with the federal Office of Foreign Asset Control requirements.
(d) Provide access to the database twenty-four hours a day, seven days a week.
(e) The Commissioner shall give strong consideration to the database's ability to provide access to additional credit information relevant to the borrower's ability to pay. This additional data can be made available to the deferred presentment providers at their option and sole expense. This additional data could include:
(i) Past performance data on deferred presentment transactions the customer has secured within or outside of the state;
(ii) Inquiry information from deferred presentment providers outside the state that would indicate deferred presentment transactions outside the state may have been secured by the customer;
(iii) Access to other performance information about the customer in relation to other subprime industries.
(3) The Commissioner shall maintain investigative and enforcement responsibility for violations of this section and may not delegate this responsibility to any third-party provider.
(4) A licensee may charge a customer any database verification fee imposed by the database provider and approved by the Commissioner to pay the costs required to validate whether a deferred presentment transaction may be extended to the borrower pursuant to this article. Licensees may rely on the information contained in the database as accurate and are not subject to any administrative penalty or civil liability as a result of relying on inaccurate information contained in the database.
(5) The licensee must verify the following information:
(a) Prior to the implementation of the statewide common database, the licensee shall maintain an intracompany database and shall verify that a consumer does not have multiple transactions involving more than two checks outstanding at any time from the lender, including the current transaction and that the aggregate amount of all deferred deposit loans outstanding from the lender for a particular consumer at any given time does not exceed five hundred dollars, exclusive of the fees allowed by this article.
(b) Upon full implementation of the statewide common database, the licensee shall access the database established pursuant to this section.
(6) Before entering into each deferred deposit transaction, a licensee shall submit the required borrower data in the format the Commissioner reasonably requires, including the borrower's name, social security number, address, amount of the transaction, borrower check number, date of the transaction, maturity date of the transaction and any other information reasonably required by the Commissioner.
(7) Prior to implementation of the database or during times when the database is generally unavailable to licensees due to technical problems, a licensee may rely upon the written verification of the borrower in a statement provided in substantially the following form in at least ten-point type as follows:
"I am not presently in a repayment plan with any licensed lender nor have I concluded a repayment plan with any licensed lender within the last fourteen days."
Upon full implementation of the database, a licensee will enter any transactions conducted during a period when the database is unavailable to the licensee within twenty-four hours of the transaction or as soon as practical after the database is again available. The licensee will indicate that the transaction was conducted during a period when the database was unavailable.
(8)Any deferred deposit loan that has been fully paid and satisfied shall be designated as a closed transaction in the database immediately, but in no event later than eleven fifty-nine P. M. on the day the loan was fully paid and satisfied. Failure to report the successful completion of the repayment plan in a timely manner will result in an automatic civil administrative penalty of one hundred dollars for each day that the licensee fails to indicate in the database that the loan has been paid. A licensee is not subject to civil administrative penalties in the event updates to the database are not possible due to circumstances beyond the licensee's control, including the database temporarily experiencing technical problems.
(9) Inquiries to the database by licensees shall only state that a person is eligible or ineligible for a new deferred deposit loan together with a description of the reason for the determination. Only information previously registered and recorded by the licensee on the database is made available to the licensee by the database or the Commissioner. Only the person seeking the deferred deposit loan may make a direct inquiry to the designated third-party provider to request a more detailed explanation of a particular transaction that was the basis for the database's ineligibility determination. Any information regarding any person's transactional history is confidential pursuant to this section, and is not a public record or subject to public inspection.
§32A-4-16. Repayment plan.
(a)For purposes of complying with this code section, "consecutive transaction" means a deferred deposit loan transaction that is entered into within three days of a previously terminated transaction with the same lender.
(b) After a series of a deferred deposit loan transaction and three consecutive deferred deposit loan transactions, then during the fourth consecutive deferred deposit loan transaction in a series or any later consecutive deferred deposit loan in the same series, a consumer may declare to a lender or lenders the inability to repay the outstanding deferred deposit loan transaction or transactions not later than one day prior to the respective due dates of each outstanding deferred deposit loan transaction. The notice must be made in writing and must be provided to the lender, at the lender's place of business. Upon receipt of the consumer's written notice of inability to repay, the lender must refinance the remaining balance owed by the consumer at the time of the request. The loan must be rescheduled for no less than four installments, in substantially equal amounts, set up to coincide with the dates that the consumer is regularly scheduled to receive income. Notwithstanding the foregoing, the minimum period between installment payments shall be fourteen days, and the maximum term of the installment period may not exceed ninety days.
(c)The lender may impose an additional fee not to exceed eighteen percent of the loan amount in conjunction with a loan converted to installments under this section.
(d) The lender must conspicuously display in bold type a notice to the public in the lending area of each licensed location, the following statement:
"NOTICE: If you are unable to pay your deferred deposit loan, you may be entitled to request a repayment of the deferred deposit loan in installments. If you elect this option, you must notify the lender not later than one day prior to the maturity date of the deferred deposit loan. The notice must be made in writing and must be provided to the lender at the lender's place of business. You may be charged an additional fee or finance charge when the deferred deposit loan is rescheduled in installments. If the lender refuses to provide this option under the stipulations above, you should contact the West Virginia Commissioner of Banking at ."
(e) The customer may not enter into a deferred deposit loan transaction with any lender during the term of the payment plan. After payment in full of a deferred deposit loan that is scheduled to be repaid in installments, the lender may not enter into another deferred deposit loan agreement with the same debtor within fourteen days of the date the loan is completed.
(f) Upon submission by a lender of the required consumer information to the database, as provided in section fifteen of this article, the database shall notify the lender: (i) Whether the lender may extend a loan to a consumer and the allowable amount of the loan, pursuant to the provisions of this article; (ii) whether the consumer is entitled to a repayment plan under this section and if so entitled, will instruct lender to provide the consumer with the notice required in subsection (d) of this section; and/or (iii) whether the consumer is presently in a repayment plan with one or more other lenders and therefore prohibited from obtaining any additional deferred deposit loan.
§32A-4-17. Form of loan proceeds.
A lender may pay the proceeds from a deferred deposit loan to the consumer in the form of a business instrument, money order or cash, or by way of an electronic transfer of proceeds to the customer's checking account or to a stored value card or debit card. The consumer may not be charged an additional finance charge or fee for cashing the lender's business instrument.
§32A-4-18. Endorsement of instrument.
A lender may not negotiate or present an instrument for payment unless the instrument is endorsed with the actual business name of the lender.
§32A-4-19. Redemption of instrument.
Prior to the lender negotiating or presenting the instrument, the consumer has the right to redeem any instrument held by a lender as a result of a deferred deposit loan if the consumer pays the full amount of the instrument to the lender in cash or other immediately available funds.
§32A-4-20. Authorized dishonored instrument charge.
If an instrument held by a lender as a result of a deferred deposit loan is returned to the lender from a payor financial institution due to insufficient funds, a closed account or a stop-payment order, the lender has the right to exercise all civil means authorized by law to collect the face value of the instrument; except that the provisions and remedies of article three, chapter sixty-one, are not applicable to any deferred deposit loan. In addition, the lender may contract for and collect a returned instrument charge, not to exceed fifteen dollars, plus court costs and reasonable attorney fees as awarded by a court and incurred as a result of the default. However, attorney fees may not exceed the loan amount. The lender may not collect any other fees as a result of default. A returned instrument charge is not allowed if the loan proceeds instrument is dishonored by the financial institution or the consumer places a stop-payment order due to forgery or theft.
§32A-4-21. Posting of charges.
Any lender offering a deferred deposit loan shall post at any place of business where deferred deposit loans are made a notice of the charges imposed for deferred deposit loans.
§32A-4-22. Notice on assignment or sale of instruments.
Prior to sale or assignment of instruments held by the lender as a result of a deferred deposit loan, the lender shall place a notice on the instrument in at least ten-point type to read:
"This is a deferred deposit loan instrument."
§32A-4-23. Grounds for suspension or revocation of license; reinstatement of license; penalties.

(a) The Commissioner may suspend or revoke any license issued under this article if he or she finds that the licensee or any owner, director, officer, member, partner, stockholder, employee or agent of the licensee:
(1) Has knowingly violated any provision of this article or any order, decision or rule of the Commissioner lawfully made pursuant to the authority of this article; or
(2) Has knowingly made any material misstatement in the application for the license; or
(3) Does not have available or has not continuously maintained the net worth required by the provisions of section four of this article, calculated according to generally accepted accounting principles; or
(4) Has failed or refused to keep the bond required by section four of this article in full force and effect, if applicable; or
(5) In the case of a foreign corporation, does not remain qualified to do business in this state; or
(6) Has committed any fraud or engaged in any dishonest activities with respect to the deferred deposit loan business in this state or failed to disclose any of the material particulars of any loan transaction in this state to anyone entitled to the information; or
(7) This section does not limit any right the consumer may have to bring an action for a violation of section one hundred four, article six, chapter forty-six-a of this code in an individual case.
The Commissioner may also suspend or revoke the license of a licensee if he or she finds the existence of any ground upon which the license could have been refused or any ground which would be cause for refusing a license to the licensee were he or she then applying for the same. The Commissioner may also suspend or revoke the license of a licensee pursuant to his or her authority under section thirteen, article two, chapter thirty-one-a of this code.
(b) The suspension or revocation of the license of any licensee does not impair or affect the obligation of any preexisting lawful loan between the licensee and any obligor.
(c) The Commissioner shall reinstate a suspended license, or issue a new license to a licensee whose license has been revoked, if the grounds upon which any license was suspended or revoked have been eliminated or corrected and the Commissioner is satisfied that the grounds are not likely to recur, unless the licensee's license has been revoked on more than one occasion and in the event, the Commissioner may reinstate the suspended license or issue a new license in his or her reasonable discretion.
(d) In addition to the authority conferred under this section, the Commissioner may impose a fine or penalty not exceeding one thousand dollars upon any licensee required to be licensed under this article who the Commissioner determines has violated any of the provisions of this chapter. For the purposes of this section, each separate violation is subject to the fine or penalty herein prescribed and each day after the date of notification, excluding Sundays and holidays, that an unlicensed person engages in the business or holds himself or herself out to the general public as a deferred deposit lender constitutes a separate violation.
(e) Notwithstanding the forgoing, nothing in this section shall interfere with the right of a state or federally chartered bank, savings and loan association, or credit union to offer the deferred deposit loan product through a third party agent.
§32A-4-24. Notice of refusal, or suspension or revocation, of license; relinquishing license.

(a) Whenever the Commissioner refuses to issue a license, or suspends or revokes a license, he or she shall make and enter an order to that effect and shall cause a copy of the order to be served in person or by certified mail, return receipt requested or in any other manner in which process in a civil action in this state may be served, on the applicant or licensee, as the case may be.
(b) Whenever a license is suspended or revoked, the Commissioner shall in the order of suspension or revocation direct the licensee to return to the Commissioner its license. It is the duty of the licensee to comply with any order: (i) Immediately for failure to keep the bond required by the provisions of section four of this article in full force and effect or if the license was suspended following a nonappealable final order issued by the hearing examiner; or otherwise (ii) following expiration of the period provided in section twenty-five of this article in which the licensee, if not previously provided the opportunity to a hearing on the matter, may demand a hearing before the Commissioner without a demand having been timely made.
(c) The Commissioner may promulgate rules that require the licensee or the database provider to close all transactions on the database, relating to a licensee, whenever a license is suspended or revoked, following a nonappealable final order issued by the hearing examiner, or otherwise, as provided in this article.
§32A-4-25. Hearing before Commissioner; provisions pertaining to hearing.

(a) Any applicant or licensee, as the case may be, adversely affected by an order made and entered by the Commissioner in accordance with the provisions of this article, if not previously provided the opportunity to a hearing on the matter, may, in writing demand a hearing before the Commissioner. The Commissioner shall appoint a hearing examiner to conduct the hearing and prepare a recommended decision. The written demand for a hearing must be filed with the Commissioner within thirty days after the date upon which the applicant or licensee was served with a copy of the order. The timely filing of a written demand for hearing stays or suspends execution of the order in question, pending a final determination, except for an order suspending a license for failure of the licensee to maintain the bond required by this article in full force and effect. If a written demand is timely filed as aforesaid, the aggrieved party is entitled to a hearing as a matter of right.
(b) All of the pertinent provisions of article five, chapter twenty-nine-a of this code apply to and govern the hearing and the administrative procedures in connection with and following the hearing, with like effect as if the provisions of the article were set forth in extenso in this subsection.
(c) For the purpose of conducting any such hearing hereunder, the appointed hearing examiner may issue subpoenas and subpoenas duces tecum in accordance with the provisions of section one, article five, chapter twenty-nine-a of this code. All subpoenas and subpoenas duces tecum are issued and served in the manner, within the time and for the fees and shall be enforced, as specified in the section, and all of the section provisions dealing with subpoenas and subpoenas duces tecum shall apply to subpoenas and subpoenas duces tecum issued for the purpose of a hearing hereunder.
(d) Any hearing shall be held within thirty days after the date upon which the Commissioner received the timely written demand therefor unless there is a postponement or continuance. The hearing examiner may postpone or continue any hearing on his or her own motion or for good cause shown upon the application of the aggrieved party. At any hearing, the aggrieved party may represent himself or herself or be represented by any attorney-at-law admitted to practice before any circuit court of this state.
(e) After the hearing and consideration of all of the testimony, evidence and record in the case, the hearing examiner shall make and enter an order affirming, modifying or vacating the Commissioner's earlier order, or shall make and enter an order as is considered appropriate, meet and proper. The order shall be accompanied by findings of fact and conclusions of law as specified in section three, article five, chapter twenty-nine-a of this code and a copy of the order and accompanying findings and conclusions shall be served upon the aggrieved party and his or her attorney of record, if any, in person or by certified mail, return receipt requested, or in any other manner in which process in a civil action in this State may be served. The order of the hearing examiner is final unless vacated or modified on judicial review thereof in accordance with the provisions of section twenty-six of this article.
§32A-4-26. Judicial review.
(a) Any person adversely affected by a final order made and entered by the hearing examiner after hearing held in accordance with the provisions of section twenty-five of this article is entitled to judicial review thereof. All of the pertinent provisions of section four, article five, chapter twenty-nine-a of this code apply to and govern a review with like effect as if the provisions of said section were set forth in extenso in this section.
(b) The judgment of the circuit court is final unless reversed, vacated or modified on appeal to the Supreme Court of Appeals in accordance with the provisions of section one, article six, chapter twenty-nine-a of this code.
§32A-4-27. Actions to enjoin violations.
(a) Whenever it appears to the Commissioner that any person has been or is violating or is about to violate any provision of this article, any rules of the Commissioner or any final order of the Commissioner, the Commissioner may apply in the name of the state, to the circuit court of the county in which the violation or violations, or any part thereof, has occurred, is occurring or is about to occur, or the judge thereof in vacation, for an injunction against such person and any other persons who have been, are or are about to be, involved in, or in any way participating in, any practices, acts or omissions, so in violation, enjoining the person or persons from any violation or violations.
(b) Upon application by the Commissioner as aforesaid and upon a showing by the Commissioner that the practice, act or omission to be enjoined will result in irreparable harm and that no remedy at law is available, the circuit courts of this state may by mandatory or prohibitory injunction compel compliance with the provisions of this article, any rules of the Commissioner and all final orders of the Commissioner. The court may issue a temporary injunction in any case pending a decision on the merits of any application filed. (c) The judgment of the circuit court upon any application permitted by the provisions of this section is final unless reversed, vacated or modified on appeal to the Supreme Court of Appeals. Any such appeal shall be sought in the manner and within the time provided by law for appeals from circuit courts in other civil cases.
§32A-4-28. Loans made in violation of this article void; agreements to waive article void.

(a) If any deferred deposit loan is made in willful violation of the provisions of this article, except as a result of a bona fide error, the loan may be canceled by a court of competent jurisdiction.
(b) Subject to the provisions of subsection (c) of this section in which a licensed lender and consumer may enter into an arbitration agreement, any other agreement whereby the consumer waives the benefits of this article is considered to be against public policy and void.
(c) Any loan transaction in violation of this article is subject to an action, which may be brought in a circuit court having jurisdiction, by the consumer seeking damages, reasonable attorneys fees and costs: Provided, That nothing in this section prohibits a licensed lender from entering into an arbitration agreement whereby the lender and consumer agree to waive their right to file a lawsuit and proceed in court to have a jury trial to resolve their disputes, and instead agree to submit their dispute to an arbitrator for a decision.
§32A-4-29. Applicability of other provisions of this article.
The provisions of this article apply to a lender unless these provisions are inconsistent with other provisions of state law.
§32A-4-30. Criminal culpability.
A consumer may not be subject to any criminal penalty for entering into a deferred deposit loan agreement. A consumer may not be subject to any criminal penalty in the event the instrument is dishonored, unless the consumer had no account with drawee at the time the instrument was made, drawn, negotiated or delivered, subject to the provisions of article three of chapter sixty-one.
§32A-4-31. Unfair or deceptive practices.
No person may engage in unfair or deceptive acts, practices or advertising in connection with a deferred deposit loan.


NOTE: The purpose of this bill is to establish the deferred deposit loan act.

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

Article §32A-4a-1 is new therefore, strike-throughs and underscoring have been omitted.
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