H. B. 3068
(By Delegates Mezzatesta and
R. M. Thompson)
[Introduced March 29, 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; and to amended and reenact
sections one hundred twelve and one hundred thirteen, article
three, chapter forty-six-a of said code, all relating to
prohibiting late charges on consumer installment payments in
certain circumstances.
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; and that sections one hundred
twelve and one hundred thirteen, article three, chapter forty-six-a
of said code be amended and reenacted, all to read as follows.
CHAPTER 31A. BANKS AND BANKING.
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-30. Charges and interest allowed in certain cases;
negotiability of installment notes.
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
: Provided,
That no delinquency charge may be collected on an installment when
the previous installment due was paid in advance or if at least
twice the minimum amount due on an installment was paid the
previous month.
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 the note if otherwise negotiable.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT AND PROTECTION ACT.
ARTICLE 3. FINANCE CHARGES AND RELATED PROVISIONS.
§46A-3-112. Delinquency charges on precomputed consumer credit
sales or consumer loans.
(1) With respect to a precomputed consumer credit sale or
consumer loan, refinancing or consolidation, the parties may contract for a delinquency charge on any installment not paid in
full within ten days after its scheduled due date in an amount not
exceeding the greater of:
(a) An amount, not exceeding ten dollars, which is five
percent of the unpaid amount of the installment, but in any event
not less than one dollar; or
(b) An amount equivalent to the deferral charge that would be
permitted to defer the unpaid amount of the installment for the
period that it is delinquent.
(2) A delinquency charge under subdivision (a) of subsection
(1) may be collected only once on an installment however long it
remains in default. No delinquency charge may be collected with
respect to a deferred installment unless the installment is not
paid in full within ten days after its deferred due date. A
delinquency charge may be collected at the time it accrues or at
any time thereafter.
(3) No delinquency charge may be collected on an installment
which is paid in full within ten days after its scheduled or
deferred installment due date, even though an earlier maturing
installment or a delinquency or deferral charge on an earlier
installment may not have been paid in full. For purposes of this
subsection, payments shall be applied first to current
installments, then to delinquent installments, and then to
delinquency and other charges: Provided, That no delinquency
charge may be collected on an installment when the previous
installment due was paid in advance or if at least twice the minimum amount due on an installment was paid the previous month.
(4) If two installments or parts thereof of a precomputed
consumer credit sale or consumer loan are in default for ten days
or more, the creditor may elect to convert such the sale or loan
from a precomputed sale or loan to one in which the sales finance
charge or loan finance charge is based on unpaid balances. In such
event If the creditor shall make makes a rebate pursuant to the
provisions on rebate upon prepayment, refinancing or consolidation
as of the maturity date of any installment then delinquent, and
thereafter the creditor may make a sales finance charge or loan
finance charge as authorized by the appropriate provisions on sales
finance charges or loan finance charges for consumer credit sales
or consumer loans.
The amount of the rebate shall may not be reduced by the
amount of any permitted minimum charge. If the creditor proceeds
under this subsection, any delinquency or deferral charges made
with respect to installments due at or after the maturity date of
the delinquent installments shall be rebated, and no further
delinquency or deferral charges shall be made.
(5) The commissioner shall prescribe by rule the method or
procedure for the calculation of delinquency charges consistent
with the other provisions of this chapter where the precomputed
consumer credit sale or consumer loan is payable in unequal or
irregular installments.
§46A-3-113. Delinquency charges on nonprecomputed consumer credit
sales or consumer loans repayable in installments.
(1) In addition to the continuation of the sales finance
charge or loan finance charge on a delinquent installment with
respect to a nonprecomputed consumer credit sale or consumer loan,
refinancing or consolidation, repayable in installments, the
parties may contract for a delinquency charge on any installment
not paid in full within ten days after its scheduled due date in an
amount not less than one dollar or five percent of the unpaid
installment not to exceed five dollars if five percent of the
unpaid installment is greater than one dollar.
(2) A delinquency charge under subsection (1) may be collected
only once on an installment however long it remains in default. A
delinquency charge may be collected at the time it accrues or at
any time thereafter.
(3) No delinquency charge may be collected on an installment
which is paid in full within ten days after its scheduled due date,
even though an earlier maturing installment or a delinquency or
deferral charge on an earlier installment may not have been paid in
full. For purposes of this subsection, payments shall be applied
first to current installments, then to delinquent installments, and
then to delinquency and other charges: Provided, That no
delinquency charge may be collected on an installment when the
previous installment due was paid in advance or if at least twice
the minimum amount due on an installment was paid the previous
month.
NOTE: The purpose of this bill is to
prohibit late charges on
consumer installment payments
when the previous installment due was
paid in advance or if at least twice the minimum amount due on an
installment was paid the previous month.
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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