Senate Bill No. 329
(By Senators Manchin and Helmick, By Request)
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[Introduced February 13, 1995; referred to the Committee
on Banking and Insurance.]
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A BILL to amend and reenact sections one, two, four, five, six,
eight, nine, ten, eleven, twelve and eighteen, article
seventeen, chapter thirty-one of the code of West virginia,
one thousand nine hundred thirty-one, as amended; to amend
and reenact sections five, six and seven, article two,
chapter thirty-one-a of said code; and to amend and reenact
section one hundred five, article one, chapter forty-six-a
of said code, all relating to requiring the registration and
licensing of consumer lending offices other than mortgage
loan companies operating in West Virginia; and revising
secondary mortgage loan law.
Be it enacted by the Legislature of West Virginia:
That sections one, two, four, five, six, eight, nine, ten, eleven, twelve and eighteen, article seventeen, chapter
thirty-one of the code of West virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; that
sections five, six and seven, article two, chapter thirty-one-a
of said code be amended and reenacted; and that section one
hundred five, article one, chapter forty-six-a of said code be
amended and reenacted, all to read as follows:
CHAPTER 31. CORPORATIONS.
ARTICLE 17. SECONDARY MORTGAGE LOANS.
§31-17-1. Definitions and general provisions.
As used in this article:
(1) "Secondary mortgage loan" means a loan made to an
individual or partnership which is secured, in whole or in part,
by a mortgage or deed of trust upon any interest in real property
used as a dwelling with accommodations for not more than four
families, which property is subject to the lien of one or more
prior recorded mortgages, deeds of trust or vendor's liens.
(2) "Person" means an individual, partnership, association,
trust, corporation, or any other legal entity or any combination
thereof.
(3) "Lender" means any person who makes or offers to make or
accepts or offers to accept any secondary mortgage loan in the regular course of business. A person shall be deemed to be
acting in the regular course of business if he or she makes or
accepts, or offers to make or accept, more than five secondary
mortgage loans in any one calendar year.
(4) "Broker" means any person who, for a fee or commission
or other consideration, negotiates or arranges, or who offers to
negotiate or arrange, a secondary mortgage loan between a lender
and a borrower.
(5) "Brokerage fee" means the fee or commission or other
consideration charged by a broker for the services described in
subdivision subsection (4) of this section.
(6) "Principal" or "principal sum" means the sum delivered
to the borrower by the lender, or expended by the lender to third
party creditors of the borrower for the discharge of preexisting
debts of such borrower.
(7) "Charge" or "charges" "Additional Charges" means every
type of charge incident to or arising out of the making or
acceptance of a secondary mortgage loan, except finance charges
interest, including, by whatever name called, but not by way of
limitation but not limited to, official fees and taxes,
documentary charges, reasonable closing costs, insurance premiums and other such charges as coextensive with and permitted by
section one hundred nine, article three, chapter forty-six-a of
this code. title search fees, title report fees, title opinion
fees, title guarantee fees, credit report fees, investigation
costs, investigation report costs, legal fees, fees for the
preparation of instruments, placement fees, discount fees,
brokerage fees, recording fees, appraisal costs, closing costs,
and insurance costs, except as provided in subsection (c),
section eight of this article with respect to hazard insurance
(8) "Finance charge" means the sum of all interest and
similar charges payable directly or indirectly by the debtor
imposed by the lender incident to the extension of credit, as
coextensive with the definition of "loan finance charge" set
forth in section one hundred two, article one, chapter
forty-six-a of this code. "Interest" means the compensation,
other than a charge or charges, to be paid for the loan of the
principal or principal sum.
(9) "Placement fee" or "discount fee" means a deduction from
the principal or principal sum by the lender at the time of the
making or accepting of a secondary mortgage loan, which deduction
is ultimately charged to or placed upon the borrower.
(10) "Commissioner" means the commissioner of banking of
this state.
(11) "Applicant" means a person who has applied for a
lender's or broker's license.
(12) "Licensee" means any person duly licensed by the
commissioner under the provisions of this article as a lender or
broker.
§31-17-2. License required for lender or broker; exemptions.
(a) No person shall engage in this state in the business of
lender or broker unless and until he or she shall first obtain a
license to do so from the commissioner, which license remains
unexpired, unsuspended and unrevoked, and no foreign corporation
shall, notwithstanding the provisions of section seventy-nine-a,
article one of this chapter, engage in such business in this
state unless it shall qualify to hold property and transact
business in this state: Provided, That during the first ninety
days after the effective date of this article any person who has
filed an application for a lender's or broker's license and whose
application for such the license has not been denied and the
license sought refused may engage in the business of lender or
broker, as the case may be, without a lender's or broker's
license, until his or her application is ruled upon and thereafter if the same is granted and the license sought is
issued.
(b) The provisions of this article do not apply to loans
made by banking institutions, trust companies, savings and loan
associations, building and loan associations, industrial loan
companies, insurance companies, credit unions or small loan
companies pursuant to article seven-a, chapter forty-seven of
this code, or to loans made by any other lender licensed by and
under the supervision of the commissioner by authority of any
other provisions of this code any federally insured depository
institution, or to loans made by any other lender licensed by and
under the supervision of any agency of the federal government, or
to loans made by any agency of the federal government.
(c) The provisions of this article do not apply to loans
made by industrial loan company licensees where the finance
charge imposed does not exceed that allowed to secondary mortgage
licensees; nor do the provisions of section four of this article,
or any other section of this article relating to obtaining a
separate license apply to any person who holds a valid license in
this state as an industrial loan company. However, where the
finance charge rate exceeds that permitted under subdivision (1), subsection (a), section eight of this article, an industrial loan
company is governed by the restrictions placed on additional
charges, late charges, and insurance set forth in subdivision
(2), subsections (a), (b) and (c), section eight of this article,
as well as all provisions of sections eight, nine, ten, sixteen,
seventeen, eighteen and nineteen of this article, together with
the rules pertaining thereto.
§31-17-4. Applications for licenses; requirements; bonds; fees;
renewals.
(a) Application for a lender's or broker's license shall be
in writing under oath, in the form prescribed by the
commissioner, and shall contain the full name and address (both
of the residence and place of business) of the applicant and, if
the applicant is a partnership or association, of every member
thereof, and, if a corporation, of each officer, director and
owner of five percent or more of the capital stock thereof, and
such further information as the commissioner may reasonably
require. Any application shall also disclose the location in
this state at which the business of lender or broker is to be
conducted.
(b) At the time of making application for a lender's
license, the applicant therefor shall:
(1) If a foreign corporation, submit a certificate from the
secretary of state certifying that such applicant has qualified
to hold property and transact business in this state;
(2) Submit proof that he or she has available for the
operation of the business at the location specified in the
application net assets of at least two hundred fifty thousand
dollars;
(3) File with the commissioner a bond in favor of the state
in the amount of one hundred thousand dollars, in such form and
with such conditions as the commissioner may prescribe, and
executed by a surety company authorized to do business in this
state; and
(4) Pay to the commissioner a license fee of one thousand
dollars and an investigation fee of two hundred fifty dollars. If
the commissioner shall determine that an investigation outside
this state is required to ascertain facts or information relative
to the applicant or information set forth in the application, the
applicant may be required to advance sufficient funds to pay the
estimated cost of such the investigation. An itemized statement
of the actual cost of the investigation outside this state shall
be furnished to the applicant by the commissioner, and the applicant shall pay or shall have returned to him or her, as the
case may be, the difference between his or her payment in advance
of the estimated cost and the actual cost of such the
investigation.
(c) At the time of making application for a broker's
license, the applicant therefor shall:
(1) If a foreign corporation, submit a certificate from the
secretary of state certifying that such the applicant has
qualified to hold property and transact business in this state;
(2) Submit proof that he or she has available for the
operation of the business at the location specified in the
application net assets of at least ten thousand dollars;
(3) File with the commissioner a bond in favor of the state
in the amount of ten thousand dollars, in such form and with such
conditions as the commissioner may prescribe, and executed by a
surety company authorized to do business in this state; and
(4) Pay to the commissioner a license fee of one hundred
dollars and an investigation fee of fifty dollars. Every
individual applicant for a broker's license, and if the applicant
is a partnership or association, every member thereof, shall be
at the time of the filing of the application for such license a bona fide resident of this state and shall have been such a
resident for a period of at least one year prior to the date of
such filing. In the case of a corporate applicant for a broker's
license, the owner or owners of at least fifty-one percent of the
capital stock of such corporation shall be at the time of the
filing of the application for such license bona fide residents of
this state and shall have been such residents for a period of at
least one year prior to the date of such filing.
(d) The aggregate liability of the surety on any bond given
pursuant to the provisions of this section shall in no event
exceed the amount of such bond.
§31-17-5. Refusal or issuance of license.
(a) Upon an applicant's full compliance with the provisions
of section four of this article, the commissioner shall
investigate the relevant facts with regard to such the applicant
and his or her application for a lender's or broker's license, as
the case may be. Upon the basis of the application and all other
information before him or her, the commissioner shall make and
enter an order denying the application and refusing the license
sought if the commissioner finds that:
(1) The applicant does not have available the net assets required by the provisions of section four of this article;
(2) The applicant (individually, if an individual, or the
partners, if a partnership, or the officers and directors, if a
corporation) is of such character and reputation as reasonably to
warrant the belief that the business will not be operated
lawfully and properly in accordance with the provisions of this
article;
(3) In the case of an application for a broker's license,
the applicant does not meet the residency qualifications
specified in said section four;
(4) (3) The applicant has habitually defaulted on financial
obligations; or
(5) (4) 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
lender's or broker's license which shall entitle such the
applicant to engage in the business of lender or broker, as the
case may be, during the period, unless sooner suspended or
revoked, for which the license is issued.
(b) Every application for a lender's or broker's license
shall be passed upon and the license issued or refused within
forty-five days after the applicant therefor has fully complied
with the provisions of section four of this article. Under no
circumstances whatever shall the same person hold both a lender's
and a broker's license. Whenever an application for a lender's
or broker's license is denied and the license sought is refused,
which refusal has become final, the commissioner shall retain the
investigation fee or fees but shall return the license fee to the
applicant.
§31-17-6. Minimum net assets to be maintained; bond to be kept
in full force and effect; broker residency
qualifications to be maintained; foreign
corporation to remain qualified to do business in
this state.
At all times, a licensee shall: (1) Have available the net
assets required by the provisions of section four of this
article; (2) keep the bond required by said section four in full
force and effect; (3) if such licensee be a broker, continue to
meet the residency qualifications set forth in said section four,
and (4) (3) if such the licensee be a foreign corporation, remain
qualified to hold property and transact business in this state.
§31-17-8. Maximum interest and charge or charges; insurance;
other prohibitions.
(a) A secondary mortgage loan shall be payable over a period
not in excess of sixty months, and The maximum rate of interest
finance charges and maximum total additional charge or charges on
or in connection with any such secondary mortgage loan shall be
as follows:
(1) The maximum rate of interest on the principal sum
finance charge shall not exceed eighteen percent per year on the
unpaid balance of the amount financed: be six dollars upon each
one hundred dollars for a year, and proportionately for a greater
or lesser sum, or for a longer or shorter time Provided, That
the borrower shall have the right to prepay anticipate payment of
his or her debt, in whole or in part, at any time and shall
receive a rebate for any unearned interest finance charge, which
rebate shall be computed in accordance with the "Standard Rule of
78" section one hundred eleven, article three, chapter
forty-six-a of this code: Provided, however, That the sum of any
points, investigation fees and loan origination fees may not
exceed three percent of the principal amount loaned;
(2) The total of additional charge or charges as permitted
by this section and by section one hundred nine, article three, chapter forty-six-a of this code, excluding official fees and
taxes and hazard insurance, may equal, but shall not be in excess
of, ten percent of the principal sum: Provided, That where the
principal sum at the inception of the secondary mortgage loan is
one thousand five hundred dollars or less, the total additional
charge or charges, excluding official fees, taxes and hazard
insurance, may exceed said ten percent, but shall not be in
excess of one hundred fifty dollars: Provided, however, That
such charges may not be imposed more often than once each
thirty-six months by renewal of a secondary mortgage loan or an
additional secondary mortgage loan on the same residential
property.
(b) Notwithstanding the provisions of subsection (a) of this
section, a delinquent or "late charge" not exceeding five percent
of the monthly payment, may be charged on any installment made
fifteen ten or more days after the regularly scheduled due date
in accordance with section one hundred twelve or section one
hundred thirteen, article three, chapter forty-six-a of this
code, whichever is applicable. Said The charge to may be made
only once on any one installment during the term of the secondary
mortgage loan.
(c) Hazard insurance may be required by the lender of the
borrower and the premium shall not be considered as a charge.
Decreasing term life insurance, in an amount not exceeding the
amount of the secondary mortgage loan and for a period not
exceeding the term of such the loan, and accident and health
insurance in an amount sufficient to make the monthly payments
due on said loan in the event of the disability of the borrower
and for a period not exceeding the life of said loan, may also be
required offered by the lender of the borrower and the premium
therefor may be financed. The charges for any insurance if
included in the loan, may bear interest, and may be included in
computing the charge or charges, but shall not exceed the
standard rate approved by the insurance commissioner for such the
insurance. Proof of all insurance in connection with secondary
mortgage loans subject to this article shall be furnished to the
borrower within ten days from and after the date of application
therefor by said borrower. In any secondary loan transaction in
which the lender offers to sell or provide insurance to the
borrower or cosigner in conjunction with the loan, the total cost
of all the insurance which may be financed by that lender may not
exceed twenty-five percent of the total amount financed.
(d) No application fee may be allowed whether or not the
secondary mortgage loan is consummated; however, the borrower may
be required to reimburse the lender for actual expenses incurred
by the lender after acceptance and approval of a secondary
mortgage loan proposal made in accordance with the provisions of
this article which is not consummated because of:
(1) The borrower's wilful willful failure to close said
loan; or
(2) The borrower's false or fraudulent representation of a
material fact which prevents closing of said loan as proposed.
(e) No licensee shall make, offer to make, accept or offer
to accept, any secondary mortgage loan except on the terms and
conditions authorized in this article.
(f) No licensee shall induce or permit any husband and wife,
jointly and severally, to become obligated to such the licensee
under this article, directly or contingently, or both, under more
than one secondary mortgage loan at the same time for the purpose
or with the result of obtaining greater charges than would
otherwise be permitted under the provisions of this article.
(g) No instrument evidencing or securing a secondary
mortgage loan shall contain:
(1) Any acceleration clause under which any part or all of
the unpaid balance of the obligation not yet matured may be
declared due and payable because the holder deems himself to be
insecure;
(2) Any power of attorney to confess judgment or any other
power of attorney;
(3) Any provision whereby the borrower waives any rights
accruing to him under the provisions of this article;
(4) Any requirement that more than one installment be
payable in any one installment period, or that the amount of any
installment be greater or less than that of any other
installment, except for the final installment which may be in a
lesser amount, or unless the loan is structured as a revolving
line of credit; or
(5) Any assignment of or order for the payment of any
salary, wages, commissions, or other compensation for services,
or any part thereof, earned or to be earned.
§31-17-9. Disclosure; closing statements; other records
required.
(a) Any licensee or person making on his or her own behalf,
or as agent, broker, or in other representative capacity on behalf of any other person, a secondary mortgage loan, whether
lawfully or unlawfully, shall at the time of the closing furnish
to the borrower a complete and itemized closing statement which
shall show in detail:
(1) The amount and date of the note or secondary mortgage
loan contract and the date of maturity;
(2) The nature of the security;
(3) The interest and charges finance charge rate per annum
and the itemized amount of finance charges and additional
charges;
(4) The amount financed and total of payments; principal of
the loan before adding the interest and charges;
(5) Disposition of the principal;
(6) A description of the payment schedule;
(7) The terms on which additional advances, if any, will be
made;
(8) The charge to be imposed for past due installments;
(9) A description and the cost of insurance required by the
lender or purchased by the borrower in connection with the
secondary mortgage loan;
(10) The name and address of the borrower and of the lender; and
(11) That the borrower may prepay the secondary mortgage
loan, in whole or in part, on any installment date, and that the
borrower will receive a rebate in full for any unearned finance
charge. interest prepayment
Such detailed closing statement shall be signed by the
lender or his or her representative, and a completed and signed
copy thereof shall be retained by the lender and made available
at all reasonable times to the borrower, the borrower's successor
in interest to the residential property, or the authorized agent
of the borrower or the borrower's successor, until such the time
as the indebtedness shall be satisfied in full.
The commissioner may, from time to time, by rules and
regulations prescribe additional information to be included in a
closing statement.
(b) Upon written request from the borrower, the holder of a
secondary mortgage loan instrument shall deliver to the borrower,
within ten days from and after receipt of such the written
request, a statement of the borrower's account showing the date
and amount of all payments made or credited to the account and
the total unpaid balance. Not more than two such statements shall be requested in any twelve-month period.
(c) Upon satisfaction of a secondary mortgage loan
obligation in full, the holder of the instrument evidencing or
securing such the obligation shall deliver to the borrower a
recordable release and all writings signed by the borrower which
were incident to applying for and obtaining such the secondary
mortgage loan.
§31-17-10. 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 secondary mortgage loans or the
availability thereof: Provided, That this section shall 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.
§31-17-11. Records and reports; examination of records;
analysis.
(a) Every licensee shall maintain at his or her place of
business in this state, if any, or if he or she has no place of
business in this state at his or her principal place of business outside this state, such books, accounts and records relating to
all transactions within this article as are necessary to enable
the commissioner to enforce the provisions of this article. All
such the books, accounts and records shall be preserved,
exhibited to the commissioner and kept available as provided
herein for such the reasonable period of time as the commissioner
may by rules and regulations require. The commissioner is hereby
authorized to prescribe by rules and regulations the minimum
information to be shown in such the books, accounts and records.
(b) Each licensee shall file with the commissioner on or
before the fifteenth of April of each year a report under oath or
affirmation concerning his or her business and operations in this
state for the preceding license year in the form prescribed by
the commissioner, which shall show the annual volume and
outstanding amounts of secondary mortgage loans, the
classification of such the secondary mortgage loans by size and
by security, and the gross income from, and expenses properly
chargeable to, such secondary mortgage loans.
(c) At least once each year The commissioner shall may, at
his or her discretion, make or cause to be made an examination of
the books, accounts and records of every licensee pertaining to secondary mortgage loans made in this state under the provisions
of 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. If the
examination is made outside this state, the licensee shall pay
the cost thereof in like manner as applicants are required to pay
the cost of investigations outside this state.
(d) The commissioner shall publish annually an analysis of
the information furnished in accordance with the provisions of
subsection (b) of this section, but the individual reports shall
not be public records and shall not be open to public inspection.
§31-17-12. Grounds for suspension or revocation of license;
suspension and revocation generally; reinstatement
or new license.
(a) The commissioner may suspend or revoke any license
issued hereunder if he or she finds that the licensee and/or any
owner, director, officer, member, partner, stockholder, employee
or agent of such licensee:
(1) Has knowingly violated any provision of this article or
any order, decision or rule and regulation of the commissioner
lawfully made pursuant to the authority of this article; or
(2) Has knowingly made any material misstatement in the application for such license; or
(3) Does not have available the net assets required by the
provisions of section four of this article; or
(4) Has failed or refused to keep the bond required by
section four of this article in full force and effect; or
(5) In the case of a broker's license, does not continue to
meet the residency qualifications set forth in section four of
this article; or
(6) (5) In the case of a foreign corporation, does not
remain qualified to do business in this state; or
(7) (6) Has committed any fraud or engaged in any dishonest
activities with respect to such secondary mortgage loan business
in this state, or failed to disclose any of the material
particulars of any secondary mortgage loan transaction in this
state to anyone entitled to such the information; or
(8) (7) Has otherwise demonstrated bad faith, dishonesty or
any other quality indicating that the business of the licensee in
this state has not been or will not be conducted honestly or
fairly within the purpose of this article.
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 such licensee were he or
she then applying for the same.
(b) The suspension or revocation of the license of any
licensee shall not impair or affect the obligation of any
preexisting lawful secondary mortgage loan between such licensee
and any obligor.
(c) The commissioner may reinstate a suspended license, or
issue a new license to a licensee whose license has been revoked,
if the grounds upon which any such license was suspended or
revoked have been eliminated or corrected and the commissioner is
satisfied that such the grounds are not likely to recur.
§31-17-18. Violations and penalties.
(a) Any person, or any member, officer, director, agent or
employee of such person, who violates or participates in the
violation of this article shall be is guilty of a misdemeanor,
and, upon conviction thereof, shall be punished by a fine of
fined not more than five hundred dollars, or by imprisonment of
imprisoned in a county or regional jail not more than six months,
or by both, such fine and imprisonment, in the discretion of the
court fined and imprisoned.
(b) The penalties and remedies embodied in this article are
not exclusive, but are cumulative with other applicable
provisions of this code, including, but not limited to, the
consumer protection laws in chapter forty-six-a of this code.
CHAPTER 31A. BANKS AND BANKING.
ARTICLE 2. DIVISION OF BANKING.
§31A-2-5. Certificate or license to engage in business;
filing of amendments to charter; bylaws and foreign
statutes.
(a) No person shall engage or continue in the business of
a financial institution in this state without a license or
certificate to do so issued in accordance with this section, or
other applicable law, which license or certificate remains
unsuspended, unexpired and unrevoked except that a corporation
which proposes to apply for such the license or certificate may
secure its charter, adopt bylaws, elect its directors and
officers and perfect its organization.
(b) No person shall operate an office in West Virginia
which regularly makes consumer loans in this state other than
first mortgage loans unless they are a financial institution,
licensed pawnbroker or a federally insured depository institution
authorized and qualified to do business in this state. The purchase of consumer paper does not constitute the making of
consumer loans for the purposes of this subsection, unless the
purchase is made by a business affiliated with the credit
provider pursuant to a standing arrangement.
(b) (c) Application for such the license or certificate
shall be upon such forms and contain such the information as the
commissioner may prescribe. In connection with such the
applications every corporate financial institution shall file a
certified copy of its charter and bylaws, a statement as to the
amount of capital that has been subscribed and paid in and a
statement of its financial condition duly verified under oath by
its president or vice president and its cashier or secretary as
the case may be and every financial institution other than a
corporation shall file a verified statement of its financial
condition.
(c) (d) If the application be that of a banking
institution, the commissioner of banking shall examine the
information, documents and statements submitted and, if he or she
finds that such banking institution has adopted bylaws which
provide practical, safe, just and equitable rules and methods for
the management of its business and it has complied in all respects with the provisions of this chapter and other applicable
laws, he or she shall issue to it a certificate or license
permitting it to engage in business. If the application be that
of a financial institution other than a banking institution, the
commissioner of banking shall examine the information, documents
and statements submitted, and, if he or she finds that such the
financial institution has adequate resources for the proposed
business and has provided practical, safe, just and equitable
rules and methods for the management of its business, and it has
complied in all respects with the provisions of this chapter and
other applicable laws, and that the public convenience and
advantage will be promoted by the issuance of a certificate or
license thereto, he or she shall issue to it a certificate or
license permitting it to engage in business: Provided, That any
supervised lender which is operating in good standing in
accordance with the provisions of article four, chapter
forty-six-a shall be presumed to have established that the public
convenience and advantage will be promoted in regard to its
application for a certificate of authority to operate as an
industrial loan company as defined in article seven, chapter
thirty-one of this code in the same location for which it is licensed as a supervised lender. Such certificate or license
shall be preserved and the original or copy thereof displayed in
all the West Virginia place places of business of such the
banking or other financial institution.
(d) (e) In addition to the requirements of subsection
subsections (b) and (c) of this section, every foreign
corporation applying for a license or certificate to engage in
the business of a financial institution in this state shall file
with the commissioner of banking a copy of the laws of the
jurisdiction bylaws under which it operates, together with a cite
to the statutes of the jurisdiction where it is organized which
pertain to its organization and powers and the conduct of its
business. The commissioner shall examine the information,
documents and statements submitted by such the foreign
corporation and if he or she finds that they provide practical,
safe, just and equitable rules and methods for the management of
the business of the corporation, that it has adequate resources
for the proposed business and it has complied in all respects
with the provisions of this chapter and other applicable laws,
and that the public convenience and advantage will be promoted by
the issuance of a license or certificate thereto, he or she shall issue to such the corporation a certificate or license permitting
it to engage in business in this state, which certificate or
license shall authorize such corporation to engage in the
business of the type of financial institution specified therein,
until the thirtieth day of the following June. Thereafter a new
certificate or license shall be secured annually by any such
foreign corporation, except where annual renewal of the license
or certificate is specifically not required for the type of
institution involved. The fee for the original and each
additional license or certificate issued to a foreign corporation
shall be one hundred thousand dollars, unless otherwise provided
by statute. A verified statement of the financial condition of
every such foreign corporation shall be filed with the
commissioner before the issuance of each annual certificate or
license. Such certificate or license shall be preserved and the
original or copy thereof displayed in the West Virginia place of
business of such the corporation.
(f) Unless the institution is a federally insured
depository institution or it is otherwise provided for by
statute, a new certificate or license shall be secured annually
by all domestic state financial institutions, and the fee for the original and each additional license or certificate shall be one
thousand dollars.
(e) (g) No amendment of the charter or bylaws of any
domestic or foreign corporation engaging in business in this
state as a financial institution shall become effective until the
proposed change shall have been submitted to and approved by the
commissioner of banking; but, if the commissioner does not
disapprove such the proposed change within twenty days after it
is received by him or her, it shall be deemed to have been
approved. A certified letter notifying the commissioner and
citing the law copy of the amendment of amending any statute of
another state governing such a foreign corporation shall be filed
with sent to the commissioner of banking by such the foreign
corporation within thirty days after such the amendment becomes
effective in such the other state.
(f) (h) Nothing contained in this code shall authorize any
person to engage in the banking business in this state except
corporations chartered to conduct a banking business under the
laws of West Virginia and which hold a license or certificate to
do so issued under this section or associations authorized to
conduct a banking business in West Virginia under the laws of the United States and having their principal place of business in
this state.
§31A-2-6. Commissioner's examinations of financial institution;
reports; records; communications from commissioner
to institution; examination by federal agency in
lieu of commissioner's examination.
The commissioner of banking shall make, at least once every
eighteen months, a thorough examination of all the books,
accounts, records and papers of every depository financial
institution. He or she shall carefully examine all of the assets
of each such institution, including its notes, drafts, checks,
mortgages, securities deposited to assure the payment of debts
unto it, and all papers, documents and records showing, or in any
manner relating to, its business affairs, and shall ascertain the
full amount and the nature in detail of all of its assets and
liabilities. The commissioner may also, at his or her
discretion, make or cause to be made, an annual or periodic
examination of the books, accounts, records and papers of other
financial institutions under his or her supervision for the
purposes of determining compliance with applicable consumer and
credit lending laws, and verifying information provided in any
license application or annual report submitted to the commissioner. The commissioner may also make such examination of
any subsidiaries or affiliates of a financial institution as he
or she may deem necessary to ascertain the financial condition of
such the financial institution, the relations between such the
financial institution and its subsidiaries and affiliates and the
effect of such relations upon the affairs of such financial
institution. A full report of every such examination shall be
made and filed and preserved in the office of the commissioner
and a copy thereof forthwith mailed to the institution examined.
Every such institution shall retain all of its records of final
entry for such the period of time as required in section
thirty-five, article four of this chapter for banking
institutions.
Every official communication from the commissioner to any
such institution, or to any officer thereof, relating to an
examination or an investigation of the affairs of such the
institution conducted by the commissioner or containing
suggestions or recommendations as to the manner of conducting the
business of the institution, shall be read to the board of
directors at the next meeting after the receipt thereof, and the
president, or other executive officer, of the institution shall forthwith notify the commissioner in writing of the presentation
and reading of such the communication and of any action taken
thereon by the institution.
The commissioner of banking, in his or her discretion, may
(a) accept a copy of a reasonably current examination of any
banking institution made by the federal deposit insurance
corporation or the federal reserve system in lieu of an
examination of such the banking institution required or
authorized to be made by the laws of this state, and the
commissioner may furnish to the federal deposit insurance
corporation or the federal reserve system or to any official or
examiner thereof, any copy or copies of the commissioner's
examinations of and reports on such the banking institutions;
(b) accept a copy of a reasonably current examination of any
building and loan association made by the federal home loan bank
board, a federal home loan bank or the federal savings and loan
insurance corporation, in lieu of an examination of such building
and loan association required or authorized to be made by the
laws of this state, and the commissioner may furnish to the
federal home loan bank or any of its member banks or to the
federal savings and loan insurance corporation or any official or examiner thereof, any copy or copies of the commissioner's
examination and reports on such building and loan associations
but nothing herein shall be construed to limit the duty and
responsibility of banking institutions or building and loan
associations to comply with all provisions of law relating to
examinations and reports, nor to limit the powers and authority
of the commissioner of banking with reference to examinations and
reports under existing laws.
§31A-2-7. Duties of officers, employees, etc., of financial
institution in connection with examination; examination
under oath; offenses and penalties.
All officers, directors, employees and other persons
connected with any financial institution, upon request of the
commissioner of banking, or his or her duly authorized
representative, shall furnish and give full access to all of the
books, papers, notes, bills and other evidences of debts due to
the institution; produce and furnish all documents, records,
writings and papers relating to the business of the institution
which the commissioner is required authorized to examine;
disclose fully, accurately and in detail all of the debts and
liabilities of the institution; and furnish such the clerical aid
and assistance as may be required in the performance of the commissioner's duties as provided by law. The commissioner or
his or her representative, as the case may be, shall have the
right and authority to administer oaths and to examine under oath
each officer, director, employee or other person connected with
the institution concerning any matter and thing pertaining to the
business and condition of such the institution.
Any officer, director, employee or other person connected
with any such institution who wilfully willfully fails or refuses
to so furnish the documents, papers, materials or information as
herein required or who wilfully willfully fails to discharge any
other duty or obligation as herein provided shall be guilty of a
misdemeanor, and, upon conviction thereof, shall be subject to
the penalties provided in section fifteen of article eight of
this chapter.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT
AND PROTECTION ACT.
ARTICLE 1. SHORT TITLE, DEFINITIONS AND GENERAL PROVISIONS.
§46A-1-105. Exclusions.
(a) This chapter does not apply to:
(1) Extensions of credit to government or governmental
agencies or instrumentalities;
(2) The sale of insurance by an insurer, except as otherwise provided in this chapter;
(3) Transactions under public utility or common carrier
tariffs if a subdivision or agency of this state or of the United
States regulates the charges for the services involved, the
charges for delayed payment and any discount allowed for early
payment; or
(4) Licensed pawnbrokers. and secondary mortgage lenders
licensed under the provisions of article seventeen, chapter
thirty-one of this code
(b) Secondary mortgage lender licensees are excluded from
the provisions of this chapter to the extent these provisions
directly conflict with any section of article seventeen, chapter
thirty-one of this code.
NOTE: The purpose of this bill is to require licensing with
the Commissioner of Banking of all persons who operate an office
within the state which makes consumer loans other than first
mortgage loans; revise the secondary mortgage loan act to end
unnecessary restrictions on such lending and conform its
provisions to the extent possible to general consumer credit
laws.
Strike-throughs indicate language that would be stricken
from present law, and underscoring indicates new language that
would be added.