Senate Bill No. 6

(By Senators Tomblin (Mr. President) and Boley

By Request of the Executive)
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[Introduced July 14, 1996; referred to the Committee
.]
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A BILL to amend and reenact sections one, two, four, five, six, eight, nine, ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen and eighteen, article seventeen, chapter thirty-one of the code of West Virginia, one thousand nine hundred thirty-one, as amended; to further amend said article by adding thereto a new section, designated section twenty; to amend and reenact sections six and seven, article two, chapter thirty-one-a of said code; to further amend said article by adding thereto a new section, designated section sixteen; and to amend and reenact section one hundred five, article one, chapter forty-six-a of said code, all generally relating to licensure of consumer lending offices, banking institutions and secondary mortgage companies operating in West Virginia; changing definitions; clarifying that license requirements for lenders or brokers do not apply to federally insured depository institutions; requiring annual license renewal; removing residence requirements for licensure of lenders and brokers and establishing licensing requirements for out-of-state lenders and brokers wishing to do business in West Virginia; modifying the allowable amount of finance and other charges and extending the maximum time period for second mortgage loans; requiring the banking commissioner to study the effect of extending the maximum time period for second mortgage loans; prohibiting certain charges from being assessed if second mortgage is refinanced or another loan is obtained on same property within twenty-four months and modifying allowable charges for secondary mortgages; requiring lender to provide proof of insurance to borrower within thirty days; allowing lenders to provide revolving lines of credit in certain circumstances; prohibiting brokers from receiving payment prior to completion of services unless all requirements of article six, chapter forty-six-a of this code are met; making the annual review of licensee's books and accounts by the commissioner discretionary; making it grounds to revoke or suspend licenses if lender makes consumer loans with intent to acquire secured property; modifying licensee's duty to relinquish license following suspension or revocation; modifying hearing requirements; providing that the penalties in article seventeen, chapter thirty-one of this code are cumulative; changing the periodic examination requirements for financial institutions; making the effective date of the amendments to chapters thirty-one and thirty-one-a of this code the seventh day of June, one thousand nine hundred ninety-six; establishing a per hour fee amount that the commissioner of banking may charge financial institutions for periodic record reviews; and exempting secondary mortgage lender and broker licensees from the provisions of chapter forty-six-a of this code when those provisions conflict with the provisions of chapter thirty-one or thirty-one-a of this code.

Be it enacted by the Legislature of West Virginia:
That sections one, two, four, five, six, eight, nine, ten, eleven, twelve, thirteen, fourteen, fifteen, sixteen 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 said article be further amended by adding thereto a new section, designated section twenty; that sections six and seven, article two, chapter thirty-one-a of said code be amended and reenacted; that said article be further amended by adding thereto a new section, designated section sixteen; 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 (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. total of:
(a) The net amount paid to, receivable by or paid or payable for the account of the debtor;
(b) The amount of any discount excluded from the loan finance charge; and
(c) To the extent that payment is deferred:
(i) Amounts actually paid or to be paid by the lender for registration, certificate of title or license fees if not included in paragraph (a) of this subdivision; and
(ii) Additional charges permitted by this article.
(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 interest, including, by whatever name called, but not by way of limitation, 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 finance charges, including, but not limited to, official fees and taxes, reasonable closing costs and certain documentary charges and insurance premiums and other charges which definition is to be read in conjunction with, and permitted by section one hundred nine, article three, chapter forty-six-a of this code.
(8) "Interest" means the compensation, other than a charge or charges, to be paid for the loan of the principal or principal sum "Finance charge" means the sum of all interest and similar charges payable directly or indirectly by the debtor imposed or collected 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.
(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) (9) "Commissioner" means the commissioner of banking of this state.
(11) (10) "Applicant" means a person who has applied for a lender's or broker's license.
(12) (11) "Licensee" means any person duly licensed by the commissioner under the provisions of this article as a lender or broker.
(12) "Amount financed" means the total of the following items to the extent that payment is deferred:
(a) The cash price of the goods, services or interest in land, less the amount of any down payment, whether made in cash or in property traded in;
(b) The amount actually paid or to be paid by the seller pursuant to an agreement with the buyer to discharge a security interest in or a lien on property traded in; and
(c) If not included in the cash price:
(i) Any applicable sales, use, privilege, excise or documentary stamp taxes;
(ii) Amounts actually paid or to be paid by the seller for registration, certificate of title or license fees; and
(iii) Additional charges permitted by this article.
§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 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 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 any federally insured depository institution, 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 or licensed by and under the supervision of any agency of the federal government, or to loans made by any agency of the federal government , or on behalf of, any agency or instrumentality of this state or federal government or by a nonprofit community development organization which loans are subject to federal or state government supervision and oversight.
§31-17-4. Applications for licenses; requirements; bonds; fees; renewals.

(a) Application for a lender's or broker's license shall be each year be submitted 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; and
(5) Submit proof that the applicant is a business in good standing in its state of incorporation, or if not a corporation, its state of business registration, and 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.
(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 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 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 ; and
(5) Submit proof that the applicant is a business in good standing in its state of incorporation, or if not a corporation, its state of business registration, and 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.
(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.
(e) Nonresident lenders and brokers licensed under this article by their acceptance of such license acknowledge that they are subject to the jurisdiction of the courts of West Virginia and the service of process pursuant to section one hundred thirty-seven, article two, chapter forty-six-a of this code and section thirty-three, article three, chapter fifty-six of this code.
§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; 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) if such; and (3) if the licensee be a foreign corporation, remain qualified to hold property and transact business in this state.
§31-17-8. Maximum period of loan; maximum interest and charge or charges; insurance; other prohibitions.

(a) A The maximum rate of finance charges and maximum total additional charges on or in connection with any such secondary mortgage loan shall be payable over a period not in excess of sixty months, and the maximum rate of interest and maximum total 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 shall 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 finance charge shall not exceed eighteen percent per year on the unpaid balance of the amount financed: Provided, That the borrower shall have the right to anticipate payment of his prepay his or her debt in whole or in part at any time and shall receive a rebate for any unearned interest finance charge, exclusive of any points, investigation fees and loan origination fees, 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 charged may not exceed five percent of the amount financed;
(2) The total charge or charges A secondary mortgage loan shall be payable over a period not to exceed sixty months. This sixty-month maximum loan period is temporarily extended, as of the effective date of this section, to one hundred twenty months until the first day of July, two thousand, at which time it reverts to the sixty-month maximum loan limit time period. The commissioner shall report to the Legislature by the first day of July, one thousand nine hundred ninety-nine, on the impact of this extended loan time period upon the citizens of this state. The report shall include analysis of the impact of this loan period extension on the secondary mortgage industry in this state, impacts of this extension on various socio-economic classes of citizens of this state, statistics regarding the number of homes which have been foreclosed upon based on this extension and the effect of this extension to any other citizens of this state. The commissioner may require any licensee to provide the commissioner with any information necessary to make this report;
(3) The total of additional 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 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 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 no additional charges other than official fees, taxes and hazard insurance may be required by the same or affiliated lender more often than once each thirty-six twenty-four months by renewal of a secondary mortgage loan or an additional secondary mortgage loan secured by the same residential property.;
(4) Where loan origination fees, investigation fees or points have been charged by the licensee, such fees may not be imposed again by the same or affiliated lender in any refinancing of that loan or any additional loan on that property made within twenty-four months thereof, unless these earlier charges have been rebated by payment or credit to the consumer under the actuarial method, or the total of the earlier and current changes does not exceed the five percent amount.
(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, said charge to in accordance with section one hundred twelve or one hundred thirteen, article three, chapter forty-six-a of this code, whichever is applicable. The charge may to 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, as provided in section one hundred nine, article three, chapter forty-six-a of this code. 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 to the borrower and the premium therefor, if included in the loan, may bear interest, and may be included in computing the charge or charges, but may be financed. The charges for any insurance shall not exceed the standard rate approved by the insurance commissioner for such insurance. Proof of all insurance in connection with secondary mortgage loans subject to this article shall be furnished to the borrower within ten thirty days from and after the date of application therefor by said borrower.
(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 having no set final payment date; 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.
(h) No broker licensee shall charge a borrower or receive from a borrower money or other valuable consideration before completing performance of all services the broker has agreed to perform for the borrower, unless the licensee also registers and complies with all requirements set forth for credit service organizations in article six-c, chapter forty-six-a of this code, including all additional bonding requirements as may be established therein.
(i) No lender licensee shall make revolving loans secured by a secondary mortgage lien for the retail purchase of consumer goods and services by use of a lender credit card.
§31-17-9. Disclosure; closing statements; other records required.
(a) Any licensee or person making on his 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 principal of the loan before adding the interest and charges; amount financed and total of payments;
(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 interest prepayment unearned finance charge.
Such detailed closing statement shall be signed by the lender or his 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 day 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 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) 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. It shall be a demonstration of bad faith and an unfair or deceptive act or practice to engage in a pattern of making loans where the consumer has insufficient sources of income to timely repay the debt, and the lender had the primary intent to acquire the property upon default rather than to derive profit from the loan. This section shall 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 such licensee were he 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 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.
§31-17-13. Notice of refusal, or suspension or revocation, of license; relinquishing license.

(a) Whenever the commissioner shall refuse to issue a license, or shall suspend or revoke a license, he shall make and enter an order to that effect and shall cause a copy of such 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 his its license. It shall be the duty of the licensee to comply with any such order following expiration of the period provided in section fourteen of this article in which such licensee may demand a hearing before the commissioner without such demand having been timely made, and immediately: (i) Immediately if the license was suspended either following a hearing or for failure to keep the bond required by the provisions of section four of this article in full force and effect; or otherwise (ii) following expiration of the period provided in section fourteen of this article in which such licensee, if not previously provided the opportunity to a hearing on the matter, may demand a hearing before the commissioner without such demand having been timely made.
§31-17-14. 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 section thirteen 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 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 such order. The timely filing of a written demand for hearing shall stay or suspend execution of the order in question, pending a final determination, except for an order suspending a license for failure of the licensee to keep maintain the bond required by the provisions of section four of this article in full force and effect. If a written demand is timely filed as aforesaid, the aggrieved party shall be 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 shall apply to and govern the hearing and the administrative procedures in connection with and following such hearing, with like effect as if the provisions of said article five were set forth in extenso in this subsection.
(c) For the purpose of conducting any such hearing hereunder, the commissioner shall have the power and authority to 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 shall be issued and served in the manner, within the time and for the fees and shall be enforced, as specified in section one, article five of said chapter twenty-nine-a said section, and all of the said section one 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 such hearing shall be held within twenty days after the date upon which the commissioner received the timely written demand therefor, unless there is a postponement or continuance. The commissioner may postpone or continue any hearing on his own motion, or for good cause shown upon the application of the aggrieved party. At any such hearing, the aggrieved party may represent himself or be represented by any attorney-at-law admitted to practice before any circuit court of this state.
(e) After such hearing and consideration of all of the testimony, evidence and record in the case, the commissioner shall make and enter an order affirming, modifying or vacating his earlier order, or shall make and enter such order as is deemed appropriate, meet and proper. Such 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 such order and accompanying findings and conclusions shall be served upon the aggrieved party and his 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 commissioner shall be final unless vacated or modified on judicial review thereof in accordance with the provisions of section fifteen of this article.
§31-17-15. Judicial review.
(a) Any person adversely affected by a final order made and entered by the commissioner after hearing held in accordance with the provisions of section fourteen 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 shall apply to and govern such review with like effect as if the provisions of said section four were set forth in extenso in this section.
(b) The judgment of the circuit court shall be 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.
(c) Legal counsel and services for the commissioner in all appeal proceedings in any circuit court and the supreme court of appeals shall upon request be provided by the attorney general or his assistants, and in appeal proceedings in any circuit court by the prosecuting attorney of the county as well, all without additional compensation.
§31-17-16. 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 and regulations 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 such person or persons from any such violation or violations. Such application may be made and prosecuted to conclusion whether or not any such violation or violations have resulted or shall result in prosecution or conviction under the provisions of section eighteen of this article.
(b) Upon application by the commissioner as aforesaid, the circuit courts of this state may by mandatory or prohibitory injunction compel compliance with the provisions of this article, any rules and regulations 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 shall be 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.
(d) The commissioner shall upon request be represented in all such proceedings by the attorney general or his assistants and in such proceedings in the circuit courts by the prosecuting attorneys of the several counties as well, all without additional compensation.
§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 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 for not more than six months, or by both such fine fined and imprisonment, in imprisoned, at the discretion of the court.
(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.
§31-17-20. Effective date.
The amendments to this article enacted during the first extraordinary session of the Legislature in the year one thousand nine hundred ninety-six shall be effective as of the seventh day of June, one thousand nine hundred ninety-six.
CHAPTER 31A. BANKS AND BANKING.

ARTICLE 2. DIVISION OF BANKING.
§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 the 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. Unless otherwise covered by assessments or a specific provision of this code, the cost of examinations made pursuant to this section shall be borne by the financial institution at a rate of fifty dollars per each examiner hour expended.
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.
§31A-2-16. Effective date.
The amendments to this article enacted during the first extraordinary session of the Legislature in the year one thousand nine hundred ninety-six shall be effective as of the seventh day of June, one thousand nine hundred ninety-six.
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 .
(b) Secondary mortgage lender and broker licensees are excluded from the provisions of this chapter to the extent those provisions directly conflict with any section of article seventeen, chapter thirty-one of this code.