ENGROSSED
Senate Bill No. 326
(By Senators Manchin, Helmick, Craigo, Dittmar, Sharpe, Wagner,
Kimble, Scott, Blatnik, Chafin, Wiedebusch and Yoder)
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[Originating in the Committee on Banking and Insurance;
reported February 7, 1996.]
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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 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, 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 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. the 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 subdivision (a) of this subsection; 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 finance
charges, including, by whatever name called, but not by way of
limitation but not limited to, official fees and taxes, reasonable
closing costs and certain documentary charges and insurance
premiums and other charges 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 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. "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 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, 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, 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 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.
(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 in full force and
effect; and (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 period of loan; 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 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 anticipate payment of 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 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 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 on
the same residential property;
(3) 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.
(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 , 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 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 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 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)(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 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: (i) Immediately if the license were 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, and immediately if
the license were suspended for failure to keep the bond required
by the provisions of section four of this article in full force
and effect.
§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 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
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 said section, and all of the
said section provisions dealing with subpoenas and subpoenas duces
tecum shall apply to subpoenas and subpoenas duces tecum issued for
the purpose of a hearing hereunder.
(d) Any 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 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 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 the forms and contain such 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 the 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 The certificate or license
shall be preserved and the original or copy thereof displayed in
all the West Virginia 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 the 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 the 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 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 the
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 hundred 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 copy of the amendment of any statute of another state
governing such a foreign corporation shall be filed with the
commissioner of banking by such foreign corporation within thirty
days after such amendment becomes effective in such 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 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 born 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, 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 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.