ENROLLED
Senate Bill No. 326
(By Senators Manchin, Helmick, Craigo, Dittmar, Sharpe, Wagner,
Kimble, Scott, Blatnik, Chafin, Wiedebusch and Yoder)
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[Passed March 9, 1996; in effect ninety days from passage.]
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AN ACT 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 modifying other banking institution requirements; revising
secondary mortgage loan law; changing definitions; removing
residency requirements for brokers; modifying maximum loan
periods and acceptable loan charges; increasing bonding
requirements for brokers; modifying application requirements
for brokers; requiring the commissioner of banking to study
the effects of longer allowable loan periods for second mortgages; precluding brokers from receiving any charges until
loan is issued; redefining certain activities as unfair trade
practices; allowing the banking commissioner certain
discretion relating to periodic examination of brokers
records; modifying grounds for revocation of licenses;
modifying hearing requirements; referring and adopting
penalties sections of consumer credit laws; establishing
additional licensing requirements for brokers; establishing a
per hour fee amount in which the commissioner of banking may
charge financial institutions for periodic record reviews;
modifying the release of record requirements of the banking
commissioner; and clarifying what happens when the provisions
contained herein are in conflict with other provisions of
chapter thirty-one.
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
subsection (4) of this section.
(6) "Principal" or "principal sum" means 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) "Additional charges" means every type of charge arising
out of the making or acceptance of a secondary mortgage loan,
except 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) "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) "Commissioner" means the commissioner of banking of this
state.
(10) "Applicant" means a person who has applied for a lender's
or broker's license.
(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.
(b) The provisions of this article do not apply to loans made
by banking institutions, trust companies, savings and loan associations, industrial loan companies, insurance companies,
credit unions or 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;
(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 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 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 law suit 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 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 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;
(4) Pay to the commissioner a license fee of one hundred
dollars and an investigation fee of fifty dollars; 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 law suit 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 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 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) The applicant has habitually defaulted on financial
obligations; or
(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 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 in full force and
effect; 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) The maximum rate of finance charges and maximum total
additional charges on or in connection with any secondary mortgage
loan shall be as follows:
(1) The maximum rate of 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
prepay his or her debt in whole or in part at any time and shall
receive a rebate for any unearned finance charge, exclusive of any
points, investigation fees and loan origination fees, which rebate
shall be computed in accordance with 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) 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 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 twenty-four months by
renewal of a secondary mortgage loan or an additional secondary
mortgage loan secured by the same;
(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" may be charged on any
installment made 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. The charge 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, 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 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 offered by the lender to the borrower and the premium
therefor 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 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 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 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 finance charge rate per annum and the itemized amount
of finance charges and additional charges;
(4) The 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 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 the time as the
indebtedness shall be satisfied in full.
The commissioner may, from time to time, by rules 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 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 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 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 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 the
books, accounts and records shall be preserved, exhibited to the
commissioner and kept available as provided herein for the reasonable period of time as the commissioner may by rules require.
The commissioner is hereby authorized to prescribe by rules the
minimum information to be shown in 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 the secondary mortgage loans by size and by security, and the
gross income from, and expenses properly chargeable to, such
secondary mortgage loans.
(c) The commissioner may, at his or her discretion, make or
cause to be made an examination of the books, accounts and records
of every 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 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 foreign corporation, does not remain
qualified to do business in this state; or
(6) Has committed any fraud or engaged in any dishonest
activities with respect to 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 the information; or
(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.
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 in
an individual case.
(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 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 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.
§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 maintain the bond required by 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, 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 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 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, 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 fined not more than five hundred
dollars, or imprisoned in a county or regional jail for not more
than six months, or both fined and 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.
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 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.
(c) Application for the license or certificate shall be upon the forms and contain such information as the commissioner may
prescribe. In connection with 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.
(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 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 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 of this
code 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. The certificate or license shall
be preserved and the original or copy thereof displayed in all the
West Virginia places of business of the banking or other financial
institution.
(e) In addition to the requirements of 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 bylaws under which it operates, together with a legal citation
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 the foreign corporation and if he or
she finds that it provides 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 the
corporation a certificate or license permitting it to engage in
business in this state, which certificate or license shall
authorize 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 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. The
certificate or license shall be preserved and the original or copy
thereof displayed in the West Virginia place of business of 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.
(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 the proposed change within twenty days after it is
received by him or her, it shall be deemed to have been approved.
(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 the financial institution, the relations
between the financial institution and its subsidiaries and
affiliates and the effect of the relations upon the affairs of such
financial institution. A full report of every 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
institution shall retain all of its records of final entry for 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
institution, or to any officer thereof, relating to an examination
or an investigation of the affairs of 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 the communication and of any
action taken thereon by the institution.
The commissioner of banking, in his or her discretion, may
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 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 the banking
institutions; but nothing herein shall be construed to limit the
duty and responsibility of banking institutions 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
authorized to examine; disclose fully, accurately and in detail all
of the debts and liabilities of the institution; and furnish 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 the institution.
Any officer, director, employee or other person connected with
any such institution who willfully fails or refuses to so furnish
the documents, papers, materials or information as herein required
or who 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.
(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.