Senate Bill No. 13
(By Senators Buckalew and Yoder)
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[Introduced January 10, 1996; referred to the Committee
on the Judiciary.]
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A BILL to amend and reenact section one hundred one, article
five, chapter forty-six-a of the code of West Virginia, one
thousand nine hundred thirty-one; and to further amend said
chapter by adding thereto a new article, designated article
nine, all relating to prohibiting persons from communicating
information about another person's credit; prohibiting
credit reporting agencies from accepting the information
unless it is accompanied by the other person's name,
address, date of birth and social security number; providing
that before a negative credit report is transmitted to a
prospective creditor the subject of the report should be
notified and given time to correct any alleged mistakes; and providing for civil liability.
Be it enacted by the Legislature of West Virginia:
That section one hundred one, article five, chapter
forty-six-a of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted; and
that said chapter be further amended by adding thereto a new
article, designated article nine, all to read as follows:
ARTICLE 5. CIVIL LIABILITY AND CRIMINAL PENALTIES.
§46A-5-101. Effect of violations on rights of parties;
limitation of actions.
(1) If a creditor has violated the provisions of this
chapter applying to collection of excess charges, security in
sales and leases, disclosure with respect to consumer leases,
receipts, statements of account and evidences of payment,
limitations on default charges, assignment of earnings,
authorizations to confess judgment, illegal, fraudulent or
unconscionable conduct, any prohibited debt collection practice,
or restrictions on interest in land as security, assignment of
earnings to supervised lender, security agreement on household
furniture for benefit of supervised lender, and renegotiation by
supervised lender of loan discharged in bankruptcy and credit
reporting, the consumer has a cause of action to recover actual damages and in addition a right in an action to recover from the
person violating this chapter a penalty in an amount determined
by the court not less than one hundred dollars nor more than one
thousand dollars. With respect to violations arising from
consumer credit sales or consumer loans made pursuant to
revolving charge accounts or revolving loan accounts, or from
sales as defined in article six of this chapter, no action
pursuant to this subsection may be brought more than four years
after the violations occurred. With respect to violations
arising from other consumer credit sales or consumer loans, no
action pursuant to this subsection may be brought more than one
year after the due date of the last scheduled payment of the
agreement.
(2) If a creditor has violated the provisions of this
chapter respecting authority to make supervised loans, the loan
is void and the consumer is not obligated to pay either the
principal or the loan finance charge. If he has paid any part of
the principal or of the finance charge, he has a right to recover
in an action the payment from the person violating this chapter
or from an assignee of that person's rights who undertakes direct
collection of payments or enforcement of rights arising from the debt. With respect to violations arising from supervised loans
made pursuant to revolving loan accounts, no action pursuant to
this subsection may be brought more than four years after the
violation occurred. With respect to violations arising from
other supervised loans, no action pursuant to this subsection may
be brought more than one year after the due date of the last
scheduled payment of the agreement pursuant to which the charge
was paid.
(3) A consumer is not obligated to pay a charge in excess of
that allowed by this chapter, and if he has paid an excess charge
he has a right to a refund. A refund may be made by reducing the
consumer's obligation by the amount of the excess charge. If the
consumer has paid an amount in excess of the lawful obligation
under the agreement, the consumer may recover in an action the
excess amount from the person who made the excess charge or from
an assignee of that person's rights who undertakes direct
collection of payments from or enforcement of rights against the
consumer arising from the debt.
(4) If a creditor has contracted for or received a charge in
excess of that allowed by this chapter, the consumer may, in
addition to recovering such the excess charge, also recover from the creditor or the person liable in an action a penalty in an
amount determined by the court not less than one hundred dollars
nor more than one thousand dollars. With respect to excess
charges arising from consumer credit sales or consumer loans made
pursuant to revolving charge accounts or revolving loan accounts,
no action pursuant to this subsection may be brought more than
four years after the time the excess charge was made. With
respect to excess charges arising from other consumer credit
sales or consumer loans no action pursuant to this subsection may
be brought more than one year after the due date of the last
scheduled payment of the agreement pursuant to which the charge
was made.
(5) Except as otherwise provided, a violation of this
chapter does not impair rights on a debt.
(6) If an employer discharges an employee in violation of
the provisions prohibiting discharge, the employee may within
ninety days bring a civil action for recovery of wages lost as a
result of the violation and for an order requiring the
reinstatement of the employee. Damages recoverable shall not
exceed lost wages for six weeks.
(7) A creditor has no liability for a penalty under subsection (1) or subsection (4) if within fifteen days after
discovering an error, and prior to the institution of an action
under this section or the receipt of written notice of the error,
the creditor notifies the person concerned of the error and
corrects the error. If the violation consists of a prohibited
agreement, giving the consumer a corrected copy of the writing
containing the error is sufficient notification and correction.
If the violation consists of an excess charge, correction shall
be made by an adjustment or refund.
(8) If the creditor establishes by a preponderance of
evidence that a violation is unintentional or the result of a
bona fide error of fact notwithstanding the maintenance of
procedures reasonably adapted to avoid any such violation or
error, no liability is imposed under subsections (1), (2) and
(4), and the validity of the transaction is not affected.
ARTICLE 9. CREDIT REPORTING.
§46A-9-1. Definitions.
As used in this article:
(a) "Credit reporting agency" means any organization that
keeps a record of a person's credit history for the purpose of
disbursing the information to others.
(b) "Prospective creditor" means a person or entity that is
considering extending credit to another person or entity.
(c) "Subject of the report" means the person or organization
that the credit related information reflects.
(d) "Negative credit report" is information given to a
prospective creditor which will make the prospective creditor
less likely to extend credit to the subject of the report.
§46A-9-2. Required information.
No person or entity, including a creditor, may offer and no
credit reporting agency may accept any information relating to a
debtor's or a former debtor's credit unless the person or entity
can also provide to the credit reporting agency the debtor's
name, address, date of birth and social security number.
§46A-9-3. Required time for correcting mistakes.
Before a negative credit report can be communicated to a
prospective creditor, the credit reporting agency shall notify
the subject of the report. If the subject of the report asserts
that there is a mistake in the report, he or she shall be given
a reasonable period of time to correct the alleged mistakes
before the credit report is communicated to the prospective
creditor.
NOTE: The purpose of this bill is to prohibit creditors
from offering information about a person's credit and to prohibit
credit, reporting agencies from accepting information about a
person's credit unless it is accompanied by the person's name,
address, date of birth and social security number; providing that
before a negative credit report is transmitted to a prospective
creditor the subject of the report should be notified and given
time to correct any alleged mistakes; and to provide for civil
liability.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§46A-9 is new; therefore, strike-throughs and underscoring
have been omitted.