H. B. 2756


(By Delegates Swartzmiller,
G. White and H. White)
[Introduced January 29, 2003; referred to the
Committee on Banking and Insurance then the Judiciary.]



A BILL to amend and reenact sections one and three, article three, chapter thirty-two-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said chapter by adding thereto a new article, designated article four, all relating to deferred deposit loans generally; creating the deferred deposit loan act; defining certain terms; providing for the licensing of deferred deposit lenders; investigations by the commissioner of banking; denial of license; requiring specific information regarding location, records and annual reports of licensees; prohibiting certain types of advertising by licensees; transaction documentation and notice to consumers required; finance charged allowed; loan amount limited to five hundred dollars; limiting deferred deposit loans to one renewal; form of proceeds; required endorsement; right of redemptions; dishonored charges; required posting of charges; assignment or sale of instruments; grounds for suspension or revocation of license; penalties; notice of refusal, suspension or revocation; hearing; judicial review, actions to enjoin violations; voided loans; applicability of the act; and unfair or deceptive practices.

Be it enacted by the Legislature of West Virginia:
That sections one and three, article three, chapter thirty-two-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 four, all to read as follows:
ARTICLE 3. CHECK CASHING.
§32A-3-1. Check cashing permitted.
(a) A merchant primarily in the business of making retail consumer sales may offer check cashing services at its stores to accommodate its customers in the course of said business, and may collect a fee for the service, if the check cashing service and any fees charged are incidental to the main business of the merchant. Except as set forth in subsection (b) of this section, the term "check cashing services" does not include a transaction where a customer presents a check for the exact amount of a purchase. Fees charged in connection with check cashing services may not exceed the greater of one dollar, or one percent of the face value of the check cashed.
(b) Merchants may not, in connection with providing check cashing services, agree to hold checks submitted to them for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom, unless such merchant obtains a deferred deposit lender license under the provisions of article four of this chapter.
(c) No license is required as a condition for a merchant providing check cashing services in conformity with subsections (a) and (b) of this section.
(d) Where a merchant derives more than five percent of his or her gross revenues from cashing checks, the check cashing services are not considered incidental to the main business of the merchant, and the merchant is required to be licensed under article two of this chapter.
(e) Persons holding a license pursuant to article two of this chapter may in conjunction with their licensed business, or other lawful business, engage in the business of check cashing in West Virginia. Fees charged for check cashing services by a licensee under article two of this chapter shall be posted and conform to those permitted merchants under this section. No licensee may in connection with providing check cashing services agree to hold checks submitted to it for deposit at a later date for the purpose of providing a loan of money and deriving profit therefrom, unless such person also holds a deferred deposit lender license under article four of this chapter.
(f) Federally-insured depository institutions, foreign bank agencies, and governmental entities exempt from licensure as money transmitters under this chapter are exempt from the provisions of this article. Other financial institutions licensed by and under the jurisdiction of the commissioner of banking may upon written approval engage in the check cashing business permitted merchants under this article.
(g) Except as provided or allowed by this article, no person may engage in the check cashing business. As used in this article the term "check cashing business" means any person who engages in the business of cashing checks, including drafts, money orders, or other instruments for the transmission or payment of money for a fee. However, the term "check" as used in this article does not include a travelers check or a foreign denomination check.
§32A-3-3. Violations and penalties.
(a) The charging of fees for check cashing services in excess of those permitted under this article gives rise to a cause of action by the injured party to recover twice the actual damages suffered by reason of the violation.
(b) The charging of fees for check cashing services in violation of the provisions of subsections subsection (b) or (e), section one of this article, prohibiting lending through a check cashing transaction without first obtaining a deferred deposit lender license under article four of this chapter, constitutes prohibited finance charges, and gives rise to a cause of action by the party upon whom the charge was imposed to recover all fees paid and all actual damages suffered by reason of the violation. Where the transaction is of an amount and for purposes that would constitute a consumer loan, the conduct of impermissible check cashing services is considered an unfair and deceptive act and may be subject to provisions and penalties set forth in chapter forty-six-a of this code.
(c) Engaging in the check cashing business without the license required by this article or article four of this chapter gives rise to a cause of action by the injured party to recover all fees paid and all actual damages suffered by reason of the violation.
(d) Actions brought under this article by customers for recovery of actual damages shall be brought within one year of the occurrence of the transaction.
ARTICLE 4. DEFERRED DEPOSIT LOANS.
§32A-4-1. Authority to make loans.
No person may engage in the business of making deferred deposit loans except in accordance with the provisions of this article and without having first obtained a license under this article from the commissioner.
§32A-4-2. Short title.
This act may be cited as the "Deferred Deposit Loan Act."
§32A-4-3. Definitions.
As used in this article:
(1) "Commissioner" means the commissioner of banking of West Virginia or his or her designated representative.
(2) "Consumer" means a person other than an organization who is the buyer, lessee or debtor to whom credit is granted in a consumer credit transaction.
(3) "Deferred deposit loan" means a consumer loan whereby the lender, for a fee, finance charge or other consideration, does the following:
(A) Accepts a dated instrument from the consumer;
(B) Agrees to hold the instrument for a period of time prior to negotiation or deposit of the instrument; and
(C) Pays to the consumer, credits to the consumer's account or pays to another person on the consumer's behalf the amount of the instrument, less finance charges permitted by section eleven of this article.
(4) "Instrument" means a personal check or authorization to transfer or withdraw funds from an account signed by the consumer and made payable to a person subject to this article.
(5) "Lender" means the following:
(A) Any person who offers or makes a deferred deposit loan, who arranges a deferred deposit loan for a third party, or who acts as an agent for a third party, regardless of whether the third party is exempt from licensing under this article or whether approval, acceptance or ratification by the third party is necessary to create a legal obligation for the third party.
(B) Notwithstanding the foregoing, a state or federally chartered bank, saving and loan association or credit union shall not be considered a lender for purposes of this article and shall be specifically exempt from the provisions of this article so long as all of the following are satisfied:
(i) It initially advances the loan proceeds to the customer;
(ii) It does not sell, assign or transfer in the aggregate a preponderant economic interest in the deferred deposit transactions to the arranger, agent or assistant, or an affiliate or subsidiary of the state or federally chartered bank, saving and loan association, or credit union, unless selling, assigning or transferring a preponderant economic interest is permitted by the primary regulator of the state or federally chartered bank, saving and loan association or credit union; and
(iii) It develops the deferred deposit loan program on its own.
(c) If a lender, as defined in paragraph (A) of this provision, offers, arranges, acts as an agent for or assists a state or federally chartered bank, saving and loan association or credit union in any way in the making of a deferred deposit loan and the state or federally chartered bank, saving and loan association, or credit union meets the standards set forth in paragraph (B) of this provision, the lender shall comply with all other provisions in this article to the extent they are not preempted by other state or federal laws.
(6) "Loan amount" means the amount financed as defined in regulation Z of the federal "Truth In Lending Act," 12 C.F.R. 226.18 (b), as amended.
§32A-4-4. Application for license; form; content; fee.
(a) An application for a license under this article shall be submitted in writing, under oath and on a form as prescribed by the commissioner.
(b) The application shall set forth:
(1) The full name and address of the applicant, and if the applicant is a partnership, limited liability company or association, of every member thereof, and if a corporation, of each officer, director and owner of ten percent or more of the capital stock thereof;
(2) The addresses of the location of the business to be licensed; and
(3) Such other information concerning the financial responsibility, background, experience and activities of the applicant and its members, officers, directors and principals as the commissioner may require.
(c) At the time of making application for a deferred deposit lender license, the applicant shall:
(1) If a foreign corporation, submit a certificate from the secretary of state certifying that the applicant is registered with the secretary of state to transact business in this state;
(2) Submit proof that he or she has available for the operation of the business at the locations specified in the application a minimum net worth of at least twenty-five thousand dollars per licensed location, up to a maximum of two hundred fifty thousand dollars computed according to generally accepted accounting principles as shown by the most recent audited financial statement filed with and satisfactory to the commissioner;
(3) File with the commissioner a bond in favor of the state for the benefit of consumers in the amount of twenty-five thousand dollars per licensed location, up to a maximum of two hundred fifty thousand dollars, in a form and with 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 plus the actual cost of fingerprint processing, per licensed location;
(5) Submit a full and complete disclosure of any litigation or unresolved complaint filed by a governmental authority or class action lawsuit on behalf of consumers relating to the operation of the license applicant.
§32A-4-5. Refusal or issuance of license.
(a) Upon the filing of an application for a deferred deposit lender license and full compliance with section four of this article, the commissioner shall investigate the applicant and relevant facts regarding the application. Upon the basis of the application and all other information before the commissioner, he or she shall make and enter an order denying the application and refusing the license sought if the commissioner finds that:
(1) The financial responsibility, character, reputation, experience and general fitness of the applicant and its members, senior officers, directors, principals and employees reasonably warrants the belief that the business will not be operated lawfully and properly, in the public interest and in accordance with law;
(2) The applicant does not have available the audited net worth computed according to generally accepted accounting principles required for each licensed location by the provisions of section four of this article;
(3) 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 deferred deposit lender license which shall entitle the applicant to engage in the business of deferred deposit lending during the period, unless sooner revoked, for which the license is issued.
(b) Every application for a deferred deposit lender license shall be passed upon and the license issued or refused within ninety days after the applicant has fully complied with the provisions of section four of this article. Whenever an application for a license under this article is denied and the license sought is refused, which refusal has become final, the commissioner shall retain all fees to cover administrative costs of processing the application.
§32A-4-6. Licenses; place of business; changes.
(a) Each license shall state the location at which the business is to be conducted and the full name of the licensee. Each license shall be prominently displayed in each place of business of the licensee. The licensee's master license number shall be displayed on all advertising and any printed documents or disclosures created by the applicant for distribution to a consumer. Licenses are not transferable or assignable. No licensee may offer a franchise under that license to another person.
(b) No licensee shall open an additional office or relocate any place of business without prior approval of the commissioner. Applications for such approval shall be made in writing thirty days prior to any change on a form provided by the commissioner and shall be accompanied by a payment of a one hundred fifty dollar nonrefundable application fee.
(c) Every license issued under this article shall, unless sooner suspended or revoked, expire on the thirtieth day of June of each odd numbered year and any license may be renewed in the same manner, for the same license fee or fees specified above and upon the same basis as an original license is issued in accordance with the provisions of section four of this article. All applications for the renewal of licenses shall be filed with the commissioner at least ninety days before the expiration thereof.
§32A-4-7. Records and annual reports; examination of records; cooperative agreements.

(a) Every licensee shall maintain at each branch location or at a central location, known to the commissioner, such books, accounts and records of that branch relating to all transactions within this article as are necessary to enable the commissioner to enforce the provisions of this article. A licensee shall keep its business books, accounts and records in accordance with generally accepted accounting principles and maintain business records for thirty-six months after the date of final entry.
(b) Each licensee shall file with the commissioner on or before the fifteenth day of August 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.
(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 location licensed under 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. The licensee shall bear the cost of any on-site examination made pursuant to this article at a rate of fifty dollars for each examiner hour expended, together with all reasonable and necessary travel expenses incurred in connection with the examination.
(d) The commissioner may enter into cooperative, coordinating and information-sharing agreements with any other agency supervising deferred deposit lenders.
§32A-4-8. Advertising requirements.
It is 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 a deferred deposit lending transaction: Provided, That this section does 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.
§32A-4-9. Written agreement requirements.
Each deferred deposit loan transaction and renewal shall be documented by a written agreement signed by both the lender and consumer. The written agreement shall contain the name of the consumer, the transaction date, the amount of the instrument the annual percentage rate charged and a statement of the total amount of finance charges charged expressed both as a dollar amount and an annual percentage rate. In addition, the written agreement shall include all disclosures required by rules promulgated by the commissioner of banking therefor. The written agreement shall set a date, not more than forty days after the loan transaction date, upon which the instrument may be deposited or negotiated.
§32A-4-10. Notice to consumers.
A lender shall provide the following notice in a prominent place on each loan agreement in at least ten-point type:
"A deferred deposit loan is not intended to meet long-term financial needs. A deferred deposit loan should be used only to meet short-term cash needs. Renewing the deferred deposit loan rather than paying the debt in full will require additional finance charges."
§32A-4-11. Authorized finance charge.
A lender may charge a finance charge for each deferred deposit loan that may not exceed eighteen percent of the amount loaned. Such charge shall be considered fully earned as of the date of the transaction. The lender shall charge only those charges authorized in this article in connection with a deferred deposit loan.
§32A-4-12. Maximum loan amount - Right to rescind.
(1) A lender may not lend an amount greater than five hundred dollars nor may the amount financed exceed five hundred dollars at any time to a consumer. No instrument held as a result of a deferred deposit loan may exceed five hundred ninety dollars.
(2) A consumer may rescind the deferred deposit loan on or before the close of the next business day following the loan transaction.
§32A-4-13. Multiple outstanding transactions.
A lender shall provide the following notice in a prominent place on each deferred deposit loan agreement in at least ten-point type:
"State law prohibits deferred deposit loans exceeding five hundred ninety dollars total debt from a deferred deposit lender. Exceeding this amount may create financial hardships for you and your family. You have the right to rescind this transaction or before the close of the next business day following this transaction."
§32A-4-15. Renewal.
(1) A deferred deposit loan shall not be renewed more than once. After such renewal, the consumer shall pay the debt in cash or its equivalent. If the consumer does not pay the debt, then the lender may deposit the consumer's instrument.
(2) Upon renewal of a deferred deposit loan, the lender may assess additional finance charges not to exceed eighteen percent of the amount loaned.
(3) A transaction is completed when the lender presents the instrument for payment, debits the consumer's checking account or the consumer redeems the instrument by paying the full amount of the instrument to the holder. Once the consumer has completed the deferred deposit transaction, the consumer may enter into a new deferred deposit agreement with the lender.
§32A-4-16. Form of loan proceeds.
A lender may pay the proceeds from a deferred deposit loan to the consumer in the form of a business instrument, money order or cash, or by way of an electronic transfer of such proceeds to the customer's checking account or to a stored value card or debit card. The consumer may not be charged an additional finance charge or fee for cashing the lender's business instrument.
§32A-4-17. Endorsement of instrument.
A lender may not negotiate or present an instrument for payment unless the instrument is endorsed with the actual business name of the lender.
§32A-4-18. Redemption of instrument.
Prior to the lender negotiating or presenting the instrument, the consumer may redeem any instrument held by a lender as a result of a deferred deposit loan if the consumer pays the full amount of the instrument to the lender.
§32A-4-19. Authorized dishonored instrument charge.
If an instrument held by a lender as a result of a deferred deposit loan is returned to the lender from a payor financial institution due to insufficient funds, a closed account or a stop-payment order, the lender shall have the right to exercise all civil means authorized by law to collect the face value of the instrument; except that the provisions and remedies of article three of chapter sixty-one, are not applicable to any deferred deposit loan. In addition, the lender may contract for and collect a returned instrument charge, not to exceed fifteen dollars, plus court costs and reasonable attorney fees as awarded by a court and incurred as a result of the default. However, such attorney fees may not exceed the loan amount. The lender may not collect any other fees as a result of default. A returned instrument charge is not allowed if the loan proceeds instrument is dishonored by the financial institution or the consumer places a stop-payment order due to forgery or theft.
§32A-4-20. Posting of charges.
Any lender offering a deferred deposit loan shall post at any place of business where deferred deposit loans are made a notice of the charges imposed for such deferred deposit loans.
§32A-4-21. Notice on assignment or sale of instruments.
Prior to sale or assignment of instruments held by the lender as a result of a deferred deposit loan, the lender shall place a notice on the instrument in at least ten-point type to read:
"This is a deferred deposit loan instrument."
§32A-4-22. Grounds for suspension or revocation of license; reinstatement of license; penalties.

(a) The commissioner may suspend or revoke any license issued under this article if he or she finds that the licensee or any owner, director, officer, member, partner, stockholder, employee or agent of the 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 the article; or
(2) Has knowingly made any material misstatement in the application for the license; or
(3) Does not have available or has not continuously maintained the audited net worth required by the provisions of section four of this article, calculated according to generally accepted accounting principles; or
(4) Has failed or refused to keep the bond required by section four of this article in full force and effect, if applicable; 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 the deferred deposit loan business in this state or failed to disclose any of the material particulars of any loan transaction in this state to anyone entitled to the information.
This section does not limit any right the consumer may have to bring an action for a violation of section one hundred four, article six, chapter forty-six-a of this code in an individual case.
The commissioner may also suspend or revoke the license of a licensee if he or she finds the existence of any ground upon which the license could have been refused or any ground which would be cause for refusing a license to the licensee were he or she 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 does not impair or affect the obligation of any preexisting lawful loan between the licensee and any obligor.
(c) The commissioner shall reinstate a suspended license, or issue a new license to a licensee whose license has been revoked, if the grounds upon which any license was suspended or revoked have been eliminated or corrected and the commissioner is satisfied that the grounds are not likely to recur, unless such licensee's license has been revoked on more than one occasion and in such event, the commissioner may reinstate the suspended license or issue a new license in his or her reasonable discretion.
(d) In addition to the authority conferred under this section, the commissioner may impose a fine or penalty not exceeding one thousand dollars upon any licensee required to be licensed under this article who the commissioner determines has violated any of the provisions of this chapter. For the purposes of this section, each separate violation is subject to the fine or penalty herein prescribed and each day after the date of notification, excluding Sundays and holidays, that an unlicensed person engages in the business or holds himself or herself out to the general public as a deferred deposit lender constitutes a separate violation.
(e) Notwithstanding the foregoing, nothing in this section interferes with the right of a state or federally chartered bank, savings and loan association or credit union to offer the deferred deposit loan product through a third party agent.
§32A-4-23. Notice of refusal, or suspension or revocation, of license; relinquishing license.

(a) Whenever the commissioner refuses to issue a license, or suspends or revokes a license, he or she 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 was suspended either following a hearing or for failure to keep the bond required by the provisions of section four of this article in full force and effect; or otherwise (ii) following expiration of the period provided in section twenty-four 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.
§32A-4-24. 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 this article, if not previously provided the opportunity to a hearing on the matter, may in writing demand a hearing before the commissioner. The commissioner shall appoint a hearing examiner to conduct the hearing and prepare a recommended decision. 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 the 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 is 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 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 the article were set forth in extenso in this subsection.
(c) For the purpose of conducting any hearing hereunder, the appointed hearing examiner may 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 are issued and served in the manner, within the time and for the fees and shall be enforced, as specified in the section, and all of the section provisions dealing with subpoenas and subpoena duces tecum apply to subpoenas and subpoenas duces tecum issued for the purpose of a hearing hereunder.
(d) Any hearing shall be held within thirty days after the date upon which the commissioner received the timely written demand therefor unless there is a postponement or continuance. The hearing examiner may postpone or continue any hearing on his or her own motion or for good cause shown upon the application of the aggrieved party. At any hearing, the aggrieved party may represent himself or herself or be represented by any attorney-at-law admitted to practice before any circuit court of this state.
(e) After the hearing and consideration of all of the testimony, evidence and record in the case, the hearing examiner shall make and enter an order affirming, modifying or vacating the commissioner's earlier order, or shall make and enter an order as is considered appropriate, meet and proper. The 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 the order and accompanying findings and conclusions shall be served upon the aggrieved party and his or her 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 hearing examiner is final unless vacated or modified on judicial review thereof in accordance with the provisions of section twenty-five of this article.
§32A-4-25. Judicial review.
(a) Any person adversely affected by a final order made and entered by the hearing examiner after hearing held in accordance with the provisions of section twenty-four 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 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 is 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.
§32A-4-26. 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 violation or violations.
(b) Upon application by the commissioner as aforesaid and upon a showing by the commissioner that the practice, act or omission to be enjoined will result in irreparable harm and that no remedy at law is available, 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.
§32A-4-27. Loans made in violation of this article void; agreements to waive article void.

(a) If any deferred deposit loan is made in willful violation of the provisions of this article, except as a result of a bona fide error, such loan may be canceled by a court of competent jurisdiction.
(b) Subject to the provisions of subsection (c) of this section in which a licensed lender and consumer may enter into an arbitration agreement, any other agreement whereby the consumer waives the benefits of this article is against public policy and void.
(c) Any loan transaction in violation of this article shall be subject to an action, which may be brought in a circuit court having jurisdiction, by the consumer seeking damages, reasonable attorneys fees and costs: Provided, That nothing in this section prohibits a licensed lender from entering into an arbitration agreement whereby the lender and consumer agree to waive their right to file a lawsuit and proceed in court to have a jury trial to resolve their disputes, and instead agree to submit their dispute to an arbitrator for a decision.
§32A-4-28. Applicability of other provisions of this article.
The provisions of this article apply to a lender unless such provisions are inconsistent with other provisions of state law.
§32A-4-29. Criminal culpability.
A consumer may not be subject to any criminal penalty for entering into a deferred deposit loan agreement. A consumer may not be subject to any criminal penalty in the event the instrument is dishonored, unless the consumer had no account with drawee at the time the instrument was made, drawn, negotiated or delivered, subject to the provisions of article three, chapter sixty-one of this code.
§32A-4-30. Unfair or deceptive practices.
No person may engage in unfair or deceptive acts, practices, or advertising in connection with a deferred deposit loan.



NOTE: The purpose of this bill is to provide for the licensing of deferred deposit lenders. Under the bill, a deferred deposit loan is defined as a consumer loan whereby the lender, for a fee accepts a dated instrument from the consumer and agrees to hold the instrument for a period of time before cashing it and pays the consumer the amount of the instrument less finance charges. The bill limits to five hundred dollars the amount of any instrument involved in a deferred deposit loan.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

§32A-4 is new; therefore, strike-throughs and underscoring have been omitted.