Senate Bill No. 291
(By Senators Kessler, Hunter, Ross, Minard, Oliverio,
Rowe, White, Harrison, McKenzie and Jenkins)
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[Introduced January 26, 2004; referred to the Committee on
Banking and Insurance; and then to the Committee on the
Judiciary.]
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A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §46A-2-140
, relating
to the use of checks or share drafts as security for loans or
cash advances made for personal, family or household purposes.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §46A-2-140
, to read as
follows:
ARTICLE 2. CONSUMER CREDIT PROTECTION.
§46A-2-140. No use of checks or share drafts as security for cash
advances or loans.
(a) No person may engage in the business of making, arranging,
acting as a middleman or brokering a cash advance or loan to a
borrower for a personal, family or household purpose pursuant to an agreement under which (1) a check or share draft is executed by the
borrower; (2) the check or share draft is drawn on a financial
institution for the amount advanced or borrowed, plus a fee; (3)
the check or share draft is used as security or as any direct or
indirect part of the transaction for the advance, loan or extension
of credit; and (4) the payment of the check or share draft is
deferred.
(b) Acting in violation of this section is unconscionable
conduct within the meaning of article five of this chapter and is
an unfair and deceptive practice under article six of this chapter.
Any agreement in violation of this section is void and
unenforceable.
NOTE: The purpose of this bill is to prevent the taking of
checks or similar instruments to guarantee loans or cash advances.
This section is new; therefore, strike-throughs and
underscoring have been omitted.