H. B. 4451


(By Delegates DeLong, Staton, Pino, Michael,
Caputo, Hamilton, Proudfoot, Craig and Argento)
[Introduced February 7, 2006; referred to the
Committee on Banking and Insurance then the Judiciary.]



A BILL to amend and reenact §46A-4-110a of the Code of West Virginia, 1931, as amended, relating to regulated consumer lenders; and prohibiting the use of certain adverse information concerning a consumer as the basis for increasing interest rates.

Be it enacted by the Legislature of West Virginia:
That §46A-4-110a of the Code of West Virginia, 1931, as amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-110a. Prohibited conduct.
(1) A regulated consumer lender shall may not:
(a) Accept or receive deposits or sell or offer for sale its secured or unsecured evidences or certificates of indebtedness;
(b) Pay any fees, bonuses, commissions, rewards or other consideration to any person, firm or corporation for the privilege of using any plan of operation, scheme or device for the organization or carrying on of business under this article, or the use of any name, trademark or copyright to be so used: Provided, That nothing herein prevents a regulated consumer lender from agreeing in connection with a loan to pay a broker fee, finders fee or dealer participation fee, or to split the origination fee or points paid: Provided, however, That the fee or fee split is disclosed to the borrower and where proper is included in the finance charge; or
(c) Fail to disclose the amount of a payoff of an existing loan within three business days of receiving a request for such information from either the borrower or an agent acting on behalf of the borrower.
(2) Unless preempted by federal law, no consumer loan by a regulated consumer lender may contain any scheduled balloon payment as set forth in this chapter. Nor may any regulated consumer lender loan contain terms of repayment which result in negative amortization: Provided, That nothing herein prevents unequal payment schedules resulting from a variable rate loan or a revolving line of credit.
(3) A regulated consumer lender may not make revolving loans for the retail purchase of consumer goods and services by use of a lender credit card.
(4) Unless preempted by federal law, a regulated consumer lender may not use any adverse information concerning a consumer, including any information in any consumer report or any change in the credit score of the consumer, as the basis for increasing any annual percentage rate of interest applicable to an account of the consumer under any kind of loan, regulated consumer loan, revolving charge account or an open-end consumer credit plan, or to remove or increase any introductory annual percentage rate of interest applicable to the account, for reasons other than actions or omissions of the consumer that are directly related to the account.



NOTE: The purpose of this bill is, to the extent not preempted by federal law, prohibit regulated consumer lenders from raising interest rates on a credit card or other consumer loan based on adverse credit information concerning a consumer that is not directly related to the subject credit card or loan.

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