HOUSE CONCURRENT RESOLUTION 104
(By Delegate Amores)

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Originating in the Committee on Rules]

Requesting the Joint Committee on Government and Finance to study consumer lending practices and mortgage lending practices.

Whereas, various financial institutions are offering and marketing mortgage and loan refinancing and debt consolidation offerings, which are being increasing utilized by consumers to provide additional access to capital and monetary resources; and

Whereas, while most of the refinancing and lending alternatives are extended in this state are made available by financial institutions to provide West Virginians with reasonable access to their available homeowner's equity, there is concern that there are some practices in the consumer lending and mortgage lending industry which have resulted in the issuance of loans or the incurrence of obligations which, at the time they were executed, encumbered consumers and mortgage holders with an unreasonable amount of debt in relation to the actual market value of their home or property, or otherwise contained unreasonable and unfair terms and conditions which resulted in unreasonable and excessive costs and financial obligations to the consumers and mortgage holders; and

Whereas, there is concern that some consumers have also been provided with multiple loans or obligations against the same property, without a reasonable ability to pay for the multiple debts; and

Whereas, there is concern that some of the loan and financial opportunities which are actively marketed in this state may contain terms and conditions which may be deemed unreasonable, and could be construed as unfair trade practices in violation of existing laws; and

Whereas, some of these practices may have contributed to the unreasonable and unfair foreclosure upon outstanding mortgage obligations which were issued to West Virginians;

Whereas, while the State of West Virginia has extended the Banking Commissioner and other oversight and enforcement bodies with the power to investigate and monitor the records and activities of regulated consumer lenders and mortgage lenders enforcement, to enforce the laws of this state, there is a question as to whether the existing oversight and regulatory methods are sufficient to allow for the identification and monitoring of excesses and abuses that may exist in some portions of the industry; and

Whereas, there is some question as to what information may be legitimately required from all regulated lenders through the annual financial reporting process under existing statutes, to allow for a broad examination of specific indicators for all lenders, with the intent of helping to identify a need for further examination an individual lenders' practices; and

Whereas, Approximately one half of states have adopted specific legislation to address and regulate predatory mortgage lending practices; and

Whereas, To determine the most effective means of the state's existing regulation of this industry, to examine the methods and the effectiveness of existing laws and methods used to monitor and respond to potential abuses and unfair practices, to examine the need for additional regulatory oversight, enforcement or investigatory tools, as well as to determine the impact of such action upon West Virginia citizens, it is necessary to study the practices and regulatory oversight of consumer lending practices and mortgage lending practices; therefore, be it

Resolved by the Legislature of West Virginia:

That the Joint Committee on Government and Finance is hereby requested to study consumer lending and mortgage lending practices; and, be it

Further Resolved, That the Joint Committee on Government and Finance report to the regular session of the Legislature, 2007, on its findings, conclusions and recommendations, together with drafts of any legislation necessary to effectuate its recommendations; and, be it

Further Resolved, That the expenses necessary to conduct this study, to prepare a report and to draft necessary legislation be paid from legislative appropriations to the Joint Committee on Government and Finance.