H. B. 2087
(By Delegates Moore, Reynolds and Azinger)
[Introduced February 13, 2013; referred to the
Committee on Banking and Insurance then the Judiciary.]
A BILL to amend and reenact §46A-4-111 of the Code of West
Virginia, 1931, as amended, relating to limiting the
requirement that before a loan, secured by residential real
estate may be refinanced or consolidated with a new loan, must
have a reasonable, tangible net benefit to the owner of that
real estate to those loans that are made within twenty-four
months of the initial loan.
Be it enacted by the Legislature of West Virginia:
That §46A-4-111 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-111. Disclosure of higher annual percentage rate upon
refinancing of a loan not secured by real estate
at higher rate; requiring documentation of a reasonable net tangible benefit to the borrower of
any refinancing of a real estate secured loan.
(1) Any nonrevolving consumer loan or consumer credit sale
that is not secured by residential real estate that is refinanced
or consolidated with a new loan under this article after September
1, 2009, at a higher annual percentage rate than the consumer loan
or consumer credit sale being refinanced must provide the consumer
the following disclosures:
"If you do agree to refinance or consolidate your existing
obligation, you will be paying an annual percentage rate of _____%
on the existing balance of $_____, instead of the annual percentage
rate of ______% which you are now paying.
I acknowledge receipt of this information __________ (initials
Nothing in this subsection shall prohibit the receipt of goods
or services by the borrower at the time the consolidated loan
agreement is made, nor shall this subsection prohibit or pertain to
any loan where the refinancing or consolidation results in the
consumer paying the same or a lower annual percentage rate.
(2) No nonrevolving consumer loan or consumer credit sale that
is secured by residential real estate may be refinanced or
consolidated with a new loan secured by residential real estate and
made under this article within twenty-four months of the date of
the original consumer loan or consumer credit sale secured by residential real estate, unless the new loan has a reasonable,
tangible net benefit to the borrower considering all of the
circumstances, including the terms of both the new and the
refinanced loans, the cost of the new loan and the borrower's
circumstances. The reasonable, tangible net benefit shall be
documented in writing on a form prescribed by the commissioner and
maintained in the loan file.
NOTE: The purpose of this bill is to require regulated
consumer lenders to provide a substantial benefit or a substantial
benefit disclosure form only for loans refinanced within twenty-
four months of original loan.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would