COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 193
(By Senator Minard)
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[Originating in the Committee on Banking and Insurance;
reported February 13, 2008.]
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A BILL to amend and reenact §46A-4-110 of the Code of West
Virginia, 1931, as amended, relating to the sale of membership
plans by consumer lenders; defining membership plans;
specifying conditions for sale of plans by licensees; and
requiring enrollment authorizations to be filed with the
commissioner.
Be it enacted by the Legislature of West Virginia:
That §46A-4-110 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 4. REGULATED CONSUMER LENDERS.
§46A-4-110. Conduct of business other than making loans.
(1)(a) No licensee shall conduct the business of making
loans under the provisions of this article within any office, room
or place of business in which any other business is solicited or
engaged in, or in association or conjunction therewith, except as may be authorized in writing by the commissioner upon his
or her
finding that the character of such other business is sufficiently
related to that of a financial institution and is such that the
granting of such authority would not facilitate evasions of this
article or of the rules lawfully made hereunder, except nothing
herein shall prohibit the licensee from purchasing installment
sales contracts or the sale or provision of insurance authorized by
section one hundred nine, article three of this chapter or from
making loans authorized under the provisions of the West Virginia
Secondary Mortgage Loan Act as set forth in article seventeen,
chapter thirty-one of this code
or from soliciting or selling, and
if authorized by the customer, financing membership plans, subject
to requirements of subsection (d) of this section, or from engaging
in any business previously approved by the commissioner prior to
the first day of September, one thousand nine hundred ninety-six.
(2)(b) A licensee may purchase, hold and convey real
property as follows:
(a)(1) As shall be necessary for the convenient transaction
of its business;
(b)(2) As is mortgaged to it in good faith by way of
security for loans made by or money due to such regulated consumer
lender;
(c)(3) As is conveyed to it in satisfaction of debts
previously contracted in the course of its dealings;
(d)(4) As is acquired by the sale on execution or judgment
or decree of any court in its favor.
(3)(c) A licensee shall not purchase, hold or convey any
real property in any other case or for any other purpose
whatsoever. Real property shall be conveyed only by authority of
the board of directors of any such regulated consumer lender. No
real property acquired upon foreclosure in the cases contemplated
in subdivision
(b) (2), subsection (b) of this section or acquired
under subdivisions
(c) (3) and
(d) (4) of said subsection shall be
held for a longer time than ten years, unless such period shall be
extended by the Commissioner of Banking.
(d) A licensee may sell membership plans subject to the
following conditions:
(1) The purchase of the plan by the customer is strictly
voluntary and never made a condition to the extension of credit or
granting of the loan;
(2) The customer may pay for the plan either by currency,
personal check or draft, money order, credit card or with a check
made payable from the proceeds of the loan to the customer and
endorsed by the customer to the plan;
(3) The customer shall receive and sign a copy of the
enrollment authorization;
(4) The customer may cancel the plan for a full refund paid
directly to the customer within thirty days from the effective date
of enrollment in the plan; thereafter, the member shall receive a
prorated refund of the remaining portion of the membership in the
plan;
(5) No claims or other benefits derived from the plan shall be paid to the licensee; and
(6) Copies of the plans' enrollment authorization shall be
submitted to the commissioner by the licensee prior to the sale and
solicitation of the plans within this state.
(e) A membership plan is a plan that offers security for the
property interests of the licensee's customers. Components of
these plans may include insurance deductible coverages; extended
warranties for items of personalty, excluding motor vehicles;
security services; security information; ambulance and paramedic
expenses; emergency care reimbursement; travel services; legal
consultation and referral services; emergency towing and road
services; and other services and benefits reasonably related to
property ownership.
(f) Nothing contained in this section shall be construed to
abrogate the requirements of chapter thirty-three of this code.