Current through Register Vol. XLI, No. 50, December 13, 2024
Section 106-4-2 - Regulated Consumer Lender Restrictions2.1. Balloon payments - Regulated consumer loans shall not contain balloon payments, except where provided by an applicable federal preemption of state law.2.2. Financial statements. The regulated consumer lender shall keep financial statements on file at its main office or the authorized place of examination for the last day of the month for the previous month's business.
2.3. Advertising. 2.3.a. A regulated consumer lender shall not advertise, in any manner, that a loan of a prospective borrower with another licensee will be paid or increased if the loan is transferred to the advertising regulated consumer lender.2.3.b. A regulated consumer lender shall not refer to supervision or control by the state, the Attorney General, the Commissioner of Banking, the Division of Banking, or any other state agency, in any advertising. If desired, a regulated consumer lender may advertise that it is licensed under the provisions of W. Va. Code ' 46A-4-1 et seq.2.3.c. A regulated consumer lender shall not advertise in any manner that may tend to confuse the identity of the regulated consumer lender with any other unrelated licensee or financial organization.2.3.d. Each regulated consumer lender shall retain a copy of all advertising for a period of two (2) years from the date of its use. However, when two (2) or more offices are under the same ownership or control, the copy may be kept at one (1) central office within the State.2.4. Refinancing and consolidation. Regulated consumer lenders shall refrain from refinancing and consolidating loans and installment sales contracts where no reasonable benefit accrues to the consumer. Any refinancing or consolidation of a nonrevolving loan or credit sale which does not provide the consumer a substantial benefit and results in the consumer paying an increased finance charge rate which new and higher rate exceeds that permitted to merchants by W. Va. Code ' 46A-3-101, must contain the disclosures set forth or established under W. Va. Code ' 46A-4-111. Receipt of the disclosures must be acknowledged by the consumer's signature or initials.
2.5. Revolving loan accounts. With respect to a regulated consumer loan made pursuant to a revolving loan account, regulated consumer lenders may contract for and receive, as a minimum charge, the charge provided for in W. Va. Code '46A-4-107(6)(c).
2.6. Certain other charges prohibited. 2.6.a. A regulated consumer lender shall not contract for or make any charge not specifically provided for in chapter forty-six-a of the West Virginia Code, unless the charge results from a legal action awarded by a court.2.6.b. Examples of additional charges prohibited in subdivision (a) of this subsection include, but are not limited to, collection charges and legal fees. Further, a regulated consumer lender may not make a separate charge for credit reports, loan investigation fees or appraisal fees except where those fees are part of prepaid loan finance charges or except where these credit report charges or appraisal fees are part of permitted reasonable closing costs in a loan secured by real property.2.7. Records. 2.7.a. A regulated consumer lender shall maintain adequate records for each licensed office which will enable the Commissioner to reconcile outstanding balances to the corporation's financial statement.2.7.b. In the event that records for loan accounts and installments sales contracts purchased are commingled in a regulated consumer lender's files, the regulated consumer lender shall have a system by which those records may be readily identified, one from the other. The records shall bear the date of the contract and shall readily identify the type of transaction reflected thereon.2.7.c. The records shall indicate when an account has been placed for collection or legal action taken. They shall also indicate whether judgment was obtained, together with the date and amount of judgment.2.7.d. On accounts prepaid in full, the records shall clearly indicate the amount of unearned interest rebated and the amount of unearned insurance premium rebated, if any.2.8. Reporting periods. Effective December 31, 1997, all regulated consumer lenders shall submit semiannual reports as of June 30 and December 31 in the form and content prescribed by the Commissioner. The reports are due thirty (30) days after the close of the reporting period.
2.9. Regulated consumer loans not precomputed. 2.9.a. With respect to a regulated consumer loan, other than a revolving loan account, which is not precomputed, a regulated consumer lender shall compute finance charges on unpaid principal balances outstanding from time to time, for the actual time outstanding. Each payment shall be applied first to the accumulated finance charge and the remainder of the payment applied to the unpaid principal balance: Provided, That if the amount of the payment is insufficient to pay the accumulated finance charge, the unpaid accumulated charge shall continue to accumulate to be paid from the proceeds of subsequent payments and shall not be added to the principal balance.2.9.b. Loan finance charges shall not be payable in advance or compounded. However, if part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the new loan contract may include any unpaid loan finance charge which has accrued to the extent that the accrued charge does not exceed the unpaid principal balance of the prior loan. The resulting loan contract is considered a new and separate loan transaction for all purposes.2.10. Out-of-state obligations. With respect to consumer credit sales or consumer loans consummated in another state, a regulated consumer lender shall not collect or attempt to collect a sales finance charge or loan finance charge in excess of that permitted by the West Virginia Code. In certain situations where a consumer credit sale or non-revolving loan is made in another state W. Va. Code ''46A-3-104(6)and 46A-4-107(8) permit a resident lender as assignee to collect the finance charge provided in the agreement under the laws of the state where the agreement was executed.
2.11. Failure to do business. Any regulated consumer lender who fails to have its office open for business at least three (3) hours per day, at least four (4) days per week for a consecutive period of four (4) weeks, is considered to have forfeited its license. For purposes of this subsection legal holidays may be counted as a business day. A regulated consumer lender may obtain written extensions from the Commissioner for periods not exceeding one (1) month upon presentation of evidence satisfactory to the Commissioner that the extensions are warranted.
2.12. Installment sales contracts. 2.12.a. A regulated consumer lender may purchase installment sales contracts without regard to the amount of the contracts and without regard to whether or not a buyer on a contract may also be obligated on a regulated consumer loan.2.12.b. A regulated consumer lender may purchase installment sales contracts at any discount rate agreed upon with the seller.2.12.c. A regulated consumer lender shall obtain from the seller a copy of the disclosure statement for each installment sales contract purchased and correct any bona fide errors in the computation of charges, so long as the corrections are not detrimental to the consumer.2.13. Retention and financing of fees. 2.13.a. The non-refundable loan processing fee permitted by W. Va. Code ' 46A-4-107(7) shall be included in the calculation of the loan finance charge as a prepaid finance charge and may be paid separately or withheld from the proceeds of the loan and financed, and such financing shall not constitute interest on interest. Notwithstanding the withholding of the fee from the loan proceeds, the amount financed shall constitute the loan amount for purposes of this subsection of the code.2.13.b. The total of any origination fees, points, or investigation fees assessed under subsection (4) of W. Va. Code ' 46A-4-107 which may be retained upon prepayment of a loan in a refinancing by the same lender within any twenty-four month period may not exceed five percent of the amount financed.