2.1. 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.
