Loren Allen, General Counsel for the West Virginia Bankers Association, recently outlined changes to the Consumer Credit and Protection Act, which will take effect on July 4, 2017.  According to the WVBA, the Regular Session of the 2017 West Virginia Legislature was one of the most successful and productive sessions in recent history for the banking industry.

To that end, important changes to the West Virginia Consumer Credit and Protection Act will consist of:

ARTICLE 2. CONSUMER CREDIT PROTECTION.

§46A-2-105.  Balloon payments. Effective July 4, 2017, lender is no longer required to use the exact disclosure verbiage contained in the statute but may use any language substantially similar in form and substance.

§46A-2-115.  Limitation on default charges.  Effective July 4, 2017, only payments made in accordance with the terms of a consumer credit sale or consumer loan must be credited immediately upon receipt against payments due.  Partial or non-conforming payments, overpayments, etc. may be credited immediately or may be held in suspense at the discretion of the lender, until such time as a full payment, in accordance with the terms of the contract, can be credited.

§46A-2-122.  Definitions. Effective on action filed on or after July 4, 2017, an attorney is not a “debt collector” so long as

  1. licensed or otherwise authorized to practice law in West Virginia, and
  2. represents a creditor, and
  3. collecting as an employee, partner, member, shareholder or owner of a law firm, and
  4. not operating a collection agency under the management of a person who is not a licensed attorney.

§46A-2-128.  Unfair or unconscionable means. Effective July 4, 2017, the consumer must provide notice of representation by counsel by certified mail, return receipt requested. Also effective July 4, 2017, the communications safe harbor changes from seventy two hours to three business days after receipt of such notice.

§46A-2-140. Pleadings not to be the basis of a cause of action.  Effective July 4, 2017, nothing contained in or omitted from a pleading nor the act of filing a civil action shall be the basis of a cause of action unless the pleading or the filing of the civil action

  1. makes threats to take illegal action,
  2. makes false representations regarding a claim against a consumer,
  3. attempts to collect the debt collector’s fees, or any charges or fees not expressly authorized by contract and by statute and/or the rules of civil procedure.

ARTICLE 3. FINANCE CHARGES AND RELATED PROVISIONS.

§46A-3-111. Application of payments on account; rebate upon prepayment, refinancing or consolidation; judgments and interest on judgments.  Effective July 4, 2017, only payments made to a creditor in accordance with the terms of a precomputed consumer credit sale or consumer loan must be applied to installments in the order in which they fall due.  Any payments made to a creditor which do not comply with the terms of a precomputed consumer credit sale or consumer loan may be held in a suspense or unapplied funds account at the discretion of the lender and must be credited only when there are funds sufficient to cover a full contractual payment. The creditor must disclose to the consumer the total amount of funds held in a suspense or unapplied funds account.

§46A-3-112. Delinquency charges on precomputed consumer credit sales or consumer loans.  Effective July 4, 2017, a lender may assess one contractual delinquency charge every month that the borrower remains past due for regular principle and interest payments on a precomputed consumer credit sale or consumer loan.

§46A-3-113. Delinquency charges on nonprecomputed consumer credit sales or consumer loans repayable in installments.  Effective July 4, 2017, a lender may assess one contractual delinquency charge for every month that the borrower remains past due for regular principle and interest payments on a nonprecomputed consumer credit sale or consumer loan.

ARTICLE 5. CIVIL LIABILITY AND CRIMINAL PENALTIES.

§46A-5-101.  Effect of violations on rights of parties; limitation of actions.Effective on any action filed on or after July 4, 2017, no action to set aside a foreclosure sale of any real estate securing a consumer loan may be brought more than one year after the foreclosure sale is final.

§46A-5-102.  Assertion of rights.  Statutory rights may be asserted as a claim for setoff or defense to an action against a consumer without regard to any limitation of actions. Counterclaims are subject to the appropriate statute of limitations.

§46A-5-108.  Right to cure.  Effective on any action filed on or after July 4, 2017, no suit may be filed against a creditor until the consumer has:

  1. informed the creditor in writing
  2. by certified mail, return receipt requested,
  3. to the creditor’s registered agent or
  4. if not registered, to the principal place of business,
  5. of the alleged violation and
  6. the factual basis for the violation, and
  7. providing the creditor forty-five days to make a cure offer or
  8. if a cause of action has already been filed, providing the creditor twenty days to make a cure offer

The cure offer shall:

  1. be provided to the consumer’s counsel or
  2. if unrepresented, to the consumer
  3. by certified mail, return receipt requested.

The consumer shall:

  1. have twenty days from receipt of the cure offer to accept the offer or
  2. it is deemed refused and withdrawn.

If a cure offer is accepted, the creditor shall:

  1. have twenty days to begin effectuating the agreed upon cure and
  2. the cure must be completed within a reasonable time.
  • When a claim is presented as a counterclaim, cross-claim or third party claim, the notice of right to cure shall be served with the counterclaim, cross claim or third party claim.
  • Any applicable statute of limitations is tolled during the initial notice of right to cure period, the acceptance period or for the cure performance period, whichever is longer.
  • A consumer that has accepted a cure offer may bring an action against a creditor or debt collector for failing to timely effect the cure offer.
  • It is a complete defense to any action brought under article 2, 3, 4 or 5 that a cure offer was made and accepted and the cure was performed.
  • If the finder of fact determines that the cure offer was accepted and the agreed upon cure performed, the creditor or debt collector is entitled to reasonable attorney fees and costs attendant to defending the action.
  • No cure offer is admissible in any proceeding unless the cure offer is delivered to the consumer or his/her attorney prior to the filing of the creditor’s initial responsive pleading.
  • If the cure offer is timely delivered by the creditor, the creditor may introduce the cure offer into evidence at trial.
  • The creditor is not liable for the consumer’s attorney’s fees and court costs incurred after delivery of the offer unless the actual damages, civil penalties and any other monetary or equitable relief, not including attorney’s fees and court costs, are found to exceed the cure offer.

For more information, visit http://www.wvbankers.org/.

*Reprinted/Shared with permission from author Loren White and the WVBA. Kay Casto & Chaney PLLC is a member of the WVBA.

About the WVBA:
The West Virginia Bankers Association seeks to efficiently provide for the educational needs of our member banks, promote legislative action that is in the best interests of the banking industry and state, garner grass roots participation from our member banks and foster cooperation with other trade group constituencies. Contact: lallen@wvbankers.org.

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Kay Casto & Chaney PLLC/Responsible Attorney:  Thomas H. Ewing (tewing@kaycasto.com)