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Revisiting the West Virginia Consumer Credit and Protection Act – Again
For the second time in two years, West Virginia’s legislature passes a bill to modify the state consumer protection law.
           
The West Virginia legislative session recently ended, and for the second time in two years, the legislature passed a bill that modifies the state’s primary consumer protection statute (the West Virginia Consumer Credit and Protection Act found in Chapter 46A of the West Virginia Code). In 2015, the legislature passed a bill, which the governor signed into law, and which clamped down on some areas that many saw as sources of abusive and frivolous lawsuits. The legislature has once again tweaked the law in what looks to be further attempts to make the law more balanced.
 
The new bill makes the following changes:
 
  • Balloon disclosures in consumer loans or consumer credit sales would only have to use language that is substantially similar to the language in the statute.  Previously, the disclosure had to use the exact language in the statute.
 
  • The definition of a debt collector would exclude attorneys who are licensed to practice in West Virginia or otherwise authorized to practice here so long as they are collecting the debt in their own name in connection with their law firm and not as an employee of a collection agency managed by a non-attorney. Previously, there was not any explicit exclusion.
 
  • Creditors and collectors would have three business days to process a consumer’s notice that he or she is represented by an attorney and stop communicating with the consumer. Previously, in 2015, the legislature provided for a 72 hour grace period. Prior to 2015, there was no express grace period.
 
  • Consumers would be required to send notice that they are represented by an attorney by certified mail, return receipt requested. Previously, there was no express requirement. (In the past, we saw things like notice of representation written in tiny print on the bottom of remit stubs and consumers saying it so fast during a collection call that it could not be understood.)
 
  • If a debt is beyond the statute of limitations for collection, creditors and collectors would be required to provide a disclosure to this effect in all written communication to the debtor. Previously, that disclosure only was required in the first written communication.
 
  • Pleadings that are filed in court could not be the basis for a lawsuit. Previously, West Virginia had case decisions that provided for this rule in certain circumstances, but there was not an express provision in the statute addressing it.
 
  • Lawsuits to set aside foreclosure sales would not be permitted to be brought more than one year after the sale. Previously, there was not an express provision addressing this.
 
  • Counterclaims that are filed in lawsuits would be subject to the limitations periods that are provided for in the statute. Previously, there was not any express limitation.
 
  • Consumers who want to sue under the statute would be required to inform the creditor or collector of the alleged violation of law and give them time to make an offer to cure the alleged violation. Additional provisions would limit the consumer’s recovery if the cure offer is not accepted. Previously, there was a similar provision in one part of the statute, but it appeared to only apply to suits brought under that specific provision.
 
If the governor signs the new bill into law, these new provisions will take effect on September 1, 2017. It is expected that the governor will sign it as it represents a compromise by all sides.
 
If you’d like to see the bill, you can find a copy here. If you’d like to discuss it or any other issue related to financial litigation in West Virginia, please contact us. - See more at: https://www.spilmanlaw.com/resources/attorney-authored-articles/banking-finance/revisiting-the-west-virginia-consumer-credit-and-p#sthash.ybcCNmHJ.dpuf
For the second time in two years, West Virginia’s legislature passes a bill to modify the state consumer protection law.
           
The West Virginia legislative session recently ended, and for the second time in two years, the legislature passed a bill that modifies the state’s primary consumer protection statute (the West Virginia Consumer Credit and Protection Act found in Chapter 46A of the West Virginia Code). In 2015, the legislature passed a bill, which the governor signed into law, and which clamped down on some areas that many saw as sources of abusive and frivolous lawsuits. The legislature has once again tweaked the law in what looks to be further attempts to make the law more balanced.
 
The new bill makes the following changes:
  • Balloon disclosures in consumer loans or consumer credit sales would only have to use language that is substantially similar to the language in the statute.  Previously, the disclosure had to use the exact language in the statute.
  • The definition of a debt collector would exclude attorneys who are licensed to practice in West Virginia or otherwise authorized to practice here so long as they are collecting the debt in their own name in connection with their law firm and not as an employee of a collection agency managed by a non-attorney. Previously, there was not any explicit exclusion.
  • Creditors and collectors would have three business days to process a consumer’s notice that he or she is represented by an attorney and stop communicating with the consumer. Previously, in 2015, the legislature provided for a 72 hour grace period. Prior to 2015, there was no express grace period.
  • Consumers would be required to send notice that they are represented by an attorney by certified mail, return receipt requested. Previously, there was no express requirement. (In the past, we saw things like notice of representation written in tiny print on the bottom of remit stubs and consumers saying it so fast during a collection call that it could not be understood.)
  • If a debt is beyond the statute of limitations for collection, creditors and collectors would be required to provide a disclosure to this effect in all written communication to the debtor. Previously, that disclosure only was required in the first written communication.
  • Pleadings that are filed in court could not be the basis for a lawsuit. Previously, West Virginia had case decisions that provided for this rule in certain circumstances, but there was not an express provision in the statute addressing it.
  • Lawsuits to set aside foreclosure sales would not be permitted to be brought more than one year after the sale. Previously, there was not an express provision addressing this.
  • Counterclaims that are filed in lawsuits would be subject to the limitations periods that are provided for in the statute. Previously, there was not any express limitation.
  • Consumers who want to sue under the statute would be required to inform the creditor or collector of the alleged violation of law and give them time to make an offer to cure the alleged violation. Additional provisions would limit the consumer’s recovery if the cure offer is not accepted. Previously, there was a similar provision in one part of the statute, but it appeared to only apply to suits brought under that specific provision.
  • If the governor signs the new bill into law, these new provisions will take effect on September 1, 2017. It is expected that the governor will sign it as it represents a compromise by all sides.
If you’d like to see the bill, you can find a copy here. If you’d like to discuss it or any other issue related to financial litigation in West Virginia, please contact us.
Consumer Finance Nicholas P. Mooney II
304.340.3860
nmooney@spilmanlaw.com