On February 23, legislation was introduced in the West Virginia Senate to amend the state’s Consumer Credit Protection Act.  Senate Bill 542 would revise sections 46A-2-121, -122, -125, -126, and -128, sections 46A-5-101 and -106, and add new section 46A-5-107.

Among these proposed changes, the Bill seeks to:

  • Modify section 46A-2-121(1) regarding a claim for unconscionability by eliminating the ability of a court to refuse to enforce an agreement unless a consumer proves the agreement or transaction at the time it was made to have been induced by unconscionable conduct and a term or part of the agreement or transaction was unconscionable at the time it was made;
  • In section 46A-2-122, add a new definition of “creditor” that excludes any person who receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of the debt for another, and completely revise the definition of “debt collector”;
  • Modify section 46A-2-125 regarding oppression and abuse by deleting the phrase “[t]he placement of telephone calls” from subsection (b) and replacing it with “[e]ngaging any person in telephone conversation … ,” and deleting the phrase “[c]ausing a telephone to ring” in subsection (d);
  • Revise section 46A-2-128(e) concerning unfair or unconscionable means by requiring written notification of a consumer’s representation by an attorney, specifying the information that must be provided by a consumer, and limiting the scope to communications made more than three days after receipt of such written notice;
  • Change section 46A-5-101(1) by adding a statutory damages cap of $1,000 per sale, lease, or loan (instead of $1,000 per violation); and
  • Amend section 46A-5-101(1) by removing the current limitation that an action concerning credit sales or loans cannot be brought more than one year after the due date of the last scheduled payment of the agreement and instead applying a four-year statute of limitations to all violations arising from consumer credit sales or consumer loans.

We will continue to monitor – and financial services industry participants engaged in activity in West Virginia are advised to remain aware of – this Bill as it winds through the legislature.

The Financial Servicing Litigation team at Troutman Sanders has represented national banks, investors, servicers, creditors, and debt collectors in hundreds of individual and class cases in West Virginia, obtaining dispositive rulings for their clients on motions, at trial, and through appeal.