West Virginia Code of State Rules Agency 108 - Lending And Credit Rate Board
The West Virginia Code of State Rules, Agency 108, directly pertains to the West Virginia Lending and Credit Rate Board. This board plays a significant role in regulating the maximum interest rates and finance charges that can be applied to various types of loans and credit transactions within the state.
Here's a breakdown of its purpose, responsibilities, and how its rules function:
I. Purpose and Creation:
Legislative Intent: The West Virginia Legislature established the Lending and Credit Rate Board with the recognition that changes in permissible charges on loans and credit transactions require specialized knowledge of the credit needs of West Virginia citizens and businesses, as well as the availability of credit at reasonable rates.
Flexibility and Expertise: The board was created to provide a more effective and flexible mechanism for prescribing maximum interest rates and finance charges, leveraging the expertise of its members.
II. Membership and Structure:
The board typically consists of a diverse group of members, often including:
The Commissioner of Banking (who usually serves as Chairperson).
The State Treasurer.
The Director of the Governor's Development Office.
The Director of the Division of Consumer Protection of the Attorney General's Office.
Deans of the Colleges of Business from state universities (e.g., Marshall University, West Virginia University).
Members of the public appointed by the Governor.
III. Core Responsibilities and Powers:
The primary duty of the Lending and Credit Rate Board is to prescribe semiannually the maximum interest rates and finance charges on:
Loans
Credit sales or transactions
Forbearance (allowing a delay in payment)
Similar transactions
Key aspects of its operation include:
Alternative Rates: The rates prescribed by the board are alternative rates. This means that any creditor may choose to utilize either the rates set by the board or any other rate or rates they are permitted to charge under other provisions of the West Virginia Code.
Economic Considerations: When fixing maximum rates, the board is required to consider prevailing economic conditions. This includes factors like the monthly index of long-term United States government bond yields, and yields on conventional commercial short-term loans and notes.
Public Hearings: Whenever a change in prescribed maximum rates is proposed, the board must schedule a public hearing to allow interested parties to provide input and information.
Varying Rates: The board has the authority to set varying rates based on:
The type of credit transaction (e.g., revolving credit, installment loans).
The term of the transaction.
The type of debtor.
The type of creditor.
Other relevant factors.
They can also set varying rates for different principal balances within a single category of credit.
Continuation of Rates: If the board does not meet or prescribe new rates, the existing maximum rates remain in effect until new rates are set.
Emergency Meetings: The chairperson or any three board members can call an emergency interim meeting if circumstances and economic conditions require it, with appropriate public notice.
Staff and Funding: The board is entitled to utilize the staff and offices of the West Virginia Division of Banking to support its operations, and it typically establishes a revolving fund to defray its costs.
IV. Historical Context and Evolution:
It's worth noting that while the board continues to exist and set rates, the landscape of lending and credit has evolved. Historically, the board's rates covered categories such as "Supervised Lenders" and "Industrial Loan Companies," which have since been reclassified or no longer exist in their original forms due to changes in West Virginia's consumer credit laws (e.g., Chapter 46A, Article 4, which now licenses "Regulated Consumer Lenders").
V. Where to Find the Rules:
The specific rules detailing the procedural aspects of the board's operations and its rate orders are found under Agency 108, Series 1 (e.g., "Procedural Rule West Virginia Lending and Credit Rate Board").
In essence, Agency 108 reflects West Virginia's approach to consumer protection in lending, aiming to balance the availability of credit with reasonable costs, with the Lending and Credit Rate Board serving as the body responsible for periodically assessing and setting these maximum rates based on economic realities.
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