West Virginia Record

Friday, January 24, 2020

Justice signs bill updating state Consumer Credit Protection Act

By Chris Dickerson | Apr 24, 2017


WASHINGTON – Gov. Jim Justice has signed a bill making key changes to the West Virginia Consumer Credit Protection Act, and the U.S. Chamber of Commerce is praising the move.

Justice signed Senate Bill 563 into law on April 24. Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), said the law will further reduce frivolous lawsuits and improve the business climate in the state of West Virginia.

“West Virginia continues to make progress in improving its legal climate, and we applaud the Legislature and Gov. James Justice for taking action on important reforms this session, including pre-judgment interest and consumer credit protection,” Rickard said in a statement. “SB 563 will reduce frivolous lawsuits regarding debt collection practices by permitting creditors to remedy violations before debtors resort to litigation. The legislation will prohibit abusive litigation while protecting victims from fraudulent conduct.

Lisa Rickard | IRL

“We commend the West Virginia Legislature, specifically bill sponsor Sen. Charles Trump, for passing this important legislation.”

The ILR owns The West Virginia Record.

A lobbyist who took part in negotiations on the bill said it fixes some loopholes that resulted in “gotcha lawsuits because of technical violations” of the CCPA rather than actual violations.

“It’s a pretty big piece of legislation,” according to Danielle Waltz, who also is an attorney at Jackson Kelly in Charleston. “This is something that Senator Trump is a big supporter of. The act (CCPA) was revised two years ago, and those revisions did address some of the problems, but there still were some issues. And those issues ultimately weren’t good for consumers.

“I think the hope was that those first revisions would take care of the problems. And like I said, it did address some of the problems.”

A few key provisions of the law include:

* Requiring debt collectors to inform consumers in writing if the debt collector can still file legal action against the consumer for non-payment;

* Clarifying the statute of limitations regarding when a consumer may file a claim against a debt collector or creditor;

* Exempting certain lawyers and filings from the act; and

* Requiring that a consumer give 45 days notice to a creditor or debt collector prior to filing any civil action under the West Virginia Consumer Credit and Protection Act. This provides the creditor/debt collector an opportunity to make an offer to cure.

In that 45-day window, if the consumer accepts any offer that is made, litigation is avoided. If no offer is made, the consumer may file the claim. If an offer is made during that 45-day period, but is rejected by the consumer, that consumer must be awarded more than that offer at trial in order to recover attorney's fees.

This right to cure procedure prior to a lawsuit being filed against a creditor allows the sides to engage in settlement discussions prior to the suit being filed.

Waltz said that change will “really make the parties look at the case and make a good faith offer and acceptance.”

“It would save attorney fees and put money in the hands of consumers more quickly,” she said.

Also, the previous CCPA was resulting in lawsuits being filed against attorneys for information contained in pleadings. Waltz said the latest revisions would limit that.

“There was a technicality where if you’re representing a consumer, you tell the creditor you’re doing it,” Waltz explained. “And if the creditor made calls after that, it was a violation of the act. You were required to tell the creditors in writing you were representing the consumer. But now, there is gamesmanship about how the creditor was told. Was it in an email or what?

“This bill would require the creditors be notified by certified mail. So, it would take the gamesmanship out of the equation. It has very specific requirements about how you have to provide that information.”

In short, Waltz said the law will make attorneys take a better look at the case before it’s filed.

“It’s going to have to make them take a long look at their case and tell the defendant to make an offer,” she said. “And if they don’t make the offer and go to trial, if the damages come under the offer the defendants make, it will preclude or severely limit the availability of fees.”

Waltz said the West Virginia Bankers Association, the Community Bankers Association and retailer groups were supportive of the legislation. She also said the trial bar took part in negotiations about the bill with Trump.

“Ultimately, this bill is the product of the result of negotiations of many parties,” she said. “Trump is good about bring all sides to the table. He’s so good at that. I have a great deal of respect for him and enjoy working with him on this type of legislation.

“I applaud the Legislature for the bi-partisan support of the bill,” she said.

A leader with a state group for trial lawyers echoed Waltz's comments about Trump and the negotiations.

"The Legislature passed a committee substitute for SB 563 that was negotiated by representatives from the banking industry, its regulators, debt collectors, consumer advocates and consumer attorneys," said Anthony Majestro, chair of the West Virginia Association for Justice Legislative Committee and one of the compromise's negotiators. "It is a compromise bill that all parties involved believe is fair. WVAJ again thanks everyone who was involved in the negotiation, including Senate Judiciary Chair Charles Trump."

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Organizations in this Story

U.S. Chamber Institute for Legal Reform (ILR)State of West VirginiaJackson Kelly PLLCWest Virginia Association for Justice