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2008 SESSION

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Senate Committee on Commerce and Labor
Subcommittee Financial Institutions & Insurance

Miller, Y.B. (Chairman), Edwards, Wampler, Wagner

Clerk: Martha Turner
Staff: Frank Munyan
Date of Meeting: February 4, 2008
Time and Place: Monday, Feb. 4; 8:00 a.m.; 3rd Floor East Conf. Room; GAB

S.B. 258 Mortgage lending and brokering practices; prohibitions and penalties.

Patron: Deeds

Mortgage lending practices; penalty.  Prohibits any (i) mortgage lender or broker, (ii) person required to be licensed under the Mortgage Lender and Broker Act, and (iii) person exempt from the licensing requirements of the Mortgage Lender and Broker Act, other than a state or federally chartered bank, savings institution, or chartered credit union, or person making, providing, or arranging a mortgage loan originated or purchased by an agency of the Commonwealth or a locality, from arranging special mortgages unless the borrower has obtained a written certification from an authorized independent loan counselor on the advisability of the loan transaction. A special mortgage is a residential mortgage loan originated, subsidized, or guaranteed by or through an agency of the Commonwealth, a locality, or a nonprofit organization that has one or more nonstandard payment terms which substantially benefit the borrower. Such persons are also prohibited from (a) entering into subprime loans containing a provision requiring or permitting the imposition of a prepayment penalty or charge in the event the loan is prepaid and (b) making, providing, or arranging for a residential mortgage loan, other than a reverse mortgage, if the borrower's compliance with any repayment option will result in negative amortization during any six-month period. The measure expressly gives borrowers a private cause of action, in which they may seek recovery of damages, statutory damages equal to the amount of all lender fees included in the amount of the principal of the mortgage loan, punitive damages, costs, and reasonable attorney fees. Finally, the measure makes it unlawful to knowingly make or cause to be made any deliberate and material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process; to knowingly use or facilitate the use of any deliberate and material misstatement, misrepresentation, or omission, knowing the same to contain a material misstatement, misrepresentation, or omission, during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process. Violations are to be punishable as a Class 1 misdemeanor or, if a financial loss of greater than $200 results, a Class 6 felony. Second or subsequent convictions are punishable as a Class 6 felony. Violators shall also be required to pay restitution.

A BILL to amend and reenact §§ 6.1-409, 6.1-411, and 6.1-431 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 6.1-422.2 through 6.1-422.5, relating to mortgage lending and brokering practices, including subprime loans, negative amortization, special loans, and residential mortgage fraud; penalties.

086270220

S.B. 264 Fire insurance; prohibits insurer from refusing to issue policy for family day homes.

Patron: Deeds

Fire insurance; family day homes.  Prohibits an insurer or agent from refusing to issue or renew a policy written to insure an owner-occupied dwelling solely because the insured operates a licensed or registered family day home. The policy shall not provide liability coverage for losses arising out of, or in connection with, the operation of the family day home, which coverage shall only be provided by a separate endorsement or insurance policy.

A BILL to amend and reenact §§ 38.2-2114 and 38.2-2115 of the Code of Virginia, relating to grounds for the issuance and renewal of fire insurance policies; family day homes.

088174220

S.B. 325 Credit reports; authorizes armed services members and spouses to freeze.

Patron: Wagner

Credit report security freezes for armed services members.  Authorizes Virginia-domiciled members of the armed services who are deployed to another country and their spouses to freeze access to their credit reports. If a consumer has placed a freeze on his credit report, a consumer reporting agency is prohibited from releasing the credit report, or any information in it, without the consumer’s express authorization. The measure provides a means by which the service member or spouse can release his report, permanently, temporarily, or to a specific third party. A consumer reporting agency may not charge a fee for establishing a credit freeze, but may charge a fee of no more than $5 for removing or temporarily lifting a freeze. Violations are a prohibited practice under the Consumer Protection Act.

A BILL to amend and reenact §§ 59.1-200 and 59.1-444 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 59.1-443.3, relating to information privacy; freezing access to credit reports of Virginia resident service members.

084621340

S.B. 461 Credit reports; security freezes for armed services members.

Patron: Whipple

Credit report security freezes for armed services members.  Authorizes Virginia-domiciled members of the armed services or National Guard and their spouses to freeze access to their credit reports. If a consumer has placed a freeze on his credit report, a consumer reporting agency is prohibited from releasing the credit report, or any information in it, without the consumer’s express authorization. The measure provides a means by which the service member or spouse can release his report, permanently, temporarily, or to a specific third party. A consumer reporting agency may charge a fee of no more than $5 for establishing a freeze, removing a freeze, or temporarily lifting a freeze. Violations are a prohibited practice under the Consumer Protection Act.

A BILL to amend and reenact §§ 59.1-200 and 59.1-444 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 59.1-443.3, relating to information privacy; freezing access to credit reports of Virginia resident service members.

084676352

S.B. 576 Credit reports; authorizes consumer to freeze access thereto.

Patron: Saslaw

Freezing access to credit reports.  Authorizes any consumer to freeze access to his credit report. If a consumer has placed a freeze on his credit report, a consumer reporting agency is prohibited from releasing the credit report, or any information in it, without the consumer’s express authorization. The measure provides a means by which a consumer can release his report, permanently, temporarily, or to a specific third party. Certain disclosures are exempt from the freeze. A fee of up to $10 may be charged for establishing or lifting a freeze, except identity theft victims are not required to pay a fee except for a temporary lifting of the freeze within 15 minutes of receipt of certain electronic requests. A person who willfully fails to comply with the requirements is liable to a consumer for actual damages of between $100 and $1,000, punitive damages, and reasonable attorney fees. A person who negligently fails to comply with the requirements is liable to a consumer for actual damages and reasonable attorney fees.

A BILL to amend the Code of Virginia by adding in Title 59.1 a chapter numbered 35.1, consisting of sections numbered 59.1-444.1 and 59.1-444.2, relating to security freezes.

080050324