Pub. 7 2016 Issue 2

www.wvbankers.org 10 West Virginia Banker By Sandra Murphy and Amy Tawney, Bowles Rice LLP Defending Traditional Banking — Why Advocacy and Vigilance Matter I n this year marking the 125th anniversary of the West Virginia Bankers Association (WVBA), events at the Legislature proved that having an association dedi- cated to advocacy for the banking industry is critical if traditional banking is to thrive in our state. And while the industry's participation in the legislative session is vastly important, events at the Capitol in 2015 and 2016 demonstrated that advocacy for the banking industry is a year-round effort that requires persistence and vigi- lance even when the Legislature is not in session. Lobbying efforts surrounding the state's "unconscio- nability" statute, which is a part of the West Virginia Consumer Credit and Protection Act (WVCCPA), pro- vide a case in point. In 2015, the WVBA advocated for sweeping changes to the WVCCPA, including changes to the unconscionability statute. This statute provides a cause of action if an agreement or transaction is found to have been unconscionable at the time it was made, or to have been induced by unconscionable conduct. In proposing changes to the statute, the WVBA knew that the majority rule in the United States required a plain- tiff to prove both procedural and substantive unconscio- nability. Although the West Virginia Supreme Court of Appeals had issued decisions supporting this view, plaintiff ’s lawyers persisted in arguing that inclusion of the phrase “unconscionable inducement” created a separate cause of action under the statute and that this cause of action required a much lower burden of proof to successfully bring a claim. In an effort to ensure that the prior decisions of the West Virginia Supreme Court of Appeals would with- stand challenge, the banking industry included minor changes to the statute in its omnibus legislation in 2015. When legislative leadership requested that the Associ- ation work with consumer advocates to achieve a com- promise, the Association dropped proposed changes to the unconscionability statute, largely because the West Virginia case law in this area strongly supported the industry's position that a plaintiff had a difficult burden of showing both procedural and substantive unconscio- nability to state a claim. Ultimately, the industry was able to pass legislation that reformed critical and troublesome aspects of the WVC- CPA, including the statute’s debt collection provisions. The legislation also achieved important limitations on damages in consumer lawsuits, increased the cap on late fees and brought certainty to the WVCCPA’s statute of limitations and other remedies under the Act.