Borrowing in West Virginia: What State Law Allows

Why there are no payday or title lenders

West Virginia never passed a law authorizing payday lending, and its consumer loan rate caps sit far below what a two-week payday loan costs. The Check Cashers Act closes the usual workaround: a check casher may not agree to hold your check for deposit at a later date in order to make you a loan (W. Va. Code § 32A-3-1).

Car title loans have no separate statute either, so they fall under the same rate limits that keep the business model from working here. If you see an online payday or title offer aimed at West Virginians, check the lender's license before sharing your bank account.

Rate caps for licensed consumer lenders

Nonbank consumer lenders are licensed by the Division of Financial Institutions. Section 46A-4-107 of the West Virginia Consumer Credit and Protection Act sets their ceilings by loan size:

To put the top rate in dollars: a $2,000 loan at 31% repaid over 24 months costs about $113 a month and roughly $709 in interest. That's expensive, but it's a fraction of what the same sum would cost as a rolled-over payday loan. Use the loan payment calculator to test other amounts.

Two things can push the real cost above the note rate. The first is the allowed fee: a 2% processing fee on that $2,000 loan is $40, which raises the APR a little above 31%. The second is where the lender is chartered. Banks based in other states can often lend at their home state's rates, and some online lenders partner with them, so an offer can carry a higher APR than these caps. The APR on the federal disclosure is the number to compare.

How long a creditor has to sue

West Virginia Code section 55-2-6 gives 10 years for a contract in writing signed by the person being sued, and five years for any other contract, express or implied.

Credit card debt sits between the two. Card agreements are usually accepted by using the card rather than by signing, which points to five years, but a creditor holding a signed application may argue for ten. If you're sued on an old card balance, the paperwork the creditor produces matters. Read how statutes of limitations work before you make any payment on an old account.

Your paycheck after a judgment

For a judgment arising from a consumer loan or consumer credit sale, section 46A-2-130 limits garnishment to the lesser of 20% of your weekly disposable earnings or the amount above 50 times the federal minimum hourly wage. At the current $7.25 federal minimum, that floor is $362.50 a week.

The general wage execution statute, section 38-5A-3, works the same way: the levy is capped at 20% of wages, it can't start unless your weekly after-tax pay exceeds 50 times the federal minimum wage, and it can't reduce your pay below that amount. Federal law would allow up to 25% with a 30-times floor, so West Virginia protects more.

Complaints and help

1. 1 Check the license with the Division of Financial Institutions or on NMLS Consumer Access.
2. 2 File a complaint with the Division of Financial Institutions about a licensed lender's charges or practices.
3. 3 Report illegal lending or collection abuse to the Attorney General's Consumer Protection Division or the CFPB. Know your rights with debt collectors.

Common questions