Require collection agencies to provide a 30 day notice prior to wage garnishments.

HB 4382 Text

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Committee Substitute (1)

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Key:
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= existing Code.
Red
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WEST virginia legislature
2026 regular session
ENGROSSED
Committee Substitute
for
House Bill 4382
By Delegates Burkhammer and Heckert
[Originating in the Committee on the Judiciary; Reported on February 2, 2026]

A BILL to amend and reenact §47-16-4 of the Code of West Virginia, 1931, as amended, relating to requiring collection agencies to notify debtors of wage garnishments by regular mail 30 days prior to the initial garnishment; and to send monthly statements showing balance owed.
Be it enacted by the Legislature of West Virginia:

ARTICLE 16. COLLECTION AGENCIES.

§47-16-4. Requirements for conduct of agency.

(a)
License. —
No person, firm, corporation or association
shall
may conduct within this state a collection agency without having first applied for and obtained a business franchise registration certificate pursuant to §11-12-2 of this code, nor
shall
may any person, firm, corporation or association establish or operate a collection agency or the business of a collection agency, unless such person, firm, corporation or association maintains an office within the State of West Virginia. The business franchise registration certificate shall be deemed the collection agency's license. A license is required for each collection agency, including each principal office and all branch offices thereof.
(b)
Bond. —
Each applicant shall file with the commissioner a continuing surety bond executed by a corporation which is licensed to transact the business of fidelity and surety insurance in the State of West Virginia to run concurrently with the registration tax period, which bond
must

shall
be filed with, and approved by, said commissioner before the license herein provided may be issued. A separate bond shall be filed for each collection agency including each principal office and all branch offices thereof. Each bond shall be in the amount of $5,000 payable to the State of West Virginia, and conditioned that any such person will pay all damages to the state or a private person resulting from any unlawful act or action by
such

that
person or his
or her
or its agent in connection with the conduct of the business of the collection agency. This continuing bond shall be filed with the Tax Commissioner.
An action may be brought in any court of competent jurisdiction upon the bond by any person to whom the licensee fails to account and pay as set forth in
such

that
bond. The aggregate liability of the surety for all breaches of the condition of the bond
shall

may
not exceed the sum of
such

the
bond.
Upon entering judgment for the prevailing party in any action on the bond required by this article, the court shall include in the judgment, reasonable compensation for the services of
such

the
party's attorney in the action.
The license of any licensee shall be void upon termination of the bond of the surety company, unless, prior to
such
termination, a new bond has been filed with the commissioner.
Should

If
the license of any surety company to transact business in this state
be

is
terminated, all bonds given pursuant to this article upon which
such

the
company is surety shall thereupon be suspended, and the commissioner shall immediately notify each affected licensee of
such

the
suspension and require that a new bond be filed. This notice shall be by registered or certified mail, return receipt requested, and shall be addressed to the licensee at his
or her
or its principal place of business as shown by the commissioner's records. The failure of any licensee to file a bond with new or additional surety within 30 days after being advised in writing by the commissioner of the necessity to do so shall be cause for the commissioner to revoke the license.
(c)
Record Keeping. —
Each collection agency licensed to operate in this state shall keep a record of all sums collected by
such

the
agency and of all disbursements made by
such

the
agency, and shall maintain or make available all
such
records and all records as to customers' funds at
such

the
agency's principal place of business within this state. Each collection agency shall maintain records of collections for and payments to customers for a period of six years from the date of last entry therein.
No collection agency, nor any employee thereof,
shall

may
intentionally make a false entry in any
such
collection agency record nor intentionally mutilate, destroy or otherwise dispose of any
such
record within the time limits provided in this section.
Such

The
records shall at all times be open for inspection by the commissioner, or his
or her
duly appointed representative.
No licensee
shall

may
commingle the money of collection agency customers with other moneys, but shall maintain a separate trust account in a bank for customers' funds.
Each collection agency shall, within a period of 30 days after the close of each and every calendar month, pay to
such

the
agency's customers the net proceeds due on all collections made during the preceding calendar month. When the net proceeds due the customer are less than $5 at the end of any calendar month, the collection agency may defer for a period not to exceed ninety days the payment of said proceeds, if monthly statements are mailed or delivered to the customer.

(d) Collection agencies may not cause a garnishment of wages to be executed for an unpaid debt, unless the collection agency provides the debtor with written notice of the intended garnishment by United States Postal Service regular mail to the debtor’s last known address at least 30 days prior to the initial garnishment of wages. Following the initial garnishment, the collection agency shall provide the debtor with a monthly statement by United States Postal Service regular mail indicating the amount collected by garnishment of wages and the remaining balance of the debt owed.
(e) Nothing contained in this article prohibits the application of the provisions of Chapter 46A of this code.

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