Fourth Circuit Holds Claims Under the West Virginia Consumer Credit and Protection Act Are Time-Barred if Filed More Than One Year After Loan Acceleration
In a significant consumer finance decision, the Fourth Circuit held that the one-year statute of limitations under the West Virginia Consumer Credit and Protection Act (WVCCPA) begins to run on the date the loan is accelerated. The Fourth Court affirmed the United States District Court for the Southern District of West Virginia’s dismissal of the purported class representative’s illegal debt collection claims as time-barred. The Court’s decision will have a widespread impact on consumer litigation in West Virginia and other state consumer protection statutes with similar statutes of limitation.
Under section 46A-5-101(1) of the WVCCPA, the statute of limitation is one year from “the due date of the last scheduled payment of the agreement.” The District Court granted the loan servicer’s motion for summary judgment, finding the borrowers’ claims time-barred. The issue on appeal was whether “the due date of the last scheduled payment of the agreement” is the loan acceleration date or, as borrowers argued, one year after the maturity date of the loan (effectively a thirty-one [31] year statute of limitation).
The Fourth Circuit affirmed the district court holding: “Under the language of the parties’ agreement, the event of acceleration materially altered the parties’ original schedule of payments, allowing the lender to demand full payment of the loan amount upon the borrower’s default.” A copy of the Court’s opinion is attached here.
John Lynch argued the case at the Fourth Circuit with Jason Manning on the brief. Please do not hesitate to contact John Lynch or Jason Manning if you have questions.
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