Credit Service Organizations

Who Must Register?

The following types of companies must register with Secretary of State as a Credit Service Organization (CSO) per WV Code §46A-6C:

• Credit Companies

• First and Second Mortgage Brokers and Lenders

Credit Companies

Businesses that offer to arrange, extend or repair credit in West Virginia are required to register as a Credit Service Organization (CSO) per WV Code §46A-6C. Certain categories of companies are exempt. See CSO Exemptions to Registration for detailed information.

Disclosure Requirement

All credit companies must comply with the disclosure statement, broker contract, and notice of cancellation provisions of WV Code §46A-6C-6 and §46A-6C-7. Once registered, the Secretary of State will provide the appropriate disclosure form for CSOs to provide each customer. A copy of the disclosure, signed by the customer, must be kept on file by the CSO for one year.

First and Second Mortgage Brokers and Lenders

All loan brokers who do not fall within one of the exemptions in WV Code §46A-6C-2, such as lenders actually providing the funds, nonprofit corporations, licensed real estate brokers, attorneys, accountants, must register as a CSO with the Secretary of State. See CSO Exemptions to Registration for detailed information.

Registration as a Broker

Legislation requires licensing as a broker with the West Virginia Division of Banking. This legislation does not exempt mortgage brokers from CSO registration and disclosure requirements. Details and application forms for the new mortgage broker and lender license are available online with the West Virginia Division of Banking.

Surety Bond

Although loan brokers must obtain a bond from the banking commissioner under H.B. 4139, they need not obtain a bond from the Secretary of State unless they accept money from prospective borrowers prior to closing.

Disclosure

All brokers must comply with the disclosure statement, broker contract, and notice of cancellation provisions of WV Code §46A-6C-6 and §46A-6C-7. Once registered, the Secretary of State will provide the appropriate disclosure form for CSOs to provide each customer. A copy of the disclosure, signed by the customer, must be kept on file by the CSO for one year.

Filing the Registration

Registration as a CSO is in addition to the regular required Secretary of State and State Tax Department business registrations.

For example, a foreign (out-of-state) corporation arranging loans or credit repair must file the following:

1. A Certificate of Authority Registration with Secretary of State as a foreign (out-of-state) corporation,

2. A CSO Registration Statement (Form CSO-1) (see Surety Bondbelow for additional registration information),

3. A West Virginia State Tax Department Business Registration Certificate (i.e, application for business license).

Surety Bond

A basic decision for the CSO is whether to accept any payment before the completion of all services the company has agreed to provide the customer. If any early deposit is accepted, even an advance payment made to the CSO to cover third party fees, the CSO must operate with a $15,000 surety bond in continuous effect, or have established a $15,000 surety trust account. If the CSO agrees to accept no payment before completing services, it may operate without the bond or surety account.

For further assistance registering as a Credit Service Organization, contact the Business Division​​