H*4548(Rat #0265, Act #0231 of 2016)  General Bill, By Sandifer, Forrester, 
Toole, Bales, Chumley, Burns, Hardee, Allison, Tallon, Henderson, Clemmons, 
Sottile, Crosby, V.S. Moss, Jefferson, Yow, Duckworth, H.A. Crawford, Jordan, 
Fry, Herbkersman, Lowe, Goldfinch, Hixon, Norman, Hiott, Taylor, McCoy, 
D.C. Moss, Collins, Rutherford, Anderson, Kirby, Pitts, Corley, Ballentine, 
Hamilton, Finlay, Huggins, Ott, Govan, Riley, Willis, Thayer, Felder, Hicks, 
Simrill, G.A. Brown, Bedingfield, Stringer, Ryhal, King, Loftis, Hayes, Mack, 
Rivers, Ridgeway, Clary, Brannon, Atwater, Daning, Bannister, Anthony, 
McEachern, Mitchell, Erickson, Weeks, Knight, Cole, George, Horne, G.R. Smith, 
G.M. Smith, Williams, Limehouse, Pope, Gambrell, Alexander, Stavrinakis, Newton, 
White, Spires, R.L. Brown, Gilliard, Dillard and Gagnon
 AN ACT TO AMEND SECTION 37-2-307, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO CLOSING FEES ASSESSED ON MOTOR VEHICLE SALES CONTRACTS, SO AS TO
 REQUIRE A MOTOR VEHICLE DEALER WHO CHARGES A CLOSING FEE TO PAY A REGISTRATION
 FEE AND THE FEE MUST BE INCLUDED IN THE ADVERTISED PRICE OF THE MOTOR VEHICLE;
 TO DEFINE THE TERM CLOSING FEE; TO ESTABLISH THE PROCEDURES A DEALER SHALL
 UNDERTAKE BEFORE CHARGING A CLOSING FEE AND TO AUTHORIZE THE DEPARTMENT OF
 CONSUMER AFFAIRS TO DETERMINE WHETHER A CLOSING FEE IS REASONABLE; TO PROVIDE
 THAT A DEALER WHO COMPLIES WITH CERTAIN STATUTORY REQUIREMENTS MAY LAWFULLY
 CHARGE A CLOSING FEE, TO ALLOW A MOTOR VEHICLE DEALER TO ASSERT ANY DEFENSES
 PROVIDED TO A CREDITOR PURSUANT TO TITLE 37, AND TO ALLOW A PURCHASER INJURED
 OR DAMAGED BY THE ACTION OF A MOTOR VEHICLE DEALER IN VIOLATION OF CERTAIN
 STATUTORY REQUIREMENTS MAY ASSERT THE REMEDIES AVAILABLE PURSUANT TO TITLE 37;
 TO AUTHORIZE THE DEPARTMENT OF CONSUMER AFFAIRS TO ADMINISTER AND ENFORCE
 MOTOR VEHICLE DEALER CLOSING FEES; AND TO EXPRESS THE INTENT OF THE GENERAL
 ASSEMBLY. - ratified title

   12/10/15  House  Prefiled
   12/10/15  House  Referred to Committee on Labor, Commerce and Industry
   01/12/16  House  Introduced and read first time (House Journal-page 102)
   01/12/16  House  Referred to Committee on Labor, Commerce and
                     Industry (House Journal-page 102)
   01/13/16  House  Member(s) request name added as sponsor:
                     Clemmons, Sottile, Crosby, V.S.Moss, Jefferson,
                     Yow, Duckworth, H.A.Crawford, Jordan, Fry,
                     Herbkersman, Lowe, Goldfinch, Hixon, Norman,
                     Hiott, Taylor, McCoy, D.C.Moss, Collins,
                     Rutherford, Anderson, Kirby
   01/20/16  House  Member(s) request name added as sponsor: Pitts
   01/21/16  House  Member(s) request name added as sponsor: Corley
   01/26/16  House  Member(s) request name added as sponsor:
                     Ballentine, Hamilton, Finlay, Huggins
   01/28/16  House  Member(s) request name added as sponsor: Ott,
                     Govan, Riley, Willis, Thayer, Felder, Hicks
   02/02/16  House  Member(s) request name added as sponsor: Simrill,
                     G.A.Brown, Bedingfield, Stringer, Ryhal
   02/03/16  House  Member(s) request name added as sponsor: King, Loftis
   02/04/16  House  Member(s) request name added as sponsor: Hayes,
                     Mack, Rivers, Ridgeway, Clary, Brannon, Atwater,
                     Daning, Bannister, Anthony, McEachern, Mitchell,
                     Erickson
   02/09/16  House  Member(s) request name added as sponsor: Weeks,
                     Knight, Cole, George, Horne, G.R.Smith,
                     G.M.Smith, Williams, Limehouse, Pope, Gambrell
   02/10/16  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry (House Journal-page 5)
   02/10/16  House  Member(s) request name added as sponsor:
                     Alexander, Stavrinakis, Newton
   02/11/16  House  Member(s) request name added as sponsor: White,
                     Spires, R.L.Brown, Gilliard, Dillard
   02/11/16  House  Requests for debate-Rep(s). Ott, Mack, Whipper,
                     Cobb-Hunter, Williams, Sandifer, Forrester,
                     McKnight, Kennedy, JE Smith, King, Bernstein,
                     Whitmire, Erickson, Anderson, Kirby, McCoy, MS
                     McLeod, (House Journal-page 67)
   02/23/16  House  Member(s) request name added as sponsor: Gagnon
   02/23/16  House  Amended (House Journal-page 50)
   02/23/16  House  Read second time (House Journal-page 50)
   02/23/16  House  Roll call Yeas-98  Nays-7 (House Journal-page 50)
   02/24/16         Scrivener's error corrected
   02/25/16  House  Read third time and sent to Senate
                     (House Journal-page 40)
   02/25/16  Senate Introduced and read first time (Senate Journal-page 7)
   02/25/16  Senate Referred to Committee on Judiciary
                     (Senate Journal-page 7)
   03/02/16  Senate Committee report: Majority favorable, minority
                     unfavorable Judiciary (Senate Journal-page 8)
   03/03/16         Scrivener's error corrected
   04/12/16  Senate Amended (Senate Journal-page 17)
   04/13/16         Scrivener's error corrected
   04/13/16  Senate Amended (Senate Journal-page 33)
   05/11/16  Senate Special order, set for May 11, 2016
                     (Senate Journal-page 76)
   05/17/16  Senate Amended (Senate Journal-page 44)
   05/17/16  Senate Read second time (Senate Journal-page 44)
   05/17/16  Senate Roll call Ayes-42  Nays-0 (Senate Journal-page 44)
   05/19/16  Senate Read third time and returned to House with
                     amendments (Senate Journal-page 55)
   05/26/16  House  Concurred in Senate amendment and enrolled
                     (House Journal-page 41)
   05/26/16  House  Roll call Yeas-99  Nays-0 (House Journal-page 41)
   06/02/16         Ratified R 265
   06/03/16         Signed By Governor
   06/09/16         Effective date See Act for Effective Date
   06/09/16         Act No. 231

H. 4548

(A231, R265, H4548)

AN ACT TO AMEND SECTION 37-2-307, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO CLOSING FEES ASSESSED ON MOTOR VEHICLE SALES CONTRACTS, SO AS TO REQUIRE A MOTOR VEHICLE DEALER WHO CHARGES A CLOSING FEE TO PAY A REGISTRATION FEE AND THE FEE MUST BE INCLUDED IN THE ADVERTISED PRICE OF THE MOTOR VEHICLE; TO DEFINE THE TERM CLOSING FEE; TO ESTABLISH THE PROCEDURES A DEALER SHALL UNDERTAKE BEFORE CHARGING A CLOSING FEE AND TO AUTHORIZE THE DEPARTMENT OF CONSUMER AFFAIRS TO DETERMINE WHETHER A CLOSING FEE IS REASONABLE; TO PROVIDE THAT A DEALER WHO COMPLIES WITH CERTAIN STATUTORY REQUIREMENTS MAY LAWFULLY CHARGE A CLOSING FEE, TO ALLOW A MOTOR VEHICLE DEALER TO ASSERT ANY DEFENSES PROVIDED TO A CREDITOR PURSUANT TO TITLE 37, AND TO ALLOW A PURCHASER INJURED OR DAMAGED BY THE ACTION OF A MOTOR VEHICLE DEALER IN VIOLATION OF CERTAIN STATUTORY REQUIREMENTS MAY ASSERT THE REMEDIES AVAILABLE PURSUANT TO TITLE 37; TO AUTHORIZE THE DEPARTMENT OF CONSUMER AFFAIRS TO ADMINISTER AND ENFORCE MOTOR VEHICLE DEALER CLOSING FEES; AND TO EXPRESS THE INTENT OF THE GENERAL ASSEMBLY.

Be it enacted by the General Assembly of the State of South Carolina:

Closing fees on motor vehicle sales contracts authorized and requirements for the fee

SECTION    1.    Section 37-2-307 of the 1976 Code is amended to read:

"Section 37-2-307.    (A)(1)    Every motor vehicle dealer charging closing fees on a motor vehicle sales contract shall pay a one-time registration fee of ten dollars during each state fiscal year before January thirty-first to the Department of Consumer Affairs. The department shall set the fee annually in an amount not to exceed twenty-five dollars.

(2)    The closing fee must be included in the advertised price of the motor vehicle, disclosed on the sales contract, and displayed in a conspicuous location in the motor vehicle dealership.

(B)    A closing fee is defined as a fee charged for all administrative and financial work needed to transfer the motor vehicle to the consumer, person, or entity including, but not limited to, compliance with all state, federal, and lender requirements, preparation and retrieval of documents, protection of the private personal information of the consumer, records retention, and storage costs.

(C)(1)    Prior to charging a closing fee, a motor vehicle dealer shall provide written notice to the Department of Consumer Affairs of the maximum amount of a closing fee the dealer intends to charge on an annual basis. The department may review the amount of the closing fee for reasonableness using the criteria in item (3) if the maximum amount of the closing fee intended to be charged by a dealer in a vehicle transaction exceeds two hundred twenty-five dollars per vehicle. The department shall not conduct a review of the amount of the closing fee for reasonableness when the maximum amount the dealer intends to charge in a vehicle transaction is not more than two hundred twenty-five dollars per vehicle. If the department intends to conduct a formal review of a proposed closing fee, the department shall provide written notice to the motor vehicle dealer of the department's intention to review the proposed closing fee within thirty days of receiving the proposed closing fee notice. If the department does not provide a motor vehicle dealer with written notice of the department's intention to review the proposed closing fee within thirty days, the motor vehicle dealer is authorized to charge the proposed closing fee. If the department determines that a proposed closing fee is not reasonable, the department shall issue a written order detailing the department's findings. The department may require the fee to be reduced or require the motor vehicle dealer to submit a new fee for review. The dealer is at all times authorized to submit a new closing fee that is equal to or less than two hundred twenty-five dollars per vehicle which is not subject to review. During the pendency of the review period, a motor vehicle dealer is authorized to charge a closing fee at an amount not to exceed the amount most recently on file and permitted to be charged by the department. If the department finds that a closing fee is not reasonable, the motor vehicle dealer may request a hearing in accordance with the Administrative Procedures Act.

(2)    If the maximum amount of the closing fee that the dealer intends to charge is not more than two hundred twenty-five dollars per vehicle, the closing fee is deemed approved by the department and the dealer does meet and fulfill all reasonableness requirements and criteria in compliance with the law and this section.

(3)    In determining the reasonableness of a closing fee, the department shall allow the following items to be included in a reasonable closing fee:

(a)    all administrative expenses, costs, staff, supplies, materials, and financial work needed to transfer the motor vehicle to the consumer and to procure the closing of the motor vehicle transaction;

(b)    all costs for administrative expenses, costs, staff, supplies, and materials necessary by the dealer to comply with all state, federal, and lender requirements;

(c)    all costs for administrative costs, staff, and materials needed for the preparation and retrieval of documents;

(d)    all costs for administrative costs, staff, supplies, and materials necessary for the protection of the private personal information of the consumer; and

(e)    all costs for administrative costs, staff, supplies, and materials necessary for records retention and storage costs of such records.

(D)    Whether the vehicle transaction is a credit sale, consumer lease, or cash transaction:

(1)    notwithstanding another provision of law, a motor vehicle dealer who complies with this section and any regulation promulgated under it and who charges a closing fee is not engaging in any action which is arbitrary, in bad faith, unconscionable, an unfair or deceptive practice, or an unfair method of competition for purposes of Sections 56-15-30 and 56-15-40 with regard to the charging of a closing fee and may lawfully charge a closing fee;

(2)    a motor vehicle dealer may assert any defenses provided to a creditor pursuant to the provisions of this title; and

(3)    a purchaser injured or damaged by an action of a motor vehicle dealer in violation of this section or any regulation promulgated thereunder, may assert the remedies available pursuant to the provisions of this title.

(E)(1)    The Department of Consumer Affairs shall administer and enforce the subject of motor vehicle dealer closing fees including, but not limited to, this section. The department shall make and promulgate such rules and regulations relating to motor vehicle dealer closing fees to administer and enforce this section. The department shall have access to a motor vehicle dealer's books, accounts, and records to determine if the dealer is complying with the provisions of this section, and this financial information must be kept confidential and privileged from disclosure, except as provided by law.

(2)    If the department determines that a closing fee is not reasonable, the department shall issue a written order detailing the department's findings. The department may require the fee to be reduced or require the motor vehicle dealer to submit a new fee for review. If the department finds that a closing fee is not reasonable, the motor vehicle dealer may request a hearing in accordance with the Administrative Procedures Act.

(F)    It is the intent of the General Assembly to authorize a motor vehicle dealer to charge a closing fee in compliance with this section and to protect a motor vehicle dealer from civil liability for charging a closing fee if the fee is charged in compliance with this title and any Department of Consumer Affairs regulation or administrative interpretation. It is further the intent to protect consumers by the disclosure and notice provisions established in this section and with the remedies provided by this title."

Time effective

SECTION    2.    This act takes effect upon approval by the Governor; provided, however, a motor vehicle dealer must be allowed an additional period of thirty days from the effective date to comply with Section 37-2-307(C).

Ratified the 2nd day of June, 2016.

Approved the 3rd day of June, 2016.