Current Status Introducing Body:Senate Bill Number:1388 Primary Sponsor:Martin Committee Number:02 Type of Legislation:GB Subject:Consumer lender credit cards Residing Body:Senate Current Committee:Banking and Insurance Computer Document Number:1388 Introduced Date:19940427 Last History Body:Senate Last History Date:19940427 Last History Type:Introduced, read first time, referred to Committee Scope of Legislation:Statewide All Sponsors:Martin Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
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1388 Senate 19940427 Introduced, read first time, 02
referred to Committee
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TO AMEND SECTION 37-3-202, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ADDITIONAL CHARGES THAT SUPERVISED LENDERS MAY IMPOSE, SO AS TO PROVIDE THAT WITH RESPECT TO LENDER CREDIT CARDS OR SIMILAR ARRANGEMENTS, A LENDER MAY IMPOSE AN OVER-LIMIT CHARGE OF FIFTEEN DOLLARS RATHER THAN TEN DOLLARS PLUS THE LESSER OF TEN PERCENT OF THE CREDIT LIMIT OR ONE HUNDRED DOLLARS AND TO DELETE THE REQUIREMENT THAT, IN ORDER TO ASSESS THE CHARGE SUBSEQUENTLY, THE ACCOUNT BALANCE MUST BE REDUCED BELOW THE CREDIT LIMIT PLUS THE LESSER OF TEN PERCENT OF THE CREDIT LIMIT OR ONE HUNDRED DOLLARS; AND TO AMEND SECTION 37-3-203, RELATING TO DELINQUENCY CHARGES IMPOSED BY SUPERVISED LENDERS, SO AS TO PROVIDE THAT A SUPERVISED LENDER MAY IMPOSE A DELINQUENCY CHARGE OF FIFTEEN DOLLARS RATHER THAN FIVE DOLLARS AND TO DELETE THE PROVISION AUTHORIZING THE LENDER TO RECEIVE AN ALTERNATE DELINQUENCY CHARGE OF FORTY PERCENT OF FIVE DOLLARS ADJUSTED FOR INFLATION PURSUANT TO SECTION 37-1-109.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 37-3-202 of the 1976 Code is amended to read:
"Section 37-3-202. (1) In addition to the loan finance charge permitted by this chapter a lender may contract for and receive the following additional charges in connection with a consumer loan:
(a) official fees and taxes;
(b) charges for insurance as described in subsection (2);
(c) with respect to open-end credit pursuant to a lender credit card, including similar arrangements, issued by a creditor which entitles the cardholder to purchase or lease goods or services from at least one hundred persons not related to the card issuer, under an arrangement pursuant to which the debts resulting from the purchases or leases are payable to the card issuer;
(i) annual charges, payable in advance, for the privilege of using the credit card; and
(ii) an over-limit charge not to exceed ten fifteen dollars if the balance of the account exceeds the credit limit established pursuant to the agreement between the card issuer and the cardholder plus the lesser of ten percent of the credit limit of one hundred dollars. The over-limit charge authorized by this subitem may not be assessed again against the cardholder unless the account balance has been reduced below the credit limit plus the lesser of ten percent of the credit limit or one hundred dollars, and the cardholder's account balance subsequently exceeds the credit limit plus the lesser of ten percent of the credit limit or one hundred dollars; and
(d) with respect to a loan secured by an interest in land, the following `closing costs', if they are bona fide, reasonable in amount, and not for the purpose of circumvention or evasion of this title:
(i) fees or premiums for title examination, abstract of title, title insurance, surveys, or similar purposes;
(ii) fees for preparation of a deed, settlement statement, or other documents, if not paid to the creditor or a person related to the creditor;
(iii) escrows for future payments of taxes, including assessments for improvements, insurance, and water, sewer, and land rents;
(iv) fees for notarizing deeds and other documents, if not paid to the creditor or a person related to the creditor; and
(v) fees for appraising the real estate that is collateral for the loan, if not paid to the creditor or a person related to the creditor;
(e) charges for other benefits, including insurance, conferred on the debtor, if the benefits are of value to him and if the charges are reasonable in relation to the benefits, are of a type which is not for credit, and are authorized as permissible additional charges by rule adopted by the administrator;
(f) fees and charges paid to persons registered as mortgage loan brokers pursuant to Chapter 58 of Title 40."
SECTION 2. Section 37-3-203 of the 1976 Code is amended to read:
"Section 37-3-203. (1) With respect to a consumer loan including an open-end consumer loan pursuant to a lender credit card or similar arrangement, and any refinancings or consolidations of all such consumer loans, the parties may contract for a delinquency charge on any installment not paid in full within ten days after its due date, as originally scheduled or as deferred, in an amount, not exceeding five fifteen dollars which is not more than five percent of the unpaid amount of the installment.
(2) Notwithstanding subsection (1) the lender may contract for and receive a minimum delinquency charge not to exceed forty percent of five dollars as adjusted pursuant to Section 37-1-109. The lender may contract for such a minimum charge even though the charge exceeds five percent of the unpaid amount of the installment.
(3 2) A statement in the agreement between the lender and the debtor to the effect that the lender may charge the maximum delinquency charge (or late charge) authorized by law entitles the creditor to impose a delinquency charge in the dollar amount specified in subsections subsection (1) and (2) as adjusted pursuant to Section 37-1-109 at the time the delinquency charge is imposed, subject to the five percent of the unpaid amount of the installment limitation, if applicable.
(4 3) A delinquency charge under this section may be collected only once on an installment however long it remains in default. No delinquency charge may be collected with respect to a deferred installment unless the installment is not paid in full within ten days after its deferred due date. A delinquency charge may be collected at the time it accrues or at any time thereafter.
(5 4) A delinquency charge under this section may not be collected on an installment paid in full within ten days after its scheduled or deferred installment due date even though an earlier maturing installment or a delinquency or deferral charge on an earlier installment has not been paid in full. For purposes of this subsection, a payment is deemed to have been applied first to any installment due in the computational period [Section 37-3-204(1)(a)] in which it is received and then to delinquent installments and charges.
(6 5) If two installments or parts thereof of a precomputed consumer loan are in default for ten days or more, the lender may elect to convert the loan from a precomputed loan to one in which the loan finance charge is based on unpaid balances. In this event, he shall make a rebate pursuant to the provisions on rebate upon prepayment (Section 37-3-210) as if the date of prepayment were one day before the maturity date of a delinquent installment, and thereafter may make a loan finance charge as authorized by the provisions on loan finance charge for consumer loans by lenders not supervised lenders [Section 37-3-201(1)] or finance charge for consumer loans by supervised lenders [Section 37-3-201(2)], whichever is appropriate. The amount of the rebate must not be reduced by the amount of any permitted minimum charge (Section 37-3-210). If the creditor proceeds under this subsection, any delinquency or deferral charges made with respect to installments due on or after the maturity date of the first delinquent installment must be rebated, and no further delinquency or deferral charges may be made."
SECTION 3. Notwithstanding the provisions of Section 37-1-109, the delinquency charge established by this act in Section 37-3-203(1) shall not be subject to adjustment prior to July 1, 1998.
SECTION 4. This act takes effect upon approval by the Governor.