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Printed Page 3390, May 11
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| (8) For the purpose of this section, a charge or practice expressly permitted by this title is not in itself unconscionable.
(9) Nothing in this title may be construed to prevent a finding of unconscionability where a creditor assesses an origination charge, prepaid finance charge, service, or other prepaid charge which substantially exceeds the usual and customary charge for the particular type of consumer credit transaction. In such a transaction the court shall consider the relative sophistication of the debtor and the creditor, the relative bargaining power of the debtor and creditor, and any oral or written representations made by the creditor regarding the credit service charge or the loan finance charge of the consumer credit transaction."/
Amend the bill further, as and if amended, by striking SECTION 11, and inserting:
/SECTION 11. Section 37-6-117 of the 1976 Code is amended by adding an appropriately numbered subsection to read:
"( ) Develop a written pamphlet that explains the rights and responsibilities of consumers who obtain from a licensed lender consumer loans under this title and Title 34 for distribution in all licensed consumer loan offices. Such pamphlet shall include the names, addresses, and
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/SECTION . Section 37-3-201(1) of the 1976 Code is amended to read:
"(1) With respect to a consumer loan, including a loan pursuant to open-end credit, a lender who is not a supervised lender may contract for and receive a finance charge, calculated according to the actuarial method, not exceeding eighteen twelve percent per year. With respect to a consumer loan made pursuant to open-end credit, the finance charge shall be deemed not to exceed eighteen twelve percent per year if the finance charge contracted for and received does not exceed a charge for each monthly billing cycle which is one and one-half percent of the average daily balance of the open-end account in the billing cycle for which the charge is made. The average daily balance of the open-end account is the sum of the amount unpaid each day during that cycle divided by the number of days in the cycle. The amount unpaid on a day is determined by adding to any balance unpaid as of the beginning of that day all purchases, loans and other debits and deducting all payments and other credits made or received as of that day. If the billing cycle is not monthly, the finance charge shall be deemed not to exceed eighteen twelve percent per year if the finance charge contracted for and received does not exceed a percentage which bears the same relation to one and one-half percent as the number of days in the billing cycle bears to three hundred sixty-five divided by twelve. A billing cycle is monthly if the closing date of the cycle is the same date each month or does not vary by more than four days from the regular date."/
Amend the bill further, as and if amended, by adding an appropriately
numbered SECTION to read:
"(1) `Supervised loan' means a consumer loan in which the rate of the loan finance charge exceeds eighteen twelve percent per year as determined according to the provisions on the loan finance charge for consumer loans (Section 37-3-201)."/
Amend the bill further, as and if amended, by adding an appropriately numbered section to read:
/SECTION . Section 37-3-511 of the 1976 Code is amended to read:
"Section 37-3-511. Supervised loans, in which the rate of loan finance charge exceeds eighteen twelve percent per annum, not made pursuant to a revolving loan account, in which the principal is one thousand dollars or less, shall be scheduled to be payable in substantially equal installments at equal periodic intervals except to the extent that the schedule of payments is adjusted to the seasonal or irregular income of the debtor, and
(a) over a period of not more than thirty-seven months if the principal is more than three hundred dollars, or
(b) over a period of not more than twenty-five months if the principal is three hundred dollars or less."/
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/SECTION . Section 37-1-301(10) of the 1976 Code is amended to read:
"(10) `Consumer' means the buyer, lessee, or debtor to whom credit is extended in a consumer credit transaction. In addition, for purposes of Chapters 10, 11, 13, and 15 of this Title, as well as Sections 37-5-108, 37-6-108, 37-6-117(i), and 37-6-118, the term also includes:
(1) A natural person who is a purchaser or lessee or prospective purchaser or lessee in any transaction arising out of the production, promotion, sale, or lease of consumer goods or services; or
(2) a natural person who is the object of a solicitation or offer relating to a contest, game, or prize offer subject to Chapter 15."/
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/SECTION . Section 34-29-160 of the 1976 Code, as last amended by Act 181 of 1993, Section 524, is further amended to read:
"Section 34-29-160. Subject to the conditions provided in this section and notwithstanding any other provisions of this chapter, reasonable insurance may be sold to and required of the borrower for insuring personal property securing a loan and for insuring the life and earning
Property insurance shall be in an amount not to exceed the reasonable value of the property insured and for the customary term approximating the term of the loan contract. It shall be optional with the borrower to obtain such insurance in an amount greater than the amount of the loan or for a longer term.
Life insurance must be in an amount not to exceed the approximate amount of the loan and for a term not exceeding the approximate term of the loan contract. Accident and health insurance and unemployment insurance, or both, must provide periodic benefits which may not exceed an amount which approximately equals the amount of each periodic installment payment to be made under the loan contract. However, when a loan is discharged or a new policy or policies of insurance are issued, the life, property, or accident and health insurance or all three on the prior obligation must be canceled and the unearned portion of the insurance premium or premiums, or identifiable charge, must be refunded to the borrower. However, the method of refunding the premiums on the policies must be pursuant to the Rule of 78 or the Sum of the Digits Method, except that no refund under two dollars must be made; the insurance company shall calculate its reserves on the policies in the same manner or, in the case of credit life insurance, in accordance with a mortality table and interest assumption used for ordinary life policies. Notwithstanding this requirement, if the property insurance policy or policies cover the insurable interest of the borrower as well as the lender, the policy or policies may be continued in force at the request of the borrower.
This section does not require a creditor to grant a refund or credit of a life insurance premium to the debtor if any refund or credit due to the debtor under this section is less than two dollars.
If the coverage provides accident and health benefits the policy or certificate shall contain a provision that if the insured obligor is disabled, as defined in the policy, for a period of more than three days, benefits shall commence as of the first day of disability, provided that accident and health insurance shall not be allowed on loans with a cash advance of less than one hundred dollars.
All insurance sold or provided pursuant to this section shall bear a reasonable and bona fide relation to the existing hazard or risk of loss and shall be written by an agent or agency licensed in this State in an insurance company authorized to conduct such business in this State. A licensee shall not require the purchasing of insurance from the licensee or any employee, affiliate, or associate of the licensee, as a condition
The licensee shall within thirty days after the loan is made, deliver to the borrower, or if more than one, to one of them, a policy or certificate of insurance covering any insurance procured by or through the licensee or any employee, affiliate or associate of the licensee, which shall set forth the amount of any premium or identifiable charge which the borrower has paid or is obligated to pay, the amount of insurance, the term of insurance, and a complete description of the risks insured. Such policy or certificate may contain a mortgage clause or other appropriate provisions to protect the insurable interest of the licensee.
Notwithstanding any other provision of this chapter, any gain or advantages in the form of commission, dividend, identifiable charge or otherwise, to the licensee or to any employee, affiliate or associate of the licensee from such insurance or its sale shall not be deemed to be additional or further interest or charge in connection with such a loan.
Any accident and health or property insurance sold in conjunction with this
chapter must be written on forms and at rates approved by the South Carolina
Department of Insurance, provided that a minimum charge of two dollars may be
made, pursuant to reasonable regulations adopted by it and having as their
purpose the establishment and maintenance of premium rates which are reasonably
commensurate with the coverage afforded and which are adequate, not excessive,
and not unfairly discriminatory giving due consideration to past or prospective
loss experience within or without this State, to dividends, savings, or
unabsorbed premium deposits allowed or returned by insurers to borrowers, to
reasonable expense allowances necessary to achieve proper risk distribution and
spread, and to all other relevant factors within or without this State. These
regulations may include reasonable classification systems or programs based upon
identifiable and measurable variations in the hazards or expense requirements
and may include statistical plans, systems, or programs, which the insurers may
be required to adopt, for the purpose of providing that statistical information
and data as may be necessary or reasonably appropriate to the determination of
premium rates or rate levels. The premium rates and rate levels must be
calculated to produce and maintain a ratio of losses incurred, or reasonably
expected to be incurred, to premiums earned, or reasonably expected to be
earned, of not less than fifty percent, and rates producing a lesser loss ratio
are considered excessive.
Decreasing Balance Level Balance
Individual $ .75 .65. . . . .$1.50$1.30
Joint Insurance $1.25$1.08. . . . .$2.50$2.16"/
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/SECTION . Section 37-4-203(5) of the 1976 Code, as last amended by Act 363, Section 1 of 1994, is further amended to read:
"(5) Credit life insurance premiums for each one hundred dollars of indebtedness are considered reasonable and may be charged if they are not greater than the amounts given in the following table times the number of years, or fraction of a year, that the indebtedness is scheduled to continue, subject to a minimum charge of three dollars:
Decreasing Balance Level Balance
Individual $ .65. . . . .$1.50$1.30
Joint Insurance $1.25$1.08. . . . .$2.16"/
Amend the bill further, as and if amended, by adding an appropriately numbered SECTION to read:
/SECTION . Section 37-2-207(5) of the 1976 Code is amended to read:
"(5) Notwithstanding subsection (3), and except for subsection (4), no less than forty percent of any scheduled minimum payment for that billing cycle must be applied to principal reduction in that billing cycle., provided, however, that failure to apply the forty percent of a scheduled minimum payment is not a violation of this subsection when the consumer has agreed in writing to a promotion offered by the creditor that includes deferred payments, deferred or waived finance charges, a combination thereof, or other special financing terms. Such exception shall only apply during the period of time necessary to comply with the provisions of the promotional agreement identified in writing to the customer."/
Renumber sections to conform.
Amend title to conform.
Renumber sections to conform.
Amend totals and title to conform.
Rep. GAMBLE explained the amendment.
The SPEAKER granted Rep. WILKES a leave of absence for the remainder of the day.
Rep. GAMBLE continued speaking.
The amendment was then adopted.
Reps. BAILEY and SPEARMAN proposed the following Amendment No. 2 (Doc Name L:\council\legis\amend\GJK\21989SD.95), which was adopted.
Amend the bill, as and if amended, by striking SECTION 14 on page 16 and inserting:
/SECTION 14. This act takes effect January 1, 1996, except that Section 37- 2-207(5) of the 1976 Code, as amended by this act, takes effect upon approval by the Governor./
Renumber sections to conform.
Amend totals and title to conform.
Rep. SPEARMAN explained the amendment.
The amendment was then adopted.
Reps. HARRISON and CAIN proposed the following Amendment No. 3 (Doc Name L:\council\legis\amend\BBM\10249BDW.95), which was adopted.
Amend the bill, as and if amended, Section 37-5-108(5)(b)(vii), page 602-7, line 33, by striking /a/ and inserting /the consumer's residential/.
Amend title to conform.
Rep. CAIN explained the amendment.
The amendment was then adopted.
Reps. HARRISON and CAIN proposed the following Amendment No. 4 (Doc Name L:\council\legis\amend\BBM\10250BDW.95), which was adopted.
Amend the bill, as and if amended, Section 37-5-108(5)(c)(iv), page 602-8, line 28, after /attachment/ by inserting /unless the remedy is legally permitted to the creditor/.
Amend title to conform.
Rep. CAIN explained the amendment.
The amendment was then adopted.
Amend the report, as and if amended, by striking Section 37-5-108(5)(b)(i), page 602-7, beginning on line 11, and inserting:
/(i) communicate with a consumer before 8:00 a.m. or after 9:00 p.m. or at a place, other than the consumer's residence, the consumer previously has informed the creditor in writing not to be contacted at. In the absence of mutual knowledge of circumstances to the contrary, it may be assumed that a permissible time to communicate with the consumer is between 8:00 a.m. and 9:00 p.m. at any location;/
Amend title to conform.
Rep. CAIN explained the amendment.
The amendment was then adopted.
The Bill, as amended, was read the second time and ordered to third reading.
On motion of Rep. CATO, with unanimous consent, it was ordered that S. 602 be read the third time tomorrow.
The following Bill was taken up.
S. 546 -- Senators Glover and Ford: A BILL TO AMEND CHAPTER 1, TITLE 44, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 44-1-260 SO AS TO REQUIRE THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL OR A PERSON PERFORMING AN EARLY PERIODIC SCREENING, DIAGNOSIS, AND TREATMENT SCREENING (EPSDT) OR EXAMINATION OF A CHILD TO REFER THE CHILD TO AN APPROPRIATE AGENCY FOR AN ASSISTIVE TECHNOLOGY EVALUATION IF IT IS DETERMINED THAT THE CHILD MAY BENEFIT FROM SUCH TECHNOLOGY.
Rep. WILDER explained the Bill.
Rep. MARCHBANKS objected to the Bill.
Rep. WILDER continued speaking.
Reps. TROTTER and LITTLEJOHN objected to the Bill.
Rep. ROBINSON objected to the Bill.
Rep. J. BROWN moved to adjourn debate upon the Bill until Wednesday, May 17, which was adopted.
The following Bill was taken up.
S. 463 -- Senator Passailaigue: A BILL TO AMEND SECTIONS 38-55-310 AND 38-55-330, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE BUSINESS OF INSURANCE, SO AS TO PROVIDE THAT LICENSED FUNERAL DIRECTORS EMPLOYED BY LICENSED FUNERAL HOMES MAY ACT AS AGENTS FOR LIFE INSURERS ONLY IN CONNECTION WITH PRENEED FUNERAL CONTRACTS; TO AMEND SECTION 32-7-25 OF THE 1976 CODE, RELATING TO PRENEED FUNERAL CONTRACTS, SO AS TO FURTHER REGULATE PRENEED FUNERAL CONTRACT AGREEMENTS; AND TO AMEND CHAPTER 7, TITLE 32 OF THE 1976 CODE, BY ADDING SECTION 32-7-95 SO AS TO PROVIDE THAT LICENSED FUNERAL DIRECTORS ARE SUBJECT TO THE PROHIBITIONS AGAINST SOLICITATION AND ADVERTISEMENT WHEN ACTING AS AN AGENT FOR A LIFE INSURER.
Rep. CARNELL moved to adjourn debate upon the Bill until Tuesday, June 6.
Rep. CAIN moved to table the motion, which was not agreed to.
The question then recurred to the motion to adjourn debate until Tuesday, June 6, which was agreed to.
Rep. ROBINSON moved to adjourn debate upon the following Bill until Tuesday, May 16, which was adopted.
S. 753 -- Senator Passailaigue: A BILL TO AMEND TITLE 12, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TAXATION, BY ADDING CHAPTERS 6, 8, AND 20, SO AS TO REVISE, REORGANIZE, AND RECODIFY STATE TAX LAWS IMPOSING THE INDIVIDUAL AND CORPORATE INCOME TAX, PROVIDING FOR THE WITHHOLDING OF INCOME TAXES, AND IMPOSING THE CORPORATION LICENSE TAX; TO AMEND TITLE
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