Reps. GOVAN and TAYLOR propose the following Amendment No. 2 to H. 3197 (COUNCIL\SA\3197C001.RT.SA20):
Amend the bill, as and if amended, SECTION 1, by striking Section 59-103-310 and inserting:
/ Section 59 -103-310.As used in this article:
(1) 'Administrator' means the administrator of the Department of Consumer Affairs (department) or the administrator's designees.
(2) 'Person' means a natural person, partnership, limited liability company, limited partnership, limited liability company, limited partnership, corporation, association, or other group engaged in joint business activities, however organized.
(3) 'Servicing' means:
(a) receiving scheduled periodic payments from a student loan borrower pursuant to the terms of a student education loan;
(b) applying the payments of principal and interest and such other payments with respect to the amounts received from a student loan borrower as may be required pursuant to the terms of a student education loan; and
(c) performing other administrative services with respect to a student education loan.
(4) 'Student education loan' means the creation or forbearance of debt incurred primarily for personal use to finance postsecondary education or other school-related expenses. This term does not include an extension of credit secured by a first lien or equivalent security interest in real estate.
(5) 'Student loan borrower' or 'borrower' means:
(a) a resident of this State who has received or agreed to pay a student education loan; or
(b) a person who shares legal responsibility with a resident for repaying the student education loan.
(6) 'Student loan servicer' or 'servicer' means a person, wherever located, regularly engaged in the business of, and responsible for, the servicing of a student education loan to a student loan borrower. This term does not include banks, credit unions, savings and loan associations, and savings banks that are authorized legally to accept monetary deposits from consumers and admitted to transact business in South Carolina. /
Amend the bill further, SECTION 1, by striking Section 59-103-350(A)-(C) and inserting:
/ Section 59-103-350.(A) A person may not act as a student loan servicer, directly or indirectly, without first:
(1) obtaining a license from the administrator pursuant to this section; and
(2) filing a surety bond in an amount determined by the administrator, based on the total dollar amount of loans subject to regulation by the administrator pursuant to this article in a calendar year in this State pursuant to the following:
(a) dollar volume of student education loans up to $49,999,999: surety bond of $50,000;
(b) dollar volume of student education loans from $50,000,000 to $249,999,999: surety bond of $100,000;
(c) dollar volume of student education loans greater than $250,000,000: surety bond of $150,000.
(3) In no case is the surety bond less than fifty thousand dollars. The surety bond must be executed by a surety company authorized by the laws of this State to transact business within this State. The surety bond must be in a form satisfactory to the administrator, must be executed to the administrator, and must be for the use of the State for the recovery of expenses, fines, and fees levied pursuant to this chapter and for consumers who have losses or damages as a result of noncompliance with this chapter by the servicer. The full amount of the surety bond must be in effect at all times. The license of a licensee expires upon the termination of the bond by the surety company, unless a new bond is filed with the administrator before the termination of the previous bond. If the license expires based on bond termination, all licensed activity must cease and the person must apply for a license pursuant to this section.
(B) A person seeking to act within this State as a student loan servicer shall make a written application to the administrator for an initial license in such form as the administrator prescribes. The application must be accompanied by:
(1) a financial statement prepared by a certified public accountant or a public accountant, a general partner if the applicant is a partnership, a corporate officer, if the applicant is a corporation, or a member duly authorized to execute such documents if the applicant is a limited liability company or association;
(2) information regarding the history of criminal convictions of the following to permit the administrator to make the findings under subsection (C):
(a) the applicant;
(b) partners, if the applicant is a partnership;
(c) members, if the applicant is a limited liability company or association; and
(d) officers, directors, and principal employees, if the applicant is a corporation;
(3) a nonrefundable license fee of one thousand dollars; and
(4) a nonrefundable investigation fee of eight hundred dollars.
(C) Upon the filing of an application for an initial or renewal license and the payment of the fees for licensing and investigation pursuant to subsection (B), the administrator shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant. The administrator may conduct a state and national criminal history records check, supported by fingerprints, of the applicant and of each partner, member, officer, director, and principal employee of the applicant. The actual cost of obtaining the state and national criminal history record checks shall be paid by the applicant. The administrator may issue a license if the administrator finds that:
(1) the applicant 's financial condition is sound;
(2) the applicant 's business will be conducted honestly, fairly, equitably, carefully, and efficiently within the purposes and intent of this article and in a manner commanding the confidence and trust of the community;
(3) if the applicant is:
(a) an individual, the individual is in all respects properly qualified and of good character;
(b) a partnership, each partner is in all respects properly qualified and of good character;
(c) a corporation, the president, chair of the executive committee, senior officer responsible for the corporation 's business and chief financial officer, or any other person who performs similar functions as determined by the administrator, each director, each trustee, and each shareholder owning ten percent or more of each class of the securities of the corporation or association is in all respects properly qualified and of good character; or
(d) a limited liability company or association, each member is in all respects properly qualified and of good character;
(4) no person on behalf of the applicant knowingly has made an incorrect statement of a material fact in the application or in any report or statement made pursuant to this article; and
(5) the applicant has met any other requirements as determined by the administrator. /
Amend the bill further, SECTION 1, Section 59-103-360 by adding an item at the end to read:
/(10 )Unless otherwise provided by federal law, a servicer may not charge a borrower any fee to modify, defer, forbear, renew, extend, or amend the borrower's student education loan. /