S 63 Session 123 (2019-2020) S 0063 General Bill, By Malloy A BILL TO AMEND SECTION 37-3-501 OF THE 1976 CODE, RELATING TO SUPERVISED LOANS, BY ADDING SECTION 37-3-501(1)(c), TO PROVIDE THAT SHORT-TERM VEHICLE SECURED LOANS ARE NOT SUPERVISED LOANS; TO AMEND CHAPTER 5, TITLE 39 OF THE 1976 CODE, RELATING TO THE SOUTH CAROLINA UNFAIR TRADE PRACTICES ACT, TO PROVIDE THAT IT IS AN UNFAIR TRADE PRACTICE FOR SUPERVISED LENDERS TO PROVIDE SHORT-TERM VEHICLE SECURED LOANS; TO AMEND SECOND 37-3-413, RELATING TO SHORT-TERM VEHICLE LOANS, BY ELIMINATING THE REPAYMENT TERM FROM THE DEFINITION, BY CAPPING THE LOAN INTEREST RATE FOR SPECIFIC LOAN AMOUNTS; TO AMEND CHAPTER 3, TITLE 37 OF THE 1976 CODE, TO PROVIDE FOR A DATABASE TO PREVENT A PERSON FROM HAVING A SHORT-TERM VEHICLE SECURED LOAN THAT EXCEEDS A CERTAIN LIMIT AND TO TRACK LOAN TRANSACTIONS IN GENERAL, AND TO PROVIDE THAT ALL SHORT-TERM VEHICLE SECURED LOANS MAY ONLY BE MADE BY A LICENSEE.
TO AMEND SECTION 37-3-501 OF THE 1976 CODE, RELATING TO SUPERVISED LOANS, BY ADDING SECTION 37-3-501(1)(c), TO PROVIDE THAT SHORT-TERM VEHICLE SECURED LOANS ARE NOT SUPERVISED LOANS; TO AMEND CHAPTER 5, TITLE 39 OF THE 1976 CODE, RELATING TO THE SOUTH CAROLINA UNFAIR TRADE PRACTICES ACT, TO PROVIDE THAT IT IS AN UNFAIR TRADE PRACTICE FOR SUPERVISED LENDERS TO PROVIDE SHORT-TERM VEHICLE SECURED LOANS; TO AMEND SECOND 37-3-413, RELATING TO SHORT-TERM VEHICLE LOANS, BY ELIMINATING THE REPAYMENT TERM FROM THE DEFINITION, BY CAPPING THE LOAN INTEREST RATE FOR SPECIFIC LOAN AMOUNTS; TO AMEND CHAPTER 3, TITLE 37 OF THE 1976 CODE, TO PROVIDE FOR A DATABASE TO PREVENT A PERSON FROM HAVING A SHORT-TERM VEHICLE SECURED LOAN THAT EXCEEDS A CERTAIN LIMIT AND TO TRACK LOAN TRANSACTIONS IN GENERAL, AND TO PROVIDE THAT ALL SHORT-TERM VEHICLE SECURED LOANS MAY ONLY BE MADE BY A LICENSEE. Be it enacted by the General Assembly of the State of South Carolina: SECTION 1. Section 37-3-501(1) of the 1976 Code is amended by adding: "(c) a short-term vehicle secured loan as defined in Section 37-3-413." SECTION 2. Article 1, Chapter 5, Title 39 of the 1976 Code is amended by adding: "Section 39-5-45. It is an unfair trade practice pursuant to Section 39-5-20 for a supervised lender, as defined in Section 37-3-501, to make a short-term vehicle secured loan, as defined in Section 37-3-413." SECTION 3. Section 37-3-413 of the 1976 Code is amended to read:
"Section 37-3-413. (1) A 'short-term vehicle secured loan' means a nonpurchase money consumer loan (2) A licensee may charge and collect interest on a short-term vehicle secured loan at rates not to exceed the following: (a) Twenty-two percent effective annual percentage rate on the portion of the principal that does not exceed seven hundred dollars; (b) Eighteen percent effective annual percentage rate on the portion of the principal that exceeds seven hundred dollars but does not exceed one thousand four hundred dollars; and (c) Fifteen percent effective annual percentage rate on the portion of the principal that exceeds one thousand four hundred dollars.
(a) notice, placed conspicuously above the borrower's signature and in at least fourteen point type, as follows:
'THIS IS A (b) right of rescission provision entitling the borrower to repay the principal amount borrowed without interest or other cost at any time until the close of business on the business day following the date the original loan was executed.
SECTION 4. Chapter 3, Title 37 of the 1976 Code is amended by adding: "Section 37-3-414. (A) In order to prevent a person from having a short-term vehicle secured loan that exceeds the limit in Section 37-3-413(2), the Consumer Finance Division of the Board of Financial Institutions shall implement a common database with real-time access through an internet connection for short-term vehicle secured loan lenders, as provided in this subsection. The board shall enter into a contract with a single source private vendor to develop and operate the database. Short-term vehicle secured loan lenders shall submit the person's data to the database provider before entering into a short-term vehicle secured loan transaction and once the transaction has been paid in full, in a format the board requires by regulation, including the borrower's name, social security number or employment authorization alien number, address, driver's license number, amount of the transaction, date of transaction, date that the transaction closed, and additional information required by the board. The board may adopt procedures to administer and enforce the provisions of this section and to ensure that the database is used by licensees in accordance with this section. (B) Use of the information provided in the database is limited to determining if a customer is eligible or ineligible to enter into a new short-term vehicle loan transaction and describing the reason for the determination of eligibility or ineligibility. Section 37-3-415. Short-term vehicle secured loans as defined in this section may only be made by a licensee." SECTION 5. By no later than January 1, 2020, the database must be accessible to the board and the lenders to meet the requirements of SECTION 4 of this Act in verifying if a short-term vehicle secured loan transaction is outstanding for a particular person. SECTION 6. This act takes effect upon approval by the Governor.
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