H 3242 Session 123 (2019-2020) H 3242 General Bill, By Thigpen, Cobb-Hunter and Cogswell A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 37-3-414 SO AS TO ESTABLISH CERTAIN REQUIREMENTS FOR SHORT-TERM VEHICLE-SECURED LOANS; BY ADDING SECTION 39-5-45 SO AS TO PROVIDE THAT IT IS AN UNFAIR TRADE PRACTICE FOR A SUPERVISED LENDER TO MAKE A SHORT-TERM VEHICLE-SECURED LOAN; TO AMEND SECTION 37-3-413, RELATING TO SHORT-TERM VEHICLE-SECURED LOANS, SO AS TO PROVIDE THE MAXIMUM INTEREST RATES A LENDER MAY CHARGE ON A SHORT-TERM VEHICLE-SECURED LOAN; AND TO AMEND SECTION 37-3-501, RELATING TO THE DEFINITIONS, SO AS TO INCLUDE "SHORT-TERM VEHICLE-SECURED LOAN" IN THE DEFINITION OF "SUPERVISED LOAN".
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 37-3-414 SO AS TO ESTABLISH CERTAIN REQUIREMENTS FOR SHORT-TERM VEHICLE-SECURED LOANS; BY ADDING SECTION 39-5-45 SO AS TO PROVIDE THAT IT IS AN UNFAIR TRADE PRACTICE FOR A SUPERVISED LENDER TO MAKE A SHORT-TERM VEHICLE-SECURED LOAN; TO AMEND SECTION 37-3-413, RELATING TO SHORT-TERM VEHICLE-SECURED LOANS, SO AS TO PROVIDE THE MAXIMUM INTEREST RATES A LENDER MAY CHARGE ON A SHORT-TERM VEHICLE-SECURED LOAN; AND TO AMEND SECTION 37-3-501, RELATING TO THE DEFINITIONS, SO AS TO INCLUDE "SHORT-TERM VEHICLE-SECURED LOAN" IN THE DEFINITION OF "SUPERVISED LOAN". Be it enacted by the General Assembly of the State of South Carolina: SECTION 1. Part 4, Chapter 3, Title 37 of the 1976 Code is amended by adding: "Section 37-3-414. (A) In order to prevent a borrower from agreeing to accept a short-term vehicle-secured loan that exceeds the interest rate limit provided 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. 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 transaction and once the transaction has been paid in full in a format the board requires by regulation. The data must include the borrower's name, social security number or employment authorization alien number, address, driver's license number, amount of the transaction, date of the transaction, date of the closing of the transaction, and additional information that the board may require. The board may adopt procedures to administer and enforce the provisions of this section and to ensure that the database is used by licensed lenders in accordance with this section. (B) Use of the information provided in the database is limited to the initial determination of a potential borrower's eligibility to enter into a new short-term vehicle loan transaction and providing the reason for the final eligibility determination. (C) Short-term vehicle-secured loans, as defined in this chapter, only may be made by a lender licensed pursuant to Section 37-3-503." 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 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 licensed lender may charge and collect interest on a short-term vehicle-secured loan at rates not to exceed: (a) twenty-two percent each year on the portion of principal that does not exceed seven hundred dollars; (b) eighteen percent each year on the portion of the principal that exceeds seven hundred dollars but does not exceed one thousand four hundred dollars; and (c) fifteen percent each year on the portion of the principal that exceeds one thousand four hundred dollars.
(3) A short-term vehicle-secured loan must be for an original period of at least one month. A lender may allow the loan to be renewed no more than six additional periods, not to exceed two hundred forty days, with each period equal
(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. Section 37-3-501(1) is amended by adding a subitem at the end after the undesignated paragraph to read: "(c) a short-term vehicle-secured loan as defined in Section 37-3-413." SECTION 5. The database established by Section 37-3-414 as added by SECTION 1 of this act must be accessible to the board and lenders by January 1, 2020. SECTION 6. This act takes effect upon approval by the Governor.
|