H*3262(Rat #0351, Act #0326 of 1980)  General Bill, By 
 House Labor, Commerce and Industry
 A Bill to amend Act 220 of 1979 relating to interest rates for certain
 commercial agricultural loans, so as to allow the parties to such a loan to
 contract for the rate of interest up to one percent more than the discount
 rate on ninety-day commercial paper and provide certain exemptions; to amend
 Sections 37-1-102, 37-1-202, as amended, 37-2-210, as amended, and 37-3-210,
 Code of Laws of South Carolina, 1976, and Act 686 of 1976, all relating to the
 Consumer Protection Code, so as to provide that the simplification,
 clarification and modernization of usury be added to the purposes of the Code,
 increase minimum prepayment charges from five dollars and seven dollars and
 fifty cents for certain loans to fifteen dollars, provide that state-chartered
 credit unions shall be subject to its provisions and provide charges for
 nonconsumer loans; and to amend Section 34-27-70, relating to powers of
 cooperative credit unions, so as to prohibit such credit unions from charging
 rates of interest in excess of those authorized by law instead of at the rate
 of one percent per month on unpaid loan balances.-at

   01/08/80  House  Introduced, read first time, placed on calendar
                     without reference HJ-52
   01/10/80  House  Debate adjourned HJ-211
   01/15/80  House  Debate adjourned HJ-246
   01/16/80  House  Debate adjourned HJ-276
   01/17/80  House  Debate adjourned HJ-317
   01/22/80  House  Read second time HJ-359
   01/23/80  House  Amended HJ-389
   01/23/80  House  Read third time and sent to Senate HJ-389
   01/24/80  Senate Introduced and read first time SJ-11
   01/24/80  Senate Referred to Committee on Banking and Insurance SJ-11
   01/31/80  Senate Committee report: Favorable with amendment
                     Banking and Insurance SJ-11
   02/07/80  Senate Read second time SJ-19
   02/07/80  Senate Ordered to third reading with notice of
                     amendments SJ-19
   02/14/80  Senate Amended SJ-13
   02/14/80  Senate  READ THIRD TIME SJ-13
   02/14/80  Senate Returned SJ-13
   02/19/80  House  Debate adjourned HJ-1000
   02/20/80  House  Concurred in Senate amendment and enrolled HJ-1027
   03/05/80  House  Ratified R 351 HJ-1255
   03/06/80         Signed By Governor
   03/06/80         Effective date 03/06/80(S. 6 & 7 EFF. 90 DAYS LATER)
   03/06/80         Act No. 326
   03/14/80         Copies available

AN ACT TO AMEND ACT 220 OF 1979, RELATING TO INTEREST RATES FOR CERTAIN COMMERCIAL AGRICULTURAL LOANS, SO AS TO ALLOW THE PARTIES TO SUCH A LOAN TO CONTRACT FOR THE RATE OF INTEREST UP TO ONE PERCENT MORE THAN THE DISCOUNT RATE ON NINETY-DAY COMMERCIAL PAPER AND PROVIDE CERTAIN EXEMPTIONS; TO AMEND SECTIONS 37-1-102, 37-1-202, AS AMENDED, 37-2-210, AS AMENDED, AND 37-3-210, CODE OF LAWS OF SOUTH CAROLINA, 1976, AND ACT 686 OF 1976, ALL RELATING TO THE CONSUMER PROTECTION CODE, SO AS TO PROVIDE THAT THE SIMPLIFICATION, CLARIFICATION AND MODERNIZATION OF USURY BE ADDED TO THE PURPOSES OF THE CODE, INCREASE MINIMUM PREPAYMENT CHARGES FROM FIVE DOLLARS AND SEVEN DOLLARS AND FIFTY CENTS FOR CERTAIN LOANS TO FIFTEEN DOLLARS, PROVIDE THAT STATE CHARTERED CREDIT UNIONS SHALL BE SUBJECT TO ITS PROVISIONS AND PROVIDE CHARGES FOR NONCONSUMER LOANS; AND TO AMEND SECTION 34-27-70, RELATING TO POWERS OF COOPERATIVE CREDIT UNIONS, SO AS TO PROHIBIT SUCH CREDIT UNIONS FROM CHARGING RATES OF INTEREST IN EXCESS OF THOSE AUTHORIZED BY LAW INSTEAD OF AT THE RATE OF ONE PERCENT PER MONTH ON UNPAID LOAN BALANCES.

Be it enacted by the General Assembly of the State of South Carolina:

Parties to loan may contract for rate of interest exceptions

Section 1. Section 1 of Act 220 of 1979 is amended to read:

"Section 1. The parties to a loan which is made for commercial agricultural purposes and which does not exceed fifty thousand dollars may, until and including June 30, 1981, contract for any rate of interest up to a rate one percent more than that discount rate on ninety-day commercial paper then in effect in the federal reserve district where the lender is to disburse the loan proceeds to the borrower. The provisions of this act shall apply to commercial agricultural loans covered by Public Law 96-161 not in excess of fifty thousand dollars."

Purposes of Consumer Protection Code

Section 1A. Item (a) of subsection (2) of Section 37-1-102 of the 1976 Code is amended to read:

"(a) To simplify, clarify and modernize the law governing retail installment sales, consumer credit and usury ;".

Minimum credit charges

Section 2. Subsection (2) of Section 37-2-210 of the 1976 Code as last amended by Section 13 of Act 686 of 1976, is further amended by striking beginning on line four "$5 in a transaction which had an amount financed of $75 or less, or not exceeding $7.50 in a transaction which had an amount financed of more than $75" and inserting "fifteen dollars". The subsection when amended shall read:

"(2) Upon prepayment of a consumer credit sale, whether or not precomputed, except a consumer lease or one pursuant to a revolving charge account, the creditor may collect or retain a minimum charge not exceeding fifteen dollars, if the minimum charge was contracted for and the credit service charge earned at the time of prepayment is less than the minimum charge contracted for.".

Minimum credit charges--further

Section 3. Subsection (2) of Section 37-3-210 of the 1976 Code as added by Section 1 of Act 686 of 1976, is amended by striking beginning on line four "$5.00 in a transaction which had an amount financed of $75.00 or less, or not exceeding $7.50 in a transaction which had an amount financed of more than $75.00" and inserting "fifteen dollars". The subsection when amended shall read:

"(2) Upon prepayment of a consumer loan, whether or not precomputed, except a consumer lease or one pursuant to a revolving loan account, the creditor may collect or retain a minimum charge not exceeding fifteen dollars, if the minimum charge was contracted for and the loan finance charge earned at the time of prepayment is less than the minimum charge contracted for."

Nonconsumer loans--exceptions

Section 4. Section 2 of Act 686 of 1976 is amended by striking Section 3.605 and reenacting to read:

"Section 3.605. With respect to a loan other than a consumer loan, the parties may contract for the payment by the debtor of any finance or other charge except such loans that are less than $50,000 or are primarily secured by a first lien which is a purchase money security interest in land."

Provisions construed

Section 5. The provisions of Section 4 of this act shall not be construed to amend or otherwise change the text of Section 3.605 of the South Carolina Consumer Protection Code added by Act 686 of 1976.

Credit unions may lend and borrow money under certain conditions

Section 6. Section 34-27-70 of the 1976 Code is amended to read:

"Section 34-27-70. A cooperative credit union may receive the savings of its members in payment for shares, may lend to its members at reasonable rates of interest, not to exceed that rate authorized by law, or may invest, as provided in this chapter, the funds so accumulated, and make loans of such funds to its members, may borrow from banks, savings and loan associations, building and loan associations, trust companies, or other credit unions, or persons, and loan such money to its members, and may undertake such other activities relating to the purposes of the association as its bylaws may authorize provided that any credit union may loan money to any other credit union at such rates as the parties to the loan may agree."

Exclusions

Section 7. Item (9) of Section 37-1-202 of the 1976 Code, as added by Act 686 of 1976, is amended to read:

"(10) federally chartered credit unions."

Time effective

Section 8. This act shall take effect upon approval by the Governor except that Sections 6 and 7 shall not become effective until ninety days after such approval.