S*0643(Rat #0221, Act #0144 of 1989)  General Bill, By J.C. Lindsay
 A Bill to amend Sections 37-2-416 and 37-3-408, Code of Laws of South
 Carolina, 1976, relating to the change in terms of revolving charge and loan
 accounts, so as to delete the requirement that a consumer incurs additional
 debt after notification of a change in terms, and require the written
 disclosure of a change in terms to state that if the consumer does not want to
 continue the revolving account under the new terms the creditor will terminate
 the account and permit the consumer to pay the existing balance upon the terms
 in effect before the change in terms on the written request of the consumer
 sent to the creditor at the address provided in the disclosure and authorize
 the consumer to apply for another revolving account on the new terms; and to
 amend Sections 37-2-405 and 37-3-402, relating to the right of the consumer to
 refinance balloon payments due pursuant to consumer credit sales and consumer
 loans under the South Carolina Consumer Protection Code, so as to exempt from
 the requirements of the Sections all credit transactions and all consumer
 loans rather than only those in which the primary security is a real estate
 lien if the formula for determining charges or changes in payments upon
 renegotiation is included in the agreement.-amended title

   04/11/89  Senate Introduced and read first time SJ-4
   04/11/89  Senate Referred to Committee on Banking and Insurance
   04/13/89  Senate Recalled from Committee on Banking and Insurance SJ-19
   04/25/89  Senate Read second time SJ-53
   04/25/89  Senate Ordered to third reading with notice of
                     amendments SJ-53
   04/27/89  Senate Amended SJ-143
   04/27/89  Senate Read third time and sent to House SJ-143
   05/02/89  House  Introduced and read first time HJ-43
   05/02/89  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-43
   05/10/89  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-6
   05/22/89  House  Amended HJ-37
   05/22/89  House  Read second time HJ-39
   05/23/89  House  Debate adjourned until Wednesday, May 24, 1989 HJ-4
   05/24/89  House  Read third time and returned to Senate with
                     amendments HJ-27
   05/25/89  Senate Non-concurrence in House amendment SJ-9
   05/25/89  House  House insists upon amendment and conference
                     committee appointed Reps. Limehouse, Cork & G.
                     Bailey HJ-60
   05/25/89  Senate Conference committee appointed Sens. McLeod,
                     Fielding, Lee SJ-10
   05/29/89  House  Conference report received and adopted HJ-53
   05/30/89  Senate Conference report received and adopted SJ-18
   05/30/89  Senate Ordered enrolled for ratification SJ-23
   06/02/89         Ratified R 221
   06/05/89         Signed By Governor
   06/05/89         Effective date 06/05/89
   06/05/89         Act No. 144
   06/13/89         Copies available

AN ACT TO AMEND SECTIONS 37-2-416 AND 37-3-408, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CHANGE IN TERMS OF REVOLVING CHARGE AND LOAN ACCOUNTS, SO AS TO DELETE THE REQUIREMENT THAT A CONSUMER INCURS ADDITIONAL DEBT AFTER NOTIFICATION OF A CHANGE IN TERMS, AND REQUIRE THE WRITTEN DISCLOSURE OF A CHANGE IN TERMS TO STATE THAT IF THE CONSUMER DOES NOT WANT TO CONTINUE THE REVOLVING ACCOUNT UNDER THE NEW TERMS THE CREDITOR WILL TERMINATE THE ACCOUNT AND PERMIT THE CONSUMER TO PAY THE EXISTING BALANCE UPON THE TERMS IN EFFECT BEFORE THE CHANGE IN TERMS ON THE WRITTEN REQUEST OF THE CONSUMER SENT TO THE CREDITOR AT THE ADDRESS PROVIDED IN THE DISCLOSURE AND AUTHORIZE THE CONSUMER TO APPLY FOR ANOTHER REVOLVING ACCOUNT ON THE NEW TERMS; AND TO AMEND SECTIONS 37-2-405 AND 37-3-402, RELATING TO THE RIGHT OF THE CONSUMER TO REFINANCE BALLOON PAYMENTS DUE PURSUANT TO CONSUMER CREDIT SALES AND CONSUMER LOANS UNDER THE SOUTH CAROLINA CONSUMER PROTECTION CODE, SO AS TO EXEMPT FROM THE REQUIREMENTS OF THE SECTIONS ALL CREDIT TRANSACTIONS AND ALL CONSUMER LOANS RATHER THAN ONLY THOSE IN WHICH THE PRIMARY SECURITY IS A REAL ESTATE LIEN IF THE FORMULA FOR DETERMINING CHARGES OR CHANGES IN PAYMENTS UPON RENEGOTIATION IS INCLUDED IN THE AGREEMENT.

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

Terms of account may be changed

SECTION 1. Section 37-2-416 of the 1976 Code is amended to read:

"Section 37-2-416. (1) Whether or not a change is authorized by prior agreement, a creditor may change the terms of a revolving charge account applying to any balance incurred before or after the effective date of the change. If the change increases the rate of the credit service charge or of additional charges, alters the method of determining the balance upon which charges are made so that increased charges may result, or imposes or increases minimum charges, the change is effective with respect to a balance incurred before the effective date of the change only if the consumer after receiving disclosure of the change agrees to it in writing or the creditor delivers or mails to the consumer one written disclosure of the change at least thirty days before the effective date. The written disclosure must state that if the consumer does not want to continue the revolving account under the new terms the creditor will terminate the account and permit the consumer to pay the existing balance under the terms in effect before the change in terms on the written request of the consumer sent to the creditor at the address provided in the disclosure. The disclosure also must state that the consumer may apply for another revolving account on the new terms.

(2) A disclosure provided for in subsection (1) is mailed to the consumer when mailed to him at his address used by the creditor for mailing him periodic billing statements.

(3) If a creditor attempts to change the terms of a revolving charge account as provided in subsection (1) without complying with this section, any additional cost or charge to the consumer resulting from the change is an excess charge and is subject to the remedies available to the consumer (Section 37-5-202) and to the administrator (Section 37-6-113)."

Terms of account may be changed

SECTION 2. Section 37-3-408 of the 1976 Code is amended to read:

"Section 37-3-408. (1) Whether or not a change is authorized by prior agreement, a creditor may change the terms of a revolving loan account applying to any balance incurred before or after the effective date of the change. If the change increases the rate of the loan finance charge or of additional charges, alters the method of determining the balance upon which charges are made so that increased charges may result, or imposes or increases minimum charges, the change is effective with respect to a balance incurred before the effective date of the change only if the debtor after receiving disclosure of the change agrees to it in writing or the creditor delivers or mails to the debtor one written disclosure of the change at least thirty days before the effective date. The written disclosure must state that if the consumer does not want to continue the revolving account under the new terms the creditor will terminate the account and permit the consumer to pay the existing balance under the terms in effect before the change in terms on the written request of the consumer sent to the creditor at the address provided in the disclosure. The disclosure also must state that the consumer may apply for another revolving account on the new terms.

(2) A disclosure provided for in subsection (1) is mailed to the debtor when mailed to him at his address used by the creditor for mailing him periodic billing statements.

(3) If a creditor attempts to change the terms of a revolving loan account as provided in subsection (1) without complying with this section, any additional cost or charge to the debtor resulting from the change is an excess charge and is subject to the remedies available to the debtor (Section 37-5-202) and to the administrator (Section 37-6-113)."

Exemption

SECTION 3. Section 37-2-405(2)(c) of the 1976 Code is amended to read:

"(c) a credit transaction to the extent a formula for determining the rate of the credit service charge and any change in the amount of payment upon renegotiation or refinancing is specified in the agreement between the parties or is an alternative mortgage instrument; or".

Exemption

SECTION 4. Section 37-3-402(2)(c) of the 1976 Code is amended to read:

"(c) a credit transaction to the extent a formula for determining the rate of the loan finance charge and any change in the amount of payment upon renegotiation or refinancing is specified in the agreement between the parties or is an alternative mortgage instrument; or".

Time effective

SECTION 5. This act takes effect upon approval by the Governor.