H*3695 Session 107 (1987-1988)
H*3695(Rat #0548, Act #0491 of 1988) General Bill, By T.M. Burriss, H. Brown,
Carnell, T.W. Edwards, P.B. Harris, J.R. Klapman, E.C. Lewis, R.N. McLellan,
T.F. Rogers and D.E. Winstead
A Bill to amend Section 37-1-202, Code of Laws of South Carolina, 1976,
relating to exclusions from the provisions of the South Carolina Consumer
Protection Code, so as to further provide for the exclusions related to
pawnbrokers; and to amend Chapter 39, Title 40, relating to pawnbrokers, so as
to revise the manner in which pawnbrokers are regulated, licensed, and
required to do business, to provide that persons pledging goods with
pawnbrokers have a cause of action against the pawnbroker for the violation of
certain provisions of this Chapter, and to provide certain civil and criminal
penalties for violations of this Chapter.
02/03/88 House Introduced and read first time HJ-904
02/03/88 House Referred to Committee on Labor, Commerce and
Industry HJ-905
02/24/88 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-1418
03/01/88 House Debate adjourned until Wednesday, March 2, 1988 HJ-1575
03/02/88 House Amended HJ-1614
03/02/88 House Read second time HJ-1614
03/03/88 House Read third time and sent to Senate HJ-1702
03/08/88 Senate Introduced and read first time SJ-18
03/08/88 Senate Referred to Committee on Judiciary SJ-18
04/06/88 Senate Committee report: Favorable with amendment
Judiciary SJ-132
04/07/88 Senate Amended SJ-55
04/07/88 Senate Read second time SJ-57
04/14/88 Senate Read third time SJ-192
04/14/88 Senate Returned SJ-192
04/21/88 House Concurred in Senate amendment and enrolled HJ-3158
04/28/88 Ratified R 548
05/02/88 Signed By Governor
05/02/88 Effective date 07/01/88
05/02/88 Act No. 491
05/23/88 Copies available
(A491, R548, H3695)
AN ACT TO AMEND SECTION 37-1-202, CODE OF LAWS OF SOUTH CAROLINA, 1976,
RELATING TO EXCLUSIONS FROM THE PROVISIONS OF THE SOUTH CAROLINA CONSUMER
PROTECTION CODE, SO AS TO FURTHER PROVIDE FOR THE EXCLUSIONS RELATED TO
PAWNBROKERS; AND TO AMEND CHAPTER 39, TITLE 40, RELATING TO PAWNBROKERS, SO AS
TO REVISE THE MANNER IN WHICH PAWNBROKERS ARE REGULATED, LICENSED, AND REQUIRED
TO DO BUSINESS, TO PROVIDE THAT PERSONS PLEDGING GOODS WITH PAWNBROKERS HAVE A
CAUSE OF ACTION AGAINST THE PAWNBROKER FOR THE VIOLATION OF CERTAIN PROVISIONS
OF THIS CHAPTER, AND TO PROVIDE CERTAIN CIVIL AND CRIMINAL PENALTIES FOR
VIOLATIONS OF THIS CHAPTER.
Be it enacted by the General Assembly of the State of South Carolina:
Pawnbroker exclusion revised
SECTION 1. Section 37-1-202(4) of the 1976 Code is amended to read:
"(4) Transactions made pursuant to and in compliance with Chapter 39 of
Title 40;".
Pawnbroker regulation revised
SECTION 2. Chapter 39, Title 40 of the 1976 Code is amended to read:
"CHAPTER 39
Pawnbrokers
Section 40-39-10. The following definitions apply for purposes of this
chapter:
(1) 'Person' means an individual, partnership, corporation, joint venture,
trust,
association, or any other legal entity however organized.
(2) 'Pawnbroker' means any person engaged in the business of lending money
on the security of pledged goods, or engaged in the business of purchasing
tangible personal property on condition that it may be redeemed or repurchased
by the seller for a fixed price within a fixed period of time.
(3) 'Pledged goods' means tangible personal property other than choses in
action, title, securities, or printed evidences of indebtedness, which property
is deposited with or otherwise actually delivered into the possession of a
pawnbroker in the course of his business in connection with a pawn transaction.
(4) 'Pawnshop' means the location at which or premises in which a pawnbroker
regularly conducts business.
(5) 'Month' means that period of time from one date in a calendar month to
the corresponding date in the following calendar month, but if there is no
corresponding date, then the last day of the following month, and when
computations are made for a fraction of a month, a day is one-thirtieth of a
month.
(6) 'Administrator' means the administrator of the Department of Consumer
Affairs.
(7) 'Pawn transaction' means the pledging with a pawnbroker under this
chapter of a single item of goods or tangible personal property as security for
a loan of money. Items that are usually sold as a set are considered a single
item and must be included in the same transaction, and a pledged item together
with items that are accessories to the pledged item are considered a single item
and must be included in the same transaction. A separate pawn transaction
retains its separate character when it is renewed, unless the parties agree
otherwise.
Section 40-39-20. All pawnbrokers conducting business in this State are under
the authority of and regulated by the Department of Consumer Affairs, the
administrator of which has the authority to promulgate regulations as he
considers necessary to carry out the conditions and intent of this chapter. No
person may carry on the business of a pawnbroker in any location in this State
without first having obtained a Certificate of Authority for each location from
the Department of Consumer Affairs. Upon receipt of the application for the
Certificate of Authority, the Department of Consumer Affairs shall notify the law
enforcement agency having jurisdiction where the applicant intends to do
business. The law enforcement agency shall conduct a criminal background
investigation of the applicant and upon its completion shall make the results of
the investigation known to the administrator of the Department of Consumer
Affairs along with its appropriate recommendation on the issuance of the
Certificate of Authority.
A person convicted of a felony may not be issued a Certificate of Authority to
carry on the business of a pawnbroker or in any manner engage in the business of
a pawnbroker, except that any person who is in the business of a pawnbroker on
July 1, 1988, and who has been convicted of a felony before this date may be
issued a Certificate of Authority and upon receiving it may continue in the
business of a pawnbroker but if this person is convicted of a felony on or after
July 1, 1988, he may not thereafter be issued a Certificate of Authority or carry
on the business of a pawnbroker after the date of this subsequent felony
conviction.
Section 40-39-30. No person may carry on the business of a pawnbroker in any
location other than the one designated in his Certificate of Authority, under
penalty of administrative fine, revocation of his Certificate of Authority, or
other action by the administrator pursuant to regulation or criminal prosecution
as set out in this chapter.
Section 40-39-40. No pawnbroker may charge or collect any fees, costs, or
assessments of any kind or nature other than those specifically allowed under
this chapter.
Section 40-39-50. Every person seeking a Certificate of Authority to carry on
the business of a pawnbroker shall at the time of application for his certificate
file with the Department of Consumer Affairs a bond in favor of the department
to be executed by the person granted the certificate and by two responsible
sureties or a surety company licensed to do business in this State in the penal
sum of five thousand dollars to be approved by the administrator. The bond must
be conditioned for the faithful performance of the duties and obligations
pertaining to the business so authorized. In lieu of the above, other evidence
of financial responsibility approved by the administrator must be submitted,
including, but not limited to, letters of credit or certificates of deposit.
Each applicant shall also file proof of his net worth which must be a minimum of
thirty-five thousand dollars until that time as liability insurance covering the
contents of the pawn location is secured by the pawnbroker. The amount of the
liability insurance required must be set by regulations promulgated by the
administrator.
Section 40-39-60. If any person is aggrieved by the misconduct of any licensed
pawnbroker and recovers judgment against him thereafter, he may, after the return
unsatisfied, either in whole or in part, of any execution issued upon the
judgment, maintain an action in his own name upon the bond of the pawnbroker in
any court having jurisdiction of the amount claimed.
Section 40-39-70. Every pawnbroker shall keep a record, at the time of any
loan, containing an account and description of the goods, articles, or things
pawned, pledged, or purchased, the amount of money loaned thereon, the time of
pledging them, the charges, or the rate of interest to be paid on the loan, and
the name and residence of the person pawning or pledging the goods, articles, or
things.
Section 40-39-80. Every pawnbroker at the time of each loan shall deliver to
the person pawning or pledging any articles, at no charge, a memorandum signed
by the pawnbroker and the person pawning or pledging any articles containing the
substance of the entry required by Section 40-39-70. If the memorandum is lost,
the pledgor may receive a duplicate upon payment of a fee not exceeding three
dollars. The administrator may prescribe the form to be used.
Section 40-39-90. Records kept by pawnbrokers pursuant to this chapter must
at all reasonable times be open to the inspection by court officials, law
enforcement officers, the administrator of the Department of Consumer Affairs,
and their designees. Any loan records identifying any individual must be handled
in a confidential manner at all times.
Section 40-39-100. Pawnbrokers may charge interest on loans not exceeding the
following amounts:
(1) at the rate of two dollars and fifty cents per thirty-day period for each
ten dollars loaned for the first fifty dollars loaned;
(2) at the rate of two dollars per thirty-day period for each ten dollars
loaned on that portion of the loan exceeding fifty dollars but not exceeding one
hundred dollars;
(3) at the rate of one dollar and fifty cents per thirty-day period for each
ten dollars loaned on that portion of the loan exceeding one hundred dollars but
not exceeding two hundred dollars;
(4) at the rate of one dollar per thirty-day period for each ten dollars
loaned on that portion of the loan exceeding two hundred dollars but not
exceeding one thousand dollars;
(5) at the rate of fifty cents per thirty-day period for each ten dollars
loaned on that portion of the loan exceeding one thousand dollars but not
exceeding two thousand dollars.
No pawnbroker may separate or divide a pawn transaction into two or more
transactions for the purpose or with the effect of obtaining a total pawn
interest rate in excess of that authorized for an amount financed equal to the
total of the amounts financed in the resulting transactions.
No pawnbroker may make a loan in excess of two thousand dollars. Every
pawnbroker shall post these rates in a form which is prescribed by the
administrator. The following statement must be included in the posted rate
schedule:
'Consumers: All pawnbrokers operating in South Carolina are required by law to
post a schedule showing the maximum rate of LOAN FINANCE CHARGES stated as
dollars for each ten dollars for each thirty-day period that the pawnbroker
intends to charge for various types of pawn transactions. The purpose of this
requirement is to assist you in comparing the maximum rates that pawnbrokers
charge, thereby furthering your understanding of the terms of pawn transactions
and helping you to avoid the uninformed use of credit.
NOTE: Pawnbrokers are prohibited only from granting credit at rates higher than
those specified above. A pawnbroker may be willing to grant you credit at rates
that are lower than those specified, depending on the amount, terms, collateral,
and your credit worthiness.'
Section 40-39-110. If any loan remains unpaid for a period of sixty days from
the due date or any renewal or extension thereof, the title of the borrower or
pledgor to the property pledged to secure the loan shall vest in the pawnbroker,
without advertising, sale, or accountability to the pledgor, if the pawn ticket
or memorandum delivered to the borrower in accordance with Section 40-39-80,
contains on the back thereof a notice to that effect, and if a printed or written
notice of the impending forfeiture is mailed to the pledgor at the address given
on the pawn ticket, at least ten days prior to the forfeiture date. This notice
must contain a description of the article pledged, and the amount due thereon as
of the date of the notice. No notice is required on loans of fifty dollars or
less.
Section 40-39-120. Each pawnbroker applying for a Certificate of Authority
shall tender to the department a fee of two hundred seventy-five dollars plus all
other applicable fees required by other agencies to process the application. The
administrator may revoke any Certificate of Authority if the pawnbroker has
violated this chapter or any regulation or order lawfully made pursuant to this
chapter, or if facts or conditions exist which would clearly have justified the
administrator in refusing to grant a Certificate of Authority had these facts or
conditions been known to exist at the time the application for Certificate of
Authority was made. The administrator may promulgate regulations for obtaining
and revoking the Certificate of Authority. Certificates of Authority must be
renewed on a yearly basis. Applications for renewal must be accompanied by a
renewal fee of two hundred seventy-five dollars.
Section 40-39-130. All pawnbrokers shall comply with the Federal Truth in
Lending Act. The administrator has the administrative enforcement powers set
forth in Section 108 of the Federal Truth in Lending Act.
Section 40-39-140. No pawnbroker shall accept property from a pledgor upon
which there is evidence of ownership by a third party without first taking
reasonable steps to ascertain its true ownership. Any such item accepted for
pawn by a pawnbroker must be returned on demand without fee to the third party
owner.
Section 40-39-150. The administrator of the Department of Consumer Affairs may
impose administrative fines of up to seven hundred fifty dollars for each offense
upon persons violating any of the provisions of this chapter up to a maximum of
fifteen thousand dollars for the same set of transactions or occurrences. Each
violation constitutes a separate offense. In addition, any person violating the
provisions of Sections 40-39-20 and 40-39-30 is guilty of a misdemeanor and, upon
conviction, must be punished by a fine not exceeding one thousand dollars or by
imprisonment for a term not exceeding sixty days or both. The administrator may
revoke or suspend a pawnbroker's Certificate of Authority in addition to the
penalties enumerated in this section.
Section 40-39-160. (1) If a pawnbroker violates Section 40-39-80, 40-39-100,
40-39-110, or 40-39-130, the pledgor has a cause of action to recover from the
pawnbroker actual damages and the right in an action other than a class action
to recover from the person violating these provisions a penalty in an amount to
be determined by the court of not less than one hundred nor more than one
thousand dollars. No action pursuant to this subsection may be brought more than
one year after the scheduled or accelerated maturity of the debt.
(2) A pledgor is not obligated to pay a charge in excess of that allowed by
this chapter, and has a right of refund of any excess charge paid within ten days
of written demand. A refund may not be made by reducing the consumer's
obligation by the amount of the excess charge unless the pawnbroker has notified
the pledgor that the pledgor may request a refund and the pledgor has not so
requested within ten days thereafter.
(3) In an action in which it is found that a pawnbroker has violated this
chapter, the court shall award to the pledgor the costs of the action and to the
pledgor's attorney reasonable
fees. In determining attorney's fees the amount of recovery on behalf of the
consumer is not controlling.
(4) Liability to the pledgor for violation of Section 40-39-130 is in lieu
of and not in addition to his liability under the Federal Truth in Lending Act.
No action with respect to the same violation may be maintained pursuant to both
subsection (1) of this section and the Federal Truth in Lending Act."
Time effective
SECTION 3. This act takes effect July 1, 1988. |