H*4782 Session 111 (1995-1996)
H*4782(Rat #0526, Act #0430 of 1996) General Bill, By Easterday
Similar(S 1281)
A Bill to amend Section 37-5-203, Code of Laws of South Carolina, 1976,
relating to the Consumer Protection Code, debtors' remedies, and civil
liability for violation of disclosure provisions, so as to provide that
nothing in certain provisions of this Section shall be construed to impose
civil liability or penalties on an arranger of credit when disclosure
constituting a violation of the Federal Truth in Lending Act is actually
committed by another person and the arranger of the credit has no knowledge of
the violation when it occurred, and to require the creditor to provide a copy
of the final closing documents to the arranger of credit; to amend Section
40-58-20, as amended, relating to definitions under the law regarding
registration of mortgage loan brokers, so as to enact definitions for "regular
business hours", and "satellite office"; to amend Section 40-58-65, relating
to maintaining availability, and examination of records for the regulation of
mortgage loan brokers, so as to provide, among other things, that a registered
mortgage loan broker with an official place of business within South Carolina
also may maintain one or more satell
03/20/96 House Introduced and read first time HJ-14
03/20/96 House Referred to Committee on Labor, Commerce and
Industry HJ-15
04/24/96 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-5
05/01/96 House Amended HJ-20
05/01/96 House Read second time HJ-20
05/02/96 House Read third time and sent to Senate HJ-8
05/02/96 Senate Introduced and read first time SJ-41
05/02/96 Senate Referred to Committee on Banking and Insurance SJ-41
05/09/96 Senate Recalled from Committee on Banking and Insurance SJ-26
05/21/96 Senate Amended SJ-27
05/21/96 Senate Read second time SJ-27
05/29/96 Senate Amended SJ-61
05/29/96 Senate Read third time and returned to House with
amendments SJ-61
05/30/96 House Concurred in Senate amendment and enrolled HJ-97
06/13/96 Ratified R 526
06/20/96 Became law without Governor's signature
06/20/96 Effective date 06/20/96
07/09/96 Copies available
06/27/96 Act No. 430
(A430, R526, H4782)
AN ACT TO AMEND SECTION 37-5-203, CODE OF LAWS OF
SOUTH CAROLINA, 1976, RELATING TO THE CONSUMER
PROTECTION CODE, DEBTORS' REMEDIES, AND CIVIL
LIABILITY FOR VIOLATION OF DISCLOSURE PROVISIONS, SO
AS TO PROVIDE THAT NOTHING IN CERTAIN PROVISIONS OF
THIS SECTION SHALL BE CONSTRUED TO IMPOSE CIVIL
LIABILITY OR PENALTIES ON AN ARRANGER OF CREDIT
WHEN DISCLOSURE CONSTITUTING A VIOLATION OF THE
FEDERAL TRUTH IN LENDING ACT IS ACTUALLY COMMITTED
BY ANOTHER PERSON AND THE ARRANGER OF THE CREDIT
HAS NO KNOWLEDGE OF THE VIOLATION WHEN IT
OCCURRED, AND TO REQUIRE THE CREDITOR TO PROVIDE A
COPY OF THE FINAL CLOSING DOCUMENTS TO THE
ARRANGER OF CREDIT; TO AMEND SECTION 40-58-20, AS
AMENDED, RELATING TO DEFINITIONS UNDER THE LAW
REGARDING REGISTRATION OF MORTGAGE LOAN BROKERS,
SO AS TO ENACT DEFINITIONS FOR "REGULAR BUSINESS
HOURS", AND "SATELLITE OFFICE"; TO AMEND
SECTION 40-58-65, RELATING TO MAINTAINING,
AVAILABILITY, AND EXAMINATION OF RECORDS FOR THE
REGULATION OF MORTGAGE LOAN BROKERS, SO AS TO
PROVIDE, AMONG OTHER THINGS, THAT A REGISTERED
MORTGAGE LOAN BROKER WITH AN OFFICIAL PLACE OF
BUSINESS WITHIN SOUTH CAROLINA ALSO MAY MAINTAIN
ONE OR MORE SATELLITE OFFICES; TO AMEND SECTION
40-58-110, AS AMENDED, RELATING TO REGISTRATION OF
MORTGAGE LOAN BROKERS, FIRST TIME REGISTRANTS'
PROCESSING FEE, ANNUAL RENEWAL OF REGISTRATION,
RENEWAL FEE, FAILURE TO RENEW RESULTS IN
CANCELLATION, AND LATE PENALTY, SO AS TO PROVIDE
THAT A REGISTRANT SHALL PAY AN INITIAL FEE OF ONE
HUNDRED FIFTY DOLLARS AND, THEREAFTER, A RENEWAL
FEE OF ONE HUNDRED FIFTY DOLLARS FOR EACH SATELLITE
LOCATION, TO PROVIDE THAT THE BROKER SHALL GIVE
NOTICE IN WRITING TEN DAYS BEFORE OPENING A NEW
OFFICIAL BRANCH OR SATELLITE LOCATION, AND TO
PROVIDE THAT NO INITIAL FEE IS REQUIRED WHEN THE
REGISTRANT GIVES NOTICE OF A CHANGE OF ADDRESS FOR
AN OFFICIAL BRANCH OR SATELLITE LOCATION; TO AMEND
SECTION 29-3-680, RELATING TO MORTGAGES AND DEEDS OF
TRUST, FORECLOSURE, AND APPLICATION FOR ORDER OF
APPRAISAL, SO AS TO PROVIDE THAT, EXCEPT IN ANY REAL
ESTATE FORECLOSURE PROCEEDING RELATING TO A
DWELLING PLACE OR TO A CONSUMER CREDIT
TRANSACTION, A DEFENDANT AGAINST WHOM A PERSONAL
JUDGMENT MAY BE TAKEN ON A REAL ESTATE SECURED
TRANSACTION MAY WAIVE THE APPRAISAL RIGHTS IF THE
DEBTORS, MAKERS, BORROWERS, AND/OR GUARANTORS ARE
NOTIFIED IN WRITING BEFORE THE TRANSACTION THAT A
WAIVER OF APPRAISAL RIGHTS WILL BE REQUIRED AND
UPON SIGNING A STATEMENT DURING THE TRANSACTION, TO
PROVIDE THAT THIS WAIVER MAY BE IN ANY DOCUMENT
RELATING TO THE TRANSACTION, AND TO PROVIDE THAT
THE REQUIRED LANGUAGE MUST BE ON A PAGE CONTAINING
THE SIGNATURE OF THE PERSON MAKING THE WAIVER AND
THE CAPITALIZED SENTENCE MUST BE UNDERLINED, IN
CAPITAL LETTERS, OR DISCLOSED IN ANOTHER PROMINENT
MANNER; AND TO AMEND SECTION 29-3-700, RELATING TO
MORTGAGES AND DEEDS OF TRUST, FORECLOSURE, AND
ORDER FOR APPRAISAL, SO AS TO DELETE THE PROVISION
REQUIRING PROPERTY TO BE APPRAISED BY THREE
DISINTERESTED FREEHOLDERS OF THE COUNTY IN WHICH
THE PROPERTY IS LOCATED, AND TO PROVIDE INSTEAD FOR
APPRAISAL BY THREE DISINTERESTED INDIVIDUALS WHO
MUST BE STATE-CERTIFIED GENERAL REAL ESTATE
APPRAISERS, STATE-CERTIFIED RESIDENTIAL REAL ESTATE
APPRAISERS, OR STATE-LICENSED REAL ESTATE
APPRAISERS.
Be it enacted by the General Assembly of the State of South
Carolina:
Arranger of credit; no civil liability, penalties; etc.
SECTION 1. Section 37-5-203(6) of the 1976 Code is amended to
read:
"(6) In this section, creditor includes a person who in the
ordinary course of business regularly extends or arranges for the
extension of credit, or offers to arrange for the extension of credit.
Nothing in this subsection, however, shall be construed to impose civil
liability or penalties on an arranger of credit when disclosure constituting
a violation of the Federal Truth in Lending Act is actually committed by
another person and the arranger of credit has no knowledge of the
violation when it occurred. The creditor shall provide a copy of the final
closing documents to the arranger of credit."
Definitions added
SECTION 2. Section 40-58-20 of the 1976 Code, as last amended by
Act 172 of 1993, is further amended by adding:
"(12) `Regular business hours' means open for business not less
than thirty hours a week, Monday through Friday.
(13) `Satellite office' means a location at which a mortgage broker
may conduct mortgage loan broker business other than at a location that
is open for regular business hours and is not required to be staffed
full-time by one or more employees who have the authority to contract
on behalf of the broker and to accept service on behalf of the
broker."
Satellite offices; etc.
SECTION 3. Section 40-58-65 of the 1976 Code, as added by Act 172
of 1993, is amended to read:
"Section 40-58-65. (A) A person registered pursuant to this
chapter must maintain at his usual place of business books, records, and
documents pertaining to the business conducted, to enable the department
to determine compliance with this chapter. A registrant with two or
more registered offices may consolidate the records at any one of the
registered offices. The records must be available for examination to the
administrator or his designee upon request. Books and records must be
maintained for at least three years.
(B) A mortgage broker doing business in this State shall maintain a
sufficient physical presence in this State and his records must be
maintained at the registered location in this State. At a minimum, the
broker shall maintain an official place of business open during regular
business hours, staffed by one or more employees who have the authority
to contract on behalf of the broker and to accept service on behalf of the
broker. If the official place of business is not open for business within
the hours of 8:30 A.M. until 5:00 P.M., Monday through Friday, the
broker shall notify the department in writing of the business hours
maintained by the broker's official place of business.
(C) A registered mortgage loan broker with an official place of
business within South Carolina also may maintain one or more satellite
offices, provided that the:
(1) mortgage loan broker notifies the department in writing ten days
before the opening of a satellite office of the location of the satellite
office and notifies the department that all records from the satellite office
are stored in a main or branch location in this State which is staffed by
one or more employees during regular business hours;
(2) records of any pending mortgage loan application or records in
which a loan closing is still in process are made available at the mortgage
loan broker's main or branch location as provided in item (1) to the
administrator or his designee within two business days of a written
request delivered by facsimile transmission, mail, or hand-delivery by the
administrator or his designee;
(3) broker notifies the department in writing within two business
days of closing a satellite office.
(D) The department, at its discretion, may examine the books and
records of a registrant and other specified documents to determine
whether there has been substantial compliance with this chapter. Unless
there is reason to believe a violation of this chapter has occurred,
examinations must be limited to one each year. Records and information
obtained by the department during an examination are confidential and
the department must certify that it is in compliance with the Right to
Financial Privacy Act (RFPA).
(E) If the mortgage loan broker fails to notify the department of the
existence or closing of a satellite office, the actual operating hours of the
main or branch offices where records are kept, or the whereabouts of its
records, the broker is subject to a penalty of not less than fifty dollars
and not more than two hundred fifty dollars. If after the assessment of
such a fine within a one-year period, the administrator finds that
additional violations of this section are both intentional and repeated, the
mortgage loan broker is subject to all of the remedies for violations of
this chapter set forth in Section 40-58-80."
Fees; notification; etc.
SECTION 4. Section 40-58-110(A) of the 1976 Code, as amended by
Act 172 of 1993, is further amended to read:
"(A) In addition to the initial application for registration fee of
five hundred dollars required by Section 40-58-50, first time registrants
also shall pay a one-time, nonrefundable processing fee of two hundred
dollars. Thereafter, a registrant shall pay an annual renewal fee of five
hundred dollars. A registrant shall pay an initial fee of one hundred fifty
dollars and, thereafter, a renewal fee of one hundred fifty dollars for each
satellite location. The broker shall notify the department in writing ten
days before opening a new, official branch or satellite location. No
initial fee is required when the registrant notifies the department of a
change in address for an official branch or satellite location."
Waiver of appraisal rights; etc.
SECTION 5. Section 29-3-680 of the 1976 Code is amended to read:
"Section 29-3-680. (A) In any real estate foreclosure proceeding
a defendant against whom a personal judgment is taken or asked, whether
he has theretofore appeared in the action or not, may within thirty days
after the sale of the mortgaged property apply by verified petition to the
clerk of court in which the decree or order of sale was taken for an order
of appraisal.
(B) Except in any real estate foreclosure proceeding relating to a
dwelling place, as defined in Section 12-37-250, or to a consumer credit
transaction, as defined in Section 37-1-301(11), a defendant against
whom a personal judgment may be taken on a real estate secured
transaction may waive the appraisal rights as provided by this section if
the debtors, makers, borrowers, and/or guarantors are notified in writing
before the transaction that a waiver of appraisal rights will be required
and upon signing a statement during the transaction similar to the
following:
`The laws of South Carolina provide that in any real estate foreclosure
proceeding a defendant against whom a personal judgment is taken or
asked may within thirty days after the sale of the mortgaged property
apply to the court for an order of appraisal. The statutory appraisal value
as approved by the court would be substituted for the high bid and may
decrease the amount of any deficiency owing in connection with the
transaction. THE UNDERSIGNED HEREBY WAIVES AND
RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH
MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE
WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY
APPRAISED VALUE OF THE MORTGAGED PROPERTY.'
This waiver may be in any document relating to the transaction;
however, the required language must be on a page containing the
signature of the person making the waiver and the capitalized sentence
must be underlined, in capital letters, or disclosed in another prominent
manner."
Persons to perform appraisal
SECTION 6. Section 29-3-700 of the 1976 Code is amended to read:
"Section 29-3-700. Upon the filing of such petition and deposit
with the clerk of a sufficient sum to pay the costs of the subsequent
proceedings he shall issue an order that the property be appraised at its
true value as of the date of sale by three disinterested individuals who
must be state-certified general real estate appraisers as defined in Section
40-60-20(20), state- certified residential real estate appraisers as defined
by Section 40-60-20(21), or state-licensed real estate appraisers as
defined by Section 40-60-20(22), who shall not be parties to the action or
connected in business with or related by blood or marriage within the
sixth degree to any such party."
Time effective
SECTION 7. This act takes effect upon approval by the Governor.
Became law without the signature of the Governor -- 6/20/96. |