H*3272(Rat #0217, Act #0099 of 1997)  General Bill, By Cato, Allison, Bailey, 
Boan, H. Brown, J. Brown, Carnell, Chellis, Cooper, Gamble, Govan, Harrell, 
Haskins, Law, Lee, L.H. Limbaugh, Limehouse, Loftis, Mason, Neilson, Phillips, 
Meacham, Robinson, Sandifer, Seithel, Sharpe, Simrill, J. Smith, Tripp, Trotter, 
Wilkes and Young-Brickell
 A BILL TO AMEND SECTION 37-10-105, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO PENALTIES FOR THE VIOLATION OF THE ATTORNEY'S PREFERENCE LOAN
 PROVISION UNDER THE CONSUMER PROTECTION CODE, SO AS TO DELETE CERTAIN PENALTY
 PROVISIONS, TO CREATE AN INDIVIDUAL CAUSE OF ACTION AND TO PROHIBIT A CLASS
 ACTION FOR A VIOLATION OF THE CHAPTER, AND TO SET ELEMENTS OF RECOVERABLE
 DAMAGES; AND TO MAKE THESE PROVISIONS APPLY TO CAUSES OF ACTION, INCLUDING
 APPEALS, PENDING ON MAY 2, 1997, AND TO LIMIT RECOVERY IN CLASS ACTIONS FILED
 ON OR BEFORE THAT DATE.-AMENDED TITLE

   01/21/97  House  Introduced and read first time HJ-14
   01/21/97  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-14
   02/05/97  House  Committee report: Majority favorable with amend.,
                     minority unfavorable Labor, Commerce and Industry HJ-2
   02/12/97  House  Debate adjourned until Thursday, February 13,
                     1997 HJ-28
   02/13/97  House  Debate adjourned until Tuesday, February 18, 1997 HJ-26
   02/19/97  House  Debate interrupted HJ-41
   02/20/97  House  Debate adjourned until Tuesday, February 25, 1997 HJ-18
   02/25/97  House  Debate adjourned until Wednesday, February 26,
                     1997 HJ-22
   02/26/97  House  Debate interrupted HJ-28
   02/27/97  House  Amended HJ-27
   02/27/97  House  Read second time HJ-80
   02/27/97  House  Roll call Yeas-67  Nays-45 HJ-80
   03/03/97  House  Amended HJ-25
   03/03/97  House  Read third time and sent to Senate HJ-28
   03/03/97  House  Roll call Yeas-70 Nays-37 HJ-28
   03/04/97  Senate Introduced and read first time SJ-15
   03/04/97  Senate Referred to Committee on Banking and Insurance SJ-15
   05/15/97  Senate Polled out of committee Banking and Insurance SJ-9
   05/15/97  Senate Committee report: Favorable with amendment
                     Banking and Insurance SJ-9
   05/20/97  Senate Amended SJ-23
   05/20/97  Senate Read second time SJ-23
   05/20/97  Senate Ordered to third reading with notice of
                     amendments SJ-23
   05/29/97  Senate Amended SJ-56
   05/29/97  Senate Read third time and returned to House with
                     amendments SJ-56
   06/04/97  House  Concurred in Senate amendment and enrolled HJ-23
   06/09/97         Ratified R 217
   06/15/97         Became law without Governor's signature
   06/15/97         Effective date 06/15/97
   06/15/97         See act for exception to or explanation of
                     effective date
   06/24/97         Copies available
   06/24/97         Act No. 99

AN ACT TO AMEND SECTION 37-10-105, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PENALTIES FOR THE VIOLATION OF THE ATTORNEY'S PREFERENCE LOAN PROVISION UNDER THE CONSUMER PROTECTION CODE, SO AS TO DELETE CERTAIN PENALTY PROVISIONS, TO CREATE AN INDIVIDUAL CAUSE OF ACTION AND TO PROHIBIT A CLASS ACTION FOR A VIOLATION OF THE CHAPTER, AND TO SET ELEMENTS OF RECOVERABLE DAMAGES; AND TO MAKE THESE PROVISIONS APPLY TO CAUSES OF ACTION, INCLUDING APPEALS, PENDING ON MAY 2, 1997, AND TO LIMIT RECOVERY IN CLASS ACTIONS FILED ON OR BEFORE THAT DATE.

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

Provides for certain actions by consumer against lender violating attorney's preference option

SECTION 1. Section 37-10-105 of the 1976 Code is amended to read:

"Section 37-10-105. (A) If a creditor violates a provision of this chapter, the debtor has a cause of action, other than in a class action, to recover actual damages and also a right in an action, other than in a class action, to recover from the person violating this chapter a penalty in an amount determined by the court of not less than one thousand five hundred dollars and not more than seven thousand five hundred dollars. No debtor may bring a class action for a violation of this chapter. No debtor may bring an action for a violation of this chapter more than three years after the violation occurred, except as set forth in subsection (C). The three-year statute of limitations applies to actions commenced after May 2, 1997. No inference should be drawn as to the applicable statute of limitations for any pending actions. This subsection does not bar a debtor from asserting a violation of this chapter in an action to collect a debt which was brought more than three years from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such action.

(B) No creditor may be held liable in an action brought under this section for a violation of this chapter if the creditor shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid the error.

(C) If the court finds as a matter of law that the agreement or transaction is unconscionable pursuant to Section 37-5-108 at the time it was made, or was induced by unconscionable conduct, the court may, in an action other than a class action:

(1) refuse to enforce the agreement, or a term, or part of the agreement or transaction that the court determines to have been unconscionable at the time it was made;

(2) enforce the remainder of the agreement without the unconscionable term or part, or limit the application of the unconscionable term or part to avoid an unconscionable result;

(3) rewrite or modify the agreement to eliminate an unconscionable term, part, or result and enforce the new agreement; or

(4) award:

(a) not more than the total amount of the loan finance charge and allow repayment of the unpaid balance of the loan without any finance charge;

(b) not more than double the amount of the excess loan finance charge or other charges or fees actually received by the creditor or paid by the debtor to a third party; and

(c) attorney's fees and costs.

An action pursuant to this subsection may not be brought after the original scheduled maturity date of the debt.

(D) In an action in which it is found that a creditor has violated this chapter, the court shall award to the debtor the costs of the action and to his attorneys their reasonable fees. In determining attorneys' fees, the amount of the recovery on behalf of the debtor is not controlling."

Enhances scope of Legislative Study Committee on consumer finance industry for 1997

SECTION 2. The first sentence of Section 20(A) of Act 135 of 1995 is amended to read:

"On or after July 1, 1997, a review of the consumer finance industry shall be commenced by a legislative study committee in order to study the impact of this act and such other matters as the committee deems appropriate."

Enhances scope of Legislative Study Committee on consumer finance industry for 1998

SECTION 3. The first sentence of Section 20(B) of Act 135 of 1995 is amended to read:

"On or after July 1, 1998, a second review of the consumer finance industry shall be commenced by a legislative study committee in order to further study the impact of this act, any subsequent amendments to the consumer finance laws, and such other matters as the committee deems appropriate."

Savings clause

SECTION 4. If a provision of this act or its application to a person or circumstance is held to be unconstitutional or otherwise invalid, the remainder of this act and the application of that provision to other persons or circumstances are not affected, and it must be conclusively presumed that the General Assembly would have enacted the remainder of this act without the unconstitutional provision.

Time effective

SECTION 5. This act takes effect upon approval by the Governor and applies to causes of action, including appeals, pending on May 2, 1997. Any actions filed as class actions, without regard to certification, filed on or before May 2, 1997, may proceed, but with remedies pursuant to Section 37-10-105 as amended in Section 1 of this act. The three-year statute of limitations provided herein applies to all actions commenced after May 2, 1997. No inference should be drawn as to the applicable statute of limitations for any existing action.

Became law without the signature of the Governor -- 6/15/97.