Printed Page 760, Mar. 3
| Printed Page 780, Mar. 3
|
Printed Page 760, Mar. 3
| Printed Page 780, Mar. 3
| Since South Carolina's capital markets do not have the capacity to fund its loan demand, we have used the open market philosophy to attract billions from out-of-state markets to fund the lending needs of our citizens and businesses. Investors view South Carolina's statutory framework as one which provides a legitimate business and government partnership. Borrowers here are the beneficiaries.
The 1982 proposal also provided a system requiring supervised lenders to file their maximum interest rates with the SC Department of Consumer Affairs, and also to post those rates in a conspicuous place in their lobbies. The purpose was to allow consumers to shop the market rate offerings by lenders thereby injecting competition in the marketplace. Other consumer protections requested by the S.C. Department of Consumer Affairs were adopted including provisions for unconscionable conduct by lenders and remedies for such conduct.
Our intent was to provide a balanced system whereby money would flow to borrowers without usury suppression in the market, and consumers would enjoy access to funds in order to meet their credit needs. By the same token, the supervised lending community was ar~ious and willing to provide the S.C. Department of Consumer Affairs sufficient power to regulate unscrupulous lenders who might elect to take advantage of the system. In fact, we maintain a close working relationship with this
It is our opinion that the statutory framework adopted in 1982 has worked well in South Carolina. The borrowing public has enjoyed an unrestricted flow of funds available for investment in their needs at reasonable market rates. Never before has credit been so easy - maybe too easy at times. Our partnership with consumer regulators has been positive and beneficial.
We regret, on numerous occasions since passage of the 1982 legislation, there have been those who have chosen to exploit that which was created. Our regulators have responded to the extent provided in their empowerment, and well intended lenders have supported them in thwarting activities which might threaten the freedoms gained in the 1982 Act. However, given the large number of lending institutions in our state and the large volume of loans made which have been made, abuses in the system have been the exception rather than the rule.
At today's meeting, we do not intend to categorize any activities in question by your committee or point our fingers at any specific lenders either present or of interest. However, we strongly urge the committee to eliminate from consideration the reimposition of interest rate limitations as a possible means of deterring lending practices which you may find objectionable. In doing so, you would return our state to a condition wherein the overall flow of funds would be shut down in times of higher interest rates, and hedged when favorable conditions exist. In addition, reimposition of interest rate ceilings would be tantamount to punishing the many for the actions of a few.
It has been proven that interest rate limitations do not work particularly in a state which relies heavily upon out-of-state sources for funds. In fact, the pre-1982 era serves as historical proof that the rate that you might set will then become the prevailing lending rate charged by lenders - regardless of market conditions or competitive forces at work. You will receive the blame for higher rates when they should be lower, and the shortage of funds when the market exceeds your limitation.
Should you elect to address any alleged abuses through legislation, we respectfully urge you to seek remedies via consumer protection mechanisms which do not punish those who abide by the spirit of the landmark 1982 act. We do not doubt that current statutes may be in need
Thank you very much.
Exhibit 8
Year Max. Rate Min. Rate Number
1993 71 38 80,614
1992 71 40 78,799
1991 70 40 76,492
1990 75.92 41.57 69,162
1989 57.84 38.9 49,017
1988 57.62 32.53 38,009
1987 57.86 37.84 22,035
1986 48.4 34.9 19,944
1985 51.8 33.74 15,436
1984 38.39 30.17 11,403
1983 42.55 31.73 9,009
1982 38.09 31.72 8,354
Year Max. Rate Min. Rate Number
1993 62 28 131,841
1992 64 28 122,786
1991 64 28 132,536
1990 60.66 34.07 129,545
1989 50.95 31.44 98,186
1988 47.97 27.61 95,999
1987 45.73 28.6 84,168
1986 43.71 30.07 88,303
1985 39.99 27.97 84,728
1984 37.94 27.86 86,097
1983 37.65 27.36 83,738
1982 36.02 26.26 82,204
Year Max. Rate Min. Rate Number
1993 36 20 141,923
1992 46 26 130,258
1991 46 27 129,038
1990 46.97 27.2 141,234
1989 41.98 24.99 122,530
1988 38.68 22.31 125,848
1987 37.31 23.17 121,372
1986 38.28 26.10 110,352
1985 36.5 22.86 111,171
1984 28.96 23.81 98,338
1983 31.14 22.98 83,987
1982 29.29 21.48 79,024
Year Max. Rate Min. Rate Number
1993 31 16 56,625
1992 40 24 49,487
1991 41 24 48,489
1990 42.29 24.76 60,901
1989 36.12 22.98 46,317
1988 33.98 21.44 16,916
1987 32.06 21.42 39,901
1986 31.19 21.71 34,580
1985 31.15 20.68 36.,202
1984 26.54 21.11 29,230
1983 27.04 20.83 23,149
1982 24.84 18.64 21,283
Company # of Total of A,B,C,D, Other Total Max. Average
Loans all E (28) (520) Loans Rate Rate
@ $300 Loans @ lenders' super- Filed Charged
and $300 percent- vised
below below age of lenders
loans of loans
made made
A (8
offices) 14,025 17,871 130 120%
B (6
offices) 13,368 17,491 130 126%
C (1
office) 5,064 8,183 258 126%
D (9
offices) 4,607 9,366 120 120%
E (4
offices) 4,227 7,485 180 126%
Total: 28
offices 41,291 80,614 51.62% 48.38%
Other supervised lenders = 520 offices = 39,323 loans = 76 average number per
office
A, B, C, D, and E lenders = 28 offices = 41,291 loans = 1475 average number per
office
Company # of Total of A,B,C,D, Other Total Max Average
loans @ all loans E,(28) (520) Loans Filed Rate
$300- @$300- lenders' Super- Charged
$1,000 $1,000 percent- vised
age lenders
of
loans
made
A (8
offices) 3,846 17,871 130 82%
B (6
offices) 4,118 17,491 130 88%
C (1
office) 3,119 8,183 98 88%
D (9
offices) 3,750 9,366 120 120%
E (4
offices) 3,258 7,485 180 81%
Total 28
offices 18,091 131,841 27.44% 72.58%
Company # of Total of A,B,C,D, Other Total Max. Average
Loans all E (83) 465 Loans Rate Rate
@ $300 Loans @ lenders' super- Filed Charged
and $300 percent- vised
below below age lenders
of loans
made
A + 50
Offices 3,300 76,310 48% 48%
B + 25
Offices 1,307 24,996 48% 48%
C + 4
Offices 7,321 15,036 30% 30%
C + 1
Office 513 1,080 36% 36%
E + 3
Offices 269 2,894 36% 36%
Total 83
Offices 12,710 80,614 15.76% 84.24% 120,316
Company # of Total of A,B,C,D, Other Total Max Average
loans @ all loans E,(28) (520) Loans Filed Rate
$300- @$300- lenders' Super- Charged
$1,000 $1,000 percent- vised
age lenders
of
loans
made
A 50
Offices 30,385 76,310 48% 48%
B 25
Offices 8,965 24,996 48% 48%
C 4
Offices 4,277 15,036 30% 30%
D 1
Office 331 1,080 36% 36%
E 3
Offices 867 2,894 36% 36%
Total
Offices 44,825 131,841 33.99% 66.01% 120,316
Senator SHORT spoke on the report.
On motion of Senator SHORT, with unanimous consent, ordered to be printed in the Journal of Friday, March 3, 1995.
The following Bill was read the third time and having received three readings in both Houses, it was ordered that the title be changed to that of an Act and enrolled for Ratification:
H. 3649 -- Reps. Jennings, J. Harris and Kinon: A BILL TO PROVIDE THAT THE BOARDS OF TRUSTEES OF THE SCHOOL ADMINISTRATIVE AREAS OF MARLBORO COUNTY ARE ABOLISHED AND THEIR POWERS AND DUTIES DEVOLVED UPON THE MARLBORO COUNTY BOARD OF EDUCATION, AND TO PROVIDE THAT THE ABOVE PROVISIONS SHALL NOT BE DEEMED TO ABOLISH THE ADMINISTRATIVE AREAS THEMSELVES.
(By prior motion of Senator ELLIOTT)
Printed Page 760, Mar. 3
| Printed Page 780, Mar. 3
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