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COMMITTEE REPORT
March 25, 2004
H. 4818
Introduced by Reps. Cato, J.H. Neal, Moody-Lawrence, Lloyd, R. Brown, Emory, Mack, Cobb-Hunter, Govan, Chellis, Whipper, Trotter, Cooper, White, Barfield, Harrison, Sandifer, Thompson, McGee, Merrill, W.D. Smith and Huggins
S. Printed 3/25/04--H.
Read the first time February 19, 2004.
To whom was referred a Bill (H. 4818) to amend Section 37-2-203, Code of Laws of South Carolina, 1976, relating to delinquency charges in connection with a credit sale, so as to provide, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, Section 37-2-203(5) as found in SECTION 1, page 2, line 18, and Section 37-3-203(5) as found in SECTION 3, page 3, line 21, by inserting after /12 C.F.R. 227.15,/ the words / as amended from time to time, /.
When amended, the items shall read:
/ SECTION 1. Section 37-2-203(5) of the 1976 Code is amended to read:
"(5) A delinquency charge under pursuant to this section may must not be collected on an installment paid in full within ten days after its scheduled or deferred installment due date even though an earlier maturing installment or a delinquency or deferral charge on an earlier installment has not been paid in full. For purposes of this subsection, a payment is deemed to have been applied first to any installment due in the computational period (Section 37-2-204(1)(a)) in which it is received and then to delinquent installments and charges a payment that is otherwise a full installment payment for the applicable period and is paid on its due date or within ten days after its due date if the only delinquency is attributable to a late fee or a delinquency charge assessed on an earlier installment. It is the intent of the legislature that, in construing this subsection the courts be guided by interpretations to 16 C.F.R. 444.4 and 12 C.F.R. 227.15, as amended from time to time, relating to late charges, given by the Federal Trade Commission, Federal Reserve Board, and the Federal Courts." /
/ SECTION 3. Section 37-3-203(5) of the 1976 Code is amended to read:
"(5) A delinquency charge under pursuant to this section may must not be collected on an installment paid in full within ten days after its scheduled or deferred installment due date even though an earlier maturing installment or a delinquency or deferral charge on an earlier installment has not been paid in full. For purposes of this subsection, a payment is deemed to have been applied first to any installment due in the computational period [Section 37-3-204(1)(a)] in which it is received and then to delinquent installments and charges a payment that is otherwise a full installment payment for the applicable period and is paid on its due date or within ten days after its due date if the only delinquency is attributable to a late fee or a delinquency charge assessed on an earlier installment. It is the intent of the legislature that in construing this subsection, the courts be guided by interpretations to 16 C.F.R. 444.4 and 12 C.F.R. 227.15, as amended from time to time, relating to late charges, given by the Federal Trade Commission, Federal Reserve Board, and the Federal Courts." /
Amend the bill further, Section 37-3-303(2) as found in SECTION 4, page 3, line 34, by deleting /any/ and inserting / any /.
When amended, the item shall read:
/ SECTION 4. Section 37-3-303(2) of the 1976 Code is amended to read:
"(2) A clear and conspicuous notice in substantially the following form complies with this section:
You agree to pay the debt identified below although you may not personally receive any property, services, or money. You may be sued for payment although the person who receives the property, services, or money is able to pay. This notice is not the contract that obligates you to pay the debt. Read the contract for the exact terms of your obligation.
___________________________________________
___________________________________________
___________________________________________
___________________________________________
I have received a copy of this notice.
____________ _____________________ /
(Date) (Signed)
Renumber sections to conform.
Amend title to conform.
HARRY F. CATO for Committee.
TO AMEND SECTION 37-2-203, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DELINQUENCY CHARGES IN CONNECTION WITH A CREDIT SALE, SO AS TO PROVIDE THAT A DELINQUENCY CHARGE MUST NOT BE APPLIED TO A DELINQUENCY ATTRIBUTABLE ONLY TO AN ASSESSMENT AGAINST AN EARLIER INSTALLMENT AND TO PROVIDE FOR CONSTRUCTION OF THE PROVISION IN CONFORMITY WITH FEDERAL LAW; TO AMEND SECTION 37-3-202, RELATING TO ADDITIONAL CHARGES PERMITTED IN CONNECTION WITH A CONSUMER LOAN, SO AS TO INCLUDE OPEN-END CREDIT PURSUANT TO A LENDER CREDIT CARD OR SIMILAR ARRANGEMENT IN CONFORMANCE WITH OTHER PROVISIONS AND TO MAKE A TECHNICAL CORRECTION; TO AMEND SECTION 37-3-203, RELATING TO DELINQUENCY CHARGES IN CONNECTION WITH A CONSUMER LOAN, SO AS TO PROVIDE THAT THE DELINQUENCY CHARGE MUST NOT BE APPLIED TO A DELINQUENCY ATTRIBUTABLE ONLY TO AN ASSESSMENT AGAINST AN EARLIER INSTALLMENT AND TO PROVIDE FOR CONSTRUCTION OF THE PROVISION IN CONFORMITY WITH FEDERAL LAW; AND TO AMEND SECTION 37-3-303, RELATING TO NOTICE TO CO-SIGNERS AND SIMILAR PARTIES TO A CONSUMER LOAN, SO AS TO INCLUDE A CONSPICUOUS NOTICE IN CONFORMITY WITH OTHER LAW AND TO MAKE A TECHNICAL CORRECTION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 37-2-203(5) of the 1976 Code is amended to read:
"(5) A delinquency charge under pursuant to this section may must not be collected on an installment paid in full within ten days after its scheduled or deferred installment due date even though an earlier maturing installment or a delinquency or deferral charge on an earlier installment has not been paid in full. For purposes of this subsection, a payment is deemed to have been applied first to any installment due in the computational period (Section 37-2-204(1)(a)) in which it is received and then to delinquent installments and charges a payment that is otherwise a full installment payment for the applicable period and is paid on its due date or within ten days after its due date if the only delinquency is attributable to a late fee or a delinquency charge assessed on an earlier installment. It is the intent of the legislature that, in construing this subsection the courts be guided by interpretations to 16 C.F.R. 444.4 and 12 C.F.R. 227.15, relating to late charges, given by the Federal Trade Commission, Federal Reserve Board, and the Federal Courts."
SECTION 2. Section 37-3-202(1)(c) of the 1976 Code is amended to read:
"(c) with respect to open-end credit pursuant to a lender credit card issued by a creditor or similar arrangement, as defined in Section 37-1-301(16), which entitles the cardholder debtor to purchase or lease goods or services from at least one hundred persons not related to the card issuer lender, under an arrangement pursuant to which the debts resulting from the purchases or leases are payable to the card issuer lender;
(i) annual charges, payable in advance, for the privilege of using the lender credit card or other credit arrangement; and
(ii) an over-limit charge not to exceed ten dollars if the balance of the account exceeds the credit limit established pursuant to the agreement between the card issuer lender and the cardholder debtor plus the lesser of ten percent of the credit limit of or one hundred dollars. The over-limit charge authorized by this subitem may must not be assessed again against the cardholder debtor unless the account balance has been reduced below the credit limit plus the lesser of ten percent of the credit limit or one hundred dollars, and the cardholder's debtor's account balance subsequently exceeds the credit limit plus the lesser of ten percent of the credit limit or one hundred dollars; and"
SECTION 3. Section 37-3-203(5) of the 1976 Code is amended to read:
"(5) A delinquency charge under pursuant to this section may must not be collected on an installment paid in full within ten days after its scheduled or deferred installment due date even though an earlier maturing installment or a delinquency or deferral charge on an earlier installment has not been paid in full. For purposes of this subsection, a payment is deemed to have been applied first to any installment due in the computational period [Section 37-3-204(1)(a)] in which it is received and then to delinquent installments and charges a payment that is otherwise a full installment payment for the applicable period and is paid on its due date or within ten days after its due date if the only delinquency is attributable to a late fee or a delinquency charge assessed on an earlier installment. It is the intent of the legislature that in construing this subsection, the courts be guided by interpretations to 16 C.F.R. 444.4 and 12 C.F.R. 227.15, relating to late charges, given by the Federal Trade Commission, Federal Reserve Board, and the Federal Courts."
SECTION 4. Section 37-3-303(2) of the 1976 Code is amended to read:
"(2) A clear and conspicuous notice in substantially the following form complies with this section:
You agree to pay the debt identified below although you may not personally receive any property, services, or money. You may be sued for payment although the person who receives the property, services, or money is able to pay. This notice is not the contract that obligates you to pay the debt. Read the contract for the exact terms of your obligation.
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
I have received a copy of this notice.
_________________________ __________________________
(Date) (Signed)"
SECTION 5. Section 37-3-303(5) of the 1976 Code is amended to read:
"(5) A notice to co-signer which complies with the Federal Trade Commission's Trade Regulation Rule on Credit Practices (16 C.F.R. Section 444) or which complies with a regulation regarding co-signer notices promulgated by any federal agency pursuant to Section 18(f) of the Federal Trade Commission Act, 15 U.S.C. Section 57a(f) (Section 202(a) of the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, Public Law 93-63F) likewise complies with this section, provided that the notice does not indicate that the creditor may collect any amount or engage in any activity which would be illegal under South Carolina law and the notice contains the following information signed and dated by the co-signer:
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
I have received a copy of this notice.
_________________________ _________________________
(Date) (Signed)"
SECTION 6. This act takes effect upon approval by the Governor.
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