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H. 3093
STATUS INFORMATION
General Bill
Sponsors: Rep. Cobb-Hunter
Document Path: l:\council\bills\bbm\10445mm05.doc
Introduced in the House on January 11, 2005
Currently residing in the House Committee on Judiciary
Summary: Check cashing services or deferred presentment services may not rely on civil or criminal remedies for fraudulent checks
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/8/2004 House Prefiled 12/8/2004 House Referred to Committee on Judiciary 1/11/2005 House Introduced and read first time HJ-78 1/11/2005 House Referred to Committee on Judiciary HJ-78
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND SECTION 34-11-60, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DRAWING AND UTTERING ANY FRAUDULENT CHECK, DRAFT, OR OTHER WRITTEN ORDER, SO AS TO PROVIDE THAT THE SECTION DOES NOT APPLY TO A CHECK GIVEN TO A DEFERRED PRESENTMENT SERVICE OR A CHECK CASHING SERVICE; TO AMEND SECTION 34-11-70, AS AMENDED, RELATING TO EVIDENCE OF FRAUDULENT INTENT AND PROSECUTION FOR ISSUANCE OF ANY FRAUDULENT CHECK, DRAFT, OR OTHER WRITTEN ORDER, SO AS TO PROVIDE THAT A COMMERCIAL AGENT FOR COLLECTION OF AN OBLIGATION PAID FOR WITH ANY FRAUDULENT CHECK, DRAFT, OR OTHER WRITTEN ORDER DOES NOT HAVE THE SAME RIGHTS AS THE ORIGINAL PAYEE UNLESS THE CHECK, DRAFT, OR OTHER WRITTEN ORDER HAS BEEN ENDORSED OVER TO THE AGENT FOR COLLECTION FOR VALUE AND WITHOUT RESERVATION OF RIGHTS; TO AMEND SECTION 34-39-180, RELATING TO REGULATION OF DEFERRED PRESENTMENT SERVICES AND SECTION 34-41-60, RELATING TO REGULATION OF CHECK CASHING SERVICES, SO AS TO PROVIDE THAT NEITHER SERVICE MAY RELY ON THE CIVIL OR CRIMINAL REMEDIES IN CHAPTER, 11, TITLE 34, FOR PROSECUTING OR CIVILLY ENFORCING PAYMENT OF A FRAUDULENT CHECK.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 34-11-60(d) of the 1976 Code, as last amended by Act 87 of 1999, is further amended to read:
"(d)(1) The word 'credit' as used in this section means securing further advances of money, goods, or services by means of a any check, draft, or other written order, given in whole or in part payment of a then existing account. Payment for meals, lodging, or other goods or services at any hotel, motel, or other hostelry by means of a any check, draft, or other written order at any time prior to before or upon departure or checkout from the hostelry must be construed as obtaining those goods or services by means of such any check, draft, or other written order for the purposes of this section.
(2) This section does not apply to any giving any check given:
(i) only in full or partial payment of a preexisting debt unless given to satisfy a preexisting debt which resulted from a revolving credit account which is not a consumer credit transaction as defined in Section 37-1-301(11),;
(ii) to the giving of any check, or draft, or other written order where the payee knows, has been expressly notified, or has reason to believe that the drawer did not have an account or have on deposit with the drawee sufficient funds to ensure payment of the check,;
(iii) nor to any check which has not been deposited to an account of the payee within a period of ten days from the date the check was presented to the payee; or
(iv) to a deferred presentment service, as described in Chapter 39, Title 34, or a check cashing service, as described in Chapter 41 of Title 34.
(3) It is also is unlawful for any a person to induce, solicit, or to aid and abet any other another person to draw, make, utter, issue, or deliver to any a person including himself any check, draft, or other written order on any a bank or depository for the payment of money or its equivalent, being informed, knowing, or having reasonable cause for believing at the time of the inducing, soliciting, or the aiding and abetting that the maker or the drawer of the check, draft, or other written order has not sufficient funds on deposit in, or an account with, the bank or depository with which to pay the same upon presentation."
SECTION 2. Section 34-11-70(d) of the 1976 Code is amended to read:
"(d)(1) For purposes of this chapter, subsequent persons receiving a any check, draft, or other written order by endorsement from the original payee or a successor endorsee have the same rights that the original payee has against the maker of the instrument, if the maker of the instrument has the same defenses against subsequent persons as he may have had against the original payee. However, the remedies available under pursuant to this chapter may be exercised only by only one party in interest.
(2) For purposes of this chapter, a commercial agent for collection of an obligation paid for with any fraudulent check, draft, or other written order does not have the same rights as the original payee unless the check, draft, or other written order is endorsed over to the agent for collection for value and without reservation of rights by the endorser."
SECTION 3. Section 34-39-180(G) of the 1976 Code, as added by Act 433 of 1998, is amended to read:
"(G) If a check is returned to the licensee from a payer financial institution due to insufficient funds, closed account, or stop payment order, the licensee may pursue all legally available civil means to collect the check including, but not limited to, the imposition of a returned check charge as provided in Section 34-11-70(a), except that the service charge imposed by the licensee shall not exceed the lesser of ten dollars or the fee imposed by the financial institution on the licensee for the returned check. An individual who issues a personal check to a licensee under a deferred presentment agreement is not subject to criminal penalty as a loan in default, but may not rely on civil or criminal remedies provided in Chapter 11, Title 34 for prosecuting or civilly enforcing payment of a fraudulent check."
SECTION 4. Section 34-41-60(B) of the 1976 Code, as added by Act 433 of 1998, is amended to read:
"(B)(1) A licensee may not advance monies on the security of any a check unless the account from which the check being presented is drawn is legitimate, open, and active. A licensee who cashes a check for a fee shall deposit the check not later than five days from the date the check is cashed.
(2) If a check is returned to the licensee from a payer financial institution due to insufficient funds, closed account, or stop payment order, the licensee may pursue all civil means available to collect the check as a holder in due course of the check, but may not rely on civil or criminal remedies provided in Chapter 11, Title 34 for prosecuting or civilly enforcing payment of a fraudulent check."
SECTION 5. This act takes effect upon approval by the Governor.
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