Current Status Bill Number:4608 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19980211 Primary Sponsor:Kirsh All Sponsors:Kirsh, Gamble and Law Drafted Document Number:kgh\15414mm.98 Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Pawnbrokers, motor vehicle certificate of title, pledged goods, unpaid loan provisions; Businesses, Consumer Affairs
Body Date Action Description Com Leg Involved
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House 19980211 Introduced, read first time, 26 HLCI
referred to Committee
View additional legislative information at the LPITS web site.
TO AMEND SECTION 40-39-10, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PAWNBROKERS, SO AS TO INCLUDE WITHIN THE DEFINITION OF "PLEDGED GOODS," A MOTOR VEHICLE CERTIFICATE OF TITLE, OTHER THAN A CERTIFICATE OF TITLE TO A MOBILE HOME; TO AMEND SECTION 40-39-110, AS AMENDED, RELATING TO VESTING OF TITLE TO PLEDGED PROPERTY, SO AS TO PROVIDE THAT IF A LOAN IN WHICH A MOTOR VEHICLE CERTIFICATE OF TITLE IS THE PLEDGED GOODS REMAINS UNPAID AFTER A PERIOD OF SIXTY DAYS FROM THE DUE DATE OR ANY RENEWAL OR EXTENSION OF IT, THE PAWNBROKER AND THE PLEDGOR HAVE THE SAME RIGHTS AS ACCORDED UNDER PART 5, CHAPTER 9, TITLE 36 OF THE UNIFORM COMMERCIAL CODE; AND BY ADDING SECTION 40-39-105, SO AS TO SET LIMITS ON THE INTEREST CHARGED ON A PAWN TRANSACTION WHEN A MOTOR VEHICLE CERTIFICATE OF TITLE IS THE PLEDGED GOODS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 40-39-10 of the 1976 Code, as last amended by Act 491 of 1988, is further amended to read:
"Section 40-39-10. The following definitions apply for purposes of this chapter:
(1) 'Person' means an individual, partnership, corporation, joint venture, trust, association, or any other legal entity however organized.
(2) 'Pawnbroker' means any person engaged in the business of lending money on the security of pledged goods, or engaged in the business of purchasing tangible personal property on condition that it may be redeemed or repurchased by the seller for a fixed price within a fixed period of time.
(3) 'Pledged goods' means:
(a) tangible personal property other than choses in action, title, securities, or printed evidences of indebtedness, which property is deposited with or otherwise actually delivered into the possession of a pawnbroker in the course of his business in connection with a pawn transaction; or
(b) a motor vehicle certificate of title that is deposited with or otherwise delivered into the possession of a pawnbroker in the course of his business in connection with a pawn transaction. For purposes of this item, 'motor vehicle certificate of title' does not include a certificate of title to a mobile home or a certificate of title to any other item, regardless of whether it is motorized or self-propelled, which is designed as a dwelling unit.
(4) 'Pawnshop' means the location at which or premises in which a pawnbroker regularly conducts business.
(5) 'Month' means that period of time from one date in a calendar month to the corresponding date in the following calendar month, but if there is no corresponding date, then the last day of the following month, and when computations are made for a fraction of a month, a day is one-thirtieth of a month.
(6) 'Administrator' means the administrator of the Department of Consumer Affairs.
(7) 'Pawn transaction' means the pledging with a pawnbroker under this chapter of a single item of goods, or tangible personal property, or a motor vehicle certificate of title, as security for a loan of money. Items that are usually sold as a set are considered a single item and must be included in the same transaction, and a pledged item together with items that are accessories to the pledged item are considered a single item and must be included in the same transaction. A separate pawn transaction retains its separate character when it is renewed, unless the parties agree otherwise."
SECTION 2. Section 40-39-110 of the 1976 Code, as last amended by Act 491 of 1988, is further amended to read:
"Section 40-39-110. (A) Except as provided in subsection (B) of this section, if If any a loan remains unpaid for a period of sixty days from the due date or any a renewal or extension thereof of it, the title of the borrower or pledgor to the property pledged to secure the loan shall vest in the pawnbroker, without advertising, sale, or accountability to the pledgor, if:
(1) the pawn ticket or memorandum delivered to the borrower in accordance with Section 40-39-80, contains on the back thereof a notice to that effect,; and
(2) if a printed or written notice of the impending forfeiture is mailed to the pledgor at the address given on the pawn ticket, at least ten days prior to the forfeiture date. This notice must contain a description of the article pledged, and the amount due thereon as of the date of the notice. No notice is required on loans of fifty dollars or less.
(B) If a loan in which the pledged goods is a motor vehicle certificate of title remains unpaid after a period of sixty days from the due date or any renewal or extension of it, the pawnbroker has the same rights as a secured party as provided in Part 5, Chapter 9, Title 36 when a debtor is in default under a security agreement. All collections, takings of possession, and dispositions of collateral after default must be conducted in accordance with Part 5, Chapter 9, Title 36. All rights accorded a debtor as provided in Part 5, Chapter 9, Title 36 shall apply to a pledgor of a motor vehicle certificate of title.
(C)(1) A pawnbroker may not use any rights or remedies provided in subsection (B):
(a) unless the loan amount for the initial pawn transaction is at least fifty-five percent of the fair market value of the motor vehicle at the time of the pawn transaction; or
(b) if the borrower or pledgor has made payments on the principal amount of the original pawn transaction equal to at least one hundred percent of the principal amount of the original pawn transaction plus thirty percent of the interest accrued from the time of the original pawn transaction. No pawnbroker shall refuse any partial payment of principal offered by a borrower or pledgor.
(2) For purposes of item (1) of this subsection, the fair market value of the motor vehicle must be determined in the same manner as county auditors determine the assessed value of motor vehicles for property tax purposes pursuant to Section 12-36-2640."
SECTION 3. The 1976 Code is amended by adding:
"Section 40-39-105. In the case of a pawn transaction in which a motor vehicle certificate of title is the pledged goods:
(A) a pawnbroker may charge the maximum interest allowed by Section 40-39-100 on renewals only during the first ninety days of the pawn transaction; and
(B) after ninety days, a pawnbroker may charge interest on renewals at the rate of one-half of the amount for each thirty-day period allowed by Section 40-39-100."
SECTION 4. This act takes effect upon approval by the Governor.