S 1388 Session 110 (1993-1994)
S 1388 General Bill, By Martin
A Bill to amend Section 37-3-202, Code of Laws of South Carolina, 1976,
relating to additional charges that supervised lenders may impose, so as to
provide that with respect to lender credit cards or similar arrangements, a
lender may impose an over-limit charge of fifteen dollars rather than ten
dollars plus the lesser of ten percent of the credit limit or one hundred
dollars and to delete the requirement that, in order to assess the charge
subsequently, the account balance must be reduced below the credit limit or
one hundred dollars; and to amend Section 37-3-203, relating to delinquency
charges imposed by supervised lenders, so as to provide that a supervised
lender may impose a delinquency charge of fifteen dollars rather than five
dollars and to delete the provision authorizing the lender to receive an
alternate delinquency charge of forty percent of five dollars adjusted for
inflation pursuant to Section 37-1-109.
04/27/94 Senate Introduced and read first time SJ-4
04/27/94 Senate Referred to Committee on Banking and Insurance SJ-4
A BILL
TO AMEND SECTION 37-3-202, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO ADDITIONAL CHARGES
THAT SUPERVISED LENDERS MAY IMPOSE, SO AS TO
PROVIDE THAT WITH RESPECT TO LENDER CREDIT CARDS
OR SIMILAR ARRANGEMENTS, A LENDER MAY IMPOSE AN
OVER-LIMIT CHARGE OF FIFTEEN DOLLARS RATHER THAN
TEN DOLLARS PLUS THE LESSER OF TEN PERCENT OF THE
CREDIT LIMIT OR ONE HUNDRED DOLLARS AND TO
DELETE THE REQUIREMENT THAT, IN ORDER TO ASSESS
THE CHARGE SUBSEQUENTLY, THE ACCOUNT BALANCE
MUST BE REDUCED BELOW THE CREDIT LIMIT PLUS THE
LESSER OF TEN PERCENT OF THE CREDIT LIMIT OR ONE
HUNDRED DOLLARS; AND TO AMEND SECTION 37-3-203,
RELATING TO DELINQUENCY CHARGES IMPOSED BY
SUPERVISED LENDERS, SO AS TO PROVIDE THAT A
SUPERVISED LENDER MAY IMPOSE A DELINQUENCY
CHARGE OF FIFTEEN DOLLARS RATHER THAN FIVE
DOLLARS AND TO DELETE THE PROVISION AUTHORIZING
THE LENDER TO RECEIVE AN ALTERNATE DELINQUENCY
CHARGE OF FORTY PERCENT OF FIVE DOLLARS ADJUSTED
FOR INFLATION PURSUANT TO SECTION 37-1-109.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 37-3-202 of the 1976 Code is amended to
read:
"Section 37-3-202. (1) In addition to the loan finance charge
permitted by this chapter a lender may contract for and receive the
following additional charges in connection with a consumer loan:
(a) official fees and taxes;
(b) charges for insurance as described in subsection (2);
(c) with respect to open-end credit pursuant to a lender credit
card, including similar arrangements, issued by a creditor
which entitles the cardholder to purchase or lease goods or services
from at least one hundred persons not related to the card issuer, under
an arrangement pursuant to which the debts resulting from the
purchases or leases are payable to the card issuer;
(i) annual charges, payable in advance, for the privilege of
using the credit card; and
(ii) an over-limit charge not to exceed ten
fifteen dollars if the balance of the account exceeds the credit
limit established pursuant to the agreement between the card issuer and
the cardholder plus the lesser of ten percent of the credit limit of
one hundred dollars. The over-limit charge authorized by this
subitem may not be assessed again against the cardholder 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 account balance subsequently exceeds the credit limit
plus the lesser of ten percent of the credit limit or one hundred
dollars; and
(d) with respect to a loan secured by an interest in land, the
following `closing costs', if they are bona fide, reasonable in amount,
and not for the purpose of circumvention or evasion of this title:
(i) fees or premiums for title examination, abstract of title, title
insurance, surveys, or similar purposes;
(ii) fees for preparation of a deed, settlement statement, or
other documents, if not paid to the creditor or a person related to the
creditor;
(iii) escrows for future payments of taxes, including
assessments for improvements, insurance, and water, sewer, and land
rents;
(iv) fees for notarizing deeds and other documents, if not paid
to the creditor or a person related to the creditor; and
(v) fees for appraising the real estate that is collateral for the
loan, if not paid to the creditor or a person related to the creditor;
(e) charges for other benefits, including insurance, conferred on
the debtor, if the benefits are of value to him and if the charges are
reasonable in relation to the benefits, are of a type which is not for
credit, and are authorized as permissible additional charges by rule
adopted by the administrator;
(f) fees and charges paid to persons registered as mortgage loan
brokers pursuant to Chapter 58 of Title 40."
SECTION 2. Section 37-3-203 of the 1976 Code is amended to
read:
"Section 37-3-203. (1) With respect to a consumer loan
including an open-end consumer loan pursuant to a lender credit card
or similar arrangement, and any refinancings or consolidations of all
such consumer loans, the parties may contract for a delinquency
charge on any installment not paid in full within ten days after its due
date, as originally scheduled or as deferred, in an amount, not
exceeding five fifteen dollars which is not more
than five percent of the unpaid amount of the installment.
(2) Notwithstanding subsection (1) the lender may contract for
and receive a minimum delinquency charge not to exceed forty percent
of five dollars as adjusted pursuant to Section 37-1-109. The lender
may contract for such a minimum charge even though the charge
exceeds five percent of the unpaid amount of the installment.
(3 2) A statement in the agreement between the
lender and the debtor to the effect that the lender may charge the
maximum delinquency charge (or late charge) authorized by law
entitles the creditor to impose a delinquency charge in the dollar
amount specified in subsections subsection (1) and
(2) as adjusted pursuant to Section 37-1-109 at the time the
delinquency charge is imposed, subject to the five percent of the
unpaid amount of the installment limitation, if applicable.
(4 3) A delinquency charge under this section may
be collected only once on an installment however long it remains in
default. No delinquency charge may be collected with respect to a
deferred installment unless the installment is not paid in full within ten
days after its deferred due date. A delinquency charge may be
collected at the time it accrues or at any time thereafter.
(5 4) A delinquency charge under this section may
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.
(6 5) If two installments or parts thereof of a
precomputed consumer loan are in default for ten days or more, the
lender may elect to convert the loan from a precomputed loan to one
in which the loan finance charge is based on unpaid balances. In this
event, he shall make a rebate pursuant to the provisions on rebate
upon prepayment (Section 37-3-210) as if the date of prepayment were
one day before the maturity date of a delinquent installment, and
thereafter may make a loan finance charge as authorized by the
provisions on loan finance charge for consumer loans by lenders not
supervised lenders [Section 37-3-201(1)] or finance charge for
consumer loans by supervised lenders [Section 37-3-201(2)],
whichever is appropriate. The amount of the rebate must not be
reduced by the amount of any permitted minimum charge (Section 37-3-210). If the creditor proceeds under this subsection, any delinquency
or deferral charges made with respect to installments due on or after
the maturity date of the first delinquent installment must be rebated,
and no further delinquency or deferral charges may be made."
SECTION 3. Notwithstanding the provisions of Section 37-1-109,
the delinquency charge established by this act in Section 37-3-203(1)
shall not be subject to adjustment prior to July 1, 1998.
SECTION 4. This act takes effect upon approval by the Governor.
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