1981-1982 Bill 798: Consumer Protection Code Revision Act

South Carolina General Assembly
104th Session, 1981-1982

Bill 798

                    Current Status

Bill Number:               798
Ratification Number:       471
Act Number                 385
Introducing Body:          Senate
Subject:                   Consumer Protection Code Revision
                           Act

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

(A385, R471, S798)

AN ACT TO OPT OUT THE FEDERAL DEPOSITORY INSTITUTIONS DEREGULATION AND MONETARY CONTROL ACT OF 1980, AS AMENDED, WITH RESPECT TO MORTGAGES, BUSINESS AND AGRICULTURAL LOANS, AND OTHER LOAN RATE PREEMPTION PROVISIONS, SO AS TO PROVIDE THAT SUCH RATES OF INTEREST SHALL BE GOVERNED BY SOUTH CAROLINA LAW; TO AMEND SECTION 37-1-109, CODE OF LAWS OF SOUTH CAROLINA, 1976, SO AS TO SPECIFY THE SECTIONS OF TITLE 37 THAT CONTAIN DOLLAR AMOUNTS THAT ARE SUBJECT TO ADJUSTMENT AND TO DELETE SECTION 2 OF ACT 411 OF 1980 WHICH ESTABLISHES A MAY 19, 1984, TERMINATION DATE FOR SECTION 37-1-109; TO AMEND SECTION 37-1-201, AS AMENDED, SO AS TO FURTHER PROVIDE FOR THE TERRITORIAL APPLICATION OF TITLE 37 AND TO PREVENT A CREDITOR MAKING A CONSUMER CREDIT TRANSACTION WITH A RESIDENT OF SOUTH CAROLINA FROM EVADING THE APPLICABILITY OF TITLE 37 BY SPECIFYING THAT THE LAWS OF ANOTHER STATE WILL GOVERN THE TRANSACTION; TO AMEND SECTION 37-1-203, SO AS TO ELIMINATE THE REFERENCE TO COUNTY COURTS; TO AMEND SECTION 37-1-202, AS AMENDED, SO AS TO RAISE THE EXCLUSION FOR PAWNBROKER LOANS, TO MAKE TECHNICAL AMENDMENTS TO SUBSECTIONS (6), (7), AND (8), TO DELETE CERTAIN SUBSECTIONS THEREOF, AND TO ADD A NEW SUBSECTION EXCLUDING SECURITIES MARGIN ACCOUNTS FROM TITLE 37; TO AMEND SECTION 37-1-301, AS AMENDED, SO AS TO ADD CERTAIN NEW DEFINITIONS AND TO AMEND AND DELETE CERTAIN EXISTING DEFINITIONS; TO AMEND SECTION 37-1-302, SO AS TO FURTHER PROVIDE FOR THE DEFINITION OF THE "FEDERAL CONSUMER CREDIT PROTECTION ACT"; TO AMEND SECTION 37-1- 303, AS AMENDED, SO AS TO PROVIDE A REVISED ALPHABETICAL INDEX OF DEFINITIONS USED IN TITLE 37; TO AMEND SECTION 37-2-104, SO AS TO CORRECT A TYPOGRAPHICAL ERROR AND TO REVISE PARAGRAPH (B) OF SUBSECTION (2) DEALING WITH REAL ESTATE MORTGAGES THAT ARE EXCLUDED FROM THE DEFINITION OF A CONSUMER CREDIT SALE; TO AMEND SECTION 37-2-106, SO AS TO DELETE THE REFERENCE TO AGRICULTURAL PURPOSE CREDIT; TO AMEND SECTION 37-2-111, SO AS TO CORRECT A TYPOGRAPHICAL ERROR; TO AMEND SECTION 37-2-109, SO AS TO AUTHORIZE EXCLUSION OF AN APPRAISAL FEE FROM THE COMPUTATION OF THE CREDIT SERVICE CHARGE; TO AMEND SECTION 37-2-201, SO AS TO REVISE THE PERMISSIBLE RATES OF CREDIT SERVICE CHARGE THAT CAN BE LAWFULLY MADE IN A CONSUMER CREDIT SALE; TO AMEND SECTIONS 37-2-202 AND 37-3-202, AS AMENDED, SO AS TO AUTHORIZE APPRAISAL FEES AND A ONE PERCENT ASSUMPTION FEE AS PERMISSIBLE ADDITIONAL CHARGES; TO AMEND SECTIONS 37-2-203 AND 37-3-203, SO AS TO AUTHORIZE A DELINQUENCY CHARGE FOR NON-PRECOMPUTED CREDIT TRANSACTIONS SECURED BY MORTGAGES ON REAL ESTATE AND RESIDENTIAL MANUFACTURED HOMES AND TO CONFORM THESE SECTIONS TO THE 1974 OFFICIAL TEXT OF THE UNIFORM CONSUMER CREDIT CODE; TO AMEND SECTION 37-2-205, SO AS TO CORRECT A TYPOGRAPHICAL ERROR; TO AMEND SECTION 37-2-207, AS AMENDED, SO AS TO REVISE THE PERMISSIBLE MAXIMUM RATES THAT CAN BE CHARGED ON REVOLVING CHARGE ACCOUNTS; TO REPEAL SECTION 37-2-211, RELATING TO CERTAIN MAXIMUM CREDIT SERVICE CHARGES; TO ADD SECTIONS 37-2-305 AND 37-3-305, REQUIRING CREDITORS ENTERING INTO CONSUMER CREDIT TRANSACTIONS IN SOUTH CAROLINA TO FILE AND POST A MAXIMUM RATE SCHEDULE; TO ADD SECTION 37-2-306, SO AS TO PROVIDE FOR CERTAIN NOTICE PROVISIONS IN REGARD TO CONSUMER CREDIT SALES; TO AMEND SECTIONS 37-2-405 AND 37-3-402, SO AS TO DELETE THE REFERENCES TO AGRICULTURAL CREDIT AND TO PROVIDE EXEMPTIONS FOR CERTAIN TYPES OF REAL ESTATE TRANSACTIONS AND TRANSACTIONS EXEMPTED BY THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS; TO AMEND SECTION 37-2-409, SO AS TO DELETE THE REFERENCE TO AGRICULTURAL CREDIT; TO AMEND SECTION 37-2-413, SO AS TO FURTHER PROVIDE FOR ATTORNEYS' FEES WITH REGARD TO CONSUMER CREDIT SALES AND CONSUMER LEASES; TO AMEND SECTION 37-3-104, AS AMENDED, RELATING TO THE DEFINITION OF CONSUMER LOAN, SO AS TO FURTHER PROVIDE FOR SUCH DEFINITION; TO REENACT SECTION 37-3-105, DEALING WITH THE EXTENT TITLE 37 GOVERNS MORTGAGE LOANS THAT ARE PRIMARILY FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES; TO AMEND SUBSECTION (4) OF SECTION 37-3-106, SO AS TO CORRECT A TYPOGRAPHICAL ERROR; TO AMEND SECTION 37-3-109, AS AMENDED, SO AS TO EXCLUDE APPRAISAL FEES FROM THE CALCULATION OF THE LOAN FINANCE CHARGE; TO REPEAL SECTION 37-3-110, RELATING TO LENDING INSTITUTIONS POSTING SCHEDULES OF INTEREST AND FINANCE CHARGES; TO AMEND SECTION 37-3-201, AS AMENDED, SO AS TO PROVIDE THE MAXIMUM RATES THAT CAN BE CHARGED IN A CONSUMER LOAN; TO ADD SECTION 37-3-306, SO AS TO PROVIDE FOR CERTAIN NOTICE PROVISIONS IN REGARD TO CONSUMER LOANS AND OTHER LOANS; TO AMEND SECTION 37-3-404, SO AS TO FURTHER PROVIDE FOR ATTORNEYS' FEES WITH REGARD TO CONSUMER LOANS; TO AMEND SECTION 37-3-410, AS AMENDED, SO AS TO ADD A NEW PARAGRAPH (F) TO SUBSECTION (1) EXPANDING THE RIGHTS OF CONSUMERS TO ASSERT CLAIMS AND DEFENSES AGAINST LENDERS; TO AMEND SECTION 37-3-501, SO AS TO RAISE THE LIMIT FOR SUPERVISED LOANS TO CONSUMER LOANS IN EXCESS OF EIGHTEEN PERCENT; TO AMEND SECTIONS 37-3-502 THROUGH 37-3-506, SO AS TO USE THE TERM "STATE BOARD OF FINANCIAL INSTITUTIONS" IN LIEU OF "BOARD OF BANK CONTROL"; TO ALSO AMEND SECTION 37-3-503, RELATING TO LICENSES TO MAKE SUPERVISED LOANS, SO AS TO REVISE THE REQUIREMENTS FOR OBTAINING SUCH LICENSES AND TO ALSO AMEND SECTION 37-3-505, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH EVERY LICENSEE SHALL MAINTAIN RECORDS; TO AMEND SECTION 37-3-601, RELATING TO TRANSACTIONS THAT CAN BE MADE SUBJECT TO TITLE 37 BY AGREEMENT OF THE PARTIES, SO AS TO DELETE THE REFERENCE TO "A LOAN PRIMARILY SECURED BY A FIRST LIEN WHICH IS A PURCHASE MONEY SECURITY INTEREST IN LAND"; TO AMEND SECTION 37-3-605, DEALING WITH THE MAXIMUM PERMISSIBLE RATES THAT CAN BE LAWFULLY MADE IN A LOAN TRANSACTION THAT IS NOT A CONSUMER LOAN, SO AS TO ELIMINATE THE EXCEPTIONS FOR LOANS OF TWENTY-FIVE THOUSAND DOLLARS OR LESS, LOANS THAT ARE PRIMARILY SECURED BY A FIRST LIEN WHICH IS A PURCHASE MONEY SECURITY INTEREST IN LAND, AND LOANS MADE FOR AGRICULTURAL PURPOSES AND TO MAKE SUCH LOANS SUBJECT TO NEW CHAPTER 10 OF TITLE 37; TO AMEND SECTION 37-5-108, AS AMENDED, RELATING TO THE DOCTRINE OF UNCONSCIONABILITY, SO AS TO SET FORTH SPECIFIC FACTORS THAT A COURT MUST TAKE INTO ACCOUNT IN DETERMINING WHETHER A CONSUMER CREDIT TRANSACTION IS UNCONSCIONABLE, TO ADD PROVISIONS RELATING TO UNCONSCIONABLE DEBT COLLECTION PRACTICES, AND TO AUTHORIZE THE AWARD OF CERTAIN DAMAGES AND ATTORNEYS' FEES UNDER CERTAIN CONDITIONS; TO AMEND SECTION 37-6-110, DEALING WITH THE RIGHT TO CURE, SO AS TO EXCLUDE SINGLE PAYMENT CONSUMER CREDIT OBLIGATIONS AND TO ELIMINATE A REFERENCE TO A NONEXISTENT SUBSECTION (3); TO AMEND SECTION 37-5-111, WHICH DEALS FURTHER WITH THE RIGHT TO CURE, SO AS TO EXCLUDE SINGLE PAYMENT CONSUMER CREDIT OBLIGATIONS, TO REQUIRE THAT THE CREDITOR PLEAD AND PROVE THAT EITHER THE NOTICE OF CURE HAS BEEN GIVEN OR IS NOT REQUIRED AND MAKING A CREDITOR LIABLE FOR CONVERSION FOR IMPROPER FAILURE TO COMPLY WITH THE NOTICE OF CURE PROVISIONS; TO ADD TO CHAPTER 5 OF TITLE 37 SECTION 37-5-113, RELATING TO VENUE IN LITIGATION INVOLVING CONSUMER CREDIT TRANSACTIONS AND SECTIONS 37-5-114 AND 37-6-115, RELATING TO COMPLAINTS AND DEFAULT JUDGMENTS IN LITIGATION INVOLVING CONSUMER CREDIT TRANSACTIONS; TO REPEAL SECTION 37-5-201, RELATING TO INTERESTS IN LAND; TO AMEND SECTION 37-5-202, AS AMENDED, SO AS TO MAKE FAILURE TO FILE AND POST A MAXIMUM RATE CHARGE SCHEDULE AS REQUIRED BY SECTIONS 37-2-305 AND 37-3-305 A SPECIFIC VIOLATION OF THE SOUTH CAROLINA CONSUMER PROTECTION CODE, AND TO PROVIDE FOR THOSE SITUATIONS WHERE A CREDITOR SHALL NOT BE SUBJECT TO SUCH PENALTY PROVISIONS; TO AMEND SECTION 37-5-203, RELATING TO A CREDITOR'S CIVIL LIABILITY FOR VIOLATION OF DISCLOSURE PROVISIONS, SO AS TO FURTHER PROVIDE FOR THOSE SITUATIONS WHERE A CREDITOR SHALL NOT HAVE SUCH LIABILITY; TO REPEAL SECTION 37-5-204, WHICH DEALS WITH THE RIGHT OF RECISION BY CONSUMERS IN CERTAIN TYPES OF REAL ESTATE MORTGAGE TRANSACTIONS AND IS INCONSISTENT WITH PARALLEL PROVISIONS IN THE FEDERAL TRUTH-IN-LENDING ACT; TO AMEND SECTION 37-6-104, AS AMENDED, SO AS TO FURTHER PROVIDE FOR THE MANNER IN WHICH AND PARTIES AGAINST WHICH THE ADMINISTRATOR MAY BRING CLASS ACTIONS, INITIATE CRIMINAL ACTIONS OR SEEK INJUNCTIVE RELIEF; TO AMEND SECTION 37-6-105, AS AMENDED, RELATING TO INVESTIGATORY POWERS WITH RESPECT TO SUPERVISED FINANCIAL INSTITUTIONS, SO AS TO ADD A REFERENCE TO NEW SECTION 37-6-118; TO AMEND SECTION 37-6-117, WHICH DEALS WITH THE ADMINISTRATIVE RESPONSIBILITIES UNDER TITLE 37, SO AS TO INCLUDE APPROPRIATE REFERENCE TO NEW SECTION 37-6-118, TO AUTHORIZE STATE AGENCIES TO WHICH CONSUMER COMPLAINTS HAVE BEEN REFERRED TO ATTEMPT TO MEDIATE A VOLUNTARY RESOLUTION OF THIS DISPUTE, AND TO AUTHORIZE THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS TO BRING LEGAL ACTIONS ON BEHALF OF CONSUMERS UNDER CERTAIN CIRCUMSTANCES; TO ADD SECTION 37-6-118, SO AS TO ALLOW THE ADMINISTRATOR OF THE DEPARTMENT OF CONSUMER AFFAIRS THE POWER TO INVESTIGATE AND, AFTER A HEARING AND APPEAL, THE RIGHT TO PUBLICIZE THE NAMES OF BUSINESSES THAT ENGAGE IN FRAUDULENT, ILLEGAL, DECEPTIVE OR UNFAIR MARKET PRACTICES IN SOUTH CAROLINA, AND TO PROVIDE EXCEPTIONS; TO REPEAL SECTION 37-6-416, RELATING TO THE INTEREST RATE ON CERTAIN JUDGMENTS; TO ADD A NEW CHAPTER 10 TO TITLE 37 CONTAINING SECTION 37-10-101 DEFINING THE SCOPE OF THE CHAPTER AS REGULATING DESIGNATED LOAN TRANSACTIONS OTHER THAN CERTAIN CONSUMER LOAN TRANSACTIONS, SECTION 37-10-102 WHICH REGULATES ASSUMPTION FEES AND ESTABLISHES CERTAIN REQUIREMENTS FOR REAL ESTATE MORTGAGE TRANSACTIONS AND THE ATTORNEYS' FEES ASSOCIATED THEREWITH WHERE THE PRIMARY PURPOSE OF THE LOAN IS FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES, AND WHICH ALSO PROVIDES FOR CERTAIN DISCLOSURES IN REGARD TO LOAN ACCELERATION OR RENEGOTIATION PROVISIONS, SECTION 37-10-103 WHICH REGULATES THE RIGHT OF PREPAYMENT AND RESTRICTS THE USE OF VARIABLE RATES IN REAL ESTATE MORTGAGE TRANSACTIONS OF ONE HUNDRED THOUSAND DOLLARS OR LESS, SECTION 37-10-104 WHICH ESTABLISHES A MAXIMUM RATE OF EIGHTEEN PERCENT PER ANNUM ON LOANS FOR AGRICULTURAL PURPOSES OF LESS THAN TWENTY-FIVE THOUSAND DOLLARS, SECTION 37-10-105 WHICH SETS FORTH THE STATUTORY PENALTIES FOR VIOLATION OF THE PROVISIONS IN CHAPTER 10 AND SECTION 37-10-106 WHICH SETS CERTAIN MAXIMUM RATES OF INTEREST AND PROVIDES FOR THE LEGAL RATE OF INTEREST IN CERTAIN CASES; TO REPEAL THE FOLLOWING PROVISIONS OF LAW AS BEING INCONSISTENT WITH TITLE 37 OR ARE OTHERWISE UNNECESSARY OR OBSOLETE: SECTIONS 34-13-10 THROUGH 34-13-40, 34-13-120, 34-25-110 THROUGH 34-25-140, 34-31-30, 34-31-31, 34-31-40, 34-31-50, 34-31-60, 34-31-70, 34-31-80, 34-31-90, 34-31-100, ACT 7 OF 1979, ACT 379 OF 1980, ACT 6 OF 1981, SECTIONS 29-3-60, 29-3-210 THROUGH 29-3-240, 38-9-240; TO AMEND SECTION 29-3-40, DEALING WITH ADVANCEMENTS MADE BY MORTGAGEES, SO AS TO DELETE LANGUAGE RESTRICTING THE RATE OF INTEREST ON SUCH ADVANCES TO THE LEGAL RATE; TO AMEND SECTION 34-1-110, SO AS TO ELIMINATE THE RESTRICTION ON THE POWER OF THE BOARD OF FINANCIAL INSTITUTIONS TO AUTHORIZE STATE FINANCIAL INSTITUTIONS TO CHARGE THE SAME RATES AS FEDERAL FINANCIAL INSTITUTIONS MAKING LOANS IN SOUTH CAROLINA AND TO GIVE THE STATE BOARD OF FINANCIAL INSTITUTIONS AUTHORITY TO AUTHORIZE CONSUMER FINANCE COMPANIES TO CHARGE EQUIVALENT RATES AUTHORIZED BY OTHER LENDERS OPERATING IN SOUTH CAROLINA; TO AMEND SECTION 34-5-90, RELATING TO POWERS OF BANK CONSERVATORS, SO AS TO DELETE THE LANGUAGE RESTRICTING THE INTEREST RATE ON FUNDS BORROWED BY A CONSERVATOR TO THE LEGAL RATE; TO AMEND SECTION 35-1-1560, SO AS TO ELIMINATE ANY STATUTORY LIMITATIONS ON THE RATE OF INTEREST THAT CAN BE CHARGED ON SECURITIES MARGIN ACCOUNTS; TO AMEND SECTION 36-9-404, AS AMENDED, SO AS TO REQUIRE THAT ANY SECURED PARTY THAT COLLECTS A TERMINATION STATEMENT FILING FEE FROM A DEBTOR IN A TRANSACTION IN WHICH CONSUMER GOODS ARE LISTED AS COLLATERAL IN THE FINANCING STATEMENT MUST FILE A TERMINATION STATEMENT WHEN THE OBLIGATION IS REPAID WITHIN THE EARLIER OF THIRTY DAYS AFTER THE REPAYMENT OR TEN DAYS AFTER DEMAND FOR FILING BY THE DEBTOR; AND TO AMEND SECTION 40-39-100, WHICH DEALS WITH CHARGES ON PAWNBROKER LOANS TO RAISE THE DOLLAR LIMITATION IN THE SECTION FROM FIFTY TO THREE HUNDRED DOLLARS; TO DELETE CERTAIN PROVISIONS OF ACT 411 OF 1980 AND ACT 433 OF 1980, TO OFFICIALLY DESIGNATE CERTAIN PROVISIONS OF LAW AS SPECIFIC SECTIONS OF THE 1976 CODE; AND TO PROVIDE THAT THE SOUTH CAROLINA DEPARTMENT OF CONSUMER AFFAIRS SHALL CONDUCT A STUDY OF THE EFFECTS OF THIS ACT AND REPORT ITS FINDINGS TO THE GENERAL ASSEMBLY.

Be it enacted by the General Assembly of the State of South Carolina:

Applicability of act

Section 1. It is hereby explicitly stated by the terms of this act that the provisions of Title V, Part A-Mortgage Usury Laws, Mortgages, Section 501(a)(1), and Part B-Business and Agricultural Loans, Sections 511 and 512 of Public Law No. 96-221 (94 Stat. 132) known as the Depository Institutions Deregulation and Monetary Control Act of 1980, as amended, shall not apply with respect to loans, mortgages, credit sales and advances made in this State, and that this State does not want the provisions of Title V, Part A-Mortgage Usury Laws, Mortgages, Section 501(a)(1) and Part B-Business and Agricultural Loans, Sections 511 and 512 of the Depository Institutions Deregulation and Monetary Control Act of 1980 to apply with respect to loans, mortgages, credit sales and advances made in this State.

Act shall be known

Section 2. This act shall be known as the "Consumer Protection Code Revision Act of 1982".

Dollar amounts subject to change

Section 3. Section 37-1-109 of the 1976 Code, as added by Section 1 of Act 411 of 1980, is amended by adding at the end:

"(6) The dollar amounts in the following sections of this title will be subject to change in accordance with this section: 37-2-104(1) (e), 37-2-106(1) (b), 37-2-203(1) (a), 37-2-407(1), 37-3-104(1) (d), 37-3-203(1) (a), 37-3-510, 37-3-511, 37-3-514, 37-5-103 (2)."

Applicability of title

Section 4. Section 37-1-201 of the 1976 Code, as last amended by Act 475 of 1980, is further amended by adding at the end:

"(9) Notwithstanding other provisions of this section--

(a) except as provided in subsection (3) this title does not apply if the consumer is not a resident of this State at the time of a consumer credit transaction and the parties have agreed that the law of his residence applies;

(b) this title applies if the consumer is a resident of this State at the time of a consumer credit transaction.

(10) Each of the following agreements or provisions of an agreement by a consumer who is a resident of this State at the time of a consumer credit transaction is invalid with respect to the transaction--

(a) that the law of another jurisdiction apply;

(b) that the consumer consents to be subject to the process of another jurisdiction;

(d) that fixes venue;

(e) that the consumer consents to the jurisdiction of the court that does not otherwise have jurisdiction.

(11) The following provisions of this title specify the applicable law governing certain cases--

(a) applicability (Section 37-6-102) of the Part on Powers and Functions of Administrator (Part 1) of the Article Administration (Article 6);

(b) applicability (Section 37-6-201) of the Article on Notification and Fees (Part 2) of the Article on Administration (Article 6)."

Courts may exercise jurisdiction

Section 5. Subsection (1) of Section 37-1-203 of the 1976 Code is amended to read:

"(1) Subject to constitutional and statutory jurisdictional limitations the courts of this State may exercise jurisdiction over any creditor with respect to any conduct in this State governed by this title or with respect to any claim arising from a transaction subject to this title. In addition to any other method provided by statute, personal jurisdiction over a creditor may be acquired in a civil action or proceeding instituted in a court by the service of process in the manner provided by this section."

Exclusions

Section 6. Section 37-1-202 of the 1976 Code, as last amended by Act 6 of 1981, is further amended to read:

"Section 37-1-202. [Exclusions.] Except as otherwise provided, this title does not apply to:

(1) Extensions of credit to government or governmental agencies or instrumentalities;

(2) The sale of insurance by an insurer, except as otherwise provided in the chapter on insurance (Chapter 4);

(3) Transactions under public utility, municipal utility or common carrier tariffs if a subdivision or agency of this State or of the United States regulates the charges for the services involved, the charges for delayed payment, and any discount allowed for early payment;

(4) The rates and charges and the disclosure of rates and charges for loans of three hundred dollars or less made by a licensed pawnbroker pursuant to Chapter 39, Title 40;

(5) Licensing or examining restricted lenders [Section 37-3-501(4)];

(6) Rates and charges for advancing insurance premiums by insurance agents which shall be governed by the applicable provisions of Chapter 51 of Title 38; or insurance premium service companies which shall be governed by the applicable provisions of Chapter 27 of Title 38;

(7) Rates and charges on restricted loans [Section 37-3-501(3)]; which shall be subject to the applicable provisions of Title 34;

(8) Loans, sales or leases made primarily for agricultural purposes; except as otherwise provided in Chapter 10 of this title;

(9) Loans to or on behalf of students pursuant to a government supported educational loan program;

(10) Federally-chartered credit unions;

(11) Transactions in securities or commodities accounts with broker-dealers registered under Article 5 of Chapter 1, Title 35, or with the Securities and Exchange Commission."

General definitions

Section 7. Section 37-1-301 of the 1976 Code, as last amended by Act 686 of 1976, is further amended to read:

"Section 37-1-301. [General Definitions.] In addition to definitions appearing in subsequent articles, in this title:

(1) 'Actuarial method' means the method, defined by rules adopted by the Administrator, of allocating payments made on a debt between principal or amount financed and loan finance charge or credit service charge pursuant to which a payment is applied first to the accumulated loan finance charge or credit service charge and the balance is applied to the unpaid principal or unpaid amount financed.

(2) 'Administrator' means the Administrator designated in the Article (Chapter 6) on Administration (Section 37-6-103).

(3) 'Agreement' means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance.

(4) 'Agricultural purpose' means a purpose related to the production, harvest, exhibition, marketing, transportation, processing, or manufacture of agricultural products by a natural person who cultivates, plants, propagates, or nurtures the agricultural products. 'Agricultural products' includes agricultural, horticultural, vitacultural and dairy products, livestock, wildlife, poultry, bees, forest products, fish and shellfish, and any products thereof including processed and manufactured products and any and all products raised or produced on farms and any processed or manufactured products thereof.

(5) 'Alternative mortgage loan' means a loan secured by a first or junior lien on real estate other than a loan that--

(a) is a fully amortized loan repayable by the direct reduction method and

(b) has a fixed nonvariable loan finance charge. Alternative mortgage loans include, without limitation, renegotiable and variable rate mortgages, adjusted and graduated payment mortgages, shared appreciation mortgages, reverse annuity mortgages and any combination of the foregoing.

(5A) 'Assumption' means and occurs when a creditor expressly agrees in writing with a subsequent transferee of the collateral for the debt (1) to accept that transferee as a primary obligor on the note or other instrument evidencing the credit, irrespective of whether the creditor agrees to release the original debtor and irrespective of whether the creditor has the right in the contract evidencing the debt to renegotiate the terms of the indebtedness, or (2) that the transferee takes the collateral subject to the lien of the transferor but is not personally liable for repayment of the debt.

(6) 'Billing cycle' means the time interval between periodic billing statement dates.

(7) 'Card holder' means a person to whom a credit card is issued or who has agreed with the card issuer to pay obligations arising from the issuance to or use of the card by another person.

(8) 'Card issuer' means a person who issues a credit card.

(9) 'Conspicuous' means a term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. Whether a term or clause is conspicuous or not is for decision by the court.

(10) 'Consumer' means the buyer, lessee or debtor to whom credit is extended in a consumer credit transaction.

(11) 'Consumer credit transaction' means a consumer credit sale (Section 37-2-104) or consumer loan (Section 37-3-104) or a refinancing or consolidation thereof, or a consumer lease (Section 37-2-106).

(12) 'Credit' means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment.

(13) 'Creditor' means the person who grants credit in a credit transaction or, except as otherwise provided, an assignee of a creditor's right to payment, but use of the term does not in itself impose on an assignee any obligation of his assignor. In case of credit granted pursuant to a credit card, 'creditor' means the card issuer and not another person honoring the credit card.

(14) 'Debtor' means any person who is an obligor in a credit transaction, including any cosigner, comaker, guarantor, endorsee or surety, and the assignee of any obligor, and also includes any person who agrees to assume the payment of a credit obligation.

(15) 'Earnings' means compensation paid or payable to an individual or for his account for personal services rendered or to be rendered by him, whether denominated as wages, salary, commission, bonus or otherwise, and includes periodic payments pursuant to a pension, retirement or disability program.

(16) 'Lender credit card or similar arrangement' means an arrangement or loan agreement, other than a seller credit card, pursuant to which a lender gives a debtor the privilege of using a credit card, letter of credit, or other credit confirmation or identification in transactions out of which debt arises--

(a) by the lender's honoring a draft or similar order for payment of money drawn or accepted by the debtor;

(b) by the lender's payment or agreement to pay the debtor's obligations; or

(17) 'Official fees' means--

(a) fees and charges prescribed by law which actually are or will be paid to public officials for determining the existence of or for perfecting, releasing or satisfying a security interest related to a consumer credit sale, consumer lease or consumer loan; or

(b) premiums payable for insurance in lieu of perfecting a security interest otherwise required by the creditor in connection with the sale, lease or loan, if the premium does not exceed the fees and charges described in paragraph (a) which would otherwise be payable.

(18) 'Organization' means a corporation, government or governmental subdivision or agency, trust, estate, partnership, cooperative or association.

(19) 'Payable in installments' means that payment is required or permitted by agreement to be made in--

(a) two or more periodic payments, excluding a down payment, with respect to a debt arising from a consumer credit sale pursuant to which a credit service charge is made;

(b) four or more periodic payments, excluding a down payment, with respect to a debt arising from a consumer credit sale pursuant to which no credit service charge is made; or

(c) two or more periodic payments with respect to a debt arising from a consumer loan. If any periodic payment other than the down payment under an agreement requiring or permitting two or more periodic payments is more than twice the amount of any other periodic payment, excluding the down payment, the consumer credit sale, consumer lease or consumer loan is 'payable in installments'.

(20) 'Person' includes a natural person or an individual, and an organization.

(21) 'Person related to' with respect to an individual means--

(a) the spouse of the individual;

(b) a brother, brother-in-law, sister, sister-in-law of the individual;

(d) any other relative, by blood or marriage, of the individual or his spouse who shares the same home with the individual.

'Person related to' with respect to an organization means--

(a) a person directly or indirectly controlling, controlled by or under common control with the organization;

(b) an officer or director of the organization or a person performing similar functions with respect to the organization or to a person related to the organization;

(d) a relative by blood or marriage of a person related to the organization who shares the same home with him.

(22) 'Presumed' or 'presumption' means that the trier of fact must find the existence of the fact presumed unless and until evidence is introduced which would support a finding of its nonexistence.

(23) 'Residence' means any real property in which the debtor in a credit transaction secured by a first or junior lien on real property resides or expects to reside. It includes a parcel of unimproved land on which $he debtor at the time the credit transaction granting the lien is consummated resides or expects to reside.

(24) 'Residential manufactured home' means a structure, transportable in one or more sections, which is at least eight body feet wide, thirty-two body feet long, and which is built on a permanent chassis and designed to be used as a dwelling, with or without a permanent foundation, when connected to the required utilities, and includes the plumbing, heating, air-conditioning and electrical systems contained therein, and which structure is or will be used as a residence.

(25) 'Residential real property' means real estate improved or to be improved by a structure or structures designed primarily for dwelling, as opposed to business or commercial use.

(26) 'Seller credit card' means an arrangement pursuant to which a person gives to a buyer or lessee the privilege of using a credit card, letter of credit or other credit confirmation or identification primarily for the purpose of purchasing or leasing goods or services from that person, a person related to that person, or others licensed or franchised to do business under his business or trade name or designation.

(27) 'Supervised financial organization' means a person, other than an insurance company or other organization primarily engaged in an insurance business--

(a) organized, chartered or holding an authorization certificate under the laws of this State or of the United States which authorize the person to make loans and to receive deposits, including a savings, share, certificate or deposit account, or to advance or service insurance premiums;

(b) subject to supervision by an official or agency of South Carolina or of the United States."

Definition of Federal Consumer Credit Protection Act

Section 8. Section 37-1-302 of the 1976 Code is amended to read:

"Section 37-1-302. [Definition of 'Federal Consumer Credit Protection Act'.] In this title 'Federal Consumer Credit Protection Act' means the Consumer Credit Protection Act (Public Law 90-321: 82 Stat. 146), as amended from time to time, and includes regulations issued from time to time by the Board of Governors of the Federal Reserve System. Title I of the Federal Consumer Credit Protection Act is referred to throughout this title as the 'Federal Truth in Lending Act'."

Index of definitions in this title

Section 9. Section 37-1-303 of the 1976 Code, as amended by Section 10 of Act 686 of 1976, is further amended to read:

"Section 37-1-303. [Index of Definitions in this Title.] Definitions in this title and the sections in which they appear are:

'Actuarial method'--Section 37-1-301(1)

'Administrator'--Section 37-1-301(2)

'Administrator'--Section 37-6-103

'Agreement'--Section 37-1-301(3)

'Agricultural purpose'--Section 37-1-301(4)

'Alternative mortgage loan'--Section 37-1-301(5)

'Amount financed'--Section 37-2-111

'Assumption'--Section 37-1-301(5A)

'Billing cycle'--Section 37-1-301(6)

'Card holder'--Section 37-1-301(7)

'Card issuer'--Section 37-1-301(8)

'Cash price'--Section 37-2-110

'Conspicuous'--Section 37-1-301(9)

'Consumer'--Section 37-1-301(10)

'Consumer credit insurance'--Section 37-4-103

'Consumer credit sale'--Section 37-2-104

'Consumer credit transaction'--Section 37-1-301(11)

'Consumer lease'--Section 37-2-106

'Consumer loan'--Section 37-3-104

'Contested case'--Section 37-6-402(1)

'Credit'--Section 37-1-301(12)

'Credit Insurance Act'--Section 37-4-103

'Creditor'--Section 37-1-301(13)

'Credit service charge'--Section 37-2-109

'Debtor'--Section 37-1-301(14)

'Earnings'--Section 37-1-301(15)

'Federal Truth-in-Lending Act'--Section 37-1-302

'Goods'--Section 37-2-105(1)

'Home solicitation sale'--Section 37-2-501

'Lender'--Section 37-3-107(1)

'Lender credit card or similar arrangement'--Section 37-1-301(16)

'License'--Section 37-6-402(2)

'Licensing'--Section 37-6-402(3)

'Loan'--Section 37-3-106

'Loan finance charge'--Section 37-3-109

'Merchandise certificate'--Section 37-2-105(2)

'Official fees'--Section 37-1-301(17)

'Organization'--Section 37-1-301(18)

'Party'--Section 37-6-402(4)

'Payable in installments'--Section 37-1-301(19)

'Person'--Section 37-1-301(20)

'Person related to'--Section 37-1-301(21)

'Precomputed' (loan)--Section 37-3-107(2)

'Precomputed' (sale)--Section 37-2-105(7)

'Presumed' or 'presumption'--Section 37-1-301(22)

'Principal'--Section 37-3-107(3)

'Residence'--Section 37-1-301(23)

'Residential manufactured home'--Section 37-1-301(24)

'Residential real property'--Section 37-1-301(25)

'Restricted lender'--Section 37-3-501(4)

'Restricted loan'--Section 37-3-501(3)

'Revolving charge account'--Section 37-2-108

'Revolving loan account'--Section 37-3-108

'Rule'--Section 37-6-402(5)

'Sale of an interest in land'--Section 37-2-105(6)

'Sale of goods'--Section 37-2-105(4)

'Sale of services'--Section 37-2-105(5)

'Seller'--Section 37-2-107

'Seller credit card'--Section 37-1-301(26)

'Services'--Section 37-2-105(3)

'Supervised financial organization'--Section 37-1-301(27)

'Supervised lender'--Section 37-3-501(2)

'Supervised loan'--Section 37-3-501(1)."

Debt payable in installments or credit service charge made

Section 10. (A) Item (d) of subsection (1) of Section 37-2-104 of the 1976 Code is amended by striking "installment" on line one and inserting "installments". The item when amended shall read:

"(d) Either the debt is payable in installments or a credit service charge is made, and".

(B) Subsection (2) of Section 37-2-104 of the 1976 Code, as amended by Section 62 of Act 686 of 1976, is further amended to read:

"(2) Unless the sale is made subject to this title by agreement (Section 37-2-601), except for the provisions on civil liability for violation of disclosure (Section 37-5-203) and voluntary complaint resolution (Section 37-6-117), 'consumer credit sale' does not include

(a) a sale in which the seller allows the buyer to purchase goods or services pursuant to a lender credit card or similar arrangement, or

(b) a sale of an interest in land if the debt is secured by a first lien or equivalent security interest in real estate."

Lessor regularly engaged in business of leasing

Section 11. Item (a) of subsection (1) of Section 37-2-106 of the 1976 Code is amended to read:

"(a) Which a lessor regularly engaged in the business of leasing makes to a person, other than an organization, who takes under a lease primarily for a personal, family or household purpose."

Cash price of goods, etc.

Section 12. Item (1) of Section 37-2-111 of the 1976 Code is amended by striking "kind" on line one and inserting "land". The item when amended shall read:

"(1) The cash price of the goods, services or interest in land, less the amount of any down payment whether made in cash or in property traded in,".

Credit service charge defined

Section 13. Section 37-2-109 of the 1976 Code.is amended to read:

"Section 37-2-109. ['Credit Service Charge' Defined.] 'Credit service charge' means the sum of (1) all charges payable directly or indirectly by the buyer and imposed directly or indirectly by the seller as an incident to the extension of credit, including any of the following types of charges which are applicable: time price differential, service, carrying or other charge, however denominated, premium or other charge for any guarantee or insurance protecting the seller against the buyer's default or other credit loss; and, except as otherwise provided in this section, (2) charges incurred for investigating the collateral or creditworthiness of the buyer or for commissions or brokerage for obtaining the credit, irrespective of the person to whom the charges are paid or payable, unless the seller had no notice of the charges when the credit was granted. The term does not include charges as a result of default, additional charges (Section 37-2-202), delinquency charges (Section 37-2-203), deferral charges (Section 37-2-204), or in a consumer credit sale which is secured in whole or in part by a first or junior lien or real estate, charges incurred for appraising the real estate that is collateral for the credit sale, if not paid to the creditor or a person related to the creditor."

Seller may contract for credit service charge

Section 14. Subsection (1) of Section 37-2-201 of the 1976 Code and subsection (2) of Section 37-2-201 of the 1976 Code, as last amended by Section 57 of Act 686 of 1976, are further amended to read:

"(1) With respect to a consumer credit sale, including a sale pursuant to a revolving charge account, a seller may contract for and receive a credit service charge not exceeding that permitted by this section.

(2) The credit service charge, calculated according to the actuarial method, may not exceed the greater of either of the following:

(a) any rate filed and posted pursuant to Section 37-2-305, or

(b) eighteen percent per year on the unpaid balances of the amount financed."

Fees

Section 15. Section 37-2-202 of the 1976 Code, amended by Section 11 of Act 686 of 1976, is further amended by adding a new subparagraph (v) of item (d) of subsection (1) and a new subsection (3), as follows:

"(v) fees for appraising the real estate that is collateral for a credit sale, if not paid to the creditor or a person related to the creditor.

(3) With respect to an assumption of an existing obligation, the seller may, in addition to the other charges authorized herein, charge an assumption fee not exceeding the lesser of two hundred fifty dollars or one percent of the unpaid balance of the debt at the time the assumption transaction is consummated whenever the primary collateral securing the credit is real estate or a residential manufactured home and not exeeding the lesser of fifty dollars or one percent of the unpaid balance of the debt at the time the assumption transaction is consummated whenever the primary collateral securing the credit is personal property other than a residential manufactured home."

Delinquency charges

Section 16. Section 37-2-203 of the 1976 Code is amended to read:

"Section 37-2-203. [Delinquency Charges.]

(1) With respect to a precomputed consumer credit sale and a consumer credit sale which is secured by a lien on real estate or residential manufactured home where the transaction is not precomputed, and any refinancings or consolidations of all such credit sales 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 dollars, which is not more than five percent of the unpaid amount of the installment.

(2) A delinquency charge under subsection (1) 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.

(3) A delinquency charge under subsection (1) 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 a computational period [Section 37-2-204(1)(a)] in which it is received and then to delinquent installments and charges."

Total of unpaid balance if transaction not precomputed

Section 17. Subsection (1) of Section 37-2-205 of the 1976 Code is amended by striking on line five "repayment" and inserting "prepayment". The subsection as amended shall read:

"(1) If the transaction was not precomputed, the total of the unpaid balance and accrued charges on the date of refinancing, or, if the transaction was precomputed, the amount which the buyer would have been required to pay upon prepayment pursuant to the provisions on rebate upon prepayment (Section 37-2-210) on the date of refinancing, except that for the purpose of computing this amount, no minimum credit service charge [Section 37-2-201(6)] shall be allowed; and".

Billing cycle

Section 18. Section 37-2-207 of the 1976 Code, as amended by Section 1 of Act 433 of 1980, is further amended by revising subsection (3) to read as follows:

"(3) If the billing cycle is monthly, the charge may not exceed that authorized by Section 37-2-201 on the amount specified in subsection (2) of this section. If the billing cycle is not monthly, the maximum charge is that percentage which bears the same relation to the applicable monthly percentage as the number of days in the billing cycle bears to thirty. For the purposes of this section, a variation of not more than four days from month to month is the same day of the billing cycle."

Repeal

Section 19. Section 37-2-211 of the 1976 Code is repealed.

Filing and posting maximum rate Schedule

Section 20. Part 3 of Chapter 2 of Title 37 of the 1976 Code, as last amended by Act 686 of 1976, is further amended by adding at the end:

"Section 37-2-305. [Filing and Posting Maximum Rate Schedule.] (1) Every creditor [Section 37-1-301(13)], intending to impose a credit service charge in excess of eighteen percent per annum other than an assignee of a credit obligation, making consumer credit sales (Section 37-2-104) in this State shall on or before the effective date of this section, and in the case of a creditor not making consumer credit sales in this State on that date, on or before the date the creditor begins to make such credit sales in this State, file with the Department of Consumer Affairs and, except as otherwise provided in this section, post in one conspicuous place in every place of business in this State in which offers to make consumer credit sales are extended a maximum rate schedule meeting the requirements set forth in subsections (2), (3) and (4) of this section.

(a) A creditor that has seller credit cards or similar arrangements [Section 37-1-301 (26)] shall not be required to post a copy of the required rate schedule in any place of business which is authorized to honor such transactions provided that the creditor shall include a conspicuous statement of the maximum rate it intends to charge for these transactions in the initial disclosure statement required to be provided the debtor by the Federal Truth-In-Lending Act and notifies the debtor of any change in the maximum rate on or before the effective date of the change.

(2) The rate schedule required to be filed and posted by subsection (1) shall contain a list of the maximum rate of credit service charge (Section 37-2-109) stated as an annual percentage rate, determined in accordance with the Federal Truth-In-Lending Act and Federal Reserve Board Regulation Z, that the creditor intends to charge for consumer credit transactions in each of the following categories of credit:

(a) unsecured credit sales;

(b) secured credit sales other than those secured by real estate;

(d) open-end (revolving) credit;

(e) all other.

The creditor may include as many subcategories as it chooses under each of the specified categories, and may, at its option, include a series of rates for different dollar amounts and maturities. A creditor may omit one or more of the categories from the rate schedule if the creditor does not make consumer credit transactions falling within the omitted categories.

(3) The rate schedule that is filed by the creditor shall be reproduced in at least fourteen-point type for posting as required by subsection (1). The terms 'Credit Service Charge' and 'Annual Percentage Rate' will be printed in larger size type than the other terms in the posted rate schedule. The following statement shall be included in the posted rate schedule:

'Consumers: All creditors making consumer credit sales in South Carolina are required by law to post a schedule showing the maximum rate of CREDIT SERVICE CHARGES expressed as the FINANCE CHARGE stated as ANNUAL PERCENTAGE RATES that the creditor intends to charge for various types of consumer credit transactions. The purpose of this requirement is to assist you in comparing the maximum rates that creditors charge, thereby furthering your understanding of the terms of consumer credit transactions and helping you to avoid the uninformed use of credit.

NOTE: Creditors are prohibited only from granting consumer credit at rates higher than those specified above. A creditor may be willing to grant you credit at rates that are lower than those specified, depending on the amount, terms, collateral and your creditworthiness.'

(4) A rate schedule filed and posted as required by this section shall be effective until changed in accordance with this subsection. A creditor wishing to change any of the maximum rates shown on a schedule previously filed and posted or to add or delete the prescribed categories or subcategories shall file with the Department of Consumer Affairs, in duplicate, together with the required fee specified in subsection (6) and shall post as required by subsection (1) a revised schedule of maximum rates. The revised schedule shall be certified and returned to the creditor if properly filed. The revised rate schedule shall be effective for all consumer credit extended after the close of business on the day the certified schedule is received by the creditor or seven days after the date of submission postmark, whichever is earlier. The posting or changes in connection with seller credit cards and similar arrangements shall be made in accordance with subsection (1).

(5) A creditor shall have no obligation to print the maximum rate schedule in any public advertisement that mentions rates charged by that creditor.

(6) The Department of Consumer Affairs shall maintain a file for each creditor containing the original and all revised rate schedules filed by the creditor. A certified copy of each filing showing the date and time that it was received shall be sent to the creditor making the filing at the time of its receipt. A fee of four dollars for each rate schedule filed by a creditor shall be payable to the Department of Consumer Affairs for its services in maintaining the rate schedule files and providing one certified copy of each rate filing to the creditor. Additional certified copies of a filing shall be provided at a charge of two dollars per copy.

(7) The Commission on Consumer Affairs shall promulgate a regulation pursuant to subsection (2) of Section 37-6-506 establishing the format of the rate schedules prescribed by this section."

Notice of assumption rights

Section 21. Part 3 of Chapter 2 of Title 37 of the 1976 Code, as last amended by Act 686 of 1976, is further amended by adding at the end:

"Section 37-2-306. [Notice of Assumption Rights.]

The notice provisions of Section 37-10-102(c) shall apply whenever a note, mortgage, deed of trust, bond for title or other instrument evidencing a consumer credit sale contains a provision that the holder of the instrument may accelerate payment of or renegotiate the terms of the credit transaction upon any transfer of the real estate securing the property."

Balloon payments

Section 22. Section 37-2-405 of the 1976 Code is amended to read:

"Section 37-2405. [Balloon Payments.] (1) Except as provided in subsection (2), if any scheduled payment of a consumer credit sale is more than twice as large as the average of earlier scheduled payments, the consumer has the right to refinance, without penalty, the amount of that payment at the time it is due. The terms of the refinancing shall be no less favorable to the consumer than the terms of the original transaction.

(2) This section does not apply to--

(a) a transaction pursuant to a revolving charge account;

(b) a transaction to the extent that the payment schedule is adjusted to the seasonal or irregular income or scheduled payments or obligations of the consumer;

(c) a secured credit transaction in which the primary security is a lien on real estate to the extent a formula for determining the rate of the credit service charge and any change in the amount of payment upon renegotiation or refinancing is specified in the agreement between the parties or is an alternative mortgage instrument; or

(d) a transaction of a class defined by rule of the Administrator as not requiring for the protection of the consumer his right to refinance as provided in this section."

Debts arising from two or more credit sales

Section 23. Subsection (1) of Section 37-2-409 of the 1976 Code is amended by striking on line two "primarily for an agricultural purpose or". The item when amended shall read:

"(1) If debts arising from two or more consumer credit sales, other than sales pursuant to a revolving charge account, are secured by cross-collateral (Section 37-2-408) or consolidated into one debt payable on a single schedule of payments, and the debt is secured by security interests taken with respect to one or more of the sales, payments received by the seller after the taking of the cross-collateral or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied pro rata to the payment of the debts arising from the sales. Proration shall be computed on the original debts secured by the various security interests. To the extent debts are paid according to this section, security interests in items of property terminate as the debts originally incurred with respect to each item are paid.

Attorney's fees

Section 24. Section 37-2-413 of the 1976 Code is amended to read:

"Section 37-2-413. [Attorney's Fees.]

(1) With respect to a consumer credit sale or consumer lease the agreement may provide for the payment by the buyer or lessee of reasonable attorney's fees not in excess of fifteen percent of the unpaid debt after default and referral to an attorney not a salaried employee of the seller, or of the lessor or his assignee. A provision in violation of this section is unenforceable.

(2) With respect to a consumer credit sale that is secured in whole or in part by a lien on real estate the provisions of Section 37-10-102(a) shall apply whenever the seller requires the debtor to pay any attorney's fees in connection with examining the title and dosing the transaction."

Consumer loan defined

Section 25. Section 37-3-104 of the 1976 Code, as amended by Section 63 of Act 686 of 1976, and whose provisions were suspended by Section 6 of Act 7 of 1979, as amended by Act 6 of 1981, is further amended to read:

"Section 37-3-104. ['Consumer Loan' Defined.]

(1) Except as provided in Section 37-3-105, 'consumer loan' is a loan made by a person regularly engaged in the business of making loans in which--

(a) the debtor is a person other than an organization;

(b) the debt is incurred primarily for a personal, family or household purpose;

(d) either the principal does not exceed twenty-five thousand dollars or the debt is secured by an interest in land."

First mortgage real estate loans

Section 26. Section 37-3-105 of the 1976 Code, repealed by Section 64 of Act 686 of 1976, is reenacted to read:

"Section 37-3-105. [First Mortgage Real Estate Loans.]

(1) Except as otherwise provided in subsection (2), unless the loan is made subject to this title by agreement (Section 37-3-601), 'consumer loan' does not include a loan secured by a first lien or equivalent security interest in real estate.

(2) Loans excluded from the definition of a 'consumer loan' pursuant to subsection (1) shall nevertheless be subject to the following provisions of this title:

(a) Civil liability for violation of disclosure (Section 37-5-203);

(b) Voluntary complaint resolution (Section 37-6-117);

(c) Whenever the primary purpose of the credit extended is not to enable the debtor to buy or build a residence on residential real property, the administrative powers in Part I of Article 6.

For the purpose of this paragraph, a creditor shall not be subject to any liability if the loan finance charge and other fees and charges imposed by the creditor and the collection practices followed in administering or enforcing the loan are usual and customary for the particular type of loan. A charge, collection practice, or administrative procedure that is authorized or required by any state or federal statute or regulation relating to mortgage loans; or in any official manual setting forth the procedures for real estate mortgages issued by any governmental or quasi-governmental organization that purchases, insures or guarantees such loans, including without limitation, manuals issued by the Federal Housing Administration, Veterans Administration, Farmers Home Administration, Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Corporation, or by any organization that regularly insures mortgages and is authorized to conduct such business in this State, shall be deemed to be usual and customary.

(3) Loans excluded from the definition of a 'consumer loan' pursuant to subsection (1) shall also be subject to the provisions of Chapter 10 of this title."

Forbearance of debt arising from a loan

Section 27. Subsection (4) of Section 37-3-106 of the 1976 Code is amended to read:

"(4) The forbearance of debt arising from a loan."

Definition of loan fiance charge

Section 28. Subsection (1) of Section 37-3-109 of the 1976 Code, as amended by Section 24 of Act 686 of 1976, is further amended to read:

"(1) 'Loan finance charge' means the sum of--

(a) all charges payable directly or indirectly by the debtor and imposed directly or indirectly by the lender as an incident to the extension of credit, including any of the following types of charges which are applicable: interest or any amount payable under a point, discount or other system of charges, however denominated, premium or other charge for any guarantee or insurance protecting the lender against the debtor's default or other credit loss; and, except as otherwise provided in this section;

(b) charges incurred for investigating the collateral or creditworthiness of the debtor or for commissions or brokerage for obtaining the credit, irrespective of the person to whom the charges are paid or payable, unless the lender had no notice of the charges when the loan was made. The term does not include charges as a result of default, additional charges (Section 37-3-202), delinquency charges (Section 37-3-203), or deferral charges (Section 37-3-204), or in a consumer loan which is secured in whole or in part by a first or junior lien on real estate, charges incurred for appraising the real estate that is collateral for the loan, if not paid to the creditor or a person related to the creditor."

Repeal

Section 29. Section 70 of Act 686 of 1976, designated as Section 37-3-110 of the 1980 Cumulative Supplement, is repealed.

Loan finance charge

Section 30. Subsection (2) of Section 37-3-201, as last amended by Act 433 of 1980, is further amended to read:

"(2) The loan finance charge, calculated according to the actuarial method, may not exceed the greater of either of the following:

(a) any rate filed and posted pursuant to Section 37-3-305; or

(b) eighteen percent per year on the unpaid balances of principal."

Fees

Section 31. Section 37-3-202 of the 1976 Code, created by Section 1 of Act 686 of 1976, is amended by adding a new subparagraph (v) to item (d) of subsection (1) and a new subsection (3) as follows:

"(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.

(3) With respect to an assumption of an existing obligation, the lender may, in addition to the other charges authorized herein, charge an assumption fee not exceeding the lesser of two hundred fifty dollars or one percent of the unpaid balance of the loan at the time the assumption transaction is consummated whenever the primary collateral securing the credit is real estate or a residential manufactured home and not exceeding the lesser of fifty dollars or one percent of the unpaid balance of the loan at the time the assumption transaction is consummated whenever the primary collateral securing the credit is personal property other than a residential manufactured home."

Delinquency charges

Section 32. Section 37-3-203 of the 1976 Code, enacted as part of Section 1 of Act 686 of 1976, is amended to read:

"Section 37-3-203. [Delinquency Charges.]

(1) With respect to a precomputed consumer loan and any consumer loan which is secured by a lien on real estate or residential manufactured home where the transaction is not precomputed, 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 dollars which is not more than five percent of the unpaid amount of the installment.

(3) A delinquency charge under subsection (1) 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.

(4) 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 shall 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 shall be rebated, and no further delinquency or deferral charges shall be made."

Filing and posting maximum rate schedule

Section 33. Part 3 of Chapter 3 of Title 37 of the 1976 Code, as last amended by Act 686 of 1976, is further amended by adding at the end:

"Section 37-3-305. [Filing and Posting Maximum Rate Schedule.] (1) Every creditor [Section 37-1-301(13)], other than an assignee of a credit obligation, making supervised or restricted consumer loans (Section 37-3-104) in this State shall on or before the effective date of this section, and in case of a creditor not making supervised consumer loans in this State on that date, on or before the date the creditor begins to make such loans in this State, file with the Department of Consumer Affairs and, except as otherwise provided in this section, post in one conspicuous place in every place of business in this State in which offers to make consumer loans are extended a certified maximum rate schedule meeting the requirements set forth in subsections (2), (3) and (4) of this section.

A creditor that has issued lender credit cards or similar arrangements [Section 37-1-301(16)] shall not be required to post a copy of the required rate schedule in any place of business which is authorized to honor such transactions except its central and branch offices other than a branch office that is a free-standing automatic teller machine; provided, that the creditor shall include a conspicuous statement of the maximum rate it intends to charge for these transactions in the initial disclosure statement required to be provided the debtor by the Federal Truth-In-Lending Act and notifies the debtor of any change in the maximum rate on or before the effective date of the change.

(2) The rate schedule required to be filed and posted by subsection (1) shall contain a list of the maximum rate of loan finance charge (Section 37-3-109) stated as an annual percentage rate, determined in accordance with the Federal Truth-In-Lending Act and Federal Reserve Board Regulation Z, that the creditor intends to charge for consumer credit transactions in each of the following categories of credit:

(a) unsecured personal loans;

(b) secured personal loans other than those secured by real estate;

(d) open-end (revolving) credit;

(e) all other.

(3) The rate schedule that is filed by the creditor shall be reproduced in at least fourteen-point type for posting as required by subsection (1). The terms 'Loan Finance Charge' and 'Annual Percentage Rate' will be printed in larger size type than the other terms in the posted rate schedule. The following statement shall be included in the posted rate schedule:

'Consumers: All supervised and restricted creditors making consumer loans in South Carolina are required by law to post a schedule showing the maximum rate of LOAN FINANCE CHARGES stated as ANNUAL PERCENTAGE RATES that the creditor intends to charge for various types of consumer credit transactions. The purpose of this requirement is to assist you in comparing the maximum rates that creditors charge, thereby furthering your understanding of the terms of consumer credit transactions and helping you to avoid the uninformed use of credit.

(4) A rate schedule filed and posted as required by this section shall be effective until changed in accordance with this subsection. A creditor wishing to change any of the maximum rates shown on a schedule previously filed and posted or to add or delete the prescribed categories or subcategories shall file with the Department of Consumer Affairs, in duplicate, together with the required fee specified in subsection (6) and shall post as required by subsection (1) a revised schedule of maximum rates. The revised schedule shall be certified and returned to the creditor if properly filed. The revised rate schedule shall be effective for all consumer credit extended after the close of business on the day the certified schedule is received by the creditor or seven days after the date of submission postmark, whichever is earlier. The posting or changes in connection with lender credit cards and similar arrangements shall be made in accordance with subsection (1).

(5) A creditor shall have no obligation to print the maximum rate schedule in any public advertisement that mentions rates charged by that creditor.

(7) The Commission on Consumer Affairs shall promulgate a regulation pursuant to subsection (2) of Section 37-6-506 establishing the filing procedures for and the format of the rate schedules prescribed by this section."

Notice of assumption rights

Section 34. Part 3 of Chapter 3 of Title 37 of the 1976 Code, as last amended by Act 686 of 1976, is further amended by adding at the end:

"Section 37-3-306. [Notice of Assumption Rights.]

The notice provisions of Section 37-10-102(c) shall apply whenever a note, mortgage, deed of trust, bond for title or other instrument evidencing a consumer loan contains a provision that the holder of the instrument may accelerate payment of or renegotiate the terms of the loan upon any transfer of the real estate securing the property."

Balloon payments

Section 35. Section 37-3-402 of the 1976 Code is amended to read:

"Section 37-3-402. [Balloon Payments.] (1) Except as provided in subsection (2), if any scheduled payment of a consumer loan is more than twice as large as the average of earlier scheduled payments, the consumer has the right to refinance, without penalty, the amount of that payment at the time it is due. The terms of the refinancing shall be no less favorable to the consumer than the terms of the original transaction.

(2) This section does not apply to--

(a) a transaction pursuant to a revolving loan account;

(b) a transaction to the extent that the payment schedule is adjusted to the seasonal or irregular income or scheduled payments or obligations of the consumer;

(c) a secured credit transaction in which the primary security is a lien on real estate to the extent a formula for determining the rate of the loan finance charge and any change in the amount of payment upon renegotiation or refinancing is specified in the agreement between the parties or is an alternative mortgage instrument; or

(d) a transaction of a class defined by rule of the Administrator as not requiring for the protection of the consumer his right to refinance as provided in this section."

Attorney's fees

Section 36. Section 37-3-404 of the 1976 Code, as amended by Section 26 of Act 686 of 1976, is further amended to read:

"Section 37-3-404. [Attorney's Fees.]

(1) Except as provided by the provisions on limitations on attorney's fees as to certain supervised loans (Section 37-5-514), with respect to a consumer loan the agreement may provide for the payment by the debtor of reasonable attorney's fees not in excess of fifteen percent of the unpaid debt after default and referral to an attorney not a salaried employee of the lendor. A provision in violation of this section is unenforceable.

(2) With respect to a consumer loan that is secured in whole or in part by a lien on real estate the provision of Section 37-10-102(a) shall apply whenever the lender requires the debtor to pay any attorney's fees in connection with examining the title and closing the transaction."

Lender's knowledge of complaints by other buyers or lessers

Section 37. Section 37-3-410 of the 1976 Code, as amended by Section 28 of Act 686 of 1976, is further amended by adding at the end of subsection (1):

"(f) the lender, before he makes the consumer loan, has knowledge or, from his course of dealing with the particular seller or lessor or his records, notice of substantial complaints by other buyers or lessees of the particular seller's or lessor's failure or refusal to perform his contracts with them and of the particular seller's or lessor's failure to remedy his defaults within a reasonable time after notice to him of the complaints."

Supervise loan

Section 38. Subsection (1) of Section 37-3-501 of the 1976 Code, which was added by Section 2 of Act 686 of 1976, is amended by deleting "twelve" in line two and inserting "eighteen". As amended, subsection (1) shall read:

"(1) 'Supervised loan' means a consumer loan in which the rate of the loan finance charge exceeds eighteen percent per year as determined according to the provisions on the loan finance charge for consumer loans (Section 37-3-201)."

Term changed

Section 39. Sections 37-3-502 through 37-3-506 of the 1976 Code, added by Section 2 of Act 686 of 1976, are amended by deleting the term "Board of Bank Control" whenever it appears in these sections and inserting the term "State Board of Financial Institutions".

Loan subject to this title by agreement of the parties

Section 40. Section 37-3-601 of the 1976 Code, created by Section 2 of Act 686 of 1976 and amended by Section 6 of Act 433 of 1980, is further amended to read:

"Section 37-3-601. [Loans Subject to this Title by Agreement of the Parties.] The parties to a loan other than a consumer loan may agree in a writing signed by the parties that the loan is subject to the provisions of this act applying to consumer loans. If the parties so agree, the loan is a consumer loan for the purposes of this title."

Licensee to maintain records

Section 41. Subsection (1) of Section 37-3-505 of the 1976 Code, added by Section 2 of Act 686 of 1976, is amended to read:

"(1) Every licensee shall maintain records in conformity with generally accepted accounting principles and practices in a manner that will enable the State Board of Financial Institutions to determine whether the licensee is complying with the provisions of this title. The record-keeping system of a licensee shall be sufficient if he makes the required information reasonably available. The records need not be kept in the place of business where supervised loans are made, if the board is given free access to the records wherever located. The records pertaining to any loan, including the certified maximum rate chart in effect at the time the loan was made, need not be preserved for more than two years after making the final entry relating to the loan, but in the case of a revolving loan account the two years is measured from the date of each entry."

Loan finance charge or other loans

Section 42. Section 37-3-605 of the 1976 Code, added by Section 2 of Act 686 of 1976 as last amended by Section 3 of Act 433 of 1980, is further amended to read:

"Section 37-3-605. [Loan Finance Charge for Other Loans.]

With respect to a loan other than a consumer loan, the parties may contract for the payment by the debtor of any loan finance charge, except as provided in Chapter 10 of this title."

Unconscionability

Section 43. Section 37-5-108 of the 1976 Code, as amended by Section 38 of Act 686 of 1976, is further amended to read:

"Section 37-5-108. [Unconscionability; Inducement by Unconscionable Conduct; Unconscionable Debt Collection.] (1) With respect to a transaction that is, gives rise to, or leads the debtor to believe will give rise to, a consumer credit transaction, if the court as a matter of law finds:

(a) the agreement or transaction to have been unconscionable at the time it was made, or to have been induced by unconscionable . conduct, the court may refuse to enforce the agreement; or

(b) any term or part of the agreement or transaction to have been unconscionable at the time it was made, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable term or part, or so limit the application of any unconscionable term or part as to avoid any unconscionable result and award the consumer any actual damages he has sustained.

(2) With respect to a consumer credit transaction, if the court as a matter of law finds that a person has engaged in, is engaging in, or is likely to engage in unconscionable conduct in collecting a debt arising from that transaction, the court may grant an injunction and award the consumer any treble damages he has sustained.

(3) If it is claimed or appears to the court that the agreement or transaction or any term or part thereof may be unconscionable, or that a person has engaged in, is engaging in, or is likely to engage in unconscionable conduct in collecting a debt, the parties shall be afforded a reasonable opportunity to present evidence as to the setting, purpose, and effect of the agreement or transaction or term or part thereof, or of the conduct, to aid the court in making the determination.

(4) In applying subsection (1), consideration shall be given to each of the following factors, among others, as applicable:

(a) belief by the seller, lessor or lender at the time a transaction is entered into that there is no reasonable probability of payment in full of the obligation by the consumer or debtor; (b) in the case of a consumer credit sale or consumer lease, knowledge by the seller or lessor at the time of the sale or lease of the inability of the consumer to receive substantial benefits from the property or services sold or leased;

(c) in the case of a consumer credit sale or consumer lease, gross disparity between the price of the property or services sold or leased and the value of the property or services measured by the price at which similar property or services are readily obtainable in credit transactions by like consumers;

(d) the fact that the creditor contracted for or received separate charges for insurance with respect to a consumer credit sale or consumer loan with the effect of making the sale or loan, considered as a whole, unconscionable;

(e) the fact that the seller, lessor or lender has knowingly taken advantage of the inability of the consumer or debtor reasonably to protect his interests by reason of physical or mental infirmities, ignorance, illiteracy, inability to understand the language of the agreement, or similar factors.

(5) In applying subsection (2), consideration shall be given to each of the following factors, among others, as applicable:

(a) using or threatening to use force, violence, or criminal prosecution against the consumer or members of his family;

(b) communicating with the consumer or a member of his family at frequent intervals or at unusual hours or under other circumstances so that it is a reasonable inference that the primary purpose of the communication was to harass the consumer;

(c) using fraudulent, deceptive or misleading representations such as a communication which simulates legal process or which gives the appearance of being authorized, issued, or approved by a government, governmental agency, or attorney at law when it is not, or threatening or attempting to enforce a right with knowledge or reason to know that the right does not exist;

(d) causing or threatening to cause injury to the consumer's reputation or economic status by disclosing information affecting the consumer's reputation for creditworthiness with knowledge or reason to know that the information is false; communicating with the consumer's employer before obtaining a final judgment against the consumer, except as permitted by statute or to verify the consumer's employment; disclosing to a person, with knowledge or reason to know that the person does not have a legitimate business need for the information, or in any way prohibited by statute, information affecting the consumer's credit or other reputation; or disclosing information concerning the existence of a debt known to be disputed by the consumer without disclosing that fact;

(e) engaging in conduct with knowledge that like conduct has been restrained or enjoined by a court in a civil action by the Administrator against any person pursuant to the provisions on injunctions against fraudulent or unconscionable agreements or conduct (Section 37-6-111).

(6) If in an action in which unconscionability is claimed the court finds unconscionability pursuant to subsection (1) or (2), the court shall award reasonable fees to the attorney for the consumer or debtor. If the court does not find unconscionability and the consumer or debtor claiming unconscionability has brought or maintained an action he knew to be groundless, the court may award reasonable fees to the attorney for the party against whom the claim is made. In determining attorney's fees, the amount of the recovery on behalf of the consumer is not controlling.

(7) The remedies of this section are in addition to remedies available for the same conduct under law other than this title.

(8) For the purpose of this section, a charge or practice expressly permitted by this title is not in itself unconscionable."

Notice of consumer's right to cure

Section 44. Section 37-5-110 of the 1976 Code, created by Section 39 of Act 686 of 1976, is amended to read:

"Section 37-5-110. [Notice of Consumer's Right to Cure.]

(1) With respect to a consumer credit transaction payable in two or more installments, after a consumer has been in default for ten days for failure to make a required payment and has not voluntarily surrendered possession of goods that are collateral, a creditor may give the consumer the notice described in this section. A creditor gives notice to the consumer under this section when he delivers the notice to the consumer or mails the notice to him at his residence [Section 37-1-201(6)].

(2) The notice shall be in writing and conspicuously state: the name, address and telephone number of the creditor to whom payment is to be made, a brief identification of the credit transaction, the consumer's right to cure the default, and the amount of payment and date by which payment must be made to cure the default. A notice in substantially the following form complies with this subsection:

'(name, address and telephone number of creditor)

_________________________________________________________________

(account number, if any)

_________________________________________________________________

(brief identification of credit transaction)

_________________________________________________________________

_______________________________(date is the LAST DAY FOR PAYMENT)

__________________________________(amount) is the AMOUNT NOW DUE.

You are late in making your payment(s). If you pay the AMOUNT NOW DUE (above) by the LAST DAY FOR PAYMENT (above), you may continue with the contract as though you were not late. If you do not pay by that date, we may exercise our rights under the law. These rights include the right to repossess any property held as collateral for this transaction and the right, in many instances, to hold you personally responsible for any difference between the amount the property brings in a sale and the balance due us on the credit transaction in question. If you are late again in making your payments, we may exercise our rights without sending you another notice like this one. If you have questions, write or telephone the creditor promptly.'"

Cure of default

Section 45. Section 37-5-111 of the 1976 Code, created by Section 39 of Act 686 of 1976, is amended to read:

"Section 37-5-111. [Cure of Default.] (1) With respect to a consumer credit transaction payable in two or more installments, except as provided in subsection (2), after a default consisting only of the consumer's failure to make a required payment, a creditor, because of that default, may neither accelerate maturity of the unpaid balance of the obligation, nor take possession of or otherwise enforce a security interest in goods that are collateral until twenty days after a notice of the consumer's right to cure (Section 37-5-110) is given. Until expiration of the minimum applicable period after the notice is given, the consumer may cure all defaults consisting of a failure to make the required payment by tendering the amount of all unpaid sums due at the time of the tender, without acceleration, plus any unpaid delinquency or deferral charges. Cure restores the consumer to his right under the agreement as though the default had not occurred.

(2) With respect to defaults on the same obligation and subject to subsection (1), after a creditor has once given notice of consumer's right to cure (Section 37-5-110), this section gives the consumer no right to cure and imposes no limitation on the creditor's right to proceed against the consumer or goods that are collateral. For the purpose of this section, in credit extended pursuant to a revolving charge or revolving loan account, the obligation is the unpaid balance of the account and there is no right to cure and no limitation on the creditor's rights with respect to a default that occurs within twelve months after an earlier default as to which a creditor has given a notice of consumer's right to cure (Section 37-5-110).

(3) This section and the provisions on waiver, agreements to forego rights, and settlement of claims (Section 37-1-107) do not prohibit a consumer from voluntarily surrendering possession of goods which are collateral and the creditor from thereafter accelerating maturity of the obligation and enforcing the obligation and his security interest in the goods at any time after default. In any enforcement proceeding, however, the creditor must affirmatively plead and prove either that the notice to cure is not required or that the creditor has given the required notice, but the failure to so plead will not invalidate any action taken by the creditor that is otherwise lawful and if the creditor has rightfully repossessed any collateral will not constitute conversion.

(4) Any repossession of collateral in violation of this section is void and the creditor shall be liable for conversion."

Venue, complaint, stay of enforcement of or relief from default judgment

Section 46. Part 1 of Chapter 5 of Title 37 of the 1976 Code is amended by adding:

"Section 37-5-113. [Venue.] An action by a creditor against a consumer arising from a consumer credit transaction shall be brought in the county of the consumer's residence [Section 37-1-201(6)], unless an action is brought to enforce an interest in land securing the consumer's obligation, in which case the action may be brought in the county in which the land or a part thereof is located. If the county of the consumer's residence has changed, the consumer upon motion may have the action removed to the county of his current residence. If the residence of the consumer is not within this State, the action may be brought in the county in which the sale, lease or loan was made. If the initial papers offered for filing in the action on their face show noncompliance with this section, the clerk of court shall not accept them. The court may change the place of trial as otherwise provided by law.

Section 37-5-114. [Complaint; Proof; Entry of Default Judgment.] (1) In an action brought by a creditor against a consumer arising from a consumer credit transaction, the complaint shall allege the facts of the consumer's default, the amount to which the creditor is entitled, an indication of how that amount was determined, and either that the notice to cure required by Sections 37-5-110 and 37-5-111 has been given or is not required.

(2) A default judgment may not be entered in the action in favor of the creditor unless the complaint is verified by the creditor or sworn testimony, by affidavit or otherwise, is adduced showing that the creditor is entitled to the relief demanded.

Section 37-5-115. [Stay of Enforcement of or Relief from Default Judgment.] Except as otherwise set forth in this section, at any time after entry of a default judgment in favor of a creditor and against a consumer in an action arising from a consumer credit transaction, the court which rendered judgment, for cause including lack of jurisdiction to render the judgment, and upon motion of a party or its own motion, with notice as the court may direct, may stay enforcement of or relieve the consumer from the judgment by order upon just and equitable conditions; provided, however, that whenever the motion is based on the mistake, inadvertance, surprise or excusable neglect of the consumer, the motion must be filed within one year after the date the judgment is entered in the abstract of judgments pursuant to Section 15-35-520."

Repeal

Section 47. Section 37-5-201 of the 1976 Code, amended by Sections 65 and 66 of Act 686 of 1976, is repealed.

Violations

Section 48. Subsections (1) and (6) of Section 37-5-202 of the 1976 Code, as amended by Section 40 of Act 686 of 1976, is further amended to read:

"(1) If a creditor has violated any provision of this title applying to receipts, statements of account and evidences of payment (Sections 37-2-302 and 37-3-302), notice to cosigners and similar parties (Sections 37-2-302 and 37-3-303), schedule of maximum loan finance charges to be filed and posted (Sections 37-2-305 and 37-3-305) certain negotiable instruments prohibited (Sections 37-2-403), assignee subject to claims and defenses [Section 37-2-404(5)], security in sales or leases (Section 37-3-403), referral sales and leases (Section 37-2-411), attorney's fees (Sections 37-2-413 and 37-3-404), limitations on default charges (Sections 37-2-414 and 37-3-405), authorizations to confess judgment (Sections 37-2-415 and 37-3-407), lender subject to claims and defenses arising from sales and leases [Section 37-3-410(4)], card issuer subject to claims and defenses [Section 37-3-411(5)], authority to make supervised loans (Section 37-3-502), restrictions on interest in land as security (Section 37-3-510), limitations on the schedule of payments on loan terms for supervised loans (Section 37-3-511), or assurance of discontinuance (Section 37-6-109), the consumer has a cause of action to recover actual damages and also a right in an action other than a class action, to recover from the person violating this title a penalty in an amount determined by the court not less than one hundred dollars nor more than one thousand dollars. With respect to violations arising from sales or loans made pursuant to a revolving charge or a revolving loan account no action pursuant to this subsection may be brought more than two years after the violation occurred. With respect to violations arising from other consumer credit transactions, no action pursuant to this subsection may be brought more than one year after the schedule or accelerated maturity of the debt.

"(6) A creditor is not liable for a penalty under subsection (1) or (3) if he notifies the consumer of a violation before the creditor receives from the consumer written notice of the violation or the consumer has brought an action under this section, and the creditor corrects the violation within sixty days after notifying the consumer. If the violation consists of a prohibited agreement, giving the consumer a corrected copy of the writing containing the violation is sufficient notification and correction. If the violation consists of an excess charge, correction shall be made by an adjustment or refund. The Administrator and any official or agency of this State having supervisory authority over a supervised financial organization shall give prompt notice to a creditor of any violation discovered pursuant to an examination or investigation of the transactions, business, records, and acts of the creditor (Sections 37-3-506, 37-6-105 and 37-6-106)."

Liability of creditor

Section 49. Subsection (2) of Section 37-5-203 of the 1976 Code is amended to read:

"(2) A creditor has no liability under this section if within sixty days after discovering an error, and prior to the institution of an action under this section or the receipt of written notice of the error, the creditor notifies the person concerned of the error and makes whatever adjustments in the appropriate account are necessary to assure that the person will not be required to pay a finance charge in excess of the amount of percentage rate actually disclosed."

Repeal

Section 50. Section 37-5-204 of the 1976 Code is repealed Administrator not to bring class actions, etc.

Section 51. Subsection (6) of Section 37-6-104 of the 1976 Code, added by Section 43 of Act 686 of 1976, is amended by striking beginning on line two "against supervised financial organizations, supervised lenders or restricted lenders". The subsection, as amended, shall read:

"(6) The Administrator shall not bring class actions, initiate criminal actions or seek injunctive relief, as provided in this title without prior approval of a majority of the Commission on Consumer Affairs, exclusive of members who are associated with any such business within the meaning of Section 8-13-20."

Exercise of powers

Section 52. Subsection (1) of Section 37-6-105 of the 1976 Code, as amended by Act 686 of 1976, is further amended to read:

"(1) With respect to supervised financial organizations, the powers of examination and investigation (Sections 37-3-506, 37-6-106 and 376-118) and administrative enforcement (Section 37-6-108) shall be exercised by the official or agency to whose supervision the organization is subject. All other powers of the Administrator under this title may be exercised by him with respect to a supervised financial organization."

Complaint to be referred

Section 53. (A) Item (b) of Section 37-6-117 of the 1976 Code is amended to read:

"(b) Subject to the provisions of Section 37-6-118, refer to the appropriate state or federal agency any complaint which is under the jurisdiction of such agency, for appropriate action."

(B) Section 37-6-117 of the 1976 Code is amended by adding:

"(h) A state agency to which a written consumer complaint is referred pursuant to paragraph (b) of this section shall have the same power and responsibility with respect to such complaint as is provided in paragraphs (a), (b) and (d) of this section and shall endeavor to effect a voluntary settlement of any such complaint arising out of a transaction with a person who is subject to the regulatory or enforcement jurisdiction of such agency.

(i) With the approval of the Commission on Consumer Affairs, bring an individual action for a consumer who might have a cause of action for damages resulting from the use of or employment by another person of an unfair or deceptive method, act or practice, as provided in Section 39-5-140, when he deems such action is necessary to protect the consumer's interest, the actual damages sought are three hundred dollars or less, and either the individual has written evidence that two attorneys licensed to practice law in the State of South Carolina have reviewed the case and have declined to represent the individual in pursuing the cause of action, or an attorney licensed to practice law in the State of South Carolina has, after reviewing the facts of the case, in writing requested that the Administrator bring an action on behalf of the consumer under this section.

The provisions of this section shall not apply if consumer-industry appeals, arbitration or mediation panels or boards, whose decisions are binding on the participating business, are available in South Carolina for the product or service concerned, provided such business complies with the decision of the panel or board."

Investigation of unfair trade practices

Section 54. Chapter 6 of Title 37 of the 1976 Code is amended by adding:

"Section 37-6-118. [Investigation of Unfair Trade Practices in Consumer Transactions.] (1) Whenever the Administrator receives a complaint against a person pertaining to any consumer transaction arising out of the production, promotion or sale of consumer goods and services, and--

(a) the person against whom the complaint is made fails to respond to a written inquiry made by the Administrator concerning the complaint within the time limitation set forth in the inquiry, or

(b) the Administrator has probable cause to believe that the person complained of has or is engaged in market practices or a course of conduct which is fraudulent, illegal, deceptive or unfair, the Administrator may, subject to Section 37-6-105, conduct an investigation of the complaint pursuant to Section 37-6-106 to determine if that person has engaged in such market practices or course of conduct. Upon receiving written notice of an action brought by an individual or the Attorney General of South Carolina pursuant to Chapter 5 of Title 39 or of an unfair trade practice action by the Federal Trade Commission to investigate the facts complained of or to seek sanctions against the person that is the subject of the complaint, the Administrator shall automatically stay any pending investigation undertaken by him. Any action by the Administrator shall be dismissed if the other action is dismissed with prejudice or results in a final judgment granting or denying the claim asserted.

(2) The Administrator shall notify the person whose conduct is investigated of his findings of fact and conclusions, separately stated The notice shall be in writing and mailed by certified or registered mail to the address of the principal office of the person investigated or to such other address as that person may designate in writing.

(3) Upon written request, filed within twenty days after the notice is mailed, the person is entitled to a hearing on any finding or conclusion of the Administrator. Such proceedings shall be deemed a contested case within the meaning of item (2) of Section 1 of Article II of Act 176 of 1977 (the State Register and Administrative Procedures Act).

(4) The findings and conclusions of the Administrator, when and as they become final, either by failure to request a hearing as provided for in subsection (3) or by exhausting administrative and judicial remedies, shall be filed in the office of the Administrator as a part of an education and information program provided for in paragraph (e) of Section 37-6-117.

(5) The provisions of this section shall not apply if consumer-industry appeals, arbitration or mediation panels or boards, whose decisions are binding on the participating business, are available in South Carolina for the product or service concerned, provided such business complies with the decision of the panel or board."

Repeal

Section 55. Section 37-6-416 of the 1976 Code is repealed.

Miscellaneous loan provisions

Section 56. Title 37 of the 1976 Code is amended by adding a new Chapter 10 as follows:

"Chapter 10

Miscellaneous Loan Provisions

Section 37-10-101. [Scope.l This chapter applies to designated loan transactions other than consumer loan transactions (Sections 37-3-104 and 37-3-105).

Section 37-10-102. [Attorney's Fees and Other Charges on Mortgage Loans for Personal, Family or Household Purposes.] Whenever the primary purpose of a loan that is secured in whole or in part by a lien on real estate is for a personal, family or household purpose--

(a) The creditor shall ascertain the preference of the borrower as to the legal counsel that shall be employed to represent the debtor in all matters of the transaction relating to the closing of the loan and the insurance agent to furnish required insurance in connection with the mortgage and shall comply with such preference and the loan application on the first page thereof shall contain such information as is necessary to ascertain these preferences of the borrower. The creditor may require that the attorney or agent so chosen be able to provide reasonable security to the creditor by way of mortgage title insurance in a company acceptable to the creditor and other insurance in a company acceptable to the creditor. If title insurance is made a condition of the loan at any point during the negotiations, it must remain a condition all the time thereafter regardless of which attorney ultimately closes the transaction. Any legal fees other than for examination and certification of the title, the preparation of all required documents and the closing of the transaction required or incurred by the creditor in connection with the transaction shall be the responsibility of the creditor regardless of which party pays for the title work, document preparation and closing.

(b) The creditor may contract and receive the following additional charges in a transaction in which the creditor authorizes a transferee of the real estate that serves as security for the transaction to assume the original debtor's obligation-- (i) Except as otherwise provided in subparagraph (iii), the additional charges authorized by Section 37-3-202;

(ii) The charge for any credit report on the debtor required by the creditor, if not paid to the creditor or a person related to the creditor;

(iii) A nonrefundable assumption fee in an amount not exceeding the lesser of two hundred fifty dollars or one per cent of the unpaid balance of the loan at the time the assumption transaction is consummated.

(c) Where the note, mortgage, deed of trust, bond for title or other instrument evidencing such loan contains a provision that the holder of the instrument may accelerate payment of or renegotiate the terms of the loan upon and transfer of the real estate securing the transaction, the creditor shall include in all disclosure statements required by the Federal Truth-in-Lending Act to be provided to the debtor the following statement, which shall be either in capital letters or underlined: 'Assumption Notice'--The debt secured hereby is subject to call in full or the terms thereof being modified in the event the real estate securing the debt is sold, conveyed or otherwise transferred.

Section 37-10-103. [Mortgage Loans of One Hundred Thousand Dollars or Less.] With respect to a loan agreement which is secured in whole or in part by a lien on real estate under which the aggregate of all sums advanced or contemplated by the parties in good faith to be advanced will not exceed one hundred thousand dollars.

(1) The debtor shall have the right to prepay the debt in full at any time without penalty;

(2) The rate of the loan finance charge shall be a fixed, nonvariable rate. This subsection shall not apply--

(a) If the borrower otherwise agrees; and either

(b) If the purpose of the loan is to enable the debtor to pay for the construction of any improvements on the real estate which provides the security for the loan;

(c) To the extent the lender is authorized to make alternative mortgage loans by statute or by regulations promulgated by any federal or state agency that has supervisory authority over the lender; or

(d) Irrespective of whether the lender has specific authority to make a particular type of alternative mortgage or is subject to any supervisory authority, to the extent that regulations to make alternative mortgage loans have been authorized for state-chartered institutions by the State Board of Financial Institutions or authorized for federally-chartered lending institutions by federal regulatory agencies.

Section 37-1-104. [Agricultural Loans Under Twenty-Five Thousand Dollars.] With respect to a loan under which the aggregate of all sums advanced or contemplated by the parties in good faith to be advanced is less than twenty-five thousand dollars and which is primarily for an agricultural purpose, the maximum loan finance charge that may be contracted for and received shall be eighteen percent per annum, calculated according to the actuarial method.

Section 37-10-105. [Penalties for Violations.] With respect to a loan transaction subject to the provisions of this chapter, any person who shall receive or contract to receive a loan finance charge or other charge or fee in violation of this chapter shall forfeit--

(a) the total amount of the loan finance charge and the costs of the action; and the unpaid balance of the loan shall be repayable without any loan finance charge;

(b) double the amount of the excess loan finance charge or other charges or fees actually received by the creditor or paid by the debtor to a third party, to be collected by a separate action or allowed as a counterclaim in any action brought to recover the unpaid balance. A creditor may not be held liable in an action brought under this section if the creditor shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid the error.

Section 37-10-106. [Maximum Rate of Interest; Legal Rate of Interest.]

(1) No greater interest than six percent per annum shall be charged, taken, agreed upon or allowed upon any contract arising in this State for the hiring, lending, or use of money or other commodity, either by way of straight interest, discount or otherwise, except upon written contracts wherein, by express agreement, any rate of interest may be charged, except as otherwise provided in this title or by law.

(2) Whenever the term legal rate of interest or lawful rate of interest is used in any contract, judgment or other document, it shall mean the rate specified in Section 34-31-20, unless the document otherwise specifically provides.

(3) No greater interest than eight percent per annum shall be charged on life insurance policy loans unless otherwise provided by law."

Repealed and Amended

Section 57. [Specific Repealer and Amendments.] (1) The following provisions of law are repealed:

(a) Sections 34-13-10 through 34-13-40 of the 1976 Code;

(b) Section 34-13-120 of the 1976 Code;

(d) Section 34-31-30 of the 1976 Code;

(e) Section 34-31-31 of the 1976 Code;

(f) Section 34-31-40 of the 1976 Code;

(g) Section 34-31-50 of the 1976 Code;

(h) Section 34-31-60 of the 1976 Code;

(i) Section 34-31-70 of the 1976 Code;

(j) Section 34 31-80 of the 1976 Code;

(k) Section 34-31-90 of the 1976 Code;

(l) Section 34-31-100 of the 1976 Code;

(m) Act 7 of 1979 and Act 6 of 1981;

(n) Act 379 of 1980;

(o) Section 29-3-60 of the 1976 Code;

(p) Sections 29-3-210 through 29-3-240 of the 1976 Code;

(q) Section 38-9-240 of the 1976 Code.

(2) The following provisions of law are amended:

(a) Section 29-3-40 of the 1976 Code is amended to delete the phrase "but not exceeding the legal rate" after the word "mortgage" in line seven. As amended, it shall read:

"Section 29-3-40. [Priority of Certain Advancements by Morgagee.] The holder of any mortgage of real property, when the mortgage contains provisions authorizing advancements thereunder for taxes, insurance premiums, public assessments and repairs, may make such advancements and, when made, they shall be secured by the mortgage and have the same rank and priority as the principal debt thereby secured and bear interest from the date of such advancements, as provided in the mortgage. Advancements made for taxes by any such mortgage holder shall be a first lien on the mortgaged real property to the extent of the taxes so paid with interest from the date of payment, regardless of the rank and priority of the mortgage under which such taxes are advanced."

(b) Section 34-1-110 of the 1976 Code, as amended by Act 59 of 1979, is further amended to read:

"Section 34-1-110. [Authority to Permit State-Chartered Banks, Savings and Loan Associations and Credit Unions to Engage in Activities Corresponding to Those Permitted Federally-Chartered Institutions and to Authorize Consumer Finance Companies to Engage in Activities Permitted any Supervised Financial Organization.] Notwithstanding any other provision of law and in addition to all of the powers granted under Chapters 1 through 31 of Title 34 and Chapter 3 of Title 37, the State Board of Financial Institutions may by regulation permit state-chartered banks and state-chartered savings and loan associations to engage in any activities that are authorized for national banks or federally-chartered savings and loan associations by federal law or regulation of the Comptroller of the Currency in the case of national banks and the Federal Home Loan Bank Board in the case of federally-chartered savings and loan associations, may by regulation permit cooperative credit unions to engage in any activities that are authorized for federally-chartered credit unions by federal law or by regulation of the National Credit Union Administration, and may by regulation, except where otherwise restricted by statute, permit consumer finance companies operating under a license to make supervised loans pursuant to Part 5 of Chapter 3, Title 37, to engage in any lending activities that may be authorized for supervised financial organizations by law or by regulation of any agency given supervisory authority over such institutions. For the purpose of this section, the term 'activities' includes the terms and conditions under which the activity may be exercised as well as the authority to make a particular type of loan or investment or otherwise to engage in an approved activity."

(c) Section 34-5-90 of the 1976 Code is amended by striking beginning on line nine 'not exceeding the legal rate'. The section as amended shall read:

"Section 34-5-90. [Conservators May Borrow to Pay Dividends or to Reopen.] The board may, for the purpose of securing funds to pay a dividend to depositors or for the purpose of reopening any bank, banking corporation or trust company operated by a conservator under the board, authorize and empower any conservator to borrow such sum of money, in the corporate name of such bank, banking corporation or trust company, as the board may order, and evidence such indebtedness by a note or notes, payable at such time as the notes may provide and bearing such interest rate or discount as may therein be provided, securing the payment of such note by a pledge of all or any of the assets of such bank, banking corporation or trust company in the hands of such conservator. Any note and the pledge of any securities, assets or other property of any such conservator made and delivered as herein provided shall be binding upon and constitute a liability of any such bank, banking institution or trust company."

(d) Section 35-1-1560 of the 1976 Code is amended to read:

"Section 35-1-1560. [Rights and Remedies are Additional.] The rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist at law or in equity, but this chapter does not create any cause of action not specified in this section or in Section 35-1-510."

(e) Subsection (1) of Section 36-9-404 of the 1976 Code, as last amended by Section 7 of Part II of Act 644 of 1978, is further amended to read:

"(1) Whenever a secured party collects in advance from the debtor a fee for filing a termination statement in connection with a transaction in which on or after the effective date of the 'Consumer Protection Code Revision Act of 1982' the secured party files a financing statement covering consumer goods, then within one month or within ten days following written demand by the debtor after there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must file with each filing officer with whom the financing statement was filed, a termination statement to the effect that he no longer claims a security interest under the financing statement, which shall be identified by file number. In other cases, whenever there is no outstanding secured obligation and no commitment to make advances, incur obligations or otherwise give value, the secured party must, on written demand by the debtor, send the debtor, for each filing officer with whom the financing statement was filed, a termination statement to the effect that he no longer claims a secured interest under the financing statement, which shall be identified by file number. A termination statement signed by a person other than the secured party of record must be accompanied by a separate written statement of assignment signed by the secured party of record complying with subsection (2) of Section 36-9-405, including payment of the required fee. If the affected secured party fails to file such a termination statement as required by this subsection, or to send such a termination statement within ten days after proper demand therefor, he shall be liable to the debtor for one hundred dollars and, in addition, for any loss caused to the debtor by such failure."

(f) Section 40-39-100 of the 1976 Code is amended to read:

"Section 40-39-100. [Charges on Loans.] Pawnbrokers may demand or receive on loans not in excess of three hundred dollars a charge at the rate of one dollar per thirty-day period for each ten dollars loaned; provided, that a minimum charge of fifty cents may be collected for loans under ten dollars."

(g) Section 2 of Act 411 of 1980 is deleted.

(h) Section 8 of Act 433 of 1980 is deleted.

Sections designated as code sections

Section 58. A. The following sections of Article 3 of Act 1241 of 1974, which were added by the provisions of Section 1 of Act 686 of 1976, are hereby designated sections of the 1976 Code as follows:

(a) Section 3.200 as Section 37-3-200;

(b) Section 3.201 as Section 37-3-201 (as amended by Section 2 of Act 433 of 1980);

(d) Section 3.203 as Section 37-3-203;

(e) Section 3.204 as Section 37-3-204;

(f) Section 3.205 as Section 37-3-205;

(g) Section 3.206 as Section 37-3-206;

(h) Section 3.207 as Section 37-3-207;

(i) Section 3.208 as Section 37-3-208;

(j) Section 3.209 as Section 37-3-209;

(k) Section 3.210 as Section 37-3-210 (as amended by Section 3 of Act 326 of 1980).

B. The following sections of Article 3, Act 1241 of 1974, which were added by the provisions of Section 2 of Act 686 of 1976, are hereby designated sections of the 1976 Code as follows:

(a) Section 3.500 as Section 37-3-500;

(b) Section 3.501 as Section 37-3-501;

(d) Section 3.503 as Section 37-3-503;

(e) Section 3.504 as Section 37-3-504;

(f) Section 3.505 as Section 37-3-505;

(g) Section 3.506 as Section 37-3-506;

(h) Section 3.507 as Section 37-3-507;

(i) Section 3.509 as Section 37-3-509;

(j) Section 3.510 as Section 37-3-510;

(k) Section 3.511 as Section 37-3-511;

(l) Section 3.512 as Section 37-3-512;

(m) Section 3.513 as Section 37-3-513;

(n) Section 3.514 as Section 37-3-514;

and also the following sections from the same act which were amended as indicated:

(o) Section 3.601 as Section 37-3-601 (as amended by Section 6 of Act 433 of 1980);

(p) Section 3.605 as Section 37-3-605 (as amended by Section 4 of Act 326 of 1980 and Section 3 of Act 433 of 1980).

C. The following sections of Part I of Article 5 of Act 1241 of 1974, which were added by the provisions of Section 39 of Act 686 of 1976, are hereby designated sections of the 1976 Code:

(a) Section 5.109 as Section 37-5-109;

(b) Section 5.110 as Section 37-5-110;

(d) Section 5.112 as Section 37-5-112.

Applicant to meet minimum standards

Section 59. Section 37-3-503 (2) is amended to read:

"(2) An applicant meets the minimum standard of financial responsibility for engaging in the business of making supervised loans (Section 37-3-502) if he has available for operation of that business in this State assets of at least twenty-five thousand dollars for each license issued."

Analysis lines

Section 60. The analysis lines preceding the code sections in this act shall not constitute a part of the sections but are only for purposes of identification. The section headings shall not constitute a part of this act but are only for purposes of identification.

Department to conduct study

Section 61. The South Carolina Department of Consumer Affairs shall conduct a study of the effects of this act and shall report its findings to the General Assembly no later than January 1, 1985.

Time effective

Section 62. This act shall take effect upon the approval by the Governor.