South Carolina Revises Consumer Protection Codes
The state of South Carolina General Assembly 121st Session, 2015-2016, enacted provisions regarding its Consumer Protection Code. These provisions cover a wide array of changes and are effective immediately. Selected changes can be found below, see bottom for state link.
SECTION 1. Section 37-1-201(1) of the 1976 Code
This provision amends the definition of a Consumer Credit Transaction that is made within the state. A consumer Credit Transaction becomes such when any documentation that is signed and received by the creditor is within state lines or if the creditor procures a sale by means of advertising within the state. The creditor must also be a resident of the state and may induce a sale by advertising with the state. Advertising may include but is not limited to brochures, radio announcements, print, face to face solicitation, and electronic media.
SECTION 3. Section 37-1-302 of the 1976 Code
Title I of the Federal Consumer Credit Protection Act will be referred to as the Federal Truth-in-Lending Act.
SECTION 5. Section 37-2-305
Changes to this section focus on what a creditor can charge and what he or she must file with the Department of Consumer Affairs concerning their fee schedule. Any creditor that charges in excess of 18% per annum must file a rate schedule with the Department of Consumer Affairs. Creditors will then have to file a rate schedule with the Department of Consumer Affairs, and subsequently must post a maximum rate schedule in a prominent area within each place of business. The aforementioned schedule that will have been filed must include a list of the credit service charges for unsecured, secured, and credit sales secured by real estate. The list is outlined in Section 37-2-109 and is determined by the Federal Truth-in Lending Act.
If a creditor is engaged in selling variable rate credit products, the schedule being filed must include the term “Credit Service Charge” and be in fourteen point print. The term “Annual Percentage Rate” must also be included and in a lager print that other terms on the schedule.
The following terms must also appear on the 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.’
The creditor must file at least one maximum rate schedule each fiscal year before January 31st. The rate for filing will be forty dollars for each year, with an additional forty dollar charge for each location.
An expanded copy of South Carolina General Assembly 121st Session, 2015-2016 can be found at: http://www.scstatehouse.gov/sess121_2015-2016/bills/5040.htm
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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