Creditors in SC will want to keep an eye on three bills currently in the SC legislature:

H.3109
H.3125
S.17

Our SCBA legislative liaison has said that there will be a high cost/predatory lending bill passed in this session. SCBA has agreed to support a version that mirrors the NC law passed a couple of years ago.

In reading the legislation, I find that there is a threshold for total points and fees: 5% of the total loan amount for loans $20,000 or more; or the lesser of 8% of loan amount or $1000 if the loan amount is less than $20,000. Is there also a threshold for APY like the federal regulations have and if so, is it the same?

I haven't read these specific bills, but usually, yes, there is an APR threshold but it's often lower than the Sec. 32 threshold. It's usually like 7 percent over the T bill of comparable maturity for firsts and 8 percent over for 2nds, or around there. There are some that are more aggressive - 5 percent over, etc. - but those tend to be more rare, thank goodness. We'll have to see what the final bill looks like.

I think I read the bills awhile back and can't put my hands on them right now. But, I think that there is an APR threshold but that it is the same as HOEPA.

Thank you Jim.

Lrabon, I went back and HB.3125 and S.17 do have the same APR thresholds as HOEPA.

Are the links in the beginning of this thread still current?
Thanks

Here's a link to the final version that was signed by Governor Sanford on June 3.

Thanks MB.

SCBA is hosting seminars in August: 19th - Columbia; 20th - Myrtle Beach; 21st - North Charleston; and 28th - Greenville. You can sign up on the SCBA web site.

I want to make sure that we are on the same page here. The bill you guys are referring to, would it ahappen to be SB 438 passed on June 5, 2003? I wanted to confirm, because there's been a couple of other bills mentioned on this thread that I am not familiar with. My company recently received a letter from the state concerning SB 438 as we are supervised lender. Thanks!

Yup, that's the one. Nasty little bugger, ain't it??

Yes, S 438 is the bill that was passed and signed into law. Compliance is mandatory on January 1, 2004. I think some are half expecting the OCC to do the same thing in SC that they did in Georgia, but until that happens, there is still a law to be followed.

Anyone got their procedures in place? I'm working on ours right now. Tricky little piece of legislation.

Does anyone know where to find the fee disclosures? The Act says they will be provided by the Department of Consumer Affairs but I have not found them on their website. I've called but have yet to receive a response.

I am working on training material. I have created a quick reference guide for the loan officers that includes both Reg Z & the SC predatory law. If you want to see it, please PM me. I would appreciate any feed back on it. I have a question regarding the "net tangible benefit" definition. Must all of the examples given in the statute be present for the new loan to qualify, or just any one of them? Thanks!

I'm reading the definition to mean one of the examples. Notice the language, 'Flipping a loan means making a consumer home loan that refinances within 42 months an existing consumer home loan of the borrower when the new loan does not have "a" reasonable, tangible net benefit...'

Then is section 8(a) goes on to say '....occurs when "including, but not limited to", the following...'

My read is a rebuttable presumption of reasonable tangible net benefit includes but is not limited to one of those examples.

I would like to see your material but cannot PM from this site. If you don't mind, here is my address for you to send it.

dgoode@charteronebank.com

Does the Dept. of Consumer Affairs have a list of "approved credit counselors" for high-cost loans? Also, what about the disclosures they promised??

I have another question. I have heard that a lot of banks are adopting the policy of not making high-cost loans. Certainly that alleviates a great deal of the compliance burden, but what do you do when a loan is determined to be high-cost? Do you turn the loan down? If so, what do you put on your Adverse Action notice??