South Carolina Code of Regulations Chapter 15 - STATE BOARD OF FINANCIAL INSTITUTIONS CONSUMER FINANCE DIVISION
The South Carolina Code of Regulations, Chapter 15 – State Board of Financial Institutions, Consumer Finance Division pertains to the regulations governing the Consumer Finance Division under the South Carolina State Board of Financial Institutions (SBFI). This chapter establishes the rules and policies for consumer finance businesses, including lenders, brokers, and other financial service providers within the state. Its purpose is to protect consumers, ensure fair practices, and regulate the activities of financial institutions offering consumer loans.
Key Areas Covered
General Provisions
This section outlines the foundational objectives of the Consumer Finance Division, including the regulation of licensed consumer finance businesses in South Carolina.
It sets the definitions and guidelines for terms used within the chapter, such as "consumer loans," "lender," and "broker."
Licensing and Registration
Establishes the requirements for businesses to obtain a license to operate as consumer finance lenders or brokers in South Carolina.
Discusses the application process, including necessary documentation, fees, and other prerequisites for obtaining or renewing a license.
Covers the regulatory framework for background checks and eligibility criteria for applicants.
Regulation of Consumer Loans
Provides rules for the terms and conditions of consumer loans offered by licensed financial institutions.
Outlines interest rate limits, loan term requirements, and disclosure obligations to ensure that borrowers are informed about the total cost of the loan.
Discusses the legal limits on certain types of loans, including payday loans, installment loans, and other high-interest consumer credit products.
Consumer Protection and Fair Practices
Sets standards to ensure that financial institutions offering consumer loans follow fair and ethical practices when dealing with borrowers.
Establishes rules for clear disclosure of fees, interest rates, and loan terms in all consumer finance transactions.
Includes provisions for dispute resolution, addressing consumer complaints, and enforcing fair lending practices.
Supervision and Enforcement
Discusses the powers of the Consumer Finance Division to monitor the activities of licensed lenders and brokers.
Covers the inspection process for businesses and the power of the Division to investigate complaints and violations of the regulations.
Includes penalties for violations of the regulations, such as fines, suspension, or revocation of licenses, depending on the severity of the offense.
Records and Reporting Requirements
Establishes the need for financial institutions to maintain detailed records of all consumer finance transactions.
Requires lenders to submit periodic reports to the Consumer Finance Division, including financial statements, loan activity reports, and compliance documentation.
Sets forth the retention periods for records and how they should be made available for inspection by the Division.
Advertising and Marketing Regulations
Sets guidelines for how financial institutions can advertise their products, including truth in advertising standards.
Requires clear and accurate information to be provided in advertisements, ensuring that consumers are not misled by deceptive or unfair marketing practices.
Prohibits false or misleading statements in advertising related to loan products, rates, or terms.
Exemptions and Special Rules
Describes situations in which certain types of consumer finance businesses may be exempt from some regulations.
Provides exceptions for certain financial institutions, such as those regulated by federal agencies or institutions that do not primarily focus on consumer finance.
Consumer Finance Loan Servicing
Sets standards for the servicing of loans after they have been issued, including the handling of payments, collection practices, and account management.
Outlines rules for loan modification, forbearance, and debt collection to ensure that lenders act fairly and in compliance with state laws.
Appeals and Dispute Resolution
Provides procedures for appealing decisions made by the Consumer Finance Division, including license denials or penalties.
Establishes an administrative process for resolving disputes between consumers and financial institutions.
Ensures that complaints are addressed efficiently, and disputes are resolved fairly in accordance with state law.
Purpose of Chapter 15
The purpose of Chapter 15 is to:
Ensure that consumer finance businesses operate in a transparent, fair, and ethically sound manner.
Protect consumers from predatory lending practices and ensure they are well-informed about their financial obligations.
Regulate lenders and brokers to ensure that the consumer finance industry in South Carolina adheres to established standards and operates within legal boundaries.
This chapter plays a key role in creating a balance between allowing businesses to offer necessary financial products and services while ensuring consumer rights are protected and lending practices remain fair.
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