81
st Legislative Session _ 2006
Committee: House Commerce
Thursday, February 02, 2006
P - Present
E - Excused
A - Absent
Roll Call
P Boomgarden
P Bradford
P Elliott
P Faehn
P Hunt
P Krebs
P Kroger
P Pederson (Gordon)
P Schafer
P Street
P Willadsen
P Rounds, Vice-Chair
P Sebert, Chair
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Chair Sebert.
MOTION:
TO APPROVE THE MINUTES OF JANUARY 31, 2006
Moved by: Hunt
Second by: Willadsen
Action: Prevailed by voice vote.
HB 1184: provide that health care providers and institutions need not participate in
certain health care services.
Previous testimony was heard on HB 1184 at the January 31, 2006, House Commerce committee
meeting.
Presented by: Representative Don Van Etten
MOTION:
DO PASS HB 1184
Moved by: Willadsen
Second by: Hunt
Action: Prevailed by roll call vote.(10-2-1-0)
Voting Yes: Boomgarden, Bradford, Faehn, Hunt, Krebs, Kroger, Pederson (Gordon), Schafer,
Willadsen, Sebert
Voting No: Elliott, Street
Excused: Rounds
HB 1224: revise certain provisions regarding the prior approval of premium rates for
certain health benefit plans.
Presented by: Merle Scheiber, Division of Insurance
Proponents: Randy Moses, Division of Insurance
MOTION:
DO PASS HB 1224
Moved by: Hunt
Second by: Willadsen
Action: Prevailed by roll call vote.(11-1-1-0)
Voting Yes: Boomgarden, Bradford, Faehn, Hunt, Krebs, Kroger, Pederson (Gordon), Schafer,
Street, Willadsen, Sebert
Voting No: Elliott
Excused: Rounds
HB 1209: revise certain provisions regarding payday loans.
Presented by: Representative Joni Cutler (handout #1)
Proponents: Dave Gerdes, Consumer Lending Alliance, Inc.
Senator Tom Dempster
Harry Christianson, North American Title Loans
Sam Wilson, AARP
Rexford Hagg, Short Term Lending Assn.
Opponents: Brett Koenecke, Community Financial Services Assn. Of America
John Brown, SD Consumer Finance Assn.
Michael Demersseman, Consumer Finance Alliance
Roger Novotny, Division of Banking, answered questions from the committee.
MOTION:
AMEND HB 1209
1209je
On page
3 of the printed bill,
delete lines
17 to 21
, inclusive.
Moved by: Faehn
Second by: Boomgarden
Action: Prevailed by voice vote.
MOTION:
AMEND HB 1209
1209jc
On page
2,
line 21 of the printed bill,
delete "
and
"
.
On page
2
,
line 23,
after "
loan
"
insert "
. A title loan is not a short-term consumer loan for
purposes of this chapter;
(15) "Title lender," a regulated lender authorized pursuant to this chapter to make title loans;
and
(16) "Title loan," a loan for a debtor that is secured by a nonpurchase money security interest
in a motor vehicle and that is scheduled to be repaid in a single installment
".
On page
7
,
after line 2, insert:
"
Section 13. That chapter
54-4
be amended by adding thereto a NEW SECTION to read as
follows:
A title loan shall be evidenced by a written agreement in which a title lender agrees to make a
title loan to a debtor and the debtor agrees to give the title lender a security interest in a motor
vehicle owned by the debtor. The debtor shall give the title lender possession of the certificate of title
to such motor vehicle. Except as otherwise provided in this chapter, the provisions of chapter 57A-9
apply to title loans and to persons engaged in the business of making title loans.
Section 14. That chapter
54-4
be amended by adding thereto a NEW SECTION to read as
follows:
Any title loan shall be for an initial term of no more than one month but may be renewed for
additional one-month periods. Notwithstanding any other law to the contrary, before the sixth
renewal of a title loan, and at each successive renewal thereafter, the debtor shall make a payment
of at least ten percent of the original principal amount of the title loan, in addition to any finance
charges that are due. If at any renewal requiring a principal reduction, the debtor has not made
previous principal reductions adequate to satisfy the current required principal reduction, and the
debtor does not pay at least ten percent of the original loan amount, the title lender may either declare
the debtor in default or renew the title loan and defer the required principal payment for an additional
period. However, no further finance charges may accrue or be earned against the principal amount
so deferred. For purposes of this section, a renewal is any extension or continuation of a title loan
for an additional period without any change to the title loan or its terms other than a reduction in
principal.
Section 15. That chapter
54-4
be amended by adding thereto a NEW SECTION to read as
follows:
If a debtor defaults in the repayment of a title loan, the title lender's sole remedy is to seek
possession and sale of the motor vehicle securing the loan, and the title lender may not pursue the
debtor personally in any action or proceeding for repayment of the loan or for any deficiency after
the sale. The title lender shall return to the debtor any surplus obtained after the sale that is in excess
of the amount owed on the loan after any reasonable expenses of repossession, storage, and sale,
including court costs and attorney's fees have been deducted. The remedy limitation provided in this
section does not apply in the following circumstances:
(1) If a debtor obtains a title loan from a title lender under false pretenses by not disclosing
the existence of a valid prior lien or security interest affecting the motor vehicle; or
(2) If the debtor intentionally conceals, impairs, or destroys the collateral.".
Moved by: Elliott
Second by: Street
Action: Failed by voice vote.
MOTION:
DO PASS HB 1209 AS AMENDED
Moved by: Hunt
Second by: Faehn
Action: Was not acted on.
MOTION:
SUBSTITUTE MOTION AMEND HB 1209
1209jd
On page
4,
line 4 of the printed bill,
delete "
twenty
"
and insert "
ten
".
Moved by: Boomgarden
Second by: Pederson (Gordon)
Action: Failed by voice vote.
MOTION:
DO PASS HB 1209 AS AMENDED
Moved by: Hunt
Second by: Faehn
Action: Prevailed by roll call vote.(13-0-0-0)
Voting Yes: Boomgarden, Bradford, Elliott, Faehn, Hunt, Krebs, Kroger, Pederson (Gordon),
Schafer, Street, Willadsen, Rounds, Sebert
HB 1179: regulate certain consumer small loans and payday loans.
Presented by: Representative Mary Glenski (handout #2)
Opponents: Neil Fulton, Governor's Office
Brett Koenecke, Community Financial Services Assn. Of America
Rexford Hagg, Short Term Lending Assn.
Curt Everson, SD Bankers Association
MOTION:
AMEND HB 1179
1179ta
On page
2,
line 9 of the printed bill,
overstrike "
and
"
.
On page
2
,
line 14,
overstrike "
.
"
and insert "
;
".
On page
2
,
line 18,
after "
;
"
insert "
and
".
On page
2
,
after line 24, insert:
"
Section 2. That
§
54-4-58
be amended to read as follows:
54-4-58.
The licensee shall disclose in any loan contract the following:
(1)
The amount and date of the loan;
(2)
The amount of the down payment, if any;
(3)
The dates any payments are due and the amount of payments;
(4)
A list of any property used to secure the loan;
(5)
Any liens or title filings required;
(6)
The method used to compute the charges;
(7)
An explanation of
the charges
any fee or charge, including the cost of the loan as an
annual percentage rate (APR)
;
(8)
Any
fee or
charge that may be applied for delinquency;
(9)
The conditions for an extension of payment or maturity of the loan;
and
(10)
Refinancing requirements
, including any fee or charge; and
(11) The address and telephone number of the Division of Banking and that any improprieties
in making the loan or in loan practices may be referred to the division.
The licensee shall provide a copy of the loan contract to the debtor
. A violation of this section
is a Class 2 misdemeanor.
".
On page
4
,
delete line
24
.
On page
5
,
delete lines
1 to 3
, inclusive.
On page
5
,
line 4,
delete everything before "
Upon
"
.
On page
5
,
line 4,
delete "
the loan
"
and insert "a consumer small loan or a payday loan".
Moved by: Street
Second by: Elliott
Action: Prevailed by roll call vote.(8-5-0-0)
Voting Yes: Boomgarden, Bradford, Elliott, Hunt, Krebs, Kroger, Street, Willadsen
Voting No: Faehn, Pederson (Gordon), Schafer, Rounds, Sebert
MOTION:
DO PASS HB 1179 AS AMENDED
Moved by: Bradford
Second by: Elliott
Action: Was not acted on.
MOTION:
SUBSTITUTE MOTION DEFER HB 1179 TO THE 36TH LEGISLATIVE DAY
Moved by: Hunt
Second by: Rounds
Action: Prevailed by roll call vote.(9-4-0-0)
Voting Yes: Boomgarden, Faehn, Hunt, Krebs, Pederson (Gordon), Schafer, Willadsen, Rounds,
Sebert
Voting No: Bradford, Elliott, Kroger, Street
Chair Sebert announced that the February 7, 2006, House Commerce committee meeting will start
at 7:30.
MOTION:
ADJOURN
Moved by: Rounds
Second by: Pederson (Gordon)
Action: Prevailed by voice vote.
Cindy Tryon
____________________________
Committee Secretary
Lou Sebert, Chair
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