1283A 95th Legislative Session 991
AMENDMENT 1283A FOR THE INTRODUCED BILL
Introduced by: Representative Kevin Jensen
This bill has been extensively amended (hoghoused) and may no longer be consistent with the original intention of the sponsor.
An Act to
revise
the liability of a guarantorrequire
notice of a cross default clause.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That a NEW SECTION be added:
56-1-29. Cross-default clause—Notice.
If a loan agreement contains a cross-default clause, the lender shall, at the time of signing, provide the borrower with a separate notice that:
(1) Reprints the cross-default clause in its entirety, in at least 10-point bold type;
(2) Contains a plain-language summary of the rights and duties created by the clause; and
(3) Provides for a signature line wherein the borrower acknowledges that the borrower has been made aware of the provision by the lender and that the borrower comprehends and knowingly accepts the potential consequences of the clause.
A cross-default clause that is not supported by the notice requirements of this section is void and unenforceable.
Catchlines are not law. (§ 2-16-13.1) Underscores indicate new language.
Overstrikes
indicate deleted language.