State of South Dakota
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EIGHTY-SEVENTH SESSION
LEGISLATIVE ASSEMBLY, 2012
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914T0402
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SENATE COMMERCE AND ENERGY
ENGROSSED NO. SB 65 - 1/26/2012
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Introduced by: Senators Rampelberg, Cutler, Hundstad, Johnston, Krebs, Lederman,
Novstrup (Al), Olson (Russell), and Tieszen and Representatives Hunt,
Abdallah, Dennert, Lust, Turbiville, and Willadsen
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FOR AN ACT ENTITLED, An Act to revise the list of products offered to consumers by motor
vehicle dealers and sales finance companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 54-3A-5 be amended to read as follows:
54-3A-5. In addition to the finance charge, a creditor may contract for, and receive the
following additional charges in connection with an installment sales contract if such charges are
itemized and disclosed to the buyer:
(1) Official fees and taxes;
(2) Charges for guaranteed asset protection waivers, or credit life, accident, health, loss
of income, property, or liability insurance. However any insurance is optional, and
the consumer shall be informed, in writing, that any insurance is optional; and
(3) Charges for debt cancellation contracts and debt suspension contracts, as defined in
§ 51A-1-2
and sections 2 and 3 of this Act, if the debt cancellation contract or debt
suspension contract is a contract of a depository institution
or a licensee pursuant to
chapter 54-4 authorized to provide such coverage, and the contract is sold directly by
the authorized depository institution or licensee pursuant to chapter 54-4, or by a
retailer acting as an agent for the authorized depository institution or licensee
pursuant to chapter 54-4. However, any debt cancellation contract or debt suspension
contract is optional, and the consumer shall be informed, in writing, that any such
contract is optional.
Any such charges must shall be disclosed and explained to the consumer prior to signing any
agreement to repay a consumer credit obligation. Any such charges must shall be separately
agreed to in writing and separately signed by the consumer.
Section 2. That chapter 54-4 be amended by adding thereto a NEW SECTION to read as
follows:
For the purposes of this chapter, the term, debt cancellation contract, means a term of an
extension of credit or contractual arrangement modifying terms of an extension of credit under
which a licensee agrees to cancel all or part of a customer's obligation to repay an extension of
credit from the licensee upon the occurrence of a specified event. The contract may be separate
from or a part of other extension of credit documents. The term does not include installment
payment deferral arrangements in which the triggering event is the customer's unilateral election
to defer repayment, or the licensee's unilateral decision to allow a deferral of repayment.
Section 3. That chapter 54-4 be amended by adding thereto a NEW SECTION to read as
follows:
For the purposes of this chapter, the term, debt suspension contract, means a term of an
extension of credit or contractual arrangement modifying terms of an extension of credit under
which a licensee agrees to suspend all or part of a customer's obligation to repay an extension
of credit from the licensee upon the occurrence of a specified event. The contract may be
separate from or a part of other extension of credit documents. The term does not include
installment payment deferral arrangements in which the triggering event is the customer's
unilateral election to defer repayment, or the licensee's unilateral decision to allow a deferral of
repayment.
Section 4. That chapter 54-4 be amended by adding thereto a NEW SECTION to read as
follows:
A licensee pursuant to this chapter may enter into debt cancellation contracts and debt
suspension contracts and charge a fee for those contracts in connection with any extension of
credit that it makes, purchases, or of which it accepts assignment.
Section 5. That § 58-1-3 be amended to read as follows:
58-1-3. No provision of this title applies with respect to:
(1) Fraternal benefit societies, except as stated in chapter 58-37A;
(2) Bail bondsmen, other than corporate sureties and their agents, except as stated in
chapter 58-22;
(3) Motor vehicle service contracts which are contracts or agreements to perform or
indemnify for a specific duration the repair, replacement, or maintenance of motor
vehicles for operational or structural failure due to a defect in materials,
workmanship, or normal wear and tear, with or without additional provisions for
incidental payment of indemnity under limited circumstances, including towing,
rental, and emergency road service. Consideration for a motor vehicle service
contract shall be stated separately from the price of the motor vehicle;
(4) Service agreements or extended warranty plans for which the primary purpose is to
provide service, repair, or replacement on consumer goods or products including
appliances, merchandise, or equipment, or mechanical/electrical systems in single or
multiple-family dwellings. Incidental indemnity payments under such plans where
service, repair, or replacement is not feasible or economical does not void this
exemption;
(5) Any person, trust, or other entity proven to be under the exclusive regulatory
authority of the federal government or another state agency;
(6) Any agreement to provide liability protection entered into pursuant to chapter 1-24
is exempt from the regulatory requirements of Title 58, except to forms of insurance
coverage provided by an insurer otherwise subject to the insurance laws of this state;
(7) Any church plan, as defined in section 414(e) of the Internal Revenue Code of 1986,
as amended through December 31, 1999, and section (3)(33)(C)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S. C. § 1002(33)(C)(i)); or any church
benefits board, as described in section 414(e)(3)(A) of the Internal Revenue Code of
1986, as amended through December 31, 1999, and section (3)(33)(C)(i) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. § 1002(33)(C)(i));
(8) Any debt cancellation contract or debt suspension contract as defined by subdivisions
51A-1-2(10) and 51A-1-2(11) and sections 2 and 3 of this Act; or
(9) Any damage guarantee program for renters administered by a nonprofit corporation
that is recognized as an exempt organization under § 501(c)(3) of the Internal
Revenue Code and whose mission is to increase the availability of affordable housing
to low and moderate income tenants.