54-4-2.
Repealed by SL 1998, ch 280, § 29.
54-4-3 to 54-4-35.
Repealed by SL 1998, ch 280, § 30.
54-4-36 Definition of terms.
54-4-36.
Definition of terms.
Terms used in this chapter mean:
(1)
"Advertisement," a commercial message in any medium that aids, promotes, or assists,
directly or indirectly, the sale of products or services;
(2)
"Commission," the State Banking Commission;
(3)
"Director," the director of the Division of Banking of the Department of Labor and
Regulation;
(4)
"Division," the Division of Banking;
(5)
"Finance charge," the amount, however denominated, which is the direct or indirect cost
payable by a borrower for a loan;
(6)
"Financing institutions," any person engaged in the business of creating and holding or
purchasing or acquiring retail installment contracts;
(7)
"Installment loan," a loan made to be repaid in specified amounts over a certain number
of months;
(8)
"License," a license provided by this chapter;
(9)
"Installment loan contract" or "contract," an agreement evidencing a installment loan
transaction;
(10)
"Licensee," any person holding a license;
(11)
"Loan," any installment loan, single pay loan, or open-end loan which may be unsecured
or secured by real or personal property;
(12)
"Payday loan," any short-maturity loan on the security of a check, any assignment of an
interest in the account of a person at a depository institution, any authorization to debit
the person's deposit account, any assignment of salary or wages payable to a person. A
short-maturity loan made in anticipation of an income tax refund is not a payday loan for
purposes of this chapter;
(13)
"Regional revolving loan fund," a regional revolving loan fund with a service area of at
least five South Dakota counties, a designated staff for loan processing and servicing, a
loan portfolio of at least one million dollars, and which is governed by a board of
directors that meets at least quarterly;
(14)
"Short-term consumer loan," any loan to any individual borrower with a duration of six
months or less, including a payday loan. 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.
Source: SL 1998, ch 280, § 1; SL 2004, ch 17, § 305; SL 2004, ch 291, § 1; SL 2005, ch 257, § 5;
SL 2006, ch 245, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 162, eff. Apr. 12, 2011.
54-4-37 Entities exempt from chapter provisions.
54-4-37.
Entities exempt from chapter provisions.
The following entities are exempt from
the provisions of this chapter:
(1)
Any state bank and its subsidiary;
(2)
Any national bank and its subsidiary;
(3)
Any bank holding company and its subsidiary;
(4)
Any other federally insured financial institution, its holding company and subsidiary; and
(5)
Any South Dakota chartered trust company.
Source: SL 1998, ch 280, § 2; SL 1999, ch 239, § 1; SL 2004, ch 292, § 1.
54-4-38 Promulgation of rules.
54-4-38.
Promulgation of rules.
The commission may promulgate rules pursuant to chapter
1-26 to provide for:
(1)
Rules of practice;
(2)
Internal management of finance companies;
(3)
Retention of records;
(4)
Additional examination fees; and
(5)
Remote electronic lending.
Source: SL 1998, ch 280, § 3.
54-4-39 Compliance with Title 53.
54-4-39.
Compliance with Title 53.
An installment loan contract shall comply with all
provisions of Title 53.
Source: SL 1998, ch 280, § 4.
54-4-40 Application for license--Forms--Fee--Information required--Exemption from fee and bonding ...
54-4-40.
Application for license--Forms--Fee--Information required--Exemption from fee
and bonding requirements.
Any person who engages in the business of lending money shall apply
for a license as prescribed by this chapter. The applicant shall apply for a license under oath on forms
supplied by the division. The application shall contain the name of the applicant's business, proof
of surety bond, address of the business, the names and addresses of the partners, members, officers,
directors, or trustees, and other information the director may consider necessary. The applicant shall
pay an original license fee as set by rules of the commission promulgated pursuant to chapter 1-26
not to exceed one thousand dollars. If the application of an existing licensee is for an additional
location, the application need only include the location and identity of the location manager, plus any
changes from the existing license, or such other information the director may consider necessary. The
State of South Dakota, any political subdivision of the state, and any quasi-governmental
organization created by an executive order of the State of South Dakota and any subsidiary of such
organization; any nonprofit corporation formed pursuant to chapter 47-22; any nonprofit United
States Treasury Community Development Financial Institution, Small Business Administration
Certified Development Company, or Regional Revolving Loan Fund; or any commercial club,
chamber of commerce, or industrial development corporation formed pursuant to § 9-12-11 or 9-27-37 is subject to this chapter but exempt from initial license fees, renewal fees, and surety bond
requirements under this chapter.
Source: SL 1998, ch 280, § 5; SL 2004, ch 293, § 1; SL 2005, ch 257, § 1; SL 2005, ch 258, § 1;
SL 2006, ch 245, § 4.
54-4-41 Rejection or acceptance of application by director.
54-4-41.
Rejection or acceptance of application by director.
The director shall approve or
deny an application for a license within thirty days of receipt of any application.
Source: SL 1998, ch 280, § 6.
54-4-42 Bond to be filed with application.
54-4-42.
Bond to be filed with application.
The applicant shall submit with the application
for a license a bond in an amount not to exceed the total of ten thousand dollars for the first license
and two thousand five hundred dollars for each additional license. The bond shall be satisfactory to
the director and issued by a surety company qualified to do business as a surety in this state. The
bond shall be in favor of this state for the use of this state and any person who has a cause of action
under this chapter against the licensee. The bond shall be conditioned on:
(1)
The licensee's faithful performance under this chapter and any rules adopted pursuant to
this chapter; and
(2)
The payment of any amounts that are due to the state or another person during the
calendar year for which the bond is given.
The aggregate liability of a surety to all persons damaged by a licensee's violation of this chapter
may not exceed the amount of the bond.
Source: SL 1998, ch 280, § 7; SL 2005, ch 258, § 2; SL 2006, ch 245, § 5.
54-4-43 Investigation of facts concerning license application--Requirements for grant of license.
54-4-43.
Investigation of facts concerning license application--Requirements for grant of
license.
The director shall investigate the facts concerning the application. The director may review
and consider the relevant business records of the applicant and the competence, experience, integrity,
and financial ability of any person who is a member, partner, director, officer, or twenty-five percent
or more shareholder of the business. If the director finds that the financial responsibility, financial
condition, business experience, character, and general fitness of the applicant reasonably warrant the
belief that the business will be conducted lawfully and fairly, the director may grant a license based
on the findings.
Source: SL 1998, ch 280, § 8; SL 2005, ch 258, § 3.
54-4-44 Right to engage in business after procurement of license.
54-4-44.
Right to engage in business after procurement of license.
After procuring such
license from the Division of Banking, the licensee may engage in the business of making loans and
may contract for and receive interest charges and other fees at rates, amounts, and terms as agreed
to by the parties which may be included in the principal balance of the loan and specified in the
contract.
Source: SL 1998, ch 280, § 9.
54-4-45 Duration of license--Renewal.
54-4-45.
Duration of license--Renewal.
A license expires on July first. To renew a license,
the licensee shall file for renewal by June fifteenth. The renewal application shall include a renewal
fee not to exceed one thousand dollars, as set by rules of the commission promulgated pursuant to
chapter 1-26, proof of surety bond, and any other information as required by the director, by rule or
order. Any licensee that files for renewal after June fifteenth and before July first shall pay a late fee
in addition to the renewal fee. The late fee, not to exceed twenty-five percent of the renewal fee, shall
be established by the commission in rules promulgated pursuant to chapter 1-26. After June thirtieth
no license may be issued unless an application is filed pursuant to § 54-4-40.
Source: SL 1998, ch 280, § 10; SL 2004, ch 293, § 2; SL 2005, ch 258, § 4.
54-4-46 Transfer of license--Approval required for name change.
54-4-46.
Transfer of license--Approval required for name change.
The licensee may not
transfer or assign the license. The licensee may only transact business under a name shown on the
license. Any name change is subject to prior approval by the director.
Source: SL 1998, ch 280, § 11.
54-4-47 Location to be licensed--Change of location.
54-4-47.
Location to be licensed--Change of location.
Each licensee's business location shall
be licensed. The director shall approve or deny any change of location. The director shall amend the
license to show the new location upon granting approval.
Source: SL 1998, ch 280, § 12.
54-4-48 Cease and desist order for practice not in conformity to requirements--Appeal.
54-4-48.
Cease and desist order for practice not in conformity to requirements--Appeal.
The
director may issue a cease and desist order from any practice that does not conform to the
requirements set forth in this chapter or any commission rule, order, or condition imposed in writing,
or any federal statute, rule, or regulation pertaining to consumer credit. A cease and desist order may
be issued to any licensee or to any person engaging in the business of lending money without a
license. A licensee aggrieved by such order may appeal pursuant to chapters 1-26 and 1-26D.
Source: SL 1998, ch 280, § 13; SL 2005, ch 258, § 5; SL 2006, ch 245, § 6.
54-4-49 Suspension or revocation of license.
54-4-49.
Suspension or revocation of license.
The director may suspend or revoke a license
for good cause pursuant to chapters 1-26 and 1-26D. If the licensee is the holder of more than one
license, the director may suspend or revoke any or all of the licenses. For purposes of this section,
good cause includes any of the following:
(1)
Violation of any statute, rule, order, or written condition of the commission or any federal
statute, rule, or regulation pertaining to consumer credit;
(2)
Engaging in harassment or abuse, the making of false or misleading representations, or
engaging in unfair practices involving lending activity; or
(3)
Performing an act of commission or omission or practice that is a breach of trust or a
breach of fiduciary duty.
Source: SL 1998, ch 280, § 14; SL 2005, ch 258, § 6.
54-4-50 Injunction against licensee for violation.
54-4-50.
Injunction against licensee for violation.
An action may be brought in circuit court
by the attorney general or the division, or both, to enjoin a licensee from engaging in or continuing
a violation or from doing any act in furtherance thereof.
Source: SL 1998, ch 280, § 15; SL 2005, ch 258, § 7.
54-4-51 Court-appointed receivership.
54-4-51.
Court-appointed receivership.
In addition to any other means provided by law for
the enforcement of a restraining order or injunction, the court, in which the action is brought, may
impound, and appoint a receiver for, the property and business of the defendant, including books,
papers, documents, and records, as the court may deem reasonably necessary to prevent violations
of this chapter. The receiver, when so appointed and qualified, shall control the custody, collection,
administration, and liquidation of the property and business.
Source: SL 1998, ch 280, § 16; SL 2006, ch 245, § 7.
54-4-52 License required.
54-4-52.
License required.
No person may engage in the business of lending money without
a license. A violation of this section is a Class 1 misdemeanor.
Source: SL 1998, ch 280, § 17.
54-4-53 Deposit of funds.
54-4-53.
Deposit of funds.
Any money received by the division pursuant to this chapter shall
be deposited in the banking revolving fund.
Source: SL 1998, ch 280, § 18; SL 2006, ch 245, § 8.
54-4-54 Payment of annual tax--Exemption.
54-4-54.
Payment of annual tax--Exemption.
Each licensee, whether a corporation or
otherwise, shall pay the annual tax provided in chapter 10-43, upon the net income of the licensee,
and measured by the net income assignable to such business in South Dakota. The annual tax
provided by this section may not be less than twenty-four dollars. The State of South Dakota, any
political subdivision of the state, and any quasi-governmental organization created by an executive
order of the State of South Dakota and any subsidiary of such organization; any nonprofit United
States Treasury Community Development Financial Institution, Small Business Administration
Certified Development Company, or Regional Revolving Loan Fund; or any commercial club,
chamber of commerce, or industrial development corporation formed pursuant to § 9-12-11 or 9-27-37 is exempt from the payment of this tax.
Source: SL 1998, ch 280, § 19; SL 2005, ch 257, § 3.
54-4-55 Exemption from other taxes.
54-4-55.
Exemption from other taxes.
Except for taxes on real property and license fees and
other fees imposed by this chapter, the tax imposed in § 54-4-54 is in lieu of all other taxes and
license fees, state, county, or local, upon the business of the licensee, or upon any money, credits,
or other assets of the licensee whether tangible or intangible, and which money, credits, or other
assets are used for or in connection with the conduct of business transacted in South Dakota.
However, amounts determined to be in excess of business capital requirements are not exempt from
other taxes.
Source: SL 1998, ch 280, § 20; SL 2006, ch 245, § 9.
54-4-56 Renewal of application--Tax information--Forms.
54-4-56.
Renewal of application--Tax information--Forms.
Each licensee shall annually file
with its renewal application a report of income and financial condition for the preceding license year
or any other relevant information requested in writing by the director. These reports shall be under
oath and on forms prescribed by the division by rule or order.
Source: SL 1998, ch 280, § 21.
54-4-57 Examination of records--Costs--Information--Forms--Application of other provisions.
54-4-57.
Examination of records--Costs--Information--Forms--Application of other
provisions.
The division may annually, or as often as the director considers necessary, conduct an
examination of business records and accounts of any licensee licensed under this chapter. The
director may charge back to the licensee any cost associated with an on-site examination. The
director may waive an on-site examination and only require an annual self-examination. If a licensee
conducts a self-examination, the licensee shall provide any information requested under oath and on
forms provided by the division by order or rule. The provisions of § 51A-2-35 apply to records and
examination reports required under this chapter.
Source: SL 1998, ch 280, § 22; SL 2005, ch 258, § 8; SL 2006, ch 245, § 10.
54-4-58 Information required in contract.
54-4-58.
Information required in contract.
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 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;
(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.
Source: SL 1998, ch 280, § 23; SL 2006, ch 245, § 2.
54-4-59 Property insurance required.
54-4-59.
Property insurance required.
A creditor may require property insurance on any loan
secured by tangible property. The amount of insurance required shall be reasonable and appropriate
considering the nature of the property, the amount of the loan, the maturity of the loan, and any other
circumstances. The insurance policy shall show the creditor as the loss payee, unless waived by the
creditor.
Source: SL 1998, ch 280, § 24.
54-4-60 Purchase of insurance not condition to receive loan.
54-4-60.
Purchase of insurance not condition to receive loan.
A licensee may sell insurance
to anyone with whom the licensee has a lending relationship. However, the licensee may not require
the debtor to purchase the insurance from the licensee or any affiliate as a condition of the loan. The
licensee may not require a borrower to purchase credit life insurance or any other life or health
insurance as a condition of receiving the loan or as additional security.
Source: SL 1998, ch 280, § 25.
54-4-61 Copy provided to debtor.
54-4-61.
Copy provided to debtor.
The debtor may request a copy of any transaction
pertaining to the debtor's installment loan contract. The licensee shall provide such copies upon
request.
Source: SL 1998, ch 280, § 26.
54-4-62 Satisfaction of loan--Release of assignments.
54-4-62.
Satisfaction of loan--Release of assignments.
When the payment of a loan is
satisfied, the licensee shall release any liens against any property used as security, cancel any note,
and release all assignments associated with the contract. The licensee shall send the note stamped
paid in full and release any liens or assignments to the debtor within sixty days of receiving payment
in full.
Source: SL 1998, ch 280, § 27.
54-4-63 Advertising.
54-4-63.
Advertising.
Any licensee may advertise in any medium. No licensee may advertise
any statement or representation, including rates, terms, or conditions for making or negotiating loans
that is false, misleading, or deceptive, or that refers to the supervision of business by the state.
Source: SL 1998, ch 280, § 28.
54-4-64 Application of chapter.
54-4-64.
Application of chapter.
The provisions of this chapter do not apply to any person
selling goods or services and providing financing for such goods or services.
Source: SL 1998, ch 280, § 35; SL 2006, ch 245, § 11.
54-4-65 Limitation on renewal, rollover, or flip of short-term consumer loan--Fee.
54-4-65.
Limitation on renewal, rollover, or flip of short-term consumer loan--Fee.
No
licensee may renew, rollover, or flip a short- term consumer loan more than four times. No renewal,
rollover, or flip is valid unless, at the time of the renewal, rollover, or flip, the debtor pays the
outstanding fee and reduces the principal amount of the loan as provided in this section. Upon the
first renewal, rollover, or flip and each subsequent renewal, rollover, or flip, the debtor shall reduce
the principal amount of the loan by not less than ten percent of the original amount of the loan.
Source: SL 2002, ch 223, § 1; SL 2004, ch 291, § 2; SL 2006, ch 245, § 3.
54-4-66 Maximum amount of payday loan--Violation as misdemeanor.
54-4-66.
Maximum amount of payday loan--Violation as misdemeanor.
The maximum
principal amount of any payday loan, or the total outstanding principal balances of all payday loans
made by a licensee to a single borrower, may not exceed five hundred dollars at any time. A violation
of this section is a Class 1 misdemeanor.
Source: SL 2002, ch 223, § 2; SL 2004, ch 291, § 3; SL 2007, ch 278, § 1.
54-4-67 Production of records located outside state--Alternate procedures--Designated record inspe...
54-4-67.
Production of records located outside state--Alternate procedures--Designated
record inspectors.
If the division requires the production of records that are located outside this state,
the party shall either make them available to the division at a convenient location within this state
or pay the reasonable and necessary expenses for the division to examine them at the place where
they are maintained. The director may designate representatives, including officials of the state in
which the records are located, to inspect them on the director's behalf.
Source: SL 2005, ch 258, § 9.
54-4-68 Appointment of resident agent for service of process--Notice.
54-4-68.
Appointment of resident agent for service of process--Notice.
A person licensed
pursuant to chapter 54-4 shall appoint a resident agent for service of process and provide notice of
such appointment to the director.
Source: SL 2005, ch 258, § 10.
54-4-69 Consent to be sued--Form.
54-4-69.
Consent to be sued--Form.
A person licensed pursuant to chapter 54-4 shall consent
to be sued in the circuit courts of the state for purposes of the director enforcing any provision of
chapter 54-4 and any rules promulgated pursuant to chapter 54-4. The consent to suit shall be
demonstrated by the execution and submission of a consent to suit form prepared by the director,
with proof of authority to consent and execute the form.
Source: SL 2005, ch 258, § 11.
54-4-70 Title loans to be evidenced by written agreement--Possession of certification of title--Ap...
54-4-70.
Title loans to be evidenced by written agreement--Possession of certification of title--Application of statutes on secured transactions.
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.
Source: SL 2006, ch 245, § 12.
54-4-71 Term of title loan--Renewal--Payment amounts--Deferred principal amount.
54-4-71.
Term of title loan--Renewal--Payment amounts--Deferred principal amount.
Any
title loan shall be for an initial term of no more than one month but may be renewed for additional
one-month periods. No title loan may be renewed more than four times except as provided in this
section. Upon the fifth renewal of a title loan, and through the eighth renewal, the debtor shall make
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. After the eighth renewal the title loan is due in full and no further finance charges or
fees may accrue or be earned.
Source: SL 2006, ch 245, § 13.
54-4-72 Default in repayment of title loan--Remedy--Exception--Sale of reposed vehicle--Refund of ...
54-4-72.
Default in repayment of title loan--Remedy--Exception--Sale of reposed vehicle--Refund of surplus less expenses.
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.
Source: SL 2006, ch 245, § 14.
54-4-73 Debt cancellation contract defined.
54-4-73.
Debt cancellation contract defined.
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.
Source: SL 2012, ch 235, § 2.
54-4-74 Debt suspension contract defined.
54-4-74.
Debt suspension contract defined.
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.
Source: SL 2012, ch 235, § 3.
54-4-75 Debt cancellation contracts and debt suspension contracts permitted.
54-4-75.
Debt cancellation contracts and debt suspension contracts permitted.
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.
Source: SL 2012, ch 235, § 4.
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