The Cooperative Baptist Fellowship of South Carolina is a member of the SC Fair Lending Alliance. They received a CBFSC partner grant of $3,000 last year to fund the work of this statewide coalition. We are advocating for a 36% interest rate cap for consumer loans (payday lending, title loans, etc.) in our state. Bill S.518 has just been introduced into the South Carolina senate to do accomplish that goal.
Currently there are no limits on the rates of interest and fees that Supervised Lenders (auto title and high-cost installment lenders) can charge in South Carolina. Supervised Lenders must simply file the highest rate they want to charge each year with the SC Department of Consumer Affairs. In 2021, the highest rate filed by a Supervised Lender was 950% – up from 600% in 2017. In addition, payday lenders generally charge 395% APR for their short-term loans. While these loans are marketed as easy access to quick cash, a triple-digit interest rate can quickly create debt trap cycle that borrowers cannot escape. When loan payments become unmanageable, borrowers may have their cars repossessed or their credit rating destroyed, making it difficult to secure housing. These high interest loans can even force an individual to face bankruptcy.
Through the federal Military Lending Act, active-duty servicemembers and their dependents are protected from high-cost loan products with a 36% rate cap. However, veterans are not included in that protected population. In addition, high-cost lenders target people on fixed incomes, people of color, and people facing poverty. Because of their dependable social security checks, senior citizens are targeted by high-cost lenders. These high-cost loan products drain money from the pockets of the most vulnerable people in South Carolina and create obstacles for families and individuals seeking to build economic stability.
We believe that ALL South Carolinians deserve access to fair credit and we are advocating for this 36% rate cap to protect our residents. We invite you to be an advocate too!
Visit this link to let your senator know what you think about S.518 and capping interest rates.