54-1-1      Definition of terms--Debtor--Creditor.
54-1-2      Loan of money defined.
54-1-3      Debtor's contract valid in the absence of fraud.
54-1-4      Preference of creditors by debtor.
54-1-5      Marshaling of funds--Rights of creditor.
54-1-6      "Open account" defined.
54-1-7      Open account--Interest rates.
54-1-8      Open account--Notice of interest rate increase.
54-1-9      "Securitization" defined.
54-1-10      Securitization transaction--Transferor to lose interest in transferred property.

54-1-1. Definition of terms--Debtor--Creditor.

Terms used in this chapter and chapter 54-8 are defined as follows, unless the context otherwise plainly requires:

(1)    "Creditor," is one in whose favor an obligation exists by reason of which he is, or may become, entitled to the payment of money;

(2)    "Debtor," one who, by reason of an existing obligation is, or may become liable to pay money to another, whether such liability is certain or contingent.

Source: CivC 1877, §§ 2018, 2019; CL 1887, §§ 4651, 4652; RCivC 1903, §§ 2363, 2364; RC 1919, §§ 2036, 2037; SDC 1939, § 23.0101.

54-1-2. Loan of money defined.

A loan of money is a contract by which one delivers a sum of money to another, and the latter agrees to return at a future time a sum equivalent to that which he borrowed.

Source: CivC 1877, § 1092; CL 1887, § 3715; RCivC 1903, § 1411; RC 1919, § 1034; SDC 1939, § 38.0101.

54-1-3. Debtor's contract valid in the absence of fraud.

In the absence of fraud every contract of a debtor is valid against all his creditors, existing or subsequent, who have not acquired a lien on the property affected by such contract.

Source: CivC 1877, § 2020; CL 1887, § 4653; RCivC 1903, § 2365; RC 1919, § 2038; SDC 1939, § 23.0102.

54-1-4. Preference of creditors by debtor.

A debtor may pay one creditor in preference to another, or may give to one creditor security for the payment of his demand in preference to another.

Source: CivC 1877, § 2021; CL 1887, § 4654; RCivC 1903, § 2366; RC 1919, § 2039; SDC 1939, § 23.0103.

54-1-5. Marshaling of funds--Rights of creditor.

Where a creditor is entitled to resort to each of several funds for the satisfaction of his claim, and another person has an interest in or is entitled as a creditor to resort to some but not all of them, the latter may require the former to seek satisfaction from those funds to which the latter has no such claim so far as it can be done without impairing the right of the former to complete satisfaction, and without doing injustice to third persons.

Source: CivC 1877, § 2022; CL 1887, § 4655; RCivC 1903, § 2367; RC 1919, § 2040; SDC 1939, § 23.0104.

54-1-6. "Open account" defined.

The term "open account," as used in this title, means an account, usually retail in nature, under which the creditor permits the customer to make purchases or obtain loans, from time to time, directly from the creditor or indirectly by use of a check or other device as the conditions of the account may provide. The customer has the privilege of paying the balance in full or in installments and an interest charge may be computed by the creditor from time to time on the outstanding unpaid balance and added to that balance. "Open account" does not include those accounts covered in chapter 54-11, or revolving loan accounts authorized by § 51A-12-12.

Source: SL 1982, ch 340, § 1.

54-1-7. Open account--Interest rates.

Interest rates on open accounts, as defined in § 54-1-6, are subject to the provisions regarding interest rates in chapter 54-3.

Source: SL 1982, ch 340, § 2.

54-1-8. Open account--Notice of interest rate increase.

Prior to increasing interest rates on open accounts, a creditor shall notify all customers having open accounts thirty days in advance of the increase. The notification shall clearly state the new interest rate, the effective date of the new interest rate and that the customer either may continue to pay the account in installments at the existing rate without further use of the account after the effective date of the new rate, or the customer may continue to use the account after the effective date of the rate increase with the unpaid outstanding balance on that date and all subsequent purchases or use of the account subject to the increased rate. Use of the account after the effective date of the interest rate increase is deemed to be an acceptance of the increased rate by the customer.

Source: SL 1982, ch 340, § 3.

54-1-9. "Securitization" defined.

For purposes of §§ 54-1-9 and 54-1-10, a securitization is the pooling and repackaging by a special purpose entity of assets or other credit exposures that can be sold to investors. Securitization includes transactions that create stratified credit risk positions whose performance is dependent upon an underlying pool of credit exposures, including loans and commitments.

Source: SL 2003, ch 241, § 1.

54-1-10. Securitization transaction--Transferor to lose interest in transferred property.

Notwithstanding any other provisions of law specifically including § 57A-9-623, to the extent set forth in the transaction documents relating to a securitization transaction:

(1)    Any property, assets, or rights purported to be transferred, in whole or in part, in the securitization transaction shall be deemed to no longer be the property, assets, or rights of the transferor;

(2)    A transferor in the securitization transaction, its creditors or, in any insolvency proceeding with respect to the transferor or the transferor's property, a bankruptcy trustee, receiver, debtor, debtor in possession, or similar person, to the extent the issue is governed by South Dakota law, has no rights, legal or equitable, whatsoever to reacquire, reclaim, recover, repudiate, disaffirm, redeem, or recharacterize as property of the transferor, any property, assets, or rights purported to be transferred, in whole or in part, by the transferor; and

(3)    In the event of a bankruptcy, receivership, or other insolvency proceeding with respect to the transferor or the transferor's property, to the extent the issue is governed by South Dakota law, such property, assets, and rights may not be deemed to be part of the transferor's property, assets, rights, or estate.

Source: SL 2003, ch 241, § 2.