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)    "Business of lending money," includes the originating, selling, servicing, acquiring, or purchasing of any loan involving a borrower who is a person other than a family member, or the servicing, acquiring, or purchasing of a retail installment contract a party to which is a person other than a family member. The term does not include any seller-financed transaction for the sale of assets to a purchaser or any seller-financed transaction for the sale of real estate through a contract for deed so long as the interest rate for the transaction does not exceed the rate permitted under § 54-4-44;

(3)    "Commission," the State Banking Commission;

(4)    "Director," the director of the Division of Banking of the Department of Labor and Regulation;

(5)    "Division," the Division of Banking;

(6)    "Duration," the time a loan exists before it is paid off, renewed, rolled over, or flipped;

(7)    "Family member," includes an immediate family member as the term is defined in § 54-14-12 that includes any descendant of a person's grandparents and any descendant of a person's spouse's grandparents;

(8)    "Finance charge," the amount, however denominated, that is the direct or indirect cost payable by a borrower for a loan;

(9)    "Installment loan," a loan made to be repaid in specified amounts over a certain number of months;

(10)    "License," a license provided by this chapter;

(11)    "Installment loan contract" or "contract," an agreement evidencing an installment loan transaction;

(12)    "Licensee," any person holding a license;

(13)    "Loan," any installment loan, single pay loan, or open-end loan which may be unsecured or secured by real or personal property. The term does not include an installment sales contract as defined under subdivision 54-3A-1(6);

(14)    "Nationwide mortgage licensing system and registry," a licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the licensing and registration of licensed mortgage loan originators and other regulated entities;

(15)    "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;

(16)    "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 that is governed by a board of directors that meets at least quarterly;

(17)    "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;

(18)    "Title lender," a regulated lender authorized pursuant to this chapter to make title loans;

(19)    "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; SL 2015, ch 242, § 1; SL 2017, ch 205, § 1; SL 2018, ch 271, § 1.

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.

54-4-37.1. Exemption for originating, selling, servicing, or acquiring five or fewer loans in twelve-month period where total of outstanding loans under certain amount--Annual report.

Any person who, on, before, or after July 1, 2017, originates, sells, services, or acquires five or fewer loans in a twelve-month period is exempt from this chapter, except for the provisions of chapter 10-43 as referenced in § 54-4-54, as long as the total amount of the loans outstanding does not exceed four million dollars. The exemption under this section applies jointly to every entity in which a person has an equity interest, whether the loan or loans are made by that person or through an entity in which the person holds an equity interest.

Any person exempted by the provisions of this section shall report to the division annually, no later than December thirty-first of 2017, and every subsequent year for any year in which loans are originated, sold, serviced, or acquired. The annual report shall contain the name and address of the person who originated, sold, serviced, or acquired loans, the number of loans originated, sold, serviced, or acquired in the preceding calendar year, and the total balance of all loans originated, sold, serviced, or acquired.

Source: SL 2017, ch 207, § 3.

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.

An installment loan contract shall comply with all provisions of Title 53.

Source: SL 1998, ch 280, § 4.

54-4-40. Application for license--Licensure through nationwide mortgage licensing system--Public records--Exemptions .

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. Any person may be licensed and maintain a unique identifier through the nationwide mortgage licensing system and registry.

The proof of surety bond and the names and addresses of the business, members, officers, and trustees as contained in the application under this section are public records for purposes of chapter 1-27.

The state, any political subdivision of the state, and any quasi-governmental organization created by state law or an executive order of the state and any subsidiary of that organization is exempt from the requirements of this chapter. Any nonprofit corporation formed pursuant to the provisions of 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 the provisions of § 9-12-11 or 9-27-37 is subject to this chapter but exempt from initial license fees, renewal fees, and surety bond requirements pursuant to the provisions of this chapter.

Source: SL 1998, ch 280, § 5; SL 2004, ch 293, § 1, eff. Feb. 25, 2004; SL 2005, ch 257, § 1; SL 2005, ch 258, § 1; SL 2006, ch 245, § 4; SL 2015, ch 242, § 2; SL 2019, ch 208, § 1.

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.

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.

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. Engaging in business after procurement of license--Maximum finance charge--Violation as misdemeanor--Loan void.

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. However, no licensee may contract for or receive finance charges pursuant to a loan in excess of an annual rate of thirty-six percent, including all charges for any ancillary product or service and any other charge or fee incident to the extension of credit. A violation of this section is a Class 1 misdemeanor. Any loan made in violation of this section is void and uncollectible as to any principal, fee, interest, or charge.

Source: SL 1998, ch 280, § 9; SL 2017, ch 221 (Initiated Measure 21), § 2, eff. Nov. 16, 2016; SL 2017, ch 205, § 2.

54-4-44.1. Device, subterfuge, or pretense to evade maximum finance charge prohibited--Penalties.

No person may engage in any device, subterfuge, or pretense to evade the requirements of § 54-4-44, including, but not limited to, making loans disguised as a personal property sale and leaseback transaction; disguising loan proceeds as a cash rebate for the pretextual installment sale of goods or services; or making, offering, assisting, or arranging a debtor to obtain a loan with a greater rate of interest, consideration, or charge than is permitted by this chapter through any method including mail, telephone, internet, or any electronic means regardless of whether the person has a physical location in the state. Notwithstanding any other provision of this chapter, a violation of this section is subject to the penalties in § 54-4-44.

Source: SL 2017, ch 221 (Initiated Measure 21), § 3, eff. Nov. 16, 2016.

54-4-44.2. Motor vehicle purchase loan--Fees incident to extension of credit.

For purposes of § 54-4-44, fees contracted for or received that are "incident to the extension of credit" in connection with a loan for the purchase of a motor vehicle do not include fees for optional maintenance agreements and extended service contracts, official fees and taxes, sales tax, title fees, lien registration fees, and dealer documentary fees.

Source: SL 2017, ch 205, § 3.

54-4-44.3. Consumer default--Fees incident to extension of credit.

For the purposes of § 54-4-44 for all loans, late fees, return check fees, and attorney's fees incurred upon consumer default are not fees "incident to the extension of credit."

Source: SL 2017, ch 205, § 4.

54-4-44.4. Business-to-business lending exempt.

The provisions of § 54-4-44 that place limitations on licensees that are engaged in the business of making loans do not apply to a licensee engaged in business-to-business lending. For purposes of this section, the term, business-to-business lending, means any lending to or in furtherance of a business, commercial, or agricultural venture that is not for personal, family, or household use and is not secured by a nonpurchase money security interest in a motor vehicle. Any business-to-business lending subject to the provisions of this section shall be in an amount not less than five thousand dollars and only to a borrower with a federal employer identification number.

Source: SL 2017, ch 206, § 1; SL 2018, ch 272, § 1.

54-4-45. Duration of license--Renewal.

A license expires on December thirty-first. To renew a license, the licensee shall file for renewal by December first. 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 December first and before January first of the next calendar year shall pay a late fee in addition to the renewal fee. The late fee shall equal twenty-five percent of the renewal fee. After December thirty-first, no license may be issued unless an application is filed pursuant to § 54-4-40.

Any money lending license issued pursuant to chapter 54-4 that is set to expire on July 1, 2015, is extended until December 31, 2015.

Source: SL 1998, ch 280, § 10; SL 2004, ch 293, § 2, eff. Feb. 25, 2004; SL 2005, ch 258, § 4; SL 2015, ch 242, § 3.

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.

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.

54-4-47.1. Remote work--Requirements.

An employee of a licensee may work in a remote location other than the business location identified pursuant to § 54-4-40 or 54-4-47, if the licensee:

(1)    Ensures in-person interactions with consumers are not conducted at the remote location and the remote location is not represented to consumers as a business location;

(2)    Maintains secure virtual private networks and other appropriate safeguards for licensee and consumer data, information, and records;

(3)    Employs appropriate risk-based monitoring and oversight processes of work performed from a remote location and maintains records of the processes;

(4)    Ensures consumer information and records are not maintained at the remote location;

(5)    Ensures consumer and licensee information and records remain accessible and available for regulatory oversight and examination; and

(6)    Provides appropriate employee training to keep all conversations about and with consumers conducted from the remote location confidential, as if conducted from the business location, and to ensure remote employees work in an environment that maintains confidentiality.

Source: SL 2022, ch 179, § 1.

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. Conditions, denial, nonrenewal, suspension, or revocation of license.

The director may condition, deny, decline to renew, suspend for a period not to exceed six months, 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 condition, deny, decline to renew, suspend for a period not to exceed six months, 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;

(3)    Performing an act of commission or omission or practice that is a breach of trust or a breach of fiduciary duty;

(4)    Refusing to permit the director to make any examination authorized by this chapter or rule promulgated pursuant to this chapter, or any federal statute, rule, or regulation pertaining to money lending;

(5)    The licensee or any partner, officer, director, manager, or employee of the licensee has been convicted of a felony or a misdemeanor involving fraud, dishonesty, or breach of trust;

(6)    The licensee or any partner, officer, director, manager, or employee of the licensee has had a license substantially equivalent to a license under this chapter, and issued by another state or jurisdiction, denied, revoked, or suspended under the laws of that state or jurisdiction; or

(7)    The licensee has filed an application for a license which, as of the date the license was issued, or as of the date of an order denying, suspending, or revoking a license, was incomplete in any material respect or contained any statement that was, in light of the circumstances under which it was made, false or misleading with respect to any material fact.

Source: SL 1998, ch 280, § 14; SL 2005, ch 258, § 6; SL 2015, ch 242, § 4.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 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.

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.

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--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.

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 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.

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.

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.

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.

54-4-76. Loans by unlicensed lenders uncollectible except for principal.

Any loan made in South Dakota after June 30, 2015, to a resident of South Dakota, by an entity organized to engage in the business of lending money not licensed or exempt from licensure pursuant to this chapter is unenforceable and uncollectible except as to any principal extended by the entity to the borrower.

Source: SL 2015, ch 242, § 5.

54-4-77. Debt collection--Prohibitions.

No person employed by a licensee to collect or attempt to collect any debt owed or due or asserted to be owed or due may:

(1)    Harass, oppress, or abuse a borrower by:

(a)    Using any threat of violence or harm;

(b)    Publishing a list of names of borrowers who refuse to pay their debts absent providing such information to credit reporting companies;

(c)    Using obscene or profane language; or

(d)    Repeatedly using the phone with the intent to annoy borrowers;

(2)    Use any false statement when attempting to collect a debt by falsely:

(a)    Claiming to be an attorney or government representative;

(b)    Claiming that the borrower has committed a crime;

(c)    Representing that the licensee operates or any person employed by the licensee works for a credit reporting company;

(d)    Representing the amount the borrower owes;

(e)    Representing the nature and character of any forms sent to the borrower in order to collect a debt;

(f)    Indicating that the borrower will be arrested if the debt isn't paid;

(g)    Using a company name;

(h)    Indicating that the licensee will seize, garnish, attach, or sell a borrower's property or wages unless the licensee is permitted by law to take the action and the licensee intends to do so;

(i)    Indicating that legal action will be taken against the borrower, if doing so would be illegal or if the licensee does not intend to take the action;

(3)    Give false credit information about the borrower to anyone, including a credit reporting company;

(4)    Attempt to collect any interest, fee, or other charge on top of the amount a borrower owes unless the contract that created the debt or state law allows the charge;

(5)    Deposit a post-dated check early;

(6)    Take or threaten to take the borrower's property unless it can be done legally; or

(7)    Cause misleading information to be transmitted to users of caller identification technologies or otherwise block or misrepresent the identity of the caller or entity as described in subdivision 37-24-6 (16).

Source: SL 2015, ch 242, § 6; SL 2020, ch 171, § 5.

54-4-77.1. Exemptions not applicable to prohibited debt-collection tactics.

The exemptions under this chapter do not apply to any debt-collection tactic prohibited in § 54-4-77.

Source: SL 2017, ch 207, § 4.

54-4-78. Use of nationwide mortgage licensing system and registry for requesting and distributing information.

The director may use the nationwide mortgage licensing system and registry as a channeling agent for requesting and distributing information to and from other state and federal regulatory officials or agencies with money lending industry oversight authority, as deemed necessary by the director to carry out the responsibilities of this chapter.

Source: SL 2015, ch 242, § 7.

54-4-79. Contracts for collection and maintenance of records and processing of fees.

The director may establish relationships or contracts with the nationwide mortgage licensing system and registry or other entity designated by the nationwide mortgage licensing system and registry to collect and maintain records and process a transaction fee or other fee related to any licensee or other person subject to the provisions of this chapter.

Source: SL 2015, ch 242, § 8.

54-4-80. Sharing of information collected by director.

The following provisions apply to the sharing of information collected and retained by the director during the administration of this chapter:

(1)    The provisions of § 51A-2-35 regarding privacy or confidentiality apply to any information or material provided to the nationwide mortgage licensing system and registry, and any privilege arising under federal or state law, including a rule of any federal or state court, with respect to the information or material, continue to apply to the information or material after the information or material has been disclosed to the nationwide mortgage licensing system and registry. The information and material may be shared with all state and federal regulatory officials with money lending industry oversight authority without the loss of privilege or the loss of confidentiality protections pursuant to the provisions of federal law or § 51A-2-35;

(2)    No information or material that is subject to a privilege or confidentiality pursuant to this section is subject to:

(a)    Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or

(b)    Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the nationwide mortgage licensing system and registry regarding the information or material is waived, in whole or in part, by the person to whom the information or material pertains.

This section does not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, any licensee that is included in the nationwide mortgage licensing system and registry for access by the public.

Source: SL 2015, ch 242, § 9.

54-4-81. Attorney's fees recoverable if provided for in evidence of debt.

Notwithstanding § 15-17-39, any person licensed pursuant to this chapter may recover reasonable attorney's fees in the case of default of payment if provided for in a note, bond, or other evidence of debt.

Source: SL 2018, ch 272, § 2.