A bill targeting high-interest loans and other controversial lending practices passed the Senate late Wednesday.

"This is a giant step forward for the consumers of South Carolina," said Senate Banking and Insurance chairman David Thomas, who spent much of the past three years working on the legislation.

"It doesn't give us everything," said Thomas, R-Greenville. "But if you can get consumer advocates out there saying, 'Thumbs up!' you've done a yeoman's job."

The House was expected to take up its version of the legislation Thursday.

The Senate vote came after about four hours of debate interrupted by frequent breaks to work out compromises.

The measure defines and outlaws practices such as "loan flipping," in which loans are refinanced repeatedly to generate surcharges for lenders, that do less to benefit consumers than to enrich loan companies.

The bill's supporters drew distinctions between flipping and standard refinancing that helps consumers, for instance, by allowing them to take advantage of lower interest rates.

Under the Senate-approved legislation, loans could be flipped every four years.

"The fact that there's even acknowledgment there's such a thing as flipping is a wonderful thing," said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center in Columbia. Berkowitz has worked on the legislation since 1999.

Another key compromise involved premiums on insurance policies that help pay off credit debt if the consumer dies.

The Senate plan now limits the prohibition of financing such premiums to site-built houses and manufactured homes with loans backed by mortgages on property the consumer owns. The premiums still could be financed on mobile homes when they are not purchased along with land.

That was a tough compromise for some, including Sen. Scott Richardson, R-Hilton Head Island, who served on the panel that drafted the bill.

Part of the intent was to protect poor residents from credit life insurance premiums' doubling the cost of some loans, Richardson said. With such premiums, the insurer gets the money in a lump sum when a loan is made. At the same time, the policies can generate fees for the lender.