COLUMBIA - Victoria Reed was a newly single mother of four looking to save money when she became a victim of predatory lending.

Reed, 47, of Columbia moved into a smaller home with her children, hoping to save money on her mortgage. Instead, she found herself swept up in refinancing charges and a 30-year mortgage with a high interest rate.

She can't afford to refinance again or move.

"I'm a prisoner in my own house," Reed said. "I cannot afford to sell it or fix it."

Gov. Mark Sanford signed a bill Tuesday that was created to protect borrowers like Reed from unfair high-interest loans and unscrupulous lenders.

Under the law, companies are blocked from making high-cost loans that hurt borrowers -- particularly low-income and elderly customers.

The law requires anyone seeking to borrow money at a higher-than-market interest rate to attend a free credit counseling session.

It also bans certain practices such as flipping, which is the repeated refinancing of loans typically done when a borrower is having trouble making payments. That practice often puts the borrower further into debt but generates a high fee income for the lender.

The law protects consumers but does not punish the lending industry, Sanford said.

"What you see here is a great balancing act between wanting to make sure we still have credit markets that work in South Carolina while at the same time we have protections for consumers out there," Sanford said.

Some industry officials have expressed concern that the new regulations could drive lenders out of business and leave residents with fewer borrowing options.

Sen. David Thomas, R-Greenville, said the point of the bill is not to put companies out of business, but to protect consumers.

"I do not believe we will see one business go out of business in South Carolina, but we will see the end of wrongful business practices that have stolen from the public and have charged too much interest and have produced unfair and unethical business practices," Thomas said.

Advocates are pleased to see the legislation made into law after several years of work.

Columbia attorney Brian Boger, who represents Reed, began working on predatory lending cases nearly three years ago and says it's becoming a major part of his practice. He currently has more than 80 such cases in his law office.

One case sticks in his mind. A 78-year-old man refinanced his home eight times in two years. The home he once owned now belongs to the bank and the elderly man is in a Medicaid-funded nursing home, Boger said.

"They prey on the uneducated, the unsophisticated, the elderly and minorities," Boger said. "This bill would stop them in their tracks."

The predatory lending legislation takes effect Jan. 1.