Sanford Signs Predatory Lending Bill

Wednesday June 04, 2003 7:20am

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Columbia (AP) - Governor Mark Sanford ( website/news ) signed a bill today that was created to protect borrowers from unfair high interest loans and unscrupulous lenders. 

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

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.

Sanford say the law balances consumer protections against excessive regulations in the lending industry.

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