CHAPTER 1 - STATE BOARD OF FINANCIAL INSTITUTIONS

SOUTH CAROLINA STATUTES AND CODES

CHAPTER 1 - STATE BOARD OF FINANCIAL INSTITUTIONS

Title 34 - Banking, Financial Institutions and Money

CHAPTER 1.

STATE BOARD OF FINANCIAL INSTITUTIONS

SECTION 34-1-10. Definitions applicable to Title.

Effective July 1, 1976, all references to "the Board" in this title means the State Board of Financial Institutions unless context clearly indicates otherwise.

Except when otherwise specifically provided "bank" as used in this title must be construed to include all institutions doing any kind of banking business whose deposits are eligible for insurance by the Federal Deposit Insurance Corporation, excluding a savings bank, and "building and loan association" as used in this title must be construed to include a mutual or stock savings association, savings and loan association, or savings bank and all other institutions doing any kind of building and loan business whose deposits are eligible for insurance by the Federal Savings and Loan Insurance Corporation.

SECTION 34-1-20. Appointment of members.

[Section effective until January 1, 2010. See, also, section effective January 1, 2010.]

The State Board of Financial Institutions is composed of ten members, one of whom is the State Treasurer as an ex officio member and as the chairman. The remaining nine members must be appointed by the Governor with the advice and consent of the Senate. Four must be engaged in banking and recommended by the South Carolina Bankers Association, one must be recommended by the association of supervised lenders, one must be engaged in the licensed consumer finance business as a restricted lender or a supervised lender and recommended by the Independent Consumer Finance Association, two must be engaged in the cooperative credit union business and recommended by the State Cooperative Credit Union League, and one must be unaffiliated with a financial organization and serve as a representative of the consumer of the State. The terms of the present members are not affected. Each member shall represent the best interests of the public and shall not serve more than two consecutive four-year terms. The association which is to provide a member to fill a vacancy on the board, except for a consumer representative, shall submit three names, from three different institutions, from which the Governor shall select one.

SECTION 34-1-20. Appointment of members.

[Section effective January 1, 2010. See, also, section effective until January 1, 2010.]

The State Board of Financial Institutions is composed of eleven members, one of whom is the State Treasurer as an ex officio member and as the chairman. The remaining ten members must be appointed by the Governor with the advice and consent of the Senate. Four must be engaged in banking and recommended by the South Carolina Bankers Association, one must be recommended by the association of supervised lenders, one must be engaged in the mortgage lending business and recommended by the Mortgage Bankers Association of the Carolinas, one must be engaged in the licensed consumer finance business as a restricted lender or a supervised lender and recommended by the Independent Consumer Finance Association, two must be engaged in the cooperative credit union business and recommended by the State Cooperative Credit Union League, and one must be unaffiliated with a financial organization and serve as a representative of the consumers of the State. The terms of the present members are not affected. Each member shall represent the best interests of the public and shall not serve more than two consecutive four-year terms. The association which is to provide a member to fill a vacancy on the board, except for a consumer representative, shall submit three names, from three different institutions, from which the Governor shall select one.

SECTION 34-1-30. Terms of members; vacancies.

The Governor originally having appointed four members of the Board, one to serve for the term of one year, one for the term of two years, one for the term of three years and one for the term of four years, the successors of the present members, upon the expiration of their respective terms of office, shall be appointed for a term of four years and until their successors are appointed and have qualified. All vacancies shall be filled in the same manner as regular appointments.

SECTION 34-1-40. Expenses of members.

The members of the Board shall receive a per diem (which shall not be paid to the State Treasurer) not exceeding forty days per annum. In addition they shall be paid their actual necessary travelling and subsistence expenses incurred in the discharge of their duties.

SECTION 34-1-50. Office space.

The office space occupied by the Board shall be in one of the State office buildings if space is available.

SECTION 34-1-60. Powers.

The Board may supervise all banks and building and loan associations and provide regulations and instructions for the direction, control and protection of all such institutions, the conservation of their assets and the liquidation thereof, as may be necessary or proper to effectuate the purposes of this Title.

SECTION 34-1-70. Approval of charters of banks, building and loan associations, savings and loan associations, and savings banks; approval of branches.

No bank, building and loan association, savings and loan association, or savings bank may be granted a charter by the Secretary of State unless and until the Board has approved the application in writing. No branch bank, branch building and loan association, branch savings and loan association, or branch savings bank may be established without the approval in writing of the Board. Before any application for the incorporation of a bank, building and loan association, savings and loan association, or savings bank, or the establishment of a branch thereof may be approved, the Board shall make an investigation to determine whether or not the applicants have complied with all the provisions of law, whether in the judgment of the Board they are qualified to operate the institution and whether the establishment of the bank, building and loan association, savings and loan association, or savings bank or of a branch thereof, would serve the public interest, taking into consideration local circumstances and conditions at the place where it proposes to do business. A remote service unit as defined in Section 34-28-30 is not considered a branch of a bank, building and loan association, savings and loan association, or a savings bank and is not subject to any of the provisions of this section applicable to branch applications.

SECTION 34-1-80. Examining department; Commissioner of Banking.

The board shall set up an examining department, appointing a Commissioner of Banking in charge with assistants, to be appointed by him subject to the consent of the board, as necessary to perform the duties incidental to the work of the board. The term of office of the Commissioner of Banking and his assistants is at the pleasure of the board. The board may also examine the Business Development Corporation of South Carolina and Carolina Capital Investment Corporation.

SECTION 34-1-90. Commissioner of Banking shall report criminal violations to Board.

When in the exercise by the Board through its examining department of its powers of supervision over banks, banking institutions, building and loan associations, cash depositories and all institutions doing any kind of banking or building and loan business there shall be found any apparent criminal violation of any statute of this State or of any rule or regulation of the Board, the Commissioner of Banking shall file with the Board a written report of such apparent criminal violations.

SECTION 34-1-100. Initiation of criminal prosecutions.

The report shall be considered by the Board at its next meeting and should the Board conclude that the matters covered in such report of the Commissioner of Banking do constitute an apparent violation of existing statutes or rules or regulations of the Board, then the Board may direct the Commissioner of Banking to file a detailed written report of such apparent criminal violations of existing statutes or rules or regulations with the grand jury for the county in which the apparent criminal violations were committed, or direct him to make affidavit before a magistrate and obtain a warrant. The Board may direct the Commissioner of Banking to file a copy of the detailed written report of the apparent criminal violations with the solicitor for the judicial circuit in which the county in which the apparent criminal violations were committed is located.

SECTION 34-1-110. Authority for state-chartered banks, savings and loan associations, and credit unions, and licensed consumer finance companies to engage in certain activities.

[Section effective until January 1, 2010. See, also, section effective January 1, 2010.]

(A) Notwithstanding any other provision of law and in addition to all of the powers granted under Chapters 1 through 31 of Title 34 and Chapter 3 of Title 37, the State Board of Financial Institutions, by regulation or by issuing operational instructions, may permit:

(1) state-chartered banks to engage in any activity authorized for national banks by federal law or regulation of the Comptroller of the Currency or for state-chartered savings and loan associations by this title or regulation or operational instruction of the State Board of Financial Institutions;

(2) state-chartered savings and loan associations to engage in any activity authorized for federally-chartered savings and loan associations by federal law or regulation of the Office of Thrift Supervision or for state-chartered banks by this title or regulation or operational instruction of the State Board of Financial Institutions;

(3) cooperative credit unions to engage in any activity authorized for federally-chartered credit unions by federal law or by regulation of the National Credit Union Administration; and

(4) consumer finance companies operating pursuant to a license to make supervised loans as provided in Part 5, Chapter 3, Title 37, to engage in any lending activity authorized for supervised financial organizations by law or by regulation of an agency given supervisory authority over those institutions, except where otherwise restricted by statute.

(B) For the purpose of this section, the term "activity" includes the terms and conditions under which the activity may be exercised, as well as the authority to make a particular type of loan or investment or otherwise to engage in an approved activity.

SECTION 34-1-110. Authority for state-chartered banks, savings and loan associations, and credit unions, and licensed consumer finance companies to engage in certain activities.

(3) cooperative credit unions to engage in any activity authorized for federally-chartered credit unions by federal law or by regulation of the National Credit Union Administration; and

[Subsection effective January 1, 2010.]

(A) Notwithstanding any other provision of law and in addition to all of the powers granted under Chapters 1 through 31, Title 34 and Chapter 3, Title 37, the State Board of Financial Institutions, by regulation or by issuing operational instructions, may permit:

(2) state-chartered savings and loan associations to engage in any activity authorized for federally chartered savings and loan associations by federal law or regulation of the Office of Thrift Supervision or for state-chartered banks by this title or regulation or operational instruction of the State Board of Financial Institutions;

(3) cooperative credit unions to engage in any activity authorized for federally chartered credit unions by federal law or by regulation of the National Credit Union Administration;

(5) mortgage lenders and loan originators operating pursuant to a license to make mortgage loans as provided in Chapter 22, Title 37, to engage in a mortgage lending activity authorized for licensed mortgage lenders and loan originators by law or by regulation of an agency given supervisory authority over those institutions, except where otherwise restricted by statute.

SECTION 34-1-120. Penalties for obstructing Commissioner of Banking.

Any person who obstructs or interferes with the Commissioner of Banking or any of his assistants or agents in any way in performance of his duties, shall, upon conviction, be deemed guilty of a misdemeanor, and shall be subject to imprisonment for not more than one year, or a fine of not more than one thousand dollars, or both, in the discretion of the court.

SECTION 34-1-130. Study of capital reserve position of financial institutions; report.

The State Board of Financial Institutions is directed to conduct an annual study as to the capital reserve position of all financial institutions and intermediaries subject to its supervision and to report its findings to the General Assembly, including recommended legislation, if any, in its annual report to the General Assembly.

SECTION 34-1-140. State preemption of lender regulation.

A political subdivision of this State may not enact or enforce any ordinance, resolution, or rule regulating the financial or lending activities of a person or a subsidiary or affiliate of that person, including disqualification of a person from doing business with the political subdivision based upon lending interest rates or imposition of reporting requirements or other obligations upon a person regarding its financial services or lending practices, if that person or a subsidiary or an affiliate of that person:

(1) is subject to the jurisdiction of the State Board of Financial Institutions;

(2) is subject to the jurisdiction of the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Deposit Insurance Corporation, the Federal Trade Commission, or the United States Department of Housing and Urban Development;

(3) originates, purchases, sells, or assigns securities, services, property interests, or obligations created by a financial transaction or loan made, executed, or originated to assist or facilitate the transaction by a person referred to in item (1) or (2); or

(4) sells or markets banking, insurance, securities, or commodities services provided by an institution or entity defined in or required to comply with the Federal Gramm-Leach-Bliley Financial Modernization Act, 113 Stat. 1338.