Palmetto State News

S.C. State Sen. Will Climer (R-York) said yesterday that a bill to limit small dollar loans to S.C. consumers would lead to ‘less credit availability for people who need it.”

“My conclusion, as someone who is in the financial services industry, is that the net effect of this will be less credit availability for people who need it,” said Climer during a subcommittee hearing on S.910. “We’ve heard testimony from lots of other states, or from folks who've cited actions that have happened in other states, and I would just submit to you that those actions that happened in other states certainly did not lead to peace and prosperity in the realm.”

“They did not end poverty, they did not end all manner of ills that we confront day in and day out,” said Climer. “All they did was dry up access to credit for people who need it.”

One state that has been mentioned in Senate hearings on S.910 has been Illinois, which passed a bill in 2021 that capped interest rates on loans at 36%.

The effect of that law was to decrease “the number of loans to subprime borrowers by 38 percent,” said a study released in January 2023 by professors at Mississippi State University and Mississippi College and a member of the Federal Reserve Board of Governors.

“Responses to a survey of small-dollar-credit borrowers in Illinois who lost credit access suggest the interest-rate cap worsened the financial well-being of many of these borrowers,” said the research paper abstract, authored by Thomas W. Miller Jr., Mississippi State University; J. Brandon Bolen, Mississippi College; and Gregory Elliehausen, board of governors, Federal Reserve System. 

In Illinois, as in South Carolina, the coalition lobbying to pass the bill included the Center for Responsible Lending, the Durham, N.C.-based advocacy arm of the Self-Help Credit Union.

The Center for Responsible Lending has received more than $2 million from left wing political activist George Soros, reported the Greenville Leader.

The group also has received more than $25 million from a foundation started by Herb and Marion Sandler, a couple who Time magazine ranked among “25 people to blame from the (2008) financial crisis,” reported Charleston Reporter.

Self-Help’s South Carolina President is Kerri Smith, who is actively lobbying for S.910 while also currently running unopposed as a Republican in the race for the SC 28th House district.

S.910 was introduced on January 9 and is sponsored by State Sen. Tom Davis (R-Beaufort), as well as Senate Minority Leader Brad Hutto (D-Orangeburg), and Sen Deputy Minority Leader Ronnie Sabb (D-Greeleyville). 

Climer was the loan vote against advancing the bill in the special subcommittee of the Senate Labor, Commerce and Industry Committee. The bill was then passed out of the full committee earlier today on a vote of 10-7.

The S.C. Policy Council released an analysis of the bill last week that said the bill, "though perhaps well-meaning, would limit consumers' access to credit, stifle competition in the financial industry, and create an environment that makes it difficult, if not impossible, for lenders to operate" in S.C.