South Carolina Code 37-7-111. Funds paid to licensee for distribution to creditors; trust accounts; duties and responsibilities
(B) A credit counseling organization shall:
Terms Used In South Carolina Code 37-7-111
- Consumer: means consumer as defined in § 37-1-301(10). See South Carolina Code 37-7-101
- Credit counseling organization: means a person providing or offering to provide to consumers credit counseling services for a fee, compensation, or gain, or in the expectation of a fee, compensation, or gain, including debt management plans. See South Carolina Code 37-7-101
- Creditor: means the person who grants credit in a consumer credit transaction or, except as otherwise provided, an assignee of a creditor's right to payment, but the term does not in itself impose on an assignee an obligation of his assignor. See South Carolina Code 37-7-101
- Debtor: means the person or persons for whom the credit counseling service is performed. See South Carolina Code 37-7-101
- DMP: means a program in which an organization agrees to engage in debt settlement or debt pooling and distribution services on behalf of a consumer with the consumer's creditors and under which the consumer gives money or control of his funds to the organization for distribution to the consumer's creditors. See South Carolina Code 37-7-101
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Licensee: means a person licensed pursuant to this chapter. See South Carolina Code 37-7-101
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
(1) maintain separate records of account for each debtor to whom the licensee provides credit counseling services;
(2) deposit a payment from a debtor not later than one business day after receipt of the payment;
(3) disburse funds paid by or on behalf of a debtor to the debtor’s creditors within five business days after receipt of the funds;
(4) correct misdirected payments resulting from an error by the licensee;
(5) upon request, give a debtor signed, dated receipts for funds received from a debtor under a DMP, or provide a means by which the consumer may view the status of the account electronically;
(6) keep all debtor funds separate and apart at all times from funds belonging to the licensee or any of its officers, employees, or agents and use debtor funds for no purpose other than paying bills, invoices, or accounts of the debtor;
(7) reconcile the trust account at least once a month. The reconciliation must ascertain the actual cash balance in the account and compare it with the sum of the escrow balances in each debtor’s account. If the licensee has more than one trust account, each account must be scheduled and reconciled individually; and
(8) render an accounting to the debtor at least once every three months which must itemize the total amount received from the debtor, the total amount paid each creditor, the total amount each creditor has agreed to accept as payment in full on any debt owed by the debtor, the amount of charges deducted, and any amount held in the trust account on behalf of the debtor. A licensee also shall provide an accounting to a debtor within seven days after written demand, but no more than three times for each six-month period.