South Carolina Senate Bill S1027

South Carolina 2025-2026 Regular Session

• Introduced: 3/18/26
• Refer: 3/18/26

Caption

Community development corporations

Summary

S1027 authorizes certain community development corporations (CDCs) in South Carolina to make loans for improvements to real property within their designated service areas, or on property in which the CDC already holds an interest. The bill defines what qualifies as a CDC, a designated service area, an improvement, an interest in real property, and a qualified borrower, and limits the lending authority to nonprofit corporations created by or at the direction of a county or municipality for community and economic development purposes. The bill requires CDCs to adopt written loan policies before lending, sets limits on interest rates, requires verification that loan proceeds are used for qualifying improvements, and mandates recordkeeping and annual reporting to the creating local government. It also makes clear that CDCs may not take deposits or operate as banks or credit unions, and it exempts qualifying CDC loans from state laws governing the business of lending and supervised lender licensing. The authority is supplemental to other powers and does not preempt federal law.

Impact

If enacted, the bill would add a new section to Title 6 of the South Carolina Code and create a specific statutory lending authority for locally created nonprofit CDCs. It would also carve out a narrow exemption from state lending-license requirements for loans made under the act, while preserving other banking and consumer-finance restrictions. Local governments that created the CDCs would retain oversight power, including the ability to impose additional conditions, require approval for larger loans, or suspend or terminate lending authority. The new authority would sunset on June 30, 2035 unless reauthorized, though existing loans would remain valid after repeal.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate or formal support/opposition in the available materials. Based on the bill text alone, the measure appears designed as a targeted economic-development tool with built-in safeguards and local control, suggesting a generally pragmatic and administrative purpose rather than a highly controversial policy change. The absence of recorded votes or discussion prevents a reliable assessment of broader political sentiment.

Contention

The main potential points of contention are the scope of lending authority granted to nonprofit CDCs, the exemption from supervised lender licensing, and the extent to which these entities should be allowed to make loans without being treated as traditional lenders. Some stakeholders may favor the flexibility for community revitalization and local development, while others may be concerned about consumer protections, oversight, and the risk of quasi-public entities engaging in lending activity. The bill addresses some of those concerns through policy requirements, reporting, interest-rate limits, and local-government control, but those same issues are likely where debate would focus if the bill were considered.