South Carolina Licensed Attorneys May Engage in Credit Counseling
Lexington Law Firm v. S.C. Dep't of Consumer Affairs,No. 26648 (S.C.May 12, 2009).
South Carolina Supreme Court reversed an order by the South Carolina Administrative Law Court (ALC) granting summary judgment in favor of Lexington Law Firm, a Utah-based law firm. The Court determined the scope of the South Carolina Consumer Credit Counseling Act (Act).
Pursuant to section 37-7-102 of the Act, a person may not engage in credit counseling in South Carolina unless properly licensed to do so. A credit counseling organization is a person providing credit counseling for a "fee, compensation, or gain, or in the expectation of a fee, compensation, or gain, including debt management plans." S.C. Code Ann. Section 37-7-101. However, the Act exempts from the definition of credit counseling organization "attorneys at law".
Plaintiff first argued that the Department of Consumer Affairs (Department) did not have authority to grant or deny exemptions. While ALC agreed, the Supreme Court denied such conclusion and found the Department charged by the Legislature to issue licenses and consequently authorized to determine whether a party is exempt from the license requirement.
The Court then held that the exemption for attorneys at law referred to conduct in the regular course of the respective profession. Furthermore, the attorney at law must be licensed to practice law in South Carolina to be exempt. Because the Utah law firm engaged in credit counseling without being licensed to practice law in South Carolina, the firm did not qualify for the exemption and was found in violation of the Act.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
South Carolina Supreme Court reversed an order by the South Carolina Administrative Law Court (ALC) granting summary judgment in favor of Lexington Law Firm, a Utah-based law firm. The Court determined the scope of the South Carolina Consumer Credit Counseling Act (Act).
Pursuant to section 37-7-102 of the Act, a person may not engage in credit counseling in South Carolina unless properly licensed to do so. A credit counseling organization is a person providing credit counseling for a "fee, compensation, or gain, or in the expectation of a fee, compensation, or gain, including debt management plans." S.C. Code Ann. Section 37-7-101. However, the Act exempts from the definition of credit counseling organization "attorneys at law".
Plaintiff first argued that the Department of Consumer Affairs (Department) did not have authority to grant or deny exemptions. While ALC agreed, the Supreme Court denied such conclusion and found the Department charged by the Legislature to issue licenses and consequently authorized to determine whether a party is exempt from the license requirement.
The Court then held that the exemption for attorneys at law referred to conduct in the regular course of the respective profession. Furthermore, the attorney at law must be licensed to practice law in South Carolina to be exempt. Because the Utah law firm engaged in credit counseling without being licensed to practice law in South Carolina, the firm did not qualify for the exemption and was found in violation of the Act.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Posted by Ryan McCabe at 5/13/2009 9:59 AM 
Categories: Authorization,Exemptions,Professions,S.C. Supreme Court,Attorneys
Categories: Authorization,Exemptions,Professions,S.C. Supreme Court,Attorneys
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