Banks & Banking — Unfair Trade Practices – Regulated Industry Exemption – Consumer Protection Code – Real Property

Cantrell v. New Penn Financial, LLC (Lawyers Weekly No. 002-167-17, 10 pp.) (Mary Geiger Lewis, J.) 7:17-cv-01078; D.S.C.

Holding: Although the South Carolina Supreme Court has recognized that financial institutions are subject to a robust regulatory regime, it has not strayed from its holding that the regulated-industry exemption from the Unfair Trade Practices Act “is intended to exclude those actions or transactions which are allowed or authorized by regulatory agencies or other statutes,” Ward v. Dick Dyer & Assocs., Inc., 403 S.E.2d 301 (S.C. 1991), rather than all regulated activity. Because there is no suggestion that defendants’ alleged behavior during the refinancing of plaintiffs’ home was allowed or authorized by a statute or federal regulatory agency, S.C. Code Ann. § 39-5-40(a) fails to bar plaintiffs’ UTPA claims against defendants as a matter of law.

Defendants’ motion to dismiss is granted in part, denied in part, and denied without prejudice in part. Plaintiffs are permitted to file an amended complaint.

S.C. Code Ann. § 37-10-105 of the Consumer Protection Code sets forth remedies for violations of the  CPC, certain procedures for bringing claims under the CPC, and certain defenses to CPC claims. The provision does not create an independent cause of action; therefore, the court grants defendants’ motion to dismiss as to plaintiff’s claim for violation of § 37-10-105.

The remedy for violation of S.C. Code Ann. § 37-22-110 et seq. is criminal, not civil. Because plaintiffs are unable to pray for criminal relief in this civil action, the court dismisses plaintiffs’ claim for violation of § 37-22-110 et seq.

Denied in part, granted in part, and denied without prejudice in part.