COLUMBIA (AP) – The Consumer Affairs office is investigating a half dozen state-licensed lending companies that Sen. John Lindsay claims are charging “unconscionable” loan fees and causing people desperate for money to lose their homes.

Steve Hamm, the state’s Consumer Credit Administrator and Consumer Advocate, said there’s “a definite possibility” he might take away some state lending licenses at the end of the probe.

His office is investigating “five or six” companies with branches around the state that have issued more than 1,000 loans to property owners with interest and prepaid charges greatly exceeding the normal rates.

Lindsay, D-Marlboro, introduced a bill Thursday designed to clarify that the General Assembly did not intend to allow exorbitant loan charges when it deregulated credit in 1982.

Deregulation laws included a provision disallowing “unconscionable acts to induce a consumer to secure a loan.” The amended bill Lindsay introduced Thursday further defines unconscionable acts to include finance charges and prepaid charges such as origination fees that “substantially exceed the customary charge for a loan.”

Lindsay, chairman of the Banking and Insurance Committee, said he had “horrendous examples of lenders taking advantage of the people of South Carolina.”

Hamm gave The Associated Press, with the condition the borrowers and lenders not be named, several examples of loans he is investigating:

A couple in Clinton went to a Columbia area lending company last February and said they needed to borrow $10,000. They put up their home as collateral and agreed to make payments of $350 a month for nearly 15 years, making their final payoff $63,800. The interest rate was 28 percent.

Included in the deal was a $6,800 origination fee, which traditionally is used for administration and processing of the loan.

Normally, Hamm said lending companies or institutions charge a 1 percent or 1.5 percent origination fee, which would have been $150 to $300 in this case. The going interest rate is 14 percent for a homeowner with decent credit.

In another case, an Elgin man put up his home to finance $4,500. He was charged 28 percent interest and a $1,680 origination fee. His $113 monthly payments would total $14,000 before the loan is paid.

Hamm said the people who are receiving loans from the companies being investigated generally have bad credit and often can’t get loans elsewhere.

The companies, he said, will argue that they are providing a public service to people who need money but can’t get it anywhere else, and that they charge high rates to make up for taking high-risk customers.

But Hamm said that argument “is open to speculation.”

Hamm said, “Out-of-state lending institutions are coming in, opening offices and looking for people with credit problems.”