MISSISSIPPI LEGISLATURE
1997 Regular Session
To: Banks and Banking
By: Representative Montgomery
House Bill 469
AN ACT TO PROVIDE THAT WHEN A PERSON BORROWS MONEY AND PLEDGES A MOTOR VEHICLE AS COLLATERAL, THE BORROWER SHALL TURN OVER PHYSICAL POSSESSION OF THE VEHICLE TO THE LENDER UNLESS THE BORROWER CREATES A SECURITY INTEREST IN THE VEHICLE AND FOLLOWS A PROCEDURE UNDER THE MOTOR VEHICLE TITLE LAW; TO PROVIDE THAT A LENDER MAY NOT ACCEPT THE CERTIFICATE OF TITLE OF A MOTOR VEHICLE FROM A BORROWER AS EVIDENCE OF COLLATERAL FOR A LOAN UNLESS THE BORROWER CREATES A SECURITY INTEREST IN THE VEHICLE AND FOLLOWS A PROCEDURE UNDER THE MOTOR VEHICLE TITLE LAW; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Whenever a person obtains a loan of money for any purpose other than the purchase of a motor vehicle, and the borrower pledges as collateral for the loan a motor vehicle that is owned by him, the borrower shall turn over physical possession of the vehicle to the lender unless (a) the borrower creates a security interest in the vehicle in favor of the lender and (b) the borrower and the lender follow the procedure prescribed in Section 63-21-45.
(2) A person shall not turn over to a lender as collateral or evidence of collateral for a loan, and a lender may not accept from a borrower as collateral or evidence of collateral for a loan, the certificate of title of a motor vehicle that is owned by the borrower except in cases where (a) the borrower creates a security interest in the vehicle in favor of the lender and (b) the borrower and the lender follow the procedure prescribed in Section 63-21-45.
SECTION 2. This act shall take effect and be in force from and after July 1, 1997.