1997 Regular Session
To: Banks and Banking
By: Representative Ellis
House Bill 1434
AN ACT TO PROVIDE THAT A BUSINESS ENTITY MAY NOT SELL BAD CHECKS RECEIVED BY THE ENTITY IN THE COURSE OF ITS BUSINESS TO A CHECK COLLECTING ENTITY UNTIL AFTER THE BUSINESS ENTITY HAS PRESENTED THE CHECKS FOR PAYMENT AT A DEPOSITORY INSTITUTION AT LEAST ONE ADDITIONAL TIME; TO DEFINE "CHECK COLLECTING ENTITY"; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) Any corporation, partnership or other business entity that receives, in the course of its business, any check, draft or other like negotiable instrument payable to the business entity that is drawn on a bank or other depository institution and is not paid by or is dishonored by the depository institution after presentment for payment, may not sell the instrument to a check collecting entity until after the business entity has presented the instrument for payment at a depository institution at least one (1) additional time.
(2) For the purposes of this section, "check collecting entity" means a corporation, partnership or other entity that, as a part of its business:
(a) Purchases from business entities, for the face value of the instruments or at a discount from the face value of the instruments, checks, drafts or other like negotiable instruments that (i) are payable to the business entities, (ii) are drawn on a bank or other depository institution, and (iii) have not been paid by or have been dishonored by the depository institution after presentment for collection, and
(b) Charges the drawers of the instruments a fee in addition to collecting the face value of the instruments from the drawers.
SECTION 2. This act shall take effect and be in force from and after July 1, 1997.