MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Business and Financial Institutions

By: Senator(s) Woodfield

AN ACT TO AMEND SECTION 63-19-3, MISSISSIPPI CODE OF 1972, TO CLARIFY THE DEFINITIONS OF CERTAIN TERMS IN THE MOTOR VEHICLE SALES FINANCE LAW; TO AMEND SECTION 63-19-47, MISSISSIPPI CODE OF 1972, TO REVISE THE CALCULATION OF THE REFUND RECEIVED WHEN A BUYER UNDER THE MOTOR VEHICLE SALES FINANCE LAW PAYS IN FULL BEFORE MATURITY THE DEBT OF A RETAIL INSTALLMENT CONTRACT; TO AMEND SECTION 75-67-103, MISSISSIPPI CODE OF 1972, TO DEFINE THE TERM "OCCASIONAL LENDER" IN REGARD TO THE SMALL LOAN REGULATORY LAW; TO AMEND SECTION 75-67-105, MISSISSIPPI CODE OF 1972, TO REQUIRE A SEPARATE LICENSE FOR EACH ELECTRONIC LOAN PROCESSING MACHINE OWNED OR OPERATED BY A LICENSEE UNDER THE SMALL LOAN REGULATORY LAW; TO AMEND SECTION 81-19-7, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT CERTAIN MORTGAGE COMPANIES SHALL BE EXEMPT FROM LICENSING PROVISIONS UNDER THE CONSUMER LOAN BROKER ACT, BUT SHALL NOT BE EXEMPT FROM ANY OTHER PROVISIONS OF SUCH ACT; TO AMEND SECTION 81-21-21, MISSISSIPPI CODE OF 1972, TO REVISE THE CALCULATION OF THE UNEARNED PREMIUMS RETURNED TO PREMIUM FINANCE COMPANIES WHENEVER FINANCED INSURANCE CONTRACTS ARE CANCELLED; TO AMEND SECTION 81-21-27, MISSISSIPPI CODE OF 1972, TO REVISE THE EXCLUSIONS FROM COVERAGE OF THE CHAPTER OF LAW REGULATING INSURANCE PREMIUM FINANCE COMPANIES; TO CREATE A NEW CODE SECTION TO BE CODIFIED WITHIN CHAPTER 19 OF TITLE 63, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE COMMISSIONER OF BANKING AND CONSUMER FINANCE TO PROMULGATE REGULATIONS NECESSARY TO ADMINISTER THE MOTOR VEHICLE SALES FINANCE LAW; TO REPEAL SECTION 75-67-123, MISSISSIPPI CODE OF 1972, WHICH PLACES RESTRICTIONS ON LOANS MADE BY A LICENSEE UNDER THE SMALL LOAN REGULATORY LAW TO THE SAME BORROWER WITHIN 90 DAYS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 63-19-3, Mississippi Code of 1972, is amended as follows:

63-19-3. The following words and phrases, when used in this chapter, shall have the meanings respectively ascribed to them in this section, except where the context or subject matter otherwise requires:

(a) "Motor vehicle" means any self-propelled or motored device designed to be used or used primarily for the transportation of passengers or property, or both, and having a gross vehicular weight rating of less than fifteen thousand (15,000) pounds.

(b) "Commercial vehicle" means any self-propelled or motored device designed to be used or used primarily for the transportation of passengers or property, or both, and having a gross vehicular weight rating of fifteen thousand (15,000) pounds or more; provided, however, that wherever "motor vehicle" appears in this chapter, except in Section 63-19-43, the same shall be construed to include commercial vehicles where such construction is necessary in order to give effect to this chapter.

(c) "Retail buyer" or "buyer" means a person who buys a motor vehicle or commercial vehicle from a retail seller, not for the purpose of resale, and who executes a retail installment contract in connection therewith.

(d) "Retail seller" or "seller" means a person who sells a motor vehicle or commercial vehicle to a retail buyer under or subject to a retail installment contract.

(e) The "holder" of a retail installment contract means the retail seller of the motor vehicle or commercial vehicle under or subject to the contract or if the contract is purchased by a sales finance company or other assignee, the sales finance company or other assignee.

(f) "Retail installment transaction" means any transaction evidenced by a retail installment contract entered into between a retail buyer and a retail seller wherein the retail buyer buys a motor vehicle or commercial vehicle from the retail seller at a time price payable in one or more deferred installments. The cash sale price of the motor vehicle or commercial vehicle, the amount included for insurance and other benefits if a separate charge is made therefor, official fees and the finance charge shall together constitute the time price.

(g) "Retail installment contract" or "contract" means an agreement entered into in this state pursuant to which the title to or a lien upon the motor vehicle or commercial vehicle which is the subject matter of a retail installment transaction is retained or taken by a retail seller from a retail buyer as security for the buyer's obligation. The term includes a chattel mortgage, a conditional sales contract and a contract for the bailment or leasing of a motor vehicle or commercial vehicle by which the bailee or lessee contracts to pay as compensation for its use a sum substantially equivalent to or in excess of its value and by which it is agreed that the bailee or lessee is bound to become, or has the option of becoming, the owner of the motor vehicle upon full compliance with the provisions of the contract.

(h) "Cash sale price" means the price stated in a retail installment contract for which the seller would have sold to the buyer, and the buyer would have bought from the seller, the motor vehicle or commercial vehicle which is the subject matter of the retail installment contract, if such sale had been a sale for cash instead of a retail installment transaction. The cash sale price may include any taxes, registration, certificate of title, if any, license and other fees and charges for accessories and their installation and for delivery, servicing, repairing or improving the motor vehicle or commercial vehicle.

(i) "Official fees" means the fees prescribed by law for filing, recording or otherwise perfecting and releasing or satisfying a retained title or a lien created by a retail installment contract, if recorded.

(j) "Finance charge" means the amount agreed upon between the buyer and the seller, as limited in this chapter, to be added to the aggregate of the cash sale price, the amount, if any, included for insurance and other benefits and official fees, in determining the time price.

(k) "Sales finance company" means a person engaged, in whole or in part, in the business of purchasing retail installment contracts from one or more retail sellers. The term includes but is not limited to a bank, trust company, private banker, industrial bank or investment company, if so engaged. The term also includes a retail seller engaged, in whole or in part, in the business of creating and holding retail installment contracts which exceed a total aggregate outstanding indebtedness of Five Hundred Thousand Dollars ($500,000.00). The term does not include the pledgee to whom is pledged one or more of such contracts to secure a bona fide loan thereon.

(l) "Person" means an individual, partnership, corporation, association and any other group however organized.

(m) "Administrator" means the Commissioner of Banking and Consumer Finance of the State of Mississippi or his duly authorized representative.

(n) "Commissioner" means the Commissioner of Banking and Consumer Finance of the State of Mississippi.

Words in the singular include the plural and vice versa.

SECTION 2. Section 63-19-47, Mississippi Code of 1972, is amended as follows:

63-19-47. Notwithstanding the provisions of any retail installment contract to the contrary, any buyer may pay in full at any time before maturity the debt of any retail installment contract and in so paying such debt shall receive a refund credit thereon for such anticipation of payments provided such contract shall have a precomputed finance charge. The amount of such refund shall be calculated on the rule of the sum of the digits, commonly known as the "Rule of 78ths," after deducting from such refund an acquisition cost of Ten Dollars ($10.00). Where the amount of credit is less than One Dollar ($1.00), no refund need be made. In the event the finance charge on a contract evidencing the sale of a commercial vehicle is not precomputed, any buyer may pay in full at any time before maturity the then remaining unpaid principal balance of the contract and shall pay a penalty for such prepayment as may have been agreed to by the buyer and the seller in the contract, not to exceed Fifty Dollars ($50.00).

The provisions of this section shall apply in the event the vehicle is repossessed by the finance company or the dealer, and the dealer is required to pay the balance of indebtedness due the holder thereof.

SECTION 3. Section 75-67-103, Mississippi Code of 1972, is amended as follows:

75-67-103. The following words and phrases, when used in this article, shall, for the purposes of this article, have the meanings respectively ascribed to them in this section, except where the context clearly describes and indicates a different meaning:

(a) * * * "Person" means and includes every natural person, firm, corporation, copartnership, joint-stock or other association or organization, and any other legal entity whatsoever.

(b) * * * "Licensee" means and includes every person holding a valid license issued under the provisions of the Small Loan Privilege Tax Law [Sections 75-67-201 through 75-67-243] of this state, except those specifically exempt by the provisions of this article, who, in addition to any other rights and powers he or it might otherwise possess, shall engage in the business of lending money either directly or indirectly, to be paid back in monthly installments or other regular installments for periods of more or less than one (1) month, and whether or not the lender requires security from the borrower as indemnity for the repayment of the loan.

(c) "Occasional lender" means a person making five (5) or fewer loans in any twelve-month period.

(d) * * * "Commissioner" means the Commissioner of Banking and Consumer Finance of the State of Mississippi. * * *

(e) * * * "Department" means the Department of Banking and Consumer Finance of the State of Mississippi.

SECTION 4. Section 75-67-105, Mississippi Code of 1972, is amended as follows:

75-67-105. (1) No person shall engage in the business of lending money except as authorized by this article, and without being the holder of a valid and subsisting license to engage in such business as provided by the Small Loan Privilege Tax Law [Sections 75-67-201 through 75-67-243].

(2) Every person engaged in the business of lending money as authorized by this article shall have a physical office located in the State of Mississippi. A separate license is required for each office doing business in the State of Mississippi. Each electronic loan processing machine owned or operated by a licensed office is required to possess a separate license and have a permanent address with loan records to be maintained in a designated licensed office in the state.

SECTION 5. Section 81-19-7, Mississippi Code of 1972, is amended as follows:

81-19-7. Except as otherwise provided herein, this chapter does not apply to:

(a) Banks, bank holding companies, credit unions, insurance companies, savings and loan associations, savings banks, savings and loan association holding companies, small loan licensees, pawnbrokers, trust companies and their employees when acting on behalf of the employer.

(b) Approved mortgagees of the U.S. Department of Housing and Urban Development, the Federal Housing Administration or other federal agency.

(c) Mortgage companies engaged in the soliciting, packaging and/or selling of conventional residential mortgage loans into the secondary market. The exclusion provided in this paragraph (c) shall only exempt mortgage companies from the licensing requirements of this chapter and shall not exempt such companies from any other provisions of this chapter.

(d) An attorney licensed in this state who is not actively and principally engaged in the business of being a consumer loan broker even though the services of a consumer loan broker are occasionally rendered in the attorney's practice of law.

(e) A person who, without the consent of the owner, receives a mortgage or deed of trust on real or personal property as security for an obligation arising from use of materials or services in the improvement or repair of the property.

(f) A seller of real property who receives one or more mortgages or deeds of trust as security for a purchase money obligation.

SECTION 6. Section 81-21-21, Mississippi Code of 1972, is amended as follows:

81-21-21. (1) Whenever a financed insurance contract is cancelled, the insurer shall return whatever gross unearned premiums are due under the insurance contract, calculated on the rule of the sum of the digits commonly known as the "Rule of 78ths," directly to the premium finance company for the account of the insured or insureds as soon as reasonably possible, but in no event later than thirty (30) days after the effective date of cancellation.

(2) In the event that a premium is subject to an audit to determine the final premium amount, the gross unearned premium shall be calculated upon the deposit premium and the insurer shall return whatever gross unearned premiums are due based upon that deposit to the finance company for the account of the insured.

(3) In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund such excess to the insured, provided that no such refund shall be required if it amounts to less than Three Dollars ($3.00).

SECTION 7. Section 81-21-27, Mississippi Code of 1972, is amended as follows:

81-21-27. This chapter shall not apply to:

(a) The financing of insurance premiums by any seller who sells goods or services pursuant to an installment sales contract in which a time price differential is charged, or to any * * * savings and loan association, savings bank, bank, trust company, finance company, credit union or mortgage company * * *;

(b) Any insurance company, association or exchange authorized to do business in this state which solely finances the insurance premiums for its insurance policies, or a subsidiary of an authorized insurer admitted in this state or a corporation under substantially the same management or control as an admitted insurer or group of insurers, where such subsidiary, managed or controlled company is engaged in the business of financing insurance premiums on policies issued only by its parent insurer or affiliated group of insurers; and

(c) Any insurance agent or producing agent licensed to do business in this state who finances premiums on policies solely written by such agent or producing agent.

SECTION 8. The commissioner shall have the power and authority to adopt, promulgate and issue such rules and regulations, not inconsistent with this article, or any other statute of the State of Mississippi, as he shall deem necessary for the purpose of the administration of this chapter. A copy of every rule and regulation promulgated by the commissioner shall be filed in accordance with the Administrative Procedures Law, Section 25-43-1 et seq., Mississippi Code of 1972.

SECTION 9. Section 75-67-123, Mississippi Code of 1972, which places restrictions on loans made by a licensee under the Small Loan Regulatory Law to the same borrower within ninety (90) days, is hereby repealed.

SECTION 10. Section 8 of this act shall be codified as a separate code section within Chapter 19 of Title 63, Mississippi Code of 1972.

SECTION 11. This act shall take effect and be in force from and after its passage.