MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Banks and Banking

By: Representative Robinson (84th)

AN ACT TO CREATE NEW SECTION 75-67-108, MISSISSIPPI CODE OF 1972, TO AUTHORIZE SMALL LOAN LICENSEES TO SELL NONCREDIT PRODUCTS THAT ARE NOT RELATED TO ANY LOAN OR EXTENSION OF CREDIT MADE BY THE LICENSEE, IF CERTAIN CONDITIONS ARE MET; TO AMEND SECTION 75-67-121, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PRECEDING PROVISION; AND FOR RELATED PURPOSES. 

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

SECTION 1. The following shall be codified as Section 75-67-108, Mississippi Code of 1972:

75-67-108. (1) In addition to engaging in the business of handling loans, lending money and exercising any other powers authorized under this article, any licensee under this article shall be authorized to sell noncredit products, including, but not limited to, automobile club services and accidental death and dismemberment insurance, that are not related to any loan or extension of credit made by the licensee, if the following conditions are met:

(a) The licensee shall not require the purchase of the noncredit product as a condition of receiving any loan or other extension of credit from the licensee;

(b) The licensee shall not make the customer's ability to obtain any current or future loan or other extension of credit from the licensee contingent upon the customer's agreement to purchase the noncredit product or otherwise transact business with the licensee; and

(c) The licensee shall allow the customer to pay the cost of the noncredit product using funds other than the proceeds of a loan obtained from the licensee, or have the cost of the noncredit product deducted from the proceeds of any loan obtained from the licensee.

(2) The licensee shall disclose in writing to the customer of any noncredit product the provisions of subsection (1) of this section and the full cost to the customer of purchasing the noncredit product.

(3) The Commissioner of Banking and Consumer Finance shall enforce the provisions of this section, and he may adopt reasonable rules and regulations to prevent abuse of the provisions of this section.

SECTION 2. Section 75-67-121, Mississippi Code of 1972, is amended as follows:

75-67-121. Any licensee under this article may charge any borrower on loans of One Hundred Dollars ($100.00) or more the actual cost of recording any instrument executed as security for a loan; any reasonable fee paid to an attorney for investigating the title to any property given as security for a loan; the actual cost of any premium paid for insurance upon any property given as security for a loan, such insurance to be placed with an insurance company agent of the borrower's selection so long as it is licensed to do business in the State of Mississippi; the actual cost of any premium paid for life, health and/or accident insurance on any borrower where the amount of insurance required is not in excess of the amount of the loan and the premium therefor is in keeping with that usually and customarily paid for like insurance.

Whenever he shall find it necessary, the Commissioner of Banking and Consumer Finance shall have the power to adopt and enforce reasonable rules and regulations to prevent the abuse of this section and the making of excessive charges under this section.

Nothing in this section shall restrict the authority of any licensee to sell noncredit products as authorized under Section 75-67-108 and to charge reasonable costs for those products.

SECTION 3. This act shall take effect and be in force from and after July 1, 1998.