MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Banks and Banking

By: Representative Guice

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 vehicle, including automobiles, motorcycles, motor trucks, motor homes, and all other vehicles operated over the public highways of this state and propelled by power other than muscular power, but excluding traction engines, road rollers, implements of husbandry and other agricultural equipment and vehicles which only run on a track.

(b) "Commercial vehicle" means any motor vehicle as defined in paragraph (a) which is not used primarily for personal or household purposes.

(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 state inspection fees and 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, or from subsequent purchasers or assignees of contracts. 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 Two Hundred Fifty Thousand Dollars ($250,000.00). 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 or his duly authorized representative.

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

Words in the singular include the plural and vice versa.

SECTION 2. Section 63-19-7, Mississippi Code of 1972, is amended as follows:

63-19-7. No person shall engage in the business of a sales finance company in this state, or of financing motor vehicle contracts or retail contracts directly or indirectly from retail sellers located in this state, without a license therefor as provided in this chapter. A separate license is required for each office doing business under this chapter. A separate license is also required for the location where the records of lending conducted under this chapter are maintained if different from the place of origination. However, no bank, trust company, private banker, industrial bank or investment company authorized to do business in this state shall be required to obtain a license under this chapter. They shall, however, comply with all of the other provisions of this chapter.

SECTION 3. Section 63-19-9, Mississippi Code of 1972, is amended as follows:

63-19-9. (1) The application for such license shall be in writing, under oath and in the form prescribed by the commissioner. The application shall contain the name of the applicant; date of incorporation, if incorporated; the address where the business * * * is to be conducted, the address where the records are maintained and similar information as to any branch office of the applicant; the name and resident address of the owner or partners or, if a corporation or association, of the directors, trustees and principal officers; and such other pertinent information as the commissioner may require.

(2) An applicant shall file along with his application for license a surety bond in the principal amount of One Thousand Dollars ($1,000.00) written by a surety company authorized to do business in the State of Mississippi and approved by the commissioner. Such bond shall be payable to the State of Mississippi and shall be conditioned upon the applicant operating his business in conformity to the laws of this state and the regulations promulgated by the commissioner. Suits may be brought on such bond and against the surety thereon by any person having a right of action against same in the name of the State of Mississippi.

(3) If the commissioner finds at any time that any bond filed with him by a licensee under the provisions of this section is insecure for any reason, or if same has been exhausted, the commissioner shall require an additional bond in the amount of One Thousand Dollars ($1,000.00) conditioned as provided in this section. If, after ten (10) days' written notice by the commissioner, any licensee fails, neglects or refuses to furnish such additional bond, the license held by such person shall be forthwith cancelled by the commissioner. Notice of all suits filed against the licensee and the surety on his bond shall be given the commissioner at the time of the institution thereof, and notice of the result of outcome of all such suits shall be given the commissioner within ten (10) days after the termination thereof.

SECTION 4. Section 63-19-11, Mississippi Code of 1972, is amended as follows:

63-19-11. The license fee for each calendar year or part thereof shall be the sum of Three Hundred Dollars ($300.00) for each place of business engaged in the business of financing motor vehicle contracts or purchasing motor vehicle contracts whether from retail sellers in this state or from subsequent purchasers or assignees of contracts.

SECTION 5. Section 63-19-21, Mississippi Code of 1972, is amended as follows:

63-19-21. No license shall be denied, suspended or revoked except after hearing thereon. The commissioner shall give the licensee at least ten (10) days' written notice, in the form of an order to show cause, of the time and place of such hearing by certified mail addressed to the principal place of business * * * of such licensee. The said notice shall contain the grounds of complaint against the licensee. Any order suspending or revoking such license shall recite the grounds upon which the same is based. The order shall be entered upon the records of the commissioner and shall not be effective until after thirty (30) days' written notice thereof given after such entry forwarded by registered mail to the licensee at such principal place of business. No revocation, suspension or surrender of any license shall impair or affect the obligation of any lawful retail installment contract acquired previously thereto by the licensee.

Within thirty (30) days after any such denial, suspension or revocation of a license the person aggrieved may apply for a review thereof by an application to any chancellor or judge of the chancery court of the county wherein is located the principal place of business * * * of such licensee in accordance with the practice of said court. Any chancellor or judge of the chancery court of the county wherein is located the principal place of business in this state of such licensee shall determine de novo all questions, both of fact and of law, touching upon the legality and reasonableness of the determination of the commissioner, and shall render such judgment as shall be lawful and just.

SECTION 6. Section 63-19-23, Mississippi Code of 1972, is amended as follows:

63-19-23. Each licensee shall keep and use in his business such books, accounts and other records which shall be in accordance with sound and accepted business practices and shall be in such form as will clearly reflect all transactions and will enable the commissioner to determine whether the licensee is complying with the provisions of this chapter. Such records shall be kept with respect to each contract for a period of not less than twenty-four (24) months after the final transaction of the contract. Such records shall include a copy of the contract, all other related documents relating to the contract, and any other information which may be required by the commissioner. All such records shall be open to the inspection of the commissioner or his duly authorized representatives at all times during regular business hours. Records shall be maintained in folders, envelopes or similar method of separation containing original or hard copy, printouts from computers or magnetic media if readily available for viewing on a screen with the capability of being promptly printed on request. The commissioner shall, at intermittent periods, make such investigations and examinations of any licensee or other person as he deems necessary to determine compliance with this chapter. For such purpose he may examine the books, accounts, records and other documents or matters of any licensee or other person. He shall have the power to compel the production of all relevant books, records and other documents and materials relative to an examination or investigation. Such investigations and examinations shall not be made more often than once during a year unless the commissioner has reason to believe the licensee is not complying with the provisions of this chapter.

SECTION 7. Section 63-19-31, Mississippi Code of 1972, is amended as follows:

63-19-31. (1) (a) A retail installment contract shall be in writing, shall be signed by both the buyer and the seller, and shall be completed as to all essential provisions prior to the signing of the contract by the buyer.

(b) The printed portion of the contract, other than instructions for completion, shall be in at least eight point type. The contract shall contain in a size equal to at least ten point bold type:

(i) A specific statement that liability insurance coverage for bodily injury and property damage caused to others is not included, if that is the case; and

(ii) The following notice: "Notice to the Buyer: 1. Do not sign this contract before you read it or if it contains any blank spaces. 2. You are entitled to an exact copy of the contract you sign."

(c) The seller shall deliver to the buyer, or mail to him at his address shown on the contract, a copy of the contract signed by the seller. Until the seller does so, a buyer who has not received delivery of the motor vehicle shall have the right to rescind his agreement and to receive a refund of all payments made and return of all goods traded in to the seller on account of or in contemplation of the contract, or if such goods cannot be returned, the value thereof. Any acknowledgment by the buyer of the delivery of a copy of the contract shall be in a size equal to at least ten (10) point bold type and, if contained in the contract, shall appear directly above the buyer's signature.

(d) The contract shall contain the names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer and a description of the motor vehicle including its make, year model, model and identification numbers or marks.

(2) The contract shall contain the following items and shall disclose the following charges to the borrower:

(a) The cash sale price of the motor vehicle;

(b) The amount of the buyer's down payment, and whether made in money or goods, or partly in money and partly in goods;

(c) The difference between items (a) and (b);

(d) The amount, if any, included for insurance and other benefits specifying the types of coverage and benefits;

(e) The amount of official fees, as defined in Section 63-19-3(i);

(f) The principal balance, which is the sum of items (c), (d), and (e);

(g) The amount of the finance charge;

(h) The time balance, which is the sum of items (f) and (g), payable in installments by the buyer to the seller, the number of installments, the amount of each installment and the due date or period thereof.

The above items need not be stated in the sequence or order set forth. Additional items may be included to explain the calculations involved in determining the stated time balance to be paid by the buyer. Notwithstanding any provision of this chapter to the contrary, in any contract evidencing the sale of a commercial vehicle, the statement of the amount of the finance charge (item (g) hereof) and the amount of each installment (item (h) hereof) may be calculated using the finance charge rate applicable to the transaction as of the date of execution of the contract, notwithstanding the fact that such finance charge rate may increase or decrease over the term of the contract according to any formula or index set forth in the contract; provided, however, that under no circumstances may the variable rate under such contract at any time exceed the finance charge limitations found in Section 63-19-43 * * *.

(3) No retail installment contract shall be signed by any party thereto when it contains blank spaces to be filled in after it has been signed except that, if delivery of the motor vehicle is not made at the time of the execution of the contract, the identifying numbers or marks of the motor vehicle or similar information and the due date of the first installment may be inserted in the contract after its execution. The buyer's written acknowledgment, conforming to the requirements of subdivision (c) of subsection (1) of this section, of delivery of a copy of a contract shall be conclusive proof of such delivery, that the contract when signed did not contain any blank spaces except as herein provided, and of compliance with Sections 63-19-31 to 63-19-41 in any action or proceeding by or against the holder of the contract.

SECTION 8. Section 63-19-43, Mississippi Code of 1972, is amended as follows:

63-19-43. (1) The maximum finance charge which may be contracted for or received for any purchase money loan or purchase money extension of credit made by any lender or by any licensed retail seller, or by any other entity that is expressly exempt from licensing but expressly subject to compliance with this chapter under the provisions of Section 63-19-7, in connection with sales or financing of motor vehicles and commercial vehicles, as defined in Section 63-19-3(a) and 63-19-3(b), made under this chapter, may result in a yield not to exceed the following annual percentage rates calculated according to the actuarial method:

(a) Class 1. Any new motor vehicle manufactured in the same year or the year immediately prior to the year in which the sale is made -- eighteen percent (18%) per annum on the unpaid balance.

(b) Class 2. Any new motor vehicle not in Class 1, any used motor vehicle manufactured not more than two (2) years prior to the year in which the sale is made, and any new commercial vehicle or used commercial vehicle manufactured not more than one (1) year prior to the year in which the sale is made -- twenty-one percent (21%) per annum on the unpaid balance.

(c) Class 3. Any used motor vehicle not in Class 2 and manufactured not more than four (4) years prior to the year in which the sale is made and any used commercial vehicle not in Class 2 -- twenty-six and seventy-five one-hundredths percent (26.75%) per annum on the unpaid balance.

(d) Class 4. Any used motor vehicle not in Class 2 or Class 3 and manufactured more than four (4) years prior to the year in which the sale is made -- twenty-eight and seventy-five one-hundredths percent (28.75%) per annum on the unpaid balance.

(2) Any subsequent extension, renewal or refinancing of any purchase money loan or purchase money extension of credit under this chapter which is secured by a perfected security interest in a motor vehicle or commercial vehicle pursuant to Section 63-21-43 shall continue to be secured by such security interest without the necessity of reapplying for a certificate of title under that section.

SECTION 9. Section 63-19-55, Mississippi Code of 1972, is amended as follows:

63-19-55. (1) Any person who shall willfully and intentionally violate any provision of this chapter or engage in the business of a sales finance company in this state without a license therefor as provided in this chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine not exceeding Five Hundred Dollars ($500.00). However, any licensee who is exempt from liability for an act or omission under Section 63-19-57 shall not be guilty of a misdemeanor under this section for the same act or omission.

(2) If any person engages in business as provided for in this chapter without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license.

(3) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this chapter. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Any person willfully violating Sections 63-19-31 to 63-19-45, shall be barred from recovery of any finance charge, delinquency or collection charge on the contract.

(5) However, any such contract purchased in good faith for value by any bank, trust company, private bank, industrial bank or investment company authorized to do business in this state shall be held and construed to be valid and enforceable in the hands of the purchaser for value, except that such purchaser shall not be permitted to recover on such contract from the buyer anything in excess of the principal balance due thereon, plus the amount of the finance and collection charges permitted under the terms and provisions of this chapter.

SECTION 10. The following section shall be codified as a separate Code section within Chapter 19 of Title 63, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required by this chapter.

SECTION 11. Section 81-21-3, Mississippi Code of 1972, is amended as follows:

81-21-3. (1) No person shall engage in the business of a premium finance company in this state without first having obtained a license as a premium finance company from the commissioner.

(2) The annual license fee shall be Three Hundred Dollars ($300.00) payable as of the first day of July of each year to the commissioner for deposit into the special fund in the State Treasury designated as the "Consumer Finance Fund." The commissioner may employ persons as necessary to administer this chapter and to examine or investigate and make reports on violations of this chapter.

(3) For the purpose of defraying the inspection and examination expenses and any other expenses incurred by the commissioner in the administration of this chapter, each licensee shall pay to the commissioner, at the time of examination, the sum of Two Hundred Dollars ($200.00) per diem for each day of examination, and, in addition, shall pay the actual expenses of such examination. Such fees shall be payable in addition to other fees and taxes now required by law and shall be expendable receipts for the use of the commissioner in defraying the cost of the administration of this chapter.

All fees, license tax and penalties provided for in this chapter which are payable to the commissioner shall, when collected by him or his designated representative, be deposited in the special fund in the State Treasury known as the "Consumer Finance Fund" and shall be expended by the commissioner solely and exclusively for the purpose of administering and enforcing the provisions of this chapter.

(4) Application for licensing shall be made on forms prepared by the commissioner and shall contain the following information:

(a) Name, business address and telephone number of the premium finance company;

(b) Name and business address of corporate officers and directors or principals or partners; and

(c) A sworn statement by an appropriate officer, principal or partner of the premium finance company that:

(i) The premium finance company is financially capable to engage in the business of insurance premium financing;

(ii) If a corporation, that the corporation is authorized to transact business in this state; and

(iii) If any material change occurs in the information contained in the registration form, a revised statement shall be submitted to the commissioner.

(5) An applicant shall file along with his application for license a surety bond in the principal amount of One Thousand Dollars ($1,000.00) written by a surety company authorized to do business in the State of Mississippi and approved by the commissioner. Such bond shall be payable to the State of Mississippi and shall be conditioned upon the applicant operating his business in conformity to the laws of this state and the regulations promulgated by the commissioner. Suits may be brought on such bond and against the surety thereon by any person having a right of action against same in the name of the State of Mississippi.

(6) If the commissioner finds at any time that any bond filed with him by a licensee under the provisions of this section is insecure for any reason, or if same has been exhausted, the commissioner shall require an additional bond in the amount of One Thousand Dollars ($1,000.00) conditioned as provided in this section. If, after ten (10) days' written notice by the commissioner, any licensee fails, neglects or refuses to furnish such additional bond, the license held by such person shall be forthwith cancelled by the commissioner. Notice of all suits filed against the licensee and the surety on his bond shall be given the commissioner at the time of the institution thereof, and notice of the result of outcome of all such suits shall be given the commissioner within ten (10) days after the termination thereof.

(7) The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. All such rules and regulations shall be promulgated in accordance with the provisions of the Mississippi Administrative Procedures Law.

SECTION 12. Section 81-21-9, Mississippi Code of 1972, is amended as follows:

81-21-9. (1) In lieu of revoking or suspending the license for any of the causes enumerated in this chapter, after a hearing as provided in Section 81-21-7, the commissioner may subject such company to a penalty not to exceed Five Hundred Dollars ($500.00) for each offense when the commissioner finds that the public interest would not be harmed by the continued operation of the company. The amount of any such penalty shall be paid by such company to the commissioner for deposit into the special fund in the State Treasury designated as the "Consumer Finance Fund." At any hearing provided by this chapter, the commissioner shall have authority to administer oaths to witnesses. Anyone testifying falsely, after having been administered such oath, shall be subject to the penalty of perjury.

(2) If any person engages in business as provided for in this chapter without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license.

SECTION 13. Section 81-21-15, Mississippi Code of 1972, is amended as follows:

81-21-15. (1) A premium finance company shall not charge, contract for, receive or collect any interest or service charge other than as permitted in this section.

(2) The interest is to be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance contract or as otherwise agreed to by the parties, for which the premiums are being advanced, to the date when the final installment of the premium finance agreement is payable.

(3) Notwithstanding any provision of law to the contrary, for any loan or extension of credit in an amount of Ten Thousand Dollars ($10,000.00) or less, made by a licensee under this chapter, the licensee may contract for and receive any finance charge agreed to in writing by the licensee and the insured, not to exceed an annual percentage rate of twenty-four percent (24%) * * * on the unpaid balance calculated in accordance with the actuarial method; provided, however, if the loan or extension of credit is in an amount more than Ten Thousand Dollars ($10,000.00), the licensee may contract for and receive any finance charge agreed to in writing by the licensee and the insured.

(4) Notwithstanding the provisions of any premium finance agreement, any insured may voluntarily prepay the obligation in full at any time and shall receive a refund credit, which shall represent at least as great a proportion of the interest or discount as the sum of the periodic balances, after the month in which prepayment is made, bears to the sum of all periodic balances under the schedule of installments in the agreement. Where the amount of the refund credit is less than Three Dollars ($3.00), no refund need be made.

SECTION 14. The following section shall be codified as a separate Code section within Chapter 21 of Title 81, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

SECTION 15. Section 75-15-31, Mississippi Code of 1972, is amended as follows:

75-15-31. (1) If any person to whom or which this chapter applies or any agent, subagent or representative of such person violates any of the provisions of this chapter or attempts to transact the business of selling or issuing or delivering checks as a service or for a fee or other consideration, without having first obtained license from the commissioner pursuant to the provisions of this chapter, such person and each such agent, subagent or representative shall be deemed guilty of a misdemeanor, and upon conviction shall be fined not less than One Hundred Dollars ($100.00) nor more than Five Hundred Dollars ($500.00) and he may also be confined to the county jail or sentenced to hard labor for the county, for not more than twelve (12) months. Each violation shall constitute a separate offense.

(2) If any person engages in business as provided for in this chapter without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license.

(3) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this chapter. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

SECTION 16. The following section shall be codified as a separate Code section within Chapter 15 of Title 75, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

SECTION 17. The following section shall be codified as a separate Code section within Chapter 15 of Title 75, Mississippi Code of 1972:

The commissioner may promulgate rules and regulations to effectuate the purposes of this chapter. All such rules and regulations shall be promulgated in accordance with the provisions of the Mississippi Administrative Procedures Law, Section 25-43-1 et seq.

SECTION 18. Section 75-67-215, Mississippi Code of 1972, is amended as follows:

75-67-215. (1) If any person shall engage in business as provided for in this article without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license.

(2) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this article. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

SECTION 19. The following section shall be codified as a separate Code section within Article 5 of Chapter 67 of Title 75, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

SECTION 20. Section 75-67-321, Mississippi Code of 1972, is amended as follows:

75-67-321. (1) A person may not engage in business as a pawnbroker or otherwise portray himself as a pawnbroker unless the person has a valid license authorizing engagement in the business. A separate license is required for each place of business under this article. The commissioner may issue more than one (1) license to a person if that person complies with this article for each license. A new license or application to transfer an existing license is required upon a change, directly or beneficially, in the ownership of any licensed pawnshop and an application shall be made to the commissioner in accordance with this article.

(2) When a licensee wishes to move a pawnshop to another location, the licensee shall give thirty (30) days prior written notice to the commissioner who shall amend the license accordingly.

(3) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. Every licensee, on or before each December 1st, shall pay the commissioner One Hundred Fifty Dollars ($150.00) for each license held by him as an annual fee for the succeeding calendar year. If the annual fee remains unpaid thirty (30) days after December 1 * * *, the license shall thereupon expire, but not before December thirty-first of any year for which the annual fee has been paid. If any person engages in business as provided for in this article without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding other provisions of this article, the commissioner may issue a temporary license authorizing the operator of a pawnshop on the receipt of an application to transfer a license from one person to another or on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed pawnshop. The temporary license is effective until the permanent license is issued or denied.

(5) Notwithstanding other provisions of this article, neither a new license nor an application to transfer an existing license shall be required upon any change, directly or beneficially, in the ownership of any licensed pawnshop incorporated under the laws of this state or any other state so long as the licensee continues to operate as a corporation doing a pawnshop business under the license. The commissioner may, however, require the licensee to provide such information as he deems reasonable and appropriate concerning the officer and directors of the corporation and persons owning in excess of twenty-five percent (25%) of the outstanding shares of the corporation.

SECTION 21. Section 75-67-333, Mississippi Code of 1972, is amended as follows:

75-67-333. (1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of this article, or who willfully makes a false entry in any record specifically required by this article, shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) per violation or false entry.

(2) (a) In addition to any other penalty which may be applicable, any licensee or employee who fails to make a record of a pawnshop transaction and subsequently sells or disposes of the pledged goods from such transaction shall be punished as follows:

(i) For a first offense, the licensee or employee shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or both fine and imprisonment;

(ii) For a second offense, the licensee or employee shall be guilty of a felony and upon conviction thereof, shall be punishable by a fine not in excess of Five Thousand Dollars ($5,000.00) or by imprisonment in the custody of the State Department of Corrections for a term not less than one (1) year nor more than five (5) years, or by both fine and imprisonment.

(b) Any licensee convicted in the manner provided in this subsection (2) shall forfeit the surety bond or deposit required in Section 75-67-323 and the amount of such bond or deposit shall be credited to the budget of the state or local agency, which directly participated in the prosecution of such licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. Such bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

(3) Compliance with the criminal provisions of this article shall be enforced by the appropriate law enforcement agency who may exercise for such purpose any authority conferred upon such agency by law.

(4) When the commissioner has reasonable cause to believe that a person is violating any provision of this article, the commissioner, in addition to and without prejudice to the authority provided elsewhere in this article, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(5) The commissioner may, after notice and a hearing, impose a civil penalty against any licensee adjudged by the commissioner to be in violation of the provisions of this article. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

SECTION 22. Section 75-67-341, Mississippi Code of 1972, is amended as follows:

75-67-341. (1) The Commissioner of Banking shall develop and provide any necessary forms to carry out the provisions of this article.

(2) To assure compliance with the provisions of this article, the commissioner may examine the books and records of any licensee without notice during normal business hours.

SECTION 23. The following section shall be codified as a separate Code section within Article 7 of Chapter 67 of Title 75, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

SECTION 24. Section 75-67-419, Mississippi Code of 1972, is amended as follows:

75-67-419. (1) A person may not engage in business as a title pledge lender or otherwise portray himself as a title pledge lender unless the person has a valid license authorizing engagement in the business. A separate license is required for each place of business under Sections 75-67-401 through 75-67-441. The commissioner may issue more than one (1) license to a person if that person complies with Sections 75-67-401 through 75-67-441 for each license. A new license or application to transfer an existing license is required upon a change, directly or beneficially, in the ownership of any licensed title pledge office and an application shall be made to the commissioner in accordance with Sections 75-67-401 through 75-67-441.

(2) When a licensee wishes to move a title pledge office to another location, the licensee shall give thirty (30) days prior written notice to the commissioner who shall amend the license accordingly.

(3) Each license shall remain in full force and effect until relinquished, suspended, revoked or expired. Every licensee, on or before each June 1, shall pay the commissioner One Hundred Fifty Dollars ($150.00) for each license held by him as an annual fee for the succeeding calendar year. If the annual fee remains unpaid thirty (30) days after June 1 * * *, the license shall thereupon expire, but not before June 30 of any year for which the annual fee has been paid. If any person engages in business as provided for in this article without paying the license fee provided for herein prior to commencing business or prior to the expiration of such person's current license, as the case may be, then such person shall be liable for the full amount of such license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license. All licensing fees and penalties shall be paid into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

(4) Notwithstanding other provisions of Sections 75-67-401 through 75-67-441, the commissioner may issue a temporary license authorizing the operation of a title pledge office on the receipt of an application to transfer a license from one person to another or on the receipt of an application for a license involving principals and owners that are substantially identical to those of an existing licensed title pledge office. The temporary license is effective until the permanent license is issued or denied.

(5) Notwithstanding other provisions of Sections 75-67-401 through 75-67-441, neither a new license nor an application to transfer an existing license shall be required upon any change, directly or beneficially, in the ownership of any licensed title pledge office incorporated under the laws of this state or any other state so long as the licensee continues to operate as a corporation doing a title pledge business under the license. The commissioner may, however, require the licensee to provide such information as he deems reasonable and appropriate concerning the officer and directors of the corporation and persons owning in excess of twenty-five percent (25%) of the outstanding shares of the corporation.

SECTION 25. Section 75-67-431, Mississippi Code of 1972, is amended as follows:

75-67-431. (1) In addition to any other penalty which may be applicable, any licensee or employee who willfully violates any provision of Sections 75-67-401 through 75-67-441, or who willfully makes a false entry in any record specifically required by Sections 75-67-401 through 75-67-441, shall be guilty of a misdemeanor and, upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) per violation or false entry.

(2) (a) In addition to any other penalty which may be applicable, any licensee or employee who fails to make a record of a title pledge transaction and subsequently sells or disposes of the pledged property from such transaction shall be punished as follows:

(i) For a first offense, the licensee or employee shall be guilty of a misdemeanor and upon conviction thereof, shall be punishable by a fine not in excess of One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or both fine and imprisonment;

(ii) For a second offense, the licensee or employee shall be guilty of a felony and, upon conviction thereof, shall be punishable by a fine not in excess of Five Thousand Dollars ($5,000.00) or by imprisonment in the custody of the State Department of Corrections for a term not less than one (1) year nor more than five (5) years, or by both fine and imprisonment.

(b) Any licensee convicted in the manner provided in this subsection (2) shall forfeit the surety bond or deposit required in Section 75-67-421 and the amount of the bond or deposit shall be credited to the budget of the state or local agency, which directly participated in the prosecution of the licensee, for the specific purpose of increasing law enforcement resources for that specific state or local agency. Any proceeds of a forfeited bond or deposit shall be used to augment existing state and local law enforcement budgets and not to supplant them.

(3) Compliance with the criminal provisions of Sections 75-67-401 through 75-67-441 shall be enforced by the appropriate law enforcement agency who may exercise for that purpose any authority conferred upon the agency by law.

(4) When the commissioner has reasonable cause to believe that a person is violating any provision of Sections 75-67-401 through 75-67-441, the commissioner, in addition to and without prejudice to the authority provided elsewhere in Sections 75-67-401 through 75-67-441, may enter an order requiring the person to stop or to refrain from the violation. The commissioner may sue in any circuit court of the state having jurisdiction and venue to enjoin the person from engaging in or continuing the violation or from doing any act in furtherance of the violation. In such an action, the court may enter an order or judgment awarding a preliminary or permanent injunction.

(5) The commissioner may, after notice and hearing, impose a civil penalty against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of Sections 75-67-401 through 75-67-441. Such civil penalty shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

SECTION 26. Section 75-67-433, Mississippi Code of 1972, is amended as follows:

75-67-433. If any pledged property from a title pledge transaction is found to be stolen and is returned to the rightful owner by law enforcement authorities and if the licensee who accepted such pledged property has complied with all of the duties and responsibilities as specified in Sections 75-67-401 through 75-67-441 during such transaction, then the rightful owner of such pledged property shall be liable to the licensee for the pledged amount if the rightful owner fails to prosecute or cooperate in the criminal prosecution related to such title loan transaction, provided that the rightful owner can prove that the stolen goods are his. It shall also be the responsibility of the licensee to assist or cooperate in the criminal prosecution related to such title pledge transaction. If the identity of a person who pledged stolen goods can be determined, the district attorney may prosecute such person for any applicable criminal violations.

SECTION 27. The following section shall be codified as a separate Code section within Article 9 of Chapter 67 of Title 75, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

SECTION 28. Section 81-19-15, Mississippi Code of 1972, is amended as follows:

81-19-15. Applications for renewal of a license shall be submitted, along with the payment of the annual fee, on an application form supplied by the commissioner upon which information relating to all of the applicant's licensed offices shall be set forth in accordance with instructions contained therein, including, in the discretion of the commissioner, such additional information as may be required by statute or regulation for the issuance of an initial license.

The application for renewal of a license shall be received by the commissioner within thirty (30) days prior to the expiration of any valid and existing license issued hereunder. If any person engages in business as provided for in this chapter without paying the license fee provided herein prior to commencing business or prior to the expiration of his current license shall be liable for the full amount of the license fee plus a penalty in an amount not to exceed Fifty Dollars ($50.00) for each day that the person has engaged in such business without a license or after the expiration of a license.

SECTION 29. Section 81-19-17, Mississippi Code of 1972, is amended as follows:

81-19-17. (1) Each licensee shall be subject to the supervision of the commissioner.

(2) The commissioner is authorized to make and enforce such reasonable regulations as are necessary and proper for the administration, enforcement and interpretation of the provisions of this chapter. In adopting such regulations, the commissioner shall follow the procedures set forth in the Mississippi Administrative Procedures Act (Section 25-43-1 et seq.).

(3) In order to discover violations of this chapter and to identify persons subject to the provisions of this chapter, the commissioner is authorized to examine licensees, including all books, records, accounts and papers employed by such licensees in the transaction of their business, to summon witnesses and examine them under oath concerning matters relating to the business of such persons, and to investigate such other matters as may be relevant in the opinion of the commissioner. For this purpose and for the general purposes of administration of this chapter, the commissioner may employ such deputies and assistants as may be necessary, and such deputies and assistants, in the discretion of the commissioner, may be vested with the same authority conferred upon the commissioner by this chapter.

(4) For the purpose of defraying a portion of the examination and administrative expenses incurred by the commissioner, each licensee shall pay at the time of examination the actual expenses of the examination, not to exceed Two Hundred Dollars ($200.00) per day for the time actually devoted to examining the business of the licensee. However, for any examination other than one conducted because of suspected blatant violation of this chapter, the amount charged to any single licensee in any one (1) year shall not exceed Two Thousand Dollars ($2,000.00).

(5) The commissioner may impose and collect an administrative fine against any person found to have charged or collected a service charge or advance fee from a borrower before a loan is actually found, obtained and closed for such borrower. Such fine shall not exceed Five Thousand Dollars ($5,000.00) for each violation.

(6) Whenever the commissioner has reasonable cause to believe that any person is violating any of the provisions of this chapter, in addition to all other remedies provided herein, the commissioner may, by, through and on the relation of the Attorney General, District Attorney or county attorney, apply to a court of competent jurisdiction for an injunction, both temporary and permanent, to restrain such person from engaging in or continuing such violation of the provisions of this chapter or from doing any act or acts in furtherance thereof.

(7) The commissioner may, after notice and hearing, impose an administrative fine against any licensee if the licensee or employee is adjudged by the commissioner to be in violation of the provisions of this chapter. Such administrative fine shall not exceed Five Hundred Dollars ($500.00) per violation and shall be deposited into the Consumer Finance Fund of the Department of Banking and Consumer Finance.

SECTION 30. Section 81-19-19, Mississippi Code of 1972, is amended as follows:

81-19-19. All funds coming into the possession of the commissioner as a result of this chapter, including all annual fees and examination fees * * *, shall be deposited by the commissioner into the special fund in the State Treasury known as the "Consumer Finance Fund," and shall be expended by the commissioner solely and exclusively for the administration and enforcement of this chapter. * * *

SECTION 31. The following section shall be codified as a separate Code section within Chapter 19 of Title 81, Mississippi Code of 1972:

The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by such persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of such persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

SECTION 32. Section 10 of this act shall be codified as a separate Code section within Chapter 19 of Title 63, Mississippi Code of 1972.

SECTION 33. Section 14 of this act shall be codified as a separate Code section within Chapter 21 of Title 81, Mississippi Code of 1972.

SECTION 34. Sections 16 and 17 of this act shall be codified as separate Code sections within Chapter 15 of Title 75, Mississippi Code of 1972.

SECTION 35. Section 19 of this act shall be codified as a separate Code section within Article 5 of Chapter 67 of Title 75, Mississippi Code of 1972.

SECTION 36. Section 23 of this act shall be codified as a separate Code section within Article 7 of Chapter 67 of Title 75, Mississippi Code of 1972.

SECTION 37. Section 27 of this act shall be codified as a separate Code section within Article 9 of Chapter 67 of Title 75, Mississippi Code of 1972.

SECTION 38. Section 31 of this act shall be codified as a separate Code section within Chapter 19 of Title 81, Mississippi Code of 1972.

SECTION 39. This act shall take effect and be in force from and after July 1, 1998.