Senate Bill 2479

AN ACT TO AMEND SECTION 75-17-33, MISSISSIPPI CODE OF 1972, TO REVISE THE DUTIES OF THE COMMISSIONER OF BANKING AND CONSUMER FINANCE REGARDING THE ANNOUNCEMENT OF DISCOUNT RATES AND INDICES; TO AMEND SECTION 75-17-1, MISSISSIPPI CODE OF 1972, TO DELETE THE PROVISION ALLOWING ANY BORROWER OR DEBTOR TO CONTRACT FOR A FINANCE CHARGE NOT TO EXCEED THE GREATER OF 10% PER ANNUM OR 5% PER ANNUM ABOVE THE INDEX OF CERTAIN MARKET YIELDS ON ANY LOAN, MORTGAGE OR ADVANCE WHICH IS SECURED BY A LIEN ON RESIDENTIAL REAL PROPERTY; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 75-17-33, Mississippi Code of 1972, is amended as follows:

75-17-33. The Commissioner of Banking and Consumer Finance, upon any change in * * * a rate that has been determined to be the equivalent of the discount rate on ninety-day commercial paper by the Federal Reserve bank of a Federal Reserve district of which this state is a part, shall * * * make an official announcement of the new discount rate on the same day as the change, or as soon thereafter as possible * * *.

In contracting for a finance charge pursuant to the provisions of Section 75-17-1 or Sections 75-17-21 and 75-17-23, any person shall be entitled to rely conclusively upon the most recent * * * rate * * * officially announced by the Commissioner of Banking and Consumer Finance. The Commissioner of Banking and Consumer Finance shall acquire, keep and maintain a separate record in which he shall note or post the maximum permissible rates of finance charges available under Section 75-17-1 and Sections 75-17-21 and 75-17-23. Each rate so determined shall be the maximum permissible rate of finance charge available under each particular section or subsection thereof, and when certified by the Commissioner of Banking and Consumer Finance shall be admissible in evidence or judicially noticed as the maximum permissible rate of finance charge under the provisions of that particular section or subsection.

SECTION 2. Section 75-17-1, Mississippi Code of 1972, is amended as follows:

75-17-1. (1) The legal rate of interest on all notes, accounts and contracts shall be eight percent (8%) per annum, calculated according to the actuarial method, but contracts may be made, in writing, for payment of a finance charge as otherwise provided by this section or as otherwise authorized by law.

(2) Any borrower or debtor may contract for and agree to pay a finance charge for any loan or other extension of credit made directly or indirectly to a borrower or debtor which will result in a yield not to exceed the greater of ten percent (10%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located, each calculated according to the actuarial method. The rate of finance charge authorized under this subsection (2) shall be known as the "contract rate."

(3) Notwithstanding the foregoing and any other provision of law to the contrary, any partnership, joint venture, religious society, unincorporated association, or domestic or foreign corporation, whether organized for profit or nonprofit, may contract for and agree to pay a finance charge which will result in a yield not to exceed the greater of fifteen percent (15%) per annum or five percent (5%) per annum above the discount rate, excluding any surcharge thereon, on ninety-day commercial paper in effect at the Federal Reserve bank in the Federal Reserve district where the lender is located, each calculated according to the actuarial method, on any contract, loan, extension of credit or other obligation under which the principal balance to be repaid shall originally exceed Two Thousand Five Hundred Dollars ($2,500.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced shall exceed Two Thousand Five Hundred Dollars ($2,500.00); and as to any such agreement, the claim or defense of usury by such partnership, joint venture, religious society, unincorporated association, or corporation, or their successors, guarantors, assigns or anyone on their behalf is prohibited.

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(4) Notwithstanding the foregoing and any other provision of law to the contrary, any borrower or debtor may contract for and agree to pay and any lender or extender of credit may contract for and receive any finance charge agreed to in writing by the parties, notwithstanding that such charge is in excess of that otherwise allowed on any contract, credit sale, obligation or other extension of credit, regardless of the security taken or the purpose of the extension of credit, under which the principal balance to be repaid originally exceeds Two Thousand Dollars ($2,000.00), or on any series of advances of money pursuant to a contract if the aggregate of sums advanced or originally proposed to be advanced exceeds Two Thousand Dollars ($2,000.00), or on any extension or renewal thereof; and as to any such agreement, the claim or defense of usury or violation of any law prescribing, limiting or regulating the rate of finance charge by any borrower or debtor, or his successors, guarantors, assigns or anyone on his behalf is prohibited.

(5) Notwithstanding the foregoing and any other provisions of law to the contrary, the outstanding balance of a prior loan or lease of a motor vehicle used as a trade-in, as well as other items that are capitalized or amortized during the lease term, may be included in a lease for a motor vehicle, provided that the rate of finance charge associated with the lease contract does not at any time exceed the finance charge limitations specified in Section 63-19-43.

SECTION 3. This act shall take effect and be in force from and after its passage.