MISSISSIPPI LEGISLATURE
2004 Regular Session
To: Business and Financial Institutions
By: Senator(s) Huggins
AN ACT TO PROVIDE FOR THE LICENSING AND REGULATION OF PERSONS WHO ENGAGE IN THE BUSINESS OF REPOSSESSING MOTOR VEHICLES; TO EXEMPT CERTAIN INDIVIDUALS FROM THE PROVISIONS OF THIS ACT; TO PROVIDE THAT THE SECRETARY OF STATE SHALL ADMINISTER THIS ACT; TO PROVIDE FOR APPLICATIONS FOR LICENSES UNDER THIS ACT; TO PROVIDE FOR THE MINIMUM REQUIREMENTS FOR LICENSING UNDER THIS ACT; TO PROVIDE FOR THE INVESTIGATION OF APPLICANTS BY THE SECRETARY OF STATE; TO REQUIRE AGENCIES LICENSED UNDER THIS ACT TO MAINTAIN CERTAIN GENERAL LIABILITY INSURANCE COVERAGE; TO PROVIDE FOR THE FORM OF THE LICENSE AND IDENTITY CARDS; TO PROVIDE FOR THE RENEWAL AND CANCELLATION OF LICENSES; TO AUTHORIZE LICENSEES TO SPONSOR INTERNS; TO ESTABLISH A SPECIAL FUND IN THE STATE TREASURY INTO WHICH FEES COLLECTED UNDER THIS ACT SHALL BE DEPOSITED; TO PROVIDE THAT THE MONEY IN THE FUND SHALL BE APPROPRIATED TO THE SECRETARY OF STATE FOR THE ADMINISTRATION OF THIS ACT; TO PROVIDE THE GROUNDS FOR DISCIPLINARY ACTION BY THE SECRETARY OF STATE; TO PROVIDE PENALTIES FOR VIOLATIONS OF THIS ACT; TO PROVIDE FOR THE TYPES OF LICENSES THAT MAY BE ISSUED UNDER THIS ACT; TO ESTABLISH THE FEES FOR SUCH LICENSES; TO REQUIRE AN INVENTORY OF PERSONAL PROPERTY FOUND IN REPOSSESSED VEHICLES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. As used in this act:
(a) "Person" means any individual, firm, company, agency, organization, partnership or corporation.
(b) "Licensee" means any person licensed under this act.
(c) "Principal officer" means an individual who holds the office of president, vice president, secretary or treasurer in a corporation.
(d) "Advertising" means the submission of bids, contracting or making known by any public notice or solicitation of business, directly or indirectly, that services regulated under this chapter are available for consideration.
(e) "Branch office" each additional location of an agency where business is actively conducted which advertises as performing or is engaged in the business authorized by the licensee.
(f) "Sponsor" means any recovery agent or recovery agent manager licensee who supervises and maintains under his or her direction and controls a recovery agent intern.
(g) "Intern" means an individual who studies as a trainee or apprentice under the direction and control of a designated sponsoring licensee.
(h) "Manager" means any licensee who directs the activities of licensees at any recovery agency or branch office. The manager shall be assigned to and shall primarily operate from the agency or branch office location for which he or she has been designated as manager.
(i) "Recovery agency" means any person who, for consideration, advertises as providing or is engaged in the business of performing repossessions.
(j) "Recovery agent" means any individual who, for consideration, advertises as providing or performs repossessions.
(k) "Repossession" means the recovery of a motor vehicle, by an individual who is authorized by the legal owner, lienholder, or lessor to recover, or to collect money payment in lieu of recovery of, that which has been sold or leased under a security agreement that contains a repossession clause. A repossession is complete when a licensed recovery agency is in control, custody and possession of such motor vehicle.
SECTION 2. This act shall not apply to:
(1) Any bank subject to the jurisdiction of the Department of Banking and Consumer Finance or the Comptroller of the Currency of the United States.
(2) Any person organized, chartered or holding a license or authorization certificate to make loans pursuant to the laws of this state or the United States who is subject to supervision by any official or agency of this state or the United States.
(3) An attorney-at-law in performing his or her duties as an attorney-at-law.
(4) The legal owner of personal property which has been sold under a security agreement.
(5) An officer or employee of the United States of America, or of this state or a political subdivision thereof, while the officer or employee is engaged in the performance of his or her official duties.
SECTION 3. The Secretary of State shall adopt rules necessary to administer this act.
SECTION 4. (1) Each individual, partner or principal officer in a corporation desirous to be licensed as a recovery agency shall file with the Secretary of State, a complete application accompanied by an application fee set by the Secretary of State not to exceed Sixty Dollars ($60.00). This application fee shall not be refundable.
(a) The application submitted by any individual, partner or corporate officer must be approved by the Secretary of State prior to that individual, partner or corporate officer assuming his or her duties.
(b) Individuals who invest in the ownership of a licensed agency, but do not participate in, direct or control the operations of the agency shall not be required to file an application.
(2) Each application shall be signed by the individual under oath and shall be notarized.
(3) The application shall contain the following information concerning the individual signing it:
(a) Name and any aliases.
(b) Age and date of birth.
(c) Place of birth.
(d) Social security number or alien registration number, whichever is applicable.
(e) Present residence address and his or her residence addresses within the five (5) years immediately preceding the submission of the application.
(f) Occupations held presently and within the five (5) years immediately preceding the submission of the application.
(g) A statement of all criminal convictions.
(h) A full set of fingerprints on a card provided by the Secretary of State and a fingerprint fee to be established by rule of the Secretary of State based upon costs determined by state and federal agency charges and department processing costs. An applicant who has, within the immediately preceding six (6) months, submitted a fingerprint card and fee for licensing purposes under this act shall not be required to submit another fingerprint card or fee.
(i) A personal inquiry waiver which allows the Secretary of State to conduct necessary investigations to satisfy the requirements of this act.
(j) Such further facts as may be required by the Secretary of State to show that the individual signing the application is of good moral character and qualified by experience and training to satisfy the requirements of this act.
All applicants shall submit one (1) photograph taken within the six (6) months immediately preceding the submission of the application.
(4) In addition to the application requirements for individuals, partners or officers outlined under subsection (3) of this section, the application for a recovery agency license shall contain the following information:
(a) The proposed name under which the agency intends to operate.
(b) The street address, mailing address, and telephone numbers of the principal location at which business is to be conducted in this state.
(c) The street address, mailing address and telephone numbers of all branch offices within this state.
(d) The names and titles of all partners or, in the case of a corporation, the names and titles of its principal officers.
(5) Upon submission of a complete application, a recovery agent, recovery agent intern or recovery agency manager applicant may commence employment or appropriate duties for a licensed agency or branch office. If the Secretary of State denies application for licensure, the employment of the applicant must be terminated immediately, unless he or she performs only unregulated duties.
SECTION 5. (1) Each individual licensed by the Secretary of State must:
(a) Be at least eighteen (18) years of age.
(b) Be of good moral character.
(c) Be a citizen or legal resident alien of the United States or have been granted authorization to seek employment in this country by the United States Immigration and Naturalization Service.
(2) Each recovery agency shall have a minimum of one (1) physical location within this state from which the normal business of the agency is conducted, and this location shall be considered the primary office for that recovery agency in this state.
(a) If a recovery agency desires to change the physical location of the business, as it appears on the agency license, the Secretary of State must be notified within ten (10) days of the change, and, except upon renewal, the fee prescribed in this act must be submitted for each license requiring revision. Each license requiring revision must be returned with such notification.
(b) The recovery agency license and any branch office license shall at all times be posted in a conspicuous place at the licensed physical location in this state where the business is conducted.
(c) Each recovery agency branch office licensee shall display, in a place that is in clear and unobstructed public view, a notice on a form prescribed by the Secretary of State stating that the business operating at this location is licensed and regulated by the Secretary of State and that any questions or complaints should be directed to the Secretary of State.
(d) A minimum of one (1) properly licensed manager shall be designated for each recovery agency and branch office location.
(3) Each recovery agent, recovery agent intern or recovery agency manager licensee shall notify the division in writing within ten (10) days of a change in his or her residence or mailing address.
SECTION 6. Except as otherwise provided, prior to the issuance of a license under this act, the Secretary of State shall make an investigation of the applicant for a license. The investigation shall include:
(a) An examination of fingerprint records and police records; and
(b) Such other investigation of the individual as the Secretary of State may deem necessary.
SECTION 7. (1) No recovery agency license shall be issued unless the applicant first files with the Secretary of State a certification of insurance evidencing coverage as delineated below. The coverage shall provide the Secretary of State as an additional insured for the purpose of receiving all notices of modification or cancellation of such insurance. Coverage shall be written by an insurance company which is lawfully engaged to provide insurance coverage in Mississippi. Coverage shall provide for a combined single-limit policy in the amount of at least Three Hundred Thousand Dollars ($300,000.00), which policy shall include comprehensive general liability coverage for death, bodily injury, property damage and personal injury coverage including false arrest, detention or imprisonment, malicious prosecution, libel, slander, defamation of character, and violation of the right of privacy. Coverage shall insure for the liability of all employees of the recovery agency licensed by the Secretary of State while acting in the course of their employment.
(2) The licensed agency shall notify the Secretary of State of any claim against such insurance.
(3) The licensed agency shall notify the Secretary of State immediately upon cancellation of the insurance policy, whether such cancellation was initiated by the insurance company or the insured agency.
(4) The recovery agency license shall be automatically suspended upon the date of cancellation unless evidence of insurance is provided to the Secretary of State prior to the effective date of cancellation.
SECTION 8. (1) All licenses issued pursuant to this act shall be on a form prescribed by the Secretary of State and shall include the licensee's name, license number, expiration date of the license, and any other information the Secretary of State deems necessary. Recovery agent, recovery agent intern and recovery agency manager licenses shall be in the possession of individual licensees while on duty.
(2) Licenses shall be valid for a period of two (2) years.
(3) The Secretary of State shall, upon complete application and payment of the appropriate fees, issue a separate license to each branch office for which application is made.
(4) It shall be the duty of every recovery agency to furnish all of its partners, principal corporate officers and all licensed employees an identification card. The card shall specify at least the name and license number, if appropriate, of the holder of the card and the name and license number of the recovery agency and shall be signed by a representative of the agency and by the holder of the card.
(a) Each individual to whom a license and identification card have been issued shall be responsible for the safekeeping thereof and shall not loan or let or allow any other individual to use or display the license or card.
(b) The identification card shall be in the possession of each partner, principal corporate officer or licensed employee while on duty.
(c) Upon denial, suspension or revocation of a license, or upon termination of a business association with the licensed agency, it shall be the duty of each partner, principal corporate officer, manager or licensed employee to return the identification card to the issuing agency.
(5) A licensed recovery agency must include its agency license number in any advertisement in any print medium or directory, and must include its agency license number in any written bid or offer to provide services.
SECTION 9. (1) After filing the application, unless the Secretary of State declines to issue the license or revokes it after issuance, a recovery agency shall, within five (5) working days of the withdrawal, removal, replacement or addition of any or all partners or officers, notify and file with the Secretary of State complete applications for such individuals. The agency's good standing under this act shall be contingent upon the Secretary of State's approval of any new partner or officer.
(2) Each recovery agency shall, upon the employment and termination of employment of a licensee, report such employment or termination immediately to the Secretary of State and, in the case a termination, report the reason or reasons therefor. The report shall be on a form prescribed by the Secretary of State.
SECTION 10. (1) A license granted under the provisions of this chapter shall be renewed biennially by the Secretary of State.
(2) Not less than ninety (90) days prior to the expiration date of the license, the Secretary of State shall mail a written notice to the last known residence address for individual licensees and to the last known agency address for agencies.
(3) Each licensee shall be responsible for renewing his or her license on or before its expiration by filing with the Secretary of State an application for renewal accompanied by payment of the prescribed license fee.
Each recovery agency licensee shall additionally submit on a form prescribed by the Secretary of State, a certification of insurance which evidences that the licensee maintains coverage as required under this act.
(4) A licensee who fails to file a renewal application on or before its expiration must renew his or her license by fulfilling the applicable requirements of subsection (3) and by paying a late fee equal to the amount of the license fee.
(5) No license shall be renewed three (3) months or more after its expiration date. The applicant shall submit a new, complete application and the respective fees.
(6) A renewal applicant shall not perform any activity regulated by this act between the date of expiration and the date of renewal of his or her license.
SECTION 11. (1) In the event the licensee desires to cancel his or her license, she or he shall notify the Secretary of State in writing and return the license to the Secretary of State within ten (10) days of the date of cancellation.
(2) The Secretary of State, at the written request of the licensee, may place his or her license in inactive status. A license may remain inactive for a period of three (3) years, at the end of the three-year period, if the license has not been renewed, it shall be automatically cancelled. If the license expires during the inactive period, the licensee shall be required to pay license fees and, if applicable, show proof of insurance before the license can be made active. No late fees shall apply when a license is in inactive status.
SECTION 12. (1) Only licensees may sponsor interns.
(2) An internship may not commence until the sponsor has submitted to the Secretary of State the notice of intent to sponsor. Such notice shall be on a form provided by the Secretary of State.
(3) Internship is intended to serve as a learning process. Sponsors shall assume a training status by providing direction and control of interns. Sponsors shall only sponsor interns whose place of business is within a fifty (50) mile distance of the sponsor's place of business and shall not allow interns to operate independently of such direction and control, or require interns to perform activities which do not enhance the intern's qualifications for licensure.
(4) No sponsor may sponsor more than six (6) interns at the same time.
(5) A sponsor shall certify a biannual progress report on each intern and shall certify completion or termination of an internship to the Secretary of State within fifteen (15) days after such completion of termination. The report must be made on a form provided by the Secretary of State and must include at a minimum:
(a) The inclusive dates of the internship;
(b) A narrative part explaining the primary duties, types of experiences gained, and the scope of training received; and
(c) An evaluation of the performance of the intern and a recommendation regarding future licensure.
SECTION 13. There is created within the State Treasury a special fund into which money required to be paid under this act shall be collected by the Secretary of State and deposited in the fund. The Legislature shall appropriate from the fund such amounts as it deems necessary for the purpose of administering the provisions of this act.
SECTION 14. (1) The following constitute grounds for which disciplinary action specified in subsection (2) of this section may be taken by the Secretary of State against any licensee, agency or applicant regulated by this act, or any unlicensed person engaged in activities regulated under this act.
(a) Fraud or willful misrepresentation in applying for or obtaining a license.
(b) Use of any fictitious or assumed name by an agency.
(c) Being found guilty of or entering a plea of guilty or nolo contendere to, regardless of adjudication, or being convicted of a crime that directly relates to the recovery business. A plea of nolo contendere shall create a rebuttable presumption of guilt to the underlying criminal charges, and the Secretary of State shall allow the individual being disciplined or denied an application for a licensed to present any mitigating circumstances surrounding his or her plea.
(d) A false statement by the licensee that any individual is or has been in his or her employ.
(e) A finding that the licensee or any employee is guilty of willful betrayal of a professional secret or any unauthorized release of information acquired as a result of activities regulated under this act.
(f) Proof that the applicant or licensee is guilty of fraud or deceit, or of negligence, incompetency, or misconduct, in the practice of the activities regulated under this act.
(g) Conducting activities regulated under this act without a license or with a revoked or suspended license.
(h) Failure of the licensee to maintain in full force and effect the general liability insurance coverage required by this act.
(i) Impersonating, or permitting or aiding and abetting an employee to impersonate a law enforcement officer or an employee of the state, the United States, or any political subdivision thereof by identifying himself or herself as a federal, state, county, or municipal law enforcement officer or official representative, by wearing a uniform or presenting or displaying a badge or credentials that would cause a reasonable person to believe that he or she is a law enforcement officer or that he or she has official authority, by displaying any flashing or warning vehicular lights other than amber colored, or by committing any act that is intended to falsely convey official status.
(j) Commission of an act of violence or the use of force on any person except in the lawful protection of one's self or another from physical harm.
(k) Knowingly violating, advising, encouraging or assisting the violation of any statute, court order, warrant or injunction, in the course of business regulated under this act.
(l) Transferring or attempting to transfer a license issued pursuant to this act.
(m) Employing or contracting with any unlicensed or improperly licensed person or agency to conduct activities regulated under this act, or performing any act that assists, aids, or abets a person or business entity in engaging in unlicensed activity, when the licensure status was known or could have been ascertained by reasonable inquiry.
(n) Failure or refusal to cooperate with or refusal of access to an authorized representative of the Secretary of State engaged in an official investigation pursuant to this act.
(o) Failure of any partner, principal corporate officer or licensee to have his or her identification card in his or her possession while on duty.
(p) Failure of any licensee to have his or her license in his or her possession while on duty as required by this act.
(q) Failure or refusal by a sponsor to certify a biannual written report on an intern or to certify completion or termination of an internship to the Secretary of State within fifteen (15) working days.
(r) Failure to report to the Secretary of State any person whom the licensee knows to be in violation of this act or the rules of the Secretary of State.
(s) Violating any provision of this act.
(t) Recovering a motor vehicle that has been sold under a conditional sales agreement or under the terms of the chattel mortgage before authorization has been received from the legal owner or mortgagee.
(u) Charging for expenses not actually incurred in connection with the recovery, transportation, storage or disposal of a motor vehicle.
(v) Using any motor vehicle repossessed, or using personal property obtained in a repossession, for the personal benefit of a licensee or an officer, director, partner, manager or employee of a licensee.
(w) Selling a motor vehicle under the provisions of this act, except with written authorization from the legal owner or the mortgagee thereof.
(x) Failing to remit money collected in lieu of recovery of a motor vehicle, to the client within ten (10) working days.
(y) Falsifying, altering or failing to maintain any required inventory or records regarding disposal of personal property contained in or on a recovered motor vehicle pursuant to this act.
(z) Wearing, presenting or displaying a badge in the course of repossessing a motor vehicle.
(2) When the Secretary of State finds any violation of subsection (1) of this section, it may do one or more of the following:
(a) Deny an application for the issuance or renewal of a license.
(b) Issue a reprimand.
(c) Impose an administrative fine not to exceed One Thousand Dollars ($1,000.00) for every count or separate offense.
(d) Place the licensee on probation for a period of time and subject to such conditions as the Secretary of State may specify.
(e) Suspend or revoke a license.
(3) Notwithstanding the provisions of paragraph (1)(c) of this section and subsection (2) of this section:
(a) If the applicant or licensee has been convicted of a felony, the Secretary of State shall deny the application or revoke the license unless and until civil rights have been restored by the State of Mississippi or by a state acceptable to Mississippi and a period of ten (10) years has expired since final release from supervision.
(b) If the applicant or licensee has been found guilty of, entered a plea of guilty to, or entered a plea of nolo contendere to a felony and adjudication of guilt is withheld, the Secretary of State shall deny the application or revoke the license until a period of three (3) years has expired since final release from supervision.
(c) A plea of nolo contendere shall create a rebuttable presumption of guilt to the underlying criminal charges, and the Secretary of State shall allow the person being disciplined or denied an application for a license to present any mitigating circumstances surrounding his or her plea.
(d) The grounds for discipline or denial cited in this subsection shall be applied to any disqualifying criminal history regardless of the date of commission of the underlying criminal charge. Such provisions shall be applied retroactively and prospectively.
(4) Upon revocation or suspension of a license, the licensee shall forthwith return the license which was suspended or revoked.
(5) The recovery agency license and the approval or license of each officer, partner or owner of the agency are automatically suspended upon entry of a final order imposing an administrative fine against the agency, until the fine is paid, if thirty (30) calendar days have elapsed since the entry of the final order. All owners and corporate or agency officers or partners are jointly and severally liable for agency fines. Neither the recovery agency license or the approval or license of any officer, partner or owner of the agency may be renewed, nor may an application be approved if the owner, licensee or applicant is liable for an outstanding administrative fine imposed under this act. An individual's approval or license becomes automatically suspended if a fine imposed against the individual or his or her agency is not paid within thirty (30) days after the date of the final order, remains suspended until the fine is paid. Notwithstanding the provisions of this subsection, an individual's approval or license may not be suspended nor may an application be denied when the licensee or the applicant has an appeal from a final order pending in any appellate court.
(6) An applicant or licensee shall be ineligible to reapply for the same class of license for a period of one (1) year following the final agency action resulting in the denial or revocation of a license applied for or issued under this act. This time restriction shall not apply to administrative denials wherein the basis for denial was:
(a) An inadvertent error or omission on the application;
(b) The experience documented by the Secretary of State was insufficient at the time of application; or
(c) Failure to submit required fees.
SECTION 15. (1) Any person who violates any provision of this act shall be guilty of a misdemeanor and punished as provided in Section 99-19-31.
(2) Any person who is convicted of any violation of this act shall not be eligible for licensure for a period of five (5) years.
SECTION 16. The Secretary of State shall have the power to enforce the provisions of this act, irrespective of the place or location in which the violation occurred, and, upon the complaint of any person or on its own initiative, to cause to be investigated any suspected violation thereof or to cause to be investigated the business and business methods of any licensed or unlicensed person, agency or employee thereof, or applicant for licensure under this act.
SECTION 17. (1) Any person, firm, company, partnership or corporation which engages in business as a recovery agency shall have a recovery agency license valid for only one (1) location.
(2) Each branch office of a recovery agency shall have a recovery agency branch license.
(3) Any individual who performs the services of a manager for a recovery agency or a branch office must have a recovery agency manager license. A recovery agent licensee may be designated as the manager, in which case the recovery agency manager license is not required.
(4) Any individual who performs the services of a recovery agent must have a license.
(5) Any individual who performs repossession as an intern under the direction and control of a designated, sponsoring recovery agent licensee or a recovery agent designated, sponsoring licensee shall have a recovery agent intern license.
(6) Recovery agent or recovery agent intern licensees shall own or be an employee of a recovery agency or branch office.
SECTION 18. (1) The Secretary of State shall establish by rule biennial license fees which shall not exceed the following:
(a) Recovery agency license $450.00
(b) Recovery agency branch office license 125.00
(c) Recovery agency manager license 75.00
(d) Recovery agent license 75.00
(e) Recovery agent intern license 60.00
(2) The Secretary of State may establish by rule a fee for the replacement or revision of a license, which fee shall not exceed Thirty Dollars ($30.00).
SECTION 19. (1) In addition to the license requirements set forth in this act, each individual or agency shall comply with the following additional requirements:
(a) Each agency or branch office must designate a minimum of one (1) appropriately licensed individual to act as manager, directing the activities of the recovery agent or recovery agent intern employees. A recovery agent licensee may be designated to act as manager of a recovery agency or branch office in which case the recovery agent manager license is not required.
(b) An applicant for recovery agent manager license shall have at least one (1) year of full-time experience as a recovery agent licensee performing repossessions of motor vehicles, mobile homes or motorboats.
(c) An applicant for a recovery agent license shall have at least one (1) year of full-time experience in one, or a combination of more than one, of the following:
1. Repossession of motor vehicles.
2. Work as a recovery agent licensed intern.
SECTION 20. (1) If personal effects or other property not covered by a security agreement are contained in or on a recovered vehicle, at the time it is recovered, a complete and accurate inventory shall be made of such personal effects or property. The date and time the inventory is made shall be indicated, and it shall be signed by the recovery agent or recovery agent intern licensee who obtained the personal property. The inventory of the personal property and the records regarding any disposal of personal property shall be maintained for a period of two (2) years in the permanent records of the licensed agency and shall be made available, upon demand, to an authorized representative of the Secretary of State engaged in an official investigation.
(2) Within five (5) working days after the date of a repossession, the recovery agent or recovery agent intern licensee shall give written notification to the debtor of the whereabouts of personal effects or other property inventoried pursuant to this section. At least forty-five (45) days prior to disposing of such personal effects or other property, the recovery agent or recovery agent intern licensee shall, by United States Postal Service, proof of mailing or certified mail, notify the debtor of the intent to dispose of said property. Should the debtor, or his or her lawful designee, appear to retrieve the personal property, prior to the date on which the recovery agent or recovery agent intern licensee is allowed to dispose of the property, the licensee shall surrender the personal property to that individual upon payment of any reasonably incurred expenses for inventory and storage. If personal property is not claimed within forty-five (45) days of the notice of intent to dispose, the licensee may dispose of the personal property at his or her discretion, except that illegal items or contraband shall be surrendered to a law enforcement agency, and the licensee shall retain a receipt or other proof of surrender as part of the inventory and disposal records she or he maintains.
SECTION 21. This act shall take effect and be in force from and after July 1, 2004.