House Bill 680

AN ACT TO AMEND SECTION 75-17-21, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR ALTERNATE CHARGES THAT MAY BE MADE BY LICENSEES UNDER THE SMALL LOAN REGULATORY LAW AND SMALL LOAN PRIVILEGE TAX LAW ON LOANS OF $200.00 TO $1,000.00; TO AMEND SECTION 75-67-519, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR ALTERNATE FEES THAT MAY BE CHARGED BY LICENSEES UNDER THE CHECK CASHERS ACT FOR CASHING DELAYED DEPOSIT CHECKS OF $200.00 TO $1,000.00; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 75-17-21, Mississippi Code of 1972, is amended as follows:

75-17-21. (1) Notwithstanding any provision of law to the contrary, the maximum finance charge that may be contracted for and received for any loan or extension of credit made by a licensee under the Small Loan Regulatory Law (Sections 75-67-101 through 75-67-135) and the Small Loan Privilege Tax Law (Sections 75-67-201 through 75-67-243) may result in a yield not to exceed the following annual percentage rates calculated according to the actuarial method:

(a) Thirty-six percent (36%) per annum for the portion of the unpaid balance of the amount financed that is not greater than One Thousand Dollars ($1,000.00);

(b) Thirty-three percent (33%) per annum for the portion of the unpaid balance of the amount financed in excess of One Thousand Dollars ($1,000.00) but not greater than Two Thousand Five Hundred Dollars ($2,500.00);

(c) Twenty-four percent (24%) per annum for the portion of the unpaid balance of the amount financed in excess of Two Thousand Five Hundred Dollars ($2,500.00) but not greater than Five Thousand Dollars ($5,000.00);

(d) Fourteen percent (14%) per annum for the portion of the unpaid balance of the amount financed in excess of Five Thousand Dollars ($5,000.00).

(2) As an alternative and in lieu of the rates established in paragraphs (a), (b), (c) and (d) of subsection (1), on loans in an amount of Twenty-five Thousand Dollars ($25,000.00) or more, a licensee may contract for and receive a maximum finance charge which will result in a yield not to exceed an annual percentage rate, calculated according to the actuarial method, of eighteen percent (18%) per annum on the unpaid balance of the amount financed.

(3) A licensee may contract for and charge a closing fee as follows:

(a) For loans in the amount of Ten Thousand Dollars ($10,000.00) or less, four percent (4%) of the total payments due on the loan or Twenty-five Dollars ($25.00), whichever is greater;

(b) For loans in an amount greater than Ten Thousand Dollars ($10,000.00), a maximum charge of Five Hundred Dollars ($500.00).

The closing fee shall not be part of the finance charge.

(4) The rates set forth in paragraph (a) of subsection (1) may be increased by the number of percentage points by which 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 exceeds eight percent (8%), and the rates set forth in paragraphs (b), (c) and (d) of subsection (1) may be increased by the number of percentage points by which 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 exceeds ten percent (10%).

(5) (a) As an alternative to, and in lieu of, the finance charge established in paragraph (a) of subsection (1) and the fee established in paragraph (a) of subsection (3), on loans of an amount not less than Two Hundred Dollars ($200.00) but not more than One Thousand Dollars ($1,000.00), a licensee may charge for making the loan an acquisition charge not to exceed ten percent (10%) of the amount of the principal and an installment account handling charge not to exceed the following:

(i) Twelve Dollars ($12.00) per month on a loan of an amount not less than Two Hundred Dollars ($200.00) but not more than Three Hundred Dollars ($300.00);

(ii) Fourteen Dollars ($14.00) per month on a loan of an amount greater than Three Hundred Dollars ($300.00) but not more than Four Hundred Dollars ($400.00);

(iii) Sixteen Dollars ($16.00) per month on a loan of an amount greater than Four Hundred Dollars ($400.00) but not more than Five Hundred Dollars ($500.00);

(iv) Seventeen Dollars ($17.00) per month on a loan of an amount greater than Five Hundred Dollars ($500.00) but not more than Eight Hundred Dollars ($800.00);

(v) Twenty Dollars ($20.00) per month on a loan of an amount greater than Eight Hundred Dollars ($800.00) on the loan but not more than One Thousand Dollars ($1,000.00).

However, the scheduled payments must be in amounts that are equal to or greater than Forty Dollars ($40.00) per month, inclusive of the installment account handling charge. The acquisition charge and the installment account handling charge may be calculated for the term of the contract and added to the amount of the principal. The acceptance or payment of charges on loans made under this subsection shall not be deemed to constitute payment, deduction or receipt thereof in advance nor compounding under this subsection.

(b) On any loan on which the charges authorized under this subsection are made:

(i) The minimum term shall be three (3) months and the maximum term shall be twelve (12) months;

(ii) The loan charges may not be imposed on a loan to a borrower who has more than one (1) loan outstanding with the licensee and upon which loan charges were imposed;

(iii) Upon the prepayment of the loan in full, the installment account handling charge shall be subject to Section 75-17-11, but the acquisition charge shall not be subject to refund;

(iv) No insurance charge, service contract fee or club membership fee shall be permitted; and

(v) No licensee shall file a claim against a decedent borrower's estate for any unpaid indebtedness for a loan whose charges include an acquisition charge or an installment account handling charge.

(6) The finance charges authorized in this section are the maximum rates that may be contracted for or received for any loan or extension of credit made by a licensee under the Small Loan Regulatory Law (Sections 75-67-101 through 75-67-135), and the Small Loan Privilege Tax Law (Sections 75-67-201 through 75-67-243). Nothing in this section shall prohibit lending money or handling, negotiating or arranging loans for a finance charge that is less than that specified in this section. This section does not limit or restrict the manner of contracting for the finance charge, whether by way of add-on, discount or otherwise, so long as * * * the finance charge does not exceed that permitted by this section.

SECTION 2. Section 75-67-519, Mississippi Code of 1972, is amended as follows:

75-67-519. (1) A licensee may defer the deposit of a personal check cashed for a customer for up to thirty (30) days under the provisions of this section.

(2) The face amount of any delayed deposit check cashed under the provisions of this section shall not exceed Four Hundred Dollars ($400.00), and each customer is limited to a maximum amount of Four Hundred Dollars ($400.00) at any time. However, the face amount of any delayed deposit check cashed under the provisions of subsection (4)(b) of this section shall not exceed One Thousand Dollars ($1,000.00), and each customer is limited to a maximum amount of One Thousand Dollars ($1,000.00) at any time for delayed deposit checks cashed under the provisions of subsection (4)(b) of this section.

(3) Each delayed deposit check cashed by a licensee shall be documented by a written agreement that has been signed by the customer and the licensee. The written agreement shall contain a statement of the total amount of any fees charged, expressed as a dollar amount and as an annual percentage rate. The written agreement shall authorize the licensee to defer deposit of the personal check until a specific date not later than thirty (30) days from the date the check is cashed.

(4) (a) Except as otherwise authorized under paragraph (b) of this subsection, a licensee shall not directly or indirectly charge any fee or other consideration for cashing a delayed deposit check in excess of eighteen percent (18%) of the face amount of the check.

(b) As an alternative to, and in lieu of, the fee established in paragraph (a) of this subsection, for a delayed deposit check of a face amount of not less than Two Hundred Dollars ($200.00) but not more than One Thousand Dollars ($1,000.00), a licensee may charge for cashing the check an acquisition fee not to exceed ten percent (10%) of the face amount of the check and an account handling charge not to exceed the following:

(i) Twelve Dollars ($12.00) on a check of a face value greater than Two Hundred Dollars ($200.00) but not more than Three Hundred Dollars ($300.00);

(ii) Fourteen Dollars ($14.00)on a check of a face value greater than Three Hundred Dollars ($300.00) but not more than Four Hundred Dollars ($400.00);

(iii) Sixteen Dollars ($16.00) on a check of a face value greater than Four Hundred Dollars ($400.00) but not more than Five Hundred Dollars ($500.00);

(iv) Seventeen Dollars ($17.00) on a check of a face value greater than Five Hundred Dollars ($500.00) but not more than Eight Hundred Dollars ($800.00);

(v) Twenty Dollars ($20.00) on a check of a face value greater than Eight Hundred Dollars ($800.00) but not more than One Thousand Dollars ($1,000.00).

However, the combined amount of the acquisition fee and account handling fee must be in an amount that is equal to or greater than Forty Dollars ($40.00).

(i) The licensee may not charge the fees for cashing a check for a customer for whom the licensee has cashed more than one (1) delayed deposit check upon which the fees were charged; and

(ii) No licensee shall file a claim against the estate of a decedent customer for any unpaid indebtedness for the amount of a delayed deposit check that includes an acquisition fee or an account handling fee.

(5) No check cashed under the provisions of this section shall be repaid by the proceeds of another check cashed by the same licensee or any affiliate of the licensee. A licensee shall not renew or otherwise extend any delayed deposit check.

(6) A licensee shall not offer discount catalog sales or other similar inducements as part of a delayed deposit transaction.

(7) A licensee shall not charge a late fee or collection fee on any deferred deposit transaction as a result of a returned check or the default by the customer in timely payment to the licensee. Notwithstanding anything to the contrary contained in this section, a licensee may charge a processing fee, not to exceed an amount authorized by the commissioner, for a check returned for any reason, including, without limitation, insufficient funds, closed account or stop payment, if the processing fee is authorized in the written agreement signed by the customer and licensee. In addition, if a licensee takes legal action against a customer to collect the amount of a delayed deposit check for which the licensee has not obtained payment and obtains a judgment against the customer for the amount of that check, the licensee shall also be entitled to any court-awarded fees.

(8) When cashing a delayed deposit check, a licensee may pay the customer in the form of the licensee's business check or a money order; however, no additional fee may then be charged by the licensee for cashing the licensee's business check or money order issued to the customer.

SECTION 3. This act shall take effect and be in force from and after July 1, 2007.