Bill Text: MS HB1216 | 2010 | Regular Session | Introduced

Mississippi House Bill 1216 (Prior Session Legislation)

Introduced

Bill Title: Check cashers; reduce rate of interest that may be charged for cashing a delayed deposit check.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2010-02-02 - Died In Committee [HB1216 Detail]

Download: Mississippi-2010-HB1216-Introduced.html

MISSISSIPPI LEGISLATURE

2010 Regular Session

To: Banking and Financial Services

By: Representative Banks

House Bill 1216

AN ACT TO AMEND SECTION 75-67-519, MISSISSIPPI CODE OF 1972, TO REDUCE THE MAXIMUM RATE OF INTEREST THAT A CHECK CASHER MAY CHARGE FOR CASHING A DELAYED DEPOSIT CHECK; TO SPECIFY HOW THE INTEREST ON A DELAYED DEPOSIT CHECK LOAN WILL BE CALCULATED; AND FOR RELATED PURPOSES.

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

SECTION 1. 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). Each customer is limited to a maximum amount of Four Hundred Dollars ($400.00) at any time.

(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) A licensee shall not directly or indirectly charge any fee or other consideration for cashing a delayed deposit check in excess of thirty-six percent (36%) per annum on the outstanding principal balance of any delayed deposit check and fifteen percent (15%) per annum on any remainder of the unpaid principal balance. Interest shall be contracted for and collected at the single simple interest rate applied to the outstanding balance that would earn the same amount of interest as the above rates for payment according to schedule.

(b) Interest on loans made under this section shall not be paid, deducted, or received in advance. That interest shall not be compounded, but interest on loans shall (i) be computed and paid only as a percentage of the unpaid principal balance or portion thereof, and (ii) computed on the basis of the number of days actually elapsed. For the purpose of computing interest, a day shall equal one three-hundred-sixty-fifth (1/365) of a year.

(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 such 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 2. This act shall take effect and be in force from and after July 1, 2010.