Small Loan Regulatory Law; authorize licensee to charge fee for nonrecording insurance in lieu of recording cost., the official text

MISSISSIPPI LEGISLATURE

2026 Regular Session

To: Business and Financial Institutions

By: Senator(s) Johnson

Senate Bill 2712

(As Sent to Governor)

AN ACT TO AMEND SECTION 75-67-121, MISSISSIPPI CODE OF 1972,
TO AUTHORIZE A LICENSEE UNDER THE SMALL LOAN REGULATORY LAW TO CHARGE A FEE FOR
THE PURCHASE OF NONFILING OR NONRECORDING INSURANCE IN LIEU OF THE ACTUAL COST
OF RECORDING AN INSTRUMENT EXECUTED AS SECURITY FOR A LOAN; AND FOR RELATED
PURPOSES.

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

SECTION 1.  Section
75-67-121, Mississippi Code of 1972, is amended as follows:

75-67-121.  (1)  Any
licensee under this article may charge any borrower on loans of One Hundred
Dollars ($100.00) or more the actual cost of recording any instrument executed
as security for a loan; any reasonable fee paid to an attorney for
investigating the title to any property given as security for a loan; the
actual cost of any premium paid for insurance upon any property given as
security for a loan, such insurance to be placed with an insurance company
agent of the borrower's selection so long as it is licensed to do business in
the State of Mississippi; the actual cost of any premium paid for credit life,
health and/or accident insurance and/or involuntary unemployment insurance on
any borrower where the amount of insurance required is not in excess of the
amount of the loan; and the premium for the insurance is in keeping with that
usually and customarily paid for like insurance.

In lieu of the actual
cost of recording an instrument executed as security for a loan, a licensee may
charge a fee for the purchase of nonfiling or nonrecording insurance on the instrument;
however, the fee may not exceed the amount of the fee charged by the Secretary
of State to file an initial financing statement commonly referred to as the
Mississippi Financing Statement Form UCC1 and Amendment UCC3.

(2)  In addition, after the
licensee has fully approved the loan to the borrower, the licensee may offer
the borrower the opportunity to purchase an auto club membership.  The licensee
shall inform the borrower in writing that the purchase of an auto club
membership is optional and is not required as a condition of receiving the
loan, and that failure to purchase an auto club membership will not affect the
licensee's approval of the loan or the receipt of the loan by the borrower.
The notification shall be initialed by the borrower.  If the borrower chooses
to purchase an auto club membership, the licensee shall allow the borrower to
pay the cost of the auto club membership using funds other than the proceeds of
a loan or have the cost deducted from the proceeds of any loan obtained from
the licensee.  The borrower shall be allowed to cancel the auto club membership
for a full refund of the purchase price at any time within thirty (30) days
after the date of purchase from the licensee if the borrower has not used any
of the services provided through the auto club membership.  The commissioner
shall monitor the number of loans made by licensees with which the borrower
chooses to purchase an auto club membership, and shall report that information
to the Chairmen of the House Banking and Financial Services Committee and the
Senate Business and Financial Institutions Committee by January 1, 2009.

(3)  On loans of One Hundred
Dollars ($100.00) or more, any licensee under this article may solicit and
collect from any purchasing borrower the actual cost of any insurance premium
paid for any one or more noncredit insurance policies, provided that such
insurance is optional, is filed with the Department of Insurance, and is
underwritten by an insurance company qualified to do business in Mississippi,
and provided that the following conditions are met:

(a)  The licensee shall
not require the purchase of the noncredit insurance as a condition of receiving
any loan or other extension of credit from the licensee;

(b)  The licensee's
employees offering the noncredit insurance are:

(i)  Properly
licensed with the Department of Insurance as an insurance producer for the type
of insurance being offered to the borrower by that employee; and

(ii)  Appointed
with the insurance company providing the insurance policy to the purchasing
borrower;

(c)  The licensee shall
not make the borrower's ability to obtain any current or future loan or other
extension of credit from the licensee contingent upon the borrower's agreement
to purchase the noncredit insurance or otherwise transact business with the
licensee; and

(d)  The licensee shall
allow the borrower the option to pay the cost of the noncredit insurance policy
using funds other than the proceeds of a loan obtained from the licensee, or to
have the cost of the noncredit insurance paid from the proceeds of any loan
obtained from the licensee.

The limitations on the
amount of insurance contained in subsection (1) of this section shall not apply
to insurance sold under this subsection (3).

(4)  Whenever he finds it
necessary, the Commissioner of Banking and Consumer Finance shall have the
power to adopt and enforce reasonable rules and regulations to prevent the
abuse of this section and the making of excessive charges under this section.

SECTION 2.  This act
shall take effect and be in force from and after July 1, 2026.