Surety Bonds Now Required for Lenders
Effective July 1st, 2016, Mississippi will require credit availability lenders to be bonded. The Governor of Mississippi approved Senate Bill 2409 on May 13, 2016 that now requires a bond for credit availability lenders. The license period runs from October 1st to September 30th and has a $750 initial license fee ($475 renewal fees for each license period thereafter). In order to obtain a license, the applicant must submit a set of fingerprint cards, cannot be convicted of a felon within the last ten years and maintain a net worth of $20,000 for the main business location and $5,000 additional net worth for any satellite locations.
Under the Mississippi Credit Availability Act (http://www.dbcf.state.ms.us/documents/cons_finance/ca_pamp.pdf), loan limits and terms have been established by the state to protect the business and the consumer. Amortized loans of $500 or less can be either secured or unsecured, and payable in 4-6 months of equal payments of the original loan amount plus any fees associated with the loan and is subject to a maximum 10% late fee after the account has been delinquent for 10 business days.
Amortized loans more than $500 up to $2,500 can be either secured or unsecured payable in 6 to 12 months of equal payments of the original loan amount plus any fees associated with the loan and is subject to a maximum 10% late fee after the account has been delinquent for 10 business days.
Lenders can charge monthly handling fees up to $25 per every $100 borrowed per month as well as a loan origination fee of 1% or $5.00, whichever is greater. And borrowers that default on a loan are subject to reasonable collection or attorney fees, court costs and fees associated with repossession and/or sale of collateral if there was any.
There are other terms and conditions for credit availability lenders that can be found on the State of Mississippi Department of Banking and Consumer Finance website (http://www.dbcf.state.ms.us).
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