Bill Text: MS HB824 | 2011 | Regular Session | Introduced

Mississippi House Bill 824 (Prior Session Legislation)

Introduced

Bill Title: Debt Management Services Act; exempt certain services provided by attorneys.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2011-02-01 - Died In Committee [HB824 Detail]

Download: Mississippi-2011-HB824-Introduced.html

MISSISSIPPI LEGISLATURE

2011 Regular Session

To: Banking and Financial Services

By: Representative Flaggs

House Bill 824

AN ACT TO AMEND SECTION 81-22-3, MISSISSIPPI CODE OF 1972, TO EXEMPT FROM THE MISSISSIPPI DEBT MANAGEMENT SERVICES ACT CERTAIN SERVICES PROVIDED BY ATTORNEYS IN THE REGULAR COURSE OF THE PRACTICE OF LAW; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 81-22-3, Mississippi Code of 1972, is amended as follows:

81-22-3. As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings:

(a) "Commissioner" means the Commissioner of Banking and Consumer Finance of the State of Mississippi.

(b) "Debt management service" means:

(i) The receiving of money from a consumer for the purpose of distributing one or more payments to or among one or more creditors of the consumer in full or partial payment of the consumer's obligation;

(ii) Arranging or assisting a consumer to arrange for the distribution of one or more payments to or among one or more creditors of the consumer in full or partial payment of the consumer's obligation;

(iii) Exercising control, directly or indirectly, or arranging for the exercise of control over funds of the consumer for the purpose of distributing payments to or among one or more creditors of the consumer;

(iv) Acting or offering to act as an intermediary between a consumer and one or more creditors of the consumer for the purpose of adjusting, compromising, negotiating, settling, discharging or otherwise deferring, reducing or altering the terms of payment of the consumer's obligation; or

(v) Improving or offering to improve a consumer's credit record, history or rating.

(c) "Debt management service provider" means a person that provides or offers to provide to a consumer in this state any debt management services, in return for a fee or other consideration. "Debt management service provider" does not include:

(i) Those situations involving debt adjusting services provided in the regular course of the practice of law by attorneys duly licensed to practice law in Mississippi who are active and in good standing with The Mississippi Bar, who are not employed by debt management service providers, and who do not provide these services in businesses that are ancillary to their law practices;

(ii) Those situations involving credit report error correction services and situations covered under paragraph (b)(v) of this section when provided in the regular course of the practice of law by attorneys duly licensed to practice law in Mississippi who are active and in good standing with The Mississippi Bar, who are not employed by debt management service providers, and who do not provide these services in businesses that are ancillary to their law practices;

(iii) Title insurers who adjust debts out of escrow funds only incidentally in the regular course of their principal business;

(iv) Judicial officers or others acting under court orders;

(v) Those situations involving debt adjusting incurred incidentally in connection with the lawful practice as a certified public accountant;

(vi) Bona fide trade or mercantile associations in the course of arranging adjustment of debts with business establishments;

(vii) Employers who adjust debts for their employees;

(viii) Any person who, at the request of a debtor, makes a loan to the debtor, and who, at the authorization of the debtor, acts as an adjuster of the debtor's debts solely in the disbursement of the proceeds of the loan, without compensation for the services rendered in adjusting the debts;

(ix) Any institution that is regulated, supervised or licensed by the department or any out-of-state institution that is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration; or

(x) Attorneys duly licensed to practice law in Mississippi who are active and in good standing with The Mississippi Bar, who are not employed by debt management service providers, and whose debt management services are provided in the regular course of the practice of law and not as ancillary busineses to their law practices.

(d) "Department" means the Department of Banking and Consumer Finance of the State of Mississippi.

(e) "Fair share contribution" means voluntary contributions paid to the licensee by the creditor for collecting funds from clients pursuant to debt management services.

(f) "Licensee" means a person or entity who is required to be licensed as a debt management service provider.

(g) "Person" means an individual or an organization.

(h) "Records" or "documents" means any item in hard copy or produced in a format of storage commonly described as electronic, imaged, magnetic, microphotographic or otherwise, and any reproduction so made shall have the same force and effect as the original thereof and be admitted in evidence equally with the original.

(i) "Third-party payment processor" means any entity that holds, or has access to, or can effectuate possession of, by any means, the monies of a licensee's debtors, or distributes, or is in the chain or distribution of such monies, to the creditors of such debtors, pursuant to an agreement or contract with the licensee. This term shall not include entities that solely provide the electronic routing and settlement of financial transactions and their sponsoring banks.

SECTION 2. This act shall take effect and be in force from and after its passage.