Senate Bill 2409, known as the Mississippi Credit Availability Act, passed on May 13, 2016 and will take effect on July 1, 2016. The Act establishes licensing and bonding procedures for payday lenders, referred to in the legislation as credit availability licensees.
In order to be eligible for licensing, applicants must file a $10,000 surety bond with the Department of Banking and Consumer Finance. Applicants can apply for more than one license, provided their surety bond offers $10,000 of coverage for license applied for. If any of the lending locations change ownership, a new license is required. If the business moves to a new location, the licensee must give 30 days’ written notice to the Banking Commissioner so the license can be amended.
The surety bond is a guarantee that the licensee will adhere to the provisions of the Mississippi Credit Availability Act. If a licensee violates any of their industry laws, they face license revocation, fines of up to $1,000 per violation and forfeiture of the surety bond.
Section 6 of the Act details the licensing application procedures. Application requirements include the following:
- Name, residence and business address of the applicant or applicants if they are a partnership, corporation or association
- Address of location where credit availability services will be offered
- $750 application fee
- $475 annual renewal fee to be paid on or before September 1
- Applicant’s complete financial statement showing a net worth of at least $20,000 for the first license and an additional $5,000 for each additional license
Controversially, the Act will raise the credit availability lending limit to $2,500, far exceeding the current $500 maximum. However larger loans are also allowed more time for repayment, up to twelve months versus the typical three to six months.
Contact the Department of Banking and Consumer Finance with questions about obtaining a credit availability business license. SuretyBonds.com can answer your questions about the bond requirement and help you get bonded in Mississippi.