Mississippi Debt Management Services Act; extend repealer on.

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To: Business and Financial
Institutions
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Johnson

SENATE BILL NO. 2011

AN ACT TO AMEND SECTION 81-22-31, MISSISSIPPI CODE OF 1972, 1
TO EXTEND THE DATE OF THE REPEALER ON THE MISSISSIPPI DEBT 2
MANAGEMENT SERVICES ACT; TO BRING FORWARD SECTIONS 81-22-1 THROUGH 3
81-22-28, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE 4
AMENDMENT; AND FOR RELATED PURPOSES. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 6
SECTION 1. Section 81-22-31, Mississippi Code of 1972, is 7
amended as follows: 8
81-22-31. Sections 81-22-1 through 81-22-28, Mississippi 9
Code of 1972, shall stand repealed on July 1, * * * 2030. 10
SECTION 2. Section 81-22-1, Mississippi Code of 1972, is 11
brought forward as follows: 12
81-22-1. This chapter may be known and cited as the 13
"Mississippi Debt Management Services Act." 14
SECTION 3. Section 81-22-3, Mississippi Code of 1972, is 15
brought forward as follows: 16
81-22-3. As used in this chapter, unless the context 17
otherwise indicates, the following terms have the following 18
meanings: 19
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(a) "Commissioner" means the Commissioner of Banking 20
and Consumer Finance of the State of Mississippi. 21
(b) "Debt management service" means: 22
(i) The receiving of money from a consumer for the 23
purpose of distributing one or more payments to or among one or 24
more creditors of the consumer in full or partial payment of the 25
consumer's obligation; 26
(ii) Arranging or assisting a consumer to arrange 27
for the distribution of one or more payments to or among one or 28
more creditors of the consumer in full or partial payment of the 29
consumer's obligation; 30
(iii) Exercising control, directly or indirectly, 31
or arranging for the exercise of control over funds of the 32
consumer for the purpose of distributing payments to or among one 33
or more creditors of the consumer; 34
(iv) Acting or offering to act as an intermediary 35
between a consumer and one or more creditors of the consumer for 36
the purpose of adjusting, compromising, negotiating, settling, 37
discharging or otherwise deferring, reducing or altering the terms 38
of payment of the consumer's obligation; or 39
(v) Improving or offering to improve a consumer's 40
credit record, history or rating. 41
(c) "Debt management service provider" means a person 42
that provides or offers to provide to a consumer in this state any 43
debt management services, in return for a fee or other 44
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consideration. "Debt management service provider" does not 45
include: 46
(i) Those situations involving debt adjusting 47
incurred incidentally in the lawful practice of law in this state; 48
(ii) Those situations involving credit report 49
error correction services and situations covered under paragraph 50
(b)(v) of this section when performed in the lawful practice of 51
law in this state; 52
(iii) Title insurers who adjust debts out of 53
escrow funds only incidentally in the regular course of their 54
principal business; 55
(iv) Judicial officers or others acting under 56
court orders; 57
(v) Those situations involving debt adjusting 58
incurred incidentally in connection with the lawful practice as a 59
certified public accountant; 60
(vi) Bona fide trade or mercantile associations in 61
the course of arranging adjustment of debts with business 62
establishments; 63
(vii) Employers who adjust debts for their 64
employees; 65
(viii) Any person who, at the request of a debtor, 66
makes a loan to the debtor, and who, at the authorization of the 67
debtor, acts as an adjuster of the debtor's debts solely in the 68
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disbursement of the proceeds of the loan, without compensation 69
for the services rendered in adjusting the debts; 70
(ix) Any institution that is regulated, supervised 71
or licensed by the department or any out-of-state institution that 72
is insured by the Federal Deposit Insurance Corporation or the 73
National Credit Union Administration; 74
(x) Licensed attorneys engaged in the lawful 75
practice of law; or 76
(xi) For-profit debt management service providers 77
who do not receive or hold consumer funds, who do not receive a 78
fee until a settlement is approved by the consumer and who are 79
regulated by the Federal Trade Commission. 80
(d) "Department" means the Department of Banking and 81
Consumer Finance of the State of Mississippi. 82
(e) "Fair share contribution" means voluntary 83
contributions paid to the licensee by the creditor for collecting 84
funds from clients pursuant to debt management services. 85
(f) "Licensee" means a person or entity who is required 86
to be licensed as a debt management service provider. 87
(g) "Person" means an individual or an organization. 88
(h) "Records" or "documents" means any item in hard 89
copy or produced in a format of storage commonly described as 90
electronic, imaged, magnetic, microphotographic or otherwise, and 91
any reproduction so made shall have the same force and effect as 92
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the original thereof and be admitted in evidence equally with the 93
original. 94
(i) "Third-party payment processor" means any entity 95
that holds, or has access to, or can effectuate possession of, by 96
any means, the monies of a licensee's debtors, or distributes, or 97
is in the chain or distribution of such monies, to the creditors 98
of such debtors, pursuant to an agreement or contract with the 99
licensee. This term shall not include entities that solely 100
provide the electronic routing and settlement of financial 101
transactions and their sponsoring banks. 102
SECTION 4. Section 81-22-5, Mississippi Code of 1972, is 103
brought forward as follows: 104
81-22-5. (1) Licensure and relicensure. No person or 105
entity may act as a debt management service provider with respect 106
to consumers who are residents of this state without a license 107
issued under this chapter. The license application must be in a 108
form prescribed by the commissioner. The commissioner may refuse 109
the application if it contains erroneous or incomplete 110
information. A license may not be issued unless the commissioner, 111
upon investigation, finds that the financial soundness and 112
responsibility, insurance coverage, consumer education programs 113
and services component, character and fitness of the applicant 114
and, when applicable, its partners, officers or directors, warrant 115
belief that the business will be operated honestly and fairly 116
within the purposes of this chapter. Each license shall remain in 117
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full force and effect until relinquished, suspended, revoked or 118
expired. With each initial application for a license, the 119
applicant shall pay to the commissioner a license fee of Seven 120
Hundred Fifty Dollars ($750.00), and on or before December 31 of 121
each year thereafter, an annual renewal fee of Four Hundred 122
Seventy-five Dollars ($475.00). If the annual renewal fee remains 123
unpaid after December 31, the license shall expire. If any person 124
engages in business as provided for in this chapter without paying 125
the license fee provided for in this subsection before beginning 126
business or before the expiration of the person's current license, 127
as the case may be, then the person shall be liable for the full 128
amount of the license fee, plus a penalty in an amount not to 129
exceed Twenty-five Dollars ($25.00) for each day that the person 130
has engaged in such business without a license or after the 131
expiration of a license. All licensing fees and penalties shall 132
be paid into the Consumer Finance Fund of the department. 133
(2) Action on registration application. The commissioner 134
shall take action on an application within thirty (30) days after 135
the commissioner has accepted the application as complete. Upon 136
written request, the applicant is entitled to a hearing on the 137
question of the applicant's qualifications for license if the 138
commissioner has notified the applicant in writing that the 139
application has been denied or the commissioner has not issued a 140
license within thirty (30) days after the application for the 141
license was accepted as complete by the commissioner. A request 142
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for a hearing may not be made more than sixty (60) days after the 143
application was accepted as complete or the commissioner has 144
mailed a written notice to the applicant stating that the 145
application has been denied and stating the reasons for the denial 146
of the application. 147
SECTION 5. Section 81-22-7, Mississippi Code of 1972, is 148
brought forward as follows: 149
81-22-7. To be eligible for a license, an applicant shall 150
file with the commissioner a bond with good security in the penal 151
sum of Fifty Thousand Dollars ($50,000.00), payable to the State 152
of Mississippi for the faithful performance by the licensee of the 153
duties and obligations pertaining to the business so licensed and 154
the prompt payment of any judgment that may be recovered against 155
the licensee on account of charges or other claims arising 156
directly or collectively from any violation of the provisions of 157
this chapter. The applicant may file, in lieu of the bond, cash, 158
a certificate of deposit or government bonds in the amount of 159
Fifty Thousand Dollars ($50,000.00). Those deposits shall be 160
filed with the commissioner and are subject to the same terms and 161
conditions as are provided for in the surety bond required in this 162
paragraph. Any interest or earnings on those deposits are payable 163
to the depositor. 164
SECTION 6. Section 81-22-9, Mississippi Code of 1972, is 165
brought forward as follows: 166
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81-22-9. (1) Funds deposited in escrow account. The debt 167
management service provider shall deposit, within two (2) business 168
days of receipt, all funds received from or on behalf of a 169
consumer for payment to a creditor or creditors in a federally 170
insured escrow account for the benefit of the consumer in a 171
supervised financial organization. Any escrow account established 172
to receive consumer funds is free from trustee process and 173
unavailable to creditors of the debt management service provider. 174
(2) Requirements for handling of funds. The debt management 175
service provider shall: 176
(a) Maintain separate records of account for each 177
consumer receiving debt management services; 178
(b) Remit funds received from or on behalf of a 179
consumer to the consumer's creditor or creditors within fifteen 180
(15) business days of receipt of the funds; and 181
(c) Correct or remedy any misdirected payments 182
resulting from an error by the debt management service provider 183
and reimburse the consumer for any actual costs or fees imposed by 184
a creditor as a result of such misdirection. 185
(3) Commingling of funds. The debt management service 186
provider may not commingle escrow accounts established for the 187
benefit of consumers with any operating accounts of the debt 188
management service provider. 189
SECTION 7. Section 81-22-11, Mississippi Code of 1972, is 190
brought forward as follows: 191
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81-22-11. (1) Written agreement. A debt management service 192
provider may not perform debt management services for a consumer 193
unless the consumer and the debt management service provider first 194
have executed a written agreement with regard to the debt 195
management services to be provided. A copy of the completed 196
agreement must be given to the consumer. 197
(2) Required provisions. Each agreement between a consumer 198
and a debt management service provider must be dated and signed by 199
the consumer and must include the following: 200
(a) The name and address of the consumer and the debt 201
management service provider; 202
(b) A full description of the services to be performed 203
for the consumer, any fees to be charged to the consumer for those 204
services and any contributions, fees or charges the consumer has 205
agreed to make or pay to the debt management service provider; 206
(c) Disclosure of the existence of the surety bond on 207
file with the commissioner under Section 81-22-7 and a notice that 208
the consumer may contact the Department of Banking and Consumer 209
Finance at P.O. Box 23729, Jackson, MS 39225-3729 or 210
1-800-844-2499 with any questions or complaints regarding the debt 211
management service provider; 212
(d) The identification of the federally insured 213
institution where funds remitted by a consumer for payment to one 214
or more creditors will be held; 215
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(e) The right of a party to cancel the agreement by 216
providing a written notice of cancellation to the other party; 217
(f) A complete list of the consumer's obligations that 218
are subject to the agreement and the names and addresses of the 219
creditors holding those obligations; 220
(g) A full description and schedule of the periodic 221
amounts to be remitted to the debt management service provider for 222
payment to the consumer's creditor or creditors and the amounts to 223
be remitted to each creditor; 224
(h) A notice to the consumer that by executing the 225
agreement the consumer authorizes the federally insured 226
institution to disclose financial records relating to the escrow 227
account in which the consumer's funds are held under Section 228
81-22-9 to the commissioner during the course of any examination 229
of the debt management service provider by the commissioner; and 230
(i) The following notice: 231
NOTICE TO CONSUMER: Do not sign this agreement before you 232
read it. You must be given a copy of this agreement. 233
SECTION 8. Section 81-22-13, Mississippi Code of 1972, is 234
brought forward as follows: 235
81-22-13. A debt service management provider may only charge 236
a consumer the following fees for providing debt management 237
services: 238
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(a) A maintenance fee not to exceed Thirty Dollars 239
($30.00) per month after a consumer has received a free initial 240
counseling session; 241
(b) A one-time setup fee not to exceed Seventy-five 242
Dollars ($75.00); 243
(c) A fee for obtaining the consumer's credit report 244
not to exceed Fifteen Dollars ($15.00) for an individual report or 245
Twenty-five Dollars ($25.00) for a joint report; 246
(d) A fee not to exceed Fifty Dollars ($50.00) for 247
educational courses/products that will assist the consumer in 248
achieving financial stability. Products shall be educational in 249
nature and may include, but not be limited to, the following 250
topics: Home Buyer Education, Financial Literacy Education, and 251
Credit Report Review. However, the consumer must be informed that 252
those courses and products are not a mandatory condition to 253
receive debt management services; and 254
(e) A bankruptcy consultation fee, not to exceed Fifty 255
Dollars ($50.00) per consumer, may be charged by nonprofit credit 256
counseling agencies approved by the U.S. Trustees pursuant to 11 257
USC Section 111. 258
SECTION 9. Section 81-22-15, Mississippi Code of 1972, is 259
brought forward as follows: 260
81-22-15. (1) Written reports to consumers. A debt 261
management service provider shall provide to each consumer 262
receiving debt management services periodic written reports 263
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accounting for funds received from the consumer for payment to the 264
consumer's creditor or creditors whose obligations are listed in 265
the consumer's agreement with the debt management service provider 266
and disbursements made to each such creditor on the consumer's 267
behalf since the last report. The debt management service 268
provider shall provide those reports to the consumer not less than 269
once each calendar quarter. 270
(2) Maintenance of records. Any person required to be 271
licensed under this chapter shall maintain in its offices, or such 272
other location as the department permits, the books, accounts and 273
records necessary for the department to determine whether or not 274
the person is complying with the provisions of this chapter and 275
the rules and regulations adopted by the department under this 276
chapter. These books, accounts and records shall be maintained 277
apart and separate from any other business in which the person is 278
involved. A debt management service provider shall maintain books 279
and records for each consumer for whom it provides debt management 280
services for six (6) years following the final transaction with 281
the consumer. 282
(3) Verification of payments to creditors. Licensees that 283
participate in fair share contributions with creditors shall 284
maintain records that reflect client accounts were credited for 285
the full amount of any payments due and not the net amount as a 286
result of a fair share contribution. Such records may consist of 287
either a copy of the client's statement from the creditor or the 288
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licensee may send a monthly or quarterly statement to clients that 289
reflect payments remitted to creditors. 290
(4) Within fifteen (15) days of the occurrence of any of the 291
following events, a licensee shall file a written report with the 292
commissioner describing the event and its expected impact on the 293
activities on the licensee's business in this state: 294
(a) The filing for bankruptcy or reorganization by the 295
licensee; 296
(b) The institution of revocation or suspension 297
proceedings against the licensee by any state or governmental 298
authority; or 299
(c) Any felony indictment or conviction of the licensee 300
or any of its directors or principal officers. 301
SECTION 10. Section 81-22-17, Mississippi Code of 1972, is 302
brought forward as follows: 303
81-22-17. The commissioner may exercise the following powers 304
and functions: 305
(a) Complaint investigation. The commissioner may 306
receive and act on complaints, take action to obtain voluntary 307
compliance with this chapter or refer cases to the Attorney 308
General, who shall appear for and represent the commissioner in 309
court. 310
(b) Rules. The commissioner may adopt reasonable 311
administrative regulations, not inconsistent with law, for the 312
enforcement of this chapter. 313
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(c) Examination of licensees. To assure compliance 314
with the provisions of this chapter, the department may examine 315
the books and records of any licensee without notice during normal 316
business hours. The commissioner shall charge the licensee an 317
examination fee in an amount not less than Three Hundred Dollars 318
($300.00) nor more than Six Hundred Dollars ($600.00) for each 319
office or location within the State of Mississippi, plus any 320
actual expenses incurred while examining the licensee's records or 321
books that are located outside the State of Mississippi. However, 322
in no event shall a licensee be examined more than once in a 323
two-year period unless for cause shown based upon consumer 324
complaint and/or other exigent reasons as determined by the 325
commissioner. 326
(d) Examination of nonlicensees. The department, its 327
designated officers and employees, or its duly authorized 328
representatives, for the purposes of discovering violations of 329
this chapter and for the purpose of determining whether any person 330
or individual reasonably suspected by the commissioner of 331
conducting business that requires a license under this chapter, 332
may investigate those persons and individuals and examine all 333
relevant books, records and papers employed by those persons or 334
individuals in the transaction of business, and may summon 335
witnesses and examine them under oath concerning matters as to the 336
business of those persons, or other such matters as may be 337
relevant to the discovery of violations of this chapter, 338
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including, without limitation, the conduct of business without a 339
license as required under this chapter. 340
SECTION 11. Section 81-22-19, Mississippi Code of 1972, is 341
brought forward as follows: 342
81-22-19. A debt management service provider may not: 343
(a) Purchase debt. Purchase any debt or obligation of 344
a consumer; 345
(b) Lend money. Lend money or provide credit to any 346
consumer; 347
(c) Mortgage interest. Obtain a mortgage or other 348
security interest in property of a consumer; 349
(d) Debt collector. Operate as a debt collector in 350
this state; or 351
(e) Negative amortization. Structure an agreement for 352
the consumer that, at the conclusion of the projected term for the 353
consumer's participation in the debt management service agreement, 354
would result in negative amortization of any of the consumer's 355
obligations to creditors. 356
SECTION 12. Section 81-22-21, Mississippi Code of 1972, is 357
brought forward as follows: 358
81-22-21. (1) False advertising. A debt management service 359
provider may not engage in this state in false or misleading 360
advertising concerning the terms and conditions of any services or 361
assistance offered. 362
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(2) Required words. A debt management service provider may 363
not advertise its services in Mississippi in any media 364
disseminated primarily in this state, whether print or electronic, 365
without the words "Licensed Debt Management Service Provider." 366
(3) Dissemination; no liability. This section does not 367
impose liability on the owner or personnel of any medium in which 368
an advertisement appears or through which an advertisement is 369
disseminated. 370
SECTION 13. Section 81-22-23, Mississippi Code of 1972, is 371
brought forward as follows: 372
81-22-23. (1) Violations; unfair, unconscionable or 373
deceptive practices. A debt management service provider that 374
violates any provision of this chapter or any rule adopted by the 375
commissioner, or that through any unfair, unconscionable or 376
deceptive practice causes actual damage to a consumer is subject 377
to enforcement action under subsection (2) of this section. 378
(2) Enforcement actions. The following enforcement actions 379
may be taken by the commissioner or an aggrieved consumer against 380
a debt management service provider for violations of any provision 381
of this chapter or any rule adopted under this chapter, or for 382
unfair, unconscionable or deceptive practices that cause actual 383
damage to a consumer: 384
(a) When the commissioner has reasonable cause to 385
believe that a person is violating any provision of this chapter, 386
the commissioner, in addition to and without prejudice to the 387
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authority provided elsewhere in this chapter, may enter an order 388
requiring the person to stop or to refrain from the violation. 389
The commissioner may sue in any chancery court of the state having 390
jurisdiction and venue to enjoin the person from engaging in or 391
continuing the violation or from doing any act in furtherance of 392
the violation. In such an action, the court may enter an order or 393
judgment awarding a preliminary or permanent injunction; 394
(b) The commissioner may, after notice and hearing, 395
impose a civil penalty against any licensee if the licensee, 396
individual required to be registered, or employee is adjudged by 397
the commissioner to be in violation of the provisions of this 398
chapter. The civil penalty shall not exceed Five Hundred Dollars 399
($500.00) per violation and shall be deposited into the Consumer 400
Finance Fund of the department; 401
(c) The state may enforce its rights under the surety 402
bond as required in Section 81-22-7 as an available remedy for the 403
collection of any civil penalties, criminal fines or costs of 404
investigation and/or prosecution incurred; 405
(d) A civil action by an aggrieved consumer in which 406
that consumer has the right to recover actual damages from the 407
debt management service provider in an amount determined by the 408
court plus costs of the action together with reasonable attorney's 409
fees; or 410
(e) Revocation, suspension or nonrenewal of the debt 411
management service provider's license under Section 81-22-25. 412
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SECTION 14. Section 81-22-25, Mississippi Code of 1972, is 413
brought forward as follows: 414
81-22-25. (1) Suspension or revocation. After notice and 415
hearing, the commissioner may suspend or revoke a debt management 416
service provider's license if the commissioner finds that one of 417
the conditions of subsection (2) of this section is met. 418
(2) Conditions for suspension or revocation. The following 419
conditions are grounds for suspension or revocation of a 420
registration: 421
(a) A fact or condition exists that, if it had existed 422
at the time when the licensee applied for a license, would have 423
been grounds for denying the application; 424
(b) The licensee knowingly violates a material 425
provision of this chapter or rule or order validly adopted by the 426
commissioner under authority of this chapter; 427
(c) The licensee is insolvent; 428
(d) The licensee refuses to permit the commissioner to 429
make an examination authorized by this chapter; or 430
(e) The licensee fails to respond within a reasonable 431
time and in an appropriate manner to communications from the 432
commissioner. 433
SECTION 15. Section 81-22-27, Mississippi Code of 1972, is 434
brought forward as follows: 435
81-22-27. The commissioner may employ the necessary 436
full-time employees above the number of permanent full-time 437
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employees authorized for the department for the fiscal year 2003, 438
to carry out and enforce the provisions of this chapter. The 439
commissioner also may expend the necessary funds and equip and 440
provide necessary travel expenses for those employees. 441
SECTION 16. Section 81-22-28, Mississippi Code of 1972, is 442
brought forward as follows: 443
81-22-28. (1) If a licensee seeks to utilize a third-party 444
payment processor, to hold, have access to, effectuate possession 445
of, by any means, or to distribute or be in the chain of 446
distribution of the monies of another licensee's consumers, the 447
licensee shall give the Department of Banking and Consumer Finance 448
ten (10) days' written notice. 449
(2) Such notice shall contain the name and address of the 450
third-party payment processor, a description of the services, a 451
copy of the agreement or contract between the licensee and the 452
third-party payment processor and the highest daily amount of 453
consumer funds to be held or transmitted. The third-party payment 454
processor shall submit to the department, upon request, the 455
highest daily amount held or transmitted during the previous 456
month. 457
(3) Each third-party payment processor shall file with the 458
commissioner a surety bond, issued by a bonding company or 459
insurance company authorized to do business in the State of 460
Mississippi, in the principal sum of Fifty Thousand Dollars 461
($50,000.00) and in an additional principal sum of Fifty Thousand 462
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Dollars ($50,000.00) for each additional licensee it contracts 463
with, but in no event shall the bond be required to be in excess 464
of One Hundred Fifty Thousand Dollars ($150,000.00). In lieu of 465
the surety bond, a third-party payment processor may file other 466
assets such as cash, a certificate of deposit or government bonds. 467
(4) A licensee shall not use a third-party payment processor 468
until the licensee receives written notice from the department 469
confirming that the department has received a surety bond or other 470
assets from the third-party payment processor. 471
(5) Prior to performing any of its services, the third-party 472
payment processor shall provide written authorization for the 473
department to examine all books, records, documents and materials, 474
including those maintained in electronic form, as they relate to 475
the consumers' monies held by, or distributed by the third-party 476
payment processor to the creditors of the consumers and shall have 477
received written confirmation from the department that the written 478
authorization is sufficient. The cost of the examination shall be 479
paid by the licensee. 480
(6) All agreements or contracts between a licensee and a 481
third-party payment processor shall provide for a thirty-day 482
written notice of termination to the party against whom 483
termination is being sought. A licensee shall immediately notify 484
the department in writing of the notice of termination. 485
(7) In the event a licensee elects to maintain cash, a 486
certificate of deposit or government bonds on deposit, and 487
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ST: Mississippi Debt Management Services Act;
extend repealer on.
utilizes the services of a third-party payment processor, there is 488
no requirement that the third-party payment processor obtain a 489
surety bond or maintain other assets on deposit with the 490
department. 491
SECTION 17. This act shall take effect and be in force from 492
and after July 1, 2026. 493