Miss. Admin. Code Title 5 — Banking and Consumer Finance

DEPARTMENT OF BANKING AND CONSUMER FINANCE DEPARTMENT OF BANKING AND CONSUMER FINANCE

Part 1 Banking Activities

Chapter 1 Regulation 1: Bank Operations

5 Miss. Admin. Code Pt. 1, R. 1.1 Purpose - Repeal of Prior Rules

This regulation was adopted as an amendment to the previous Bank Regulation 1 to conform to the Department’s current practice and to eliminate obsolete provisions and to add clarification. Pursuant to the Mississippi Administrative Procedures Law, Section 25-43-1.101 et seq., Mississippi Code Annotated, the Department of Banking adopted the Regulation 1, which upon their effective date, superseded and repealed the prior Bank Regulation 1. The provisions addressed in the regulation include banking hours, document filing fees, fees for special services, maximum percentages of the value of all loans and discounts, and preservation of bank records.

1. BANKING HOURS

The legal holidays for the State of Mississippi as allowed under Section 3-3-7, Mississippi Code of 1972, are:

1. First day of January (New Year's Day) 2. Third Monday of January (Robert E. Lee's and Martin Luther King, Jr.'s Birthday) 3. Third Monday of February (George Washington's Birthday) 4. Last Monday of April (Confederate Memorial Day) 5. Last Monday of May (National Memorial Day and Jefferson Davis’ Birthday) 6. Fourth of July (Independence Day) 7. First Monday of September (Labor Day) 8. Eleventh day of November (Armistice or Veteran's Day) 9. Day fixed by proclamation by The Governor of Mississippi (Thanksgiving Day) 10. Twenty-fifth day of December (Christmas Day)

In the event any state or federal legal holiday shall fall on a Saturday, a bank may observe the preceding Friday as a legal holiday or in the event any state or federal legal holiday shall fall on a Sunday, a bank may observe the next following Monday as a legal holiday.

Unless emergency circumstances exist, as determined by the Commissioner, no bank or bank branch shall close more than two whole days in any week, state and federal holidays and Sunday excepted.

All banks shall promulgate and adopt banking hours for the convenience of the public so as not to prevent the rendering of proper and reasonable banking service to the community and trade area in which the bank or branches are located. The banking hours so promulgated and adopted shall define the opening and closing on a day-to-day basis of the bank and branches and the executive officer of the bank shall provide certification to the Commission that the Board of Directors was notified of said hours.

Any closing of a half day or a whole day during the week or on Saturdays shall be included in your Board of Directors' authority. However, exceptions shall include the closing of your parent bank or branches as result of any calamity, catastrophe, or emergency such as hurricane, tornado, fire, civil riots, declaration of material law or other acts which would endanger or threaten the lives and property of your personnel, customers, or facilities wherever located.

Any opening or closing procedure or practice which is an exception to your bank's regular opening and closing routine shall also be approved by the Board of Directors.

2. DOCUMENT FILING FEES

Documents filed with the Department shall be accompanied by a fee as fixed by the Commissioner: Fee

1. Filing articles of incorporation of banking and credit unions, and issuing a certificate of incorporation. $2,500 2. Filing articles of merger when the resulting bank or credit union is a state bank or credit union. $2,500 3. Filing application for conversion from a national bank, state or federal thrift, or credit union to a state bank or credit union. $2,500 4. Filing application for a branch bank or credit union. $750 5. Filing application for a Loan Production Office (LPO) $100 6. Filing application to establish out of state branch office by in-state bank and credit union. $750

For any of the above services, should any additional special services be rendered in the examination or investigation, and considered to be out of routine, or extraordinary, the Commissioner, Department of Banking and Consumer Finance, may charge an additional fee up to and not to exceed the maximum fee as established by 81-1-115.

3. FEES FOR SPECIAL SERVICES

4. Personnel costs (per hour) 15.00 2. Reproduction (per page) .50 3. Postage Actual 4. FAX transmittal (per page) $1.00 5. Licensee listing $35.00 6. State Board of Banking Review Parity Regulations

$35.00 4. MAXIMUM PERCENTAGES OF THE VALUE OF ALL LOANS AND DISCOUNTS

The maximum percentage of the par value of all loans and discounts secured as provided for in Section 81-5-77(b), Mississippi Code of 1972, is hereby fixed at one-hundred percent (100%) of par value up to twenty-five (25%) of capital and surplus, and ninety-five (95%) of par value of all amounts above twenty-five percent (25%) of capital and surplus.

5. PRESERVATION OF BANK RECORDS (Section 81-5-7, Mississippi Code of 1972)

Each bank shall permanently retain certain records as follows:

1. Minute books of meetings of its shareholders and directors 2. Capital stock ledger 3. Capital stock certificate ledger 4. Daily statements of condition 5. General journal 6. Investment (Securities) ledger 7. All bank Reports of Examination 8. All ledger sheets showing unpaid balances in favor of depositors

Provided, however, that any or all records may be reproduced in a format of storage commonly used and any such reproduction retained in lieu of the original records.

All bank records shall be retained for a period of three years from the date of transaction. Thereafter, at the discretion of its Board of Directors, all banks are hereby permitted to destroy any and all records except those specifically outlined above.

In addition to amending the above regulations, DBCF amended and restated Banking Division Memos. The memos were amended as follows:

1. Real Estate Acquisitions – Banks are no longer required to request permission for major capital expansion to new or existing banking house buildings. This does not change branch procedures. 2. “CAMELS” Ratings – Withdrew outdated memo 3. Payment of Dividends – Withdrew outdated memo

History

• Source: Miss. Code Ann. §81-5-97; §81-1-115; §81-5-77(b); §81-5-7; Effective date February 14, 2008

Chapter 2 Regulation 2: Bank Parity

5 Miss. Admin. Code Pt. 1, R. 2.1 Purpose - Bank Parity

This regulation amended Regulation 2 and entitles state chartered banks, state chartered savings and loan associations, and state chartered savings banks the same privileges as federally chartered depository institutions. The intent of Regulation 2 is to clarify the rights, powers, privileges, immunities, duties and obligations of a national bank that may be enjoyed by state chartered banks. The adoption of such regulation in no way restricts or modifies the rights, powers, privileges, or immunities otherwise possessed or enjoyed by state- chartered banks.

The parity covers various areas of corporate governance, as well as operational activities of state chartered banks. A state chartered institution with documented data, can request parity with their federal counterpart which operates within the state. The submission of proof and request for parity must be done prior to beginning the activity. The Commissioner will determine whether to approve the request.

The list below details the numerous activities for which a state chartered institution may request parity. These items were included in the previous amendment to Regulation 2 and parity for these items may be requested with the most recent amendment. Any activity, allowed by a federal regulator, not listed must be documented and submitted for approval.

1. Corporate Governance a. Branching – A state chartered bank, before establishing a branch bank, must obtain prior approval of the Commissioner, Department of Banking and Consumer Finance upon satisfactory demonstration of public convenience and necessity; automated teller machines (ATMs) are deemed to be branch banks; and state chartered branch banks may be established without regard to any population restriction or territorial restriction and may be established outside municipalities or in unincorporated areas. Source: 12 U.S. C. § 36, 12 C. F. R. §5.30 and Department of Banking and Consumer Finance v. Clarke, 809 F. 2d 266, cert denied, 483 U. S. 1010.

b. Directors’ Qualifying Shares – A state-chartered bank, with prior approval from the Commissioner, Department of Banking and Consumer Finance, shall have authority to exchange directors’ qualifying shares of stock of a bank and to substitute in lieu thereof a like amount of qualifying shares of a holding company, with the holding company stock to be considered as directors’ qualifying shares as set forth under the provisions of Miss. Code Ann. §81-5-45. Source: 12 U.S.C. § 72 and 12 C.F.R. § 7.4210

c. Extensions of Credit to Directors, Executive Officers and Principal Shareholders - A state-chartered bank shall have authority to extend lines of credit to directors,

executive officers, and principal shareholders in accordance with 12 U.S.C. § 375b(4) and §215.4 of Regulation O. Source: 12 U.S.C §84,12 U.S.C. § 375b(4), 12 C.F.R. § 215

d. Indemnification of Directors, Officers, Employees, and Agents – A state- chartered bank, with prior approval from the Commissioner, Department of Banking and Consumer Finance, shall have authority to amend its Articles of Incorporation to provide for the indemnification of its directors, officers, employees, and agents against liabilities and expenses incurred by them in their official capacities and for the payment of premiums for insurance insuring the liability of its directors, officers, employees and agents. Source: 12 C.F.R. § 7.5217

2. Activities a. Acceptances – Sale of small denominations in acceptances created by another bank subject to reserve requirements unless there is a pro rata transfer of ownership rights. Source: 12 C.F.R. § 7.7420; Interpretive Letter 268

b. Agency Activities i. In accordance with the rules, regulations, policies, and procedures of the Department of Banking and Consumer Finance, and Mississippi state- chartered financial institution that is a subsidiary of a bank holding company may agree to receive deposits, renew time deposits, close loans, service loans, and receive payments on loans and other obligations as an agent for an affiliated depository institution. ii. Notwithstanding any other provision of law, any Mississippi financial institution acting as an agent in accordance with Subsection A of this Section shall not be considered to a branch of the other financial institution for which it acts as agent. iii. In acting as an agent pursuant this Section, a state –chartered bank may not: 1. Conduct any activity which such institution is prohibited from conducting as a principal under any applicable federal or state law, or 2. As a principal, have an agent conduct under this Section any activity which the institution is prohibited from conducting under any applicable federal or state law. iv. No provision of this Section shall be construed as affecting either of the following: 1. The authority of any financial institution to act as an agent on behalf of any other financial institution under any other provision of law. 2. Whether a financial institution which conducts any activity as an agent on behalf of any other financial institution under any other provision of law shall be considered to be a branch of such other institution.

v. Agency relationships by and between financial institutions as provided in this Section shall be on terms that are consistent with safe and sound banking practices and all applicable regulations of any appropriate state or federal banking supervisory agency. Source: 12 U.S.C. § 1828(r)

c. Agent for Deposit Placement – A bank may act as agent and place deposits in other financial institutions on behalf of customer. (Must register as a deposit broker). Source: Investment Securities Letter 32

d. ATM Network – Operation via Subsidiary. A bank may form an operating subsidiary to enter into a partnership or joint venture with another bank to establish an automated teller machine network subject to certain conditions. Source. Interpretive Letter 289.

e. ATM Networks – Conversion of proprietary ATM network into a shared network where it provides service for other banks in the network. Source: No Objection Letter 87-11; Interpretive Letter 381

f. Attachment, Injunction and Execution – No attachment, injunction or execution shall be issued against a state chartered bank or its property before final judgment in any suit, action or proceeding, any state, county or municipal court. Source: 12 U.S.C § 91 and U.S. v. Lemaire 86 F.2d 387 (5 th Cir. 1987), rehearing denied 831 F. 2d cert. denied 108 S. Ct. 1223

g. Automatic Payment Plan Account – Source: 12 C.F.R §7.7560

h. Balloon Loans – A bank may make either conventional or repurchase balloon loans. Source: Interpretive Letter 364

i. Certificates of Deposits – Purchase and Sale of Participations – A bank may either purchase certificates of deposits and sell participation interest to its customers.

j. Charitable Contributions – A bank may contribute to community funds or to charitable philanthropic or benevolent instrumentalities conducive to public welfare such sums as the board of directors may deem expedient and in the interest of the bank, provided that investment in any one project does not exceed 2% of capital and surplus and investments in all such projects do not exceed 5% of capital and surplus. Source: 12 U.S.C §24 Eighth and 12 C.F.R. §7.7480

k. Check Certification – Source: 12 U.S.C. §501

l. Check Guarantee Plans – A bank may enter into check guarantee arrangements.

m. Credit Card Bank – A bank may establish a credit card bank as a subsidiary.

n. Credit Card Customer List – Sale of – A bank may sell credit card customer list to an insurance agency offering insurance. Source: Interpretive Letter 316

o. Credit Card Issuance – Source: 12C.F.R. §7.7378

p. Data Processing Services – A bank may directly or through an operating subsidiary provide data processing services for itself and other depository institutions. Source: Interpretive Letter dated May 1, 1985, [1986 WL 149765]; Interpretive Letter dated April 25, 1986, [1986 WL 143931]; Interpretive Letter dated August 3, 1977; Interpretive Letter 449; Interpretive Letter 346; Interpretive Letter 345

q. Data Processing – Marketing of Bank Related Computer Software – Bank’s operating subsidiary may be a general partner with a corporation where the purpose of the partnership is to develop a market banking-relating computer software to financial institutions and companies that process items for financial institutions; Bank may market software. Source: Interpretive Letter dated July 13, 1987. [1987 WL 149776]; Letter December 6, 1990 [1990 WL 362196].

r. Debt Collection and Asset Management Services – Source: Interpretive Letter 498; Interpretive Letter 538

s. Economic Development Loans to Native Americans – Loans to certain authorized Indian organizations, at least 20% of which are guaranteed, without being subject to restrictions of other statutes regarding loan to value ratios, maturity, security, priority of lien or percentage of assets that may be invested. Source: 25 U.S.C. §1489

t. EFT Network Via Subsidiary – Source: Interpretive Letter 289; Interpretive Letter

u. Electronic Funds Transfer Switch – A bank may enter into a general partnership to provide an electronic funds transfer switch for use by financial institutions.

v. Guaranty of Obligation of Others – A bank may lend its credit, act as a surety or otherwise become a guarantor if it has a substantial interest in the performance of the transaction involved or has a segregated deposit sufficient amount to cover the bank’s total potential liability. Source: 12 C.F.R. §7.7010 and §7.7012; Interpretive Letter 218; Interpretive Letter 94

w. Incidental Powers Necessary to Business Banking – Source: 12 U.S.C. §24 (Seventh)

x. Indemnification of Officers and Directors – Source: Interpretive Letter dated August 2, 1977; 12 C.F.R. §7.5217; Interpretive Letter 404

y. Individual Retirement Accounts – A bank without trust powers may act as an IRA custodian if the individual retirement account funds are held in savings or in time deposits accounts. Source: OCC Banking Cir. 61; Interpretive Letter 302

z. Insurance Activities and Investments i. Acting as General Insurance Agent – authorizes national banks located in communities of less than 5,000 inhabitants to act as an insurance agent even if the principal office is in a larger community. Note, however, that Miss. Code Ann. §83-17-227 sets a limit of 7,000 and prohibits banks who maintain an office in a larger community from acting as an agent. Source: 12 U.S.C. §92; 12 C.F.R. §7.7100

ii. Annuities – A bank may act as an agent for sale of fixed rate annuities (may be subject to challenge of regulation by Insurance Department.

iii. Collateral Property Protection Insurance – A bank may sell in connection with an extension of credit from the bank, vendor’s single or double insurance rate. Source: Unnumbered Interpretive Letter dated June 3, 1986; Interpretive Letter 91

iv. Credit Life Insurance – Sale of - Source: Interpretive Letter 495; Interpretive Letter 330; Interpretive Letter 283; Interpretive Letter 152; Interpretive Letter 9; Interpretive Letter dated November 7, 1977; Interpretive Letter 8; Interpretive Letter 18; Interpretive Letter 45; Interpretive Letter 26; C.F.R. §2.4 and §2.6.

v. Credit Life Insurance – Underwriting of – A bank may acquire as an operating subsidiary, insurance company that is engaged in the business of underwriting credit life and accident health insurance in connection with loans made by the bank and its subsidiaries or may participate as a shareholding in such a company provided certain safeguards are met.

vi. Debt Cancellation Contracts – A bank may establish reserves against losses arising from cancellation of outstanding debt upon death of borrower by establishing additional charges. Source: 12 C.F.R. §7.7495

vii. Deferred Fee and Death Benefit Insurance – A bank may purchase insurance to protect its interest, including interest in the performance of its personnel. Source: Interpretive Letter 401

viii. Key Man Insurance – A bank may purchase insurance for the benefit of bank on life of a bank officer. Source: 12 C.F.R. §7.7115

ix. Lease of Bank Lobby to Unaffiliated Entities – An unaffiliated entity engaging in brokerage activities and insurance activities with rental payments made to the bank based on a percentage of gross commissions received by the tenant; note, however, subject to Mississippi Insurance Law. Source: Interpretive Letter 562; Interpretive Letter 533; Interpretive Letter 408; Interpretive Letter 407; Interpretive Letter 406; and Interpretive Letter 274

x. Life Insurance on Directors and Employees – A bank may purchase single premium life insurance policy for a director in connection with a deferred fee program. Source: Interpretive Letter 401

xi. Loan Customer List – A bank may sell list of loan customers to an insurance agency have a percentage lease arrangement with the bank.

xii. Split Dollar Life Insurance – A bank may purchase a split dollar life insurance policy on an officer or director under which the bank transfers the benefit portion of the policies to the officer or director upon retirement or resignation while retaining ownership of a portion of the policy sufficient to recover investment. Source: Interpretive Letter 429; OCC Banking Circular 249

xiii. Stock in Company Affiliated with Captive Insurer – A bank may purchase shares of stock in a company affiliated with an industry captive insurance company as a condition precedent to obtaining insurance from the captive.

xiv. Leasing Equipment and Personal Property – A bank may invest in tangible personal property, including without limitation vehicles, manufactures homes, machinery equipment or furniture or lease financing transactions on a net lease basis, provided the aggregate book value of all such property does not exceed 10% of the consolidated assets of the bank.

xv. Lease, Full Payout – A bank may reasonably rely on the residual value of leased property in structuring a full net payout lease recouping 100% of the investment plus cost of handling. Source: Interpretive Letter 20; OCC Banking Circular125

xvi. Lease Consulting Services via Subsidiary – A bank may engage in property leasing activities through a subsidiary, including lease consulting services, finder services, and lease servicing. Source: Interpretive Letter

xvii. Lease Financing - Source: 12 C.F.R. § 7.3400; 12 C.F.R. Part 23; OCC Banking Bulletin 91-47; Interpretive Letter 97

xviii. Lease of Bank Lobby to Unaffiliated Entities – An unaffiliated entity engaging in brokerage activities and insurance activities with rental payments made to the bank based on a percentage of gross commissions received by the tenant; note however, subject to Mississippi Insurance Law. Source: Interpretive Letter 562; Interpretive Letter 533; Interpretive Letter 408; Interpretive Letter 407; Interpretive Letter 406; Interpretive Letter 274

xix. Leasing of Bank Employees from Third Party – A bank may lease services of its employees from third parties so long as the Board of Directors continues to retain and exercise general supervision over the affairs of the bank. Source: Interpretive Letter 431

xx. Loan Origination Services Active Through Operating Subsidiary -

xxi. Loan Production Offices – Approval and funding as main or branch officer. Source: OCC Banking Circular 199; 12 C.F.R. §7.7380

xxii. Loan Repurchase Agreements – A bank may agree to repurchase loans or other assets. Source: 12 C.F.R. §7.7519

xxiii. Merger with Insured Depository Institution – A national bank may acquire be acquired by any insured depository institution. Source: 12 U.S.C. §215c

xxiv. Money Orders – Sale of Non-Bank Locations – Source: 12 C.F.R. §7.7500

xxv. Participations in Equipment Lease Financing Receivable –A bank may purchase a participation interest of less than 100% in an equipment lease financing receivable and such purchase would not be a participation in a partnership. Source: Interpretive Letter 374

xxvi. Participation in Small Business Administration Guaranteed Loans – A bank may purchase participations in SBA guaranteed loans, subject to certain conditions and limitations. Source: Interpretive Letter 350

xxvii. Pass-Through Participation Certificates – Purchase of - A bank may purchase pass through participation certificates that represent interest in pools of FHA – Insured Title I property improvement loans. Source: Interpretive Letter 579

xxviii. Payroll Insurer – A bank may act as payroll issuer for its customers.

xxix. Pledging Assets – A bank may pledge investment securities to secure its borrowings, within limits imposed by the need to maintain adequate liquidity. Source: Interpretive Letter dated December 16, 1987 at 1987 WL 149807

xxx. Pledging Assets to Secure Public Deposits – Source: 12 U.S.C. §90; 25 U.S.C. 162a and 12 C.F.R. §7-7410

xxxi. Preparing Income Tax Returns – A bank may not serve as an expert tax consultant. Source: 12 C.F.R. §7.7430

aa. Real Estate Activities and Investments i. Adjustable Rate Mortgages – Source: 12 C.F.R. 34.6

ii. Appraisals – A bank may perform real estate appraisals for loans it originates as well as for other financial institutions. Source: Interpretive Letter 467

iii. Collateralized Mortgage Obligations – Purchase of – A bank may purchase without limit collateralized mortgage obligations that the meeting the requirement of 12 U.S.C. §24 (Seventh). Source: Interpretive Letter dated April 16, 1987

iv. Exchanging OREO for Mortgages on Other Property – Source: Interpretive Letter dated June 4, 1986 [1986 WL 143934]

v. Investing in Mortgage Related Securities via Mutual Funds – A bank may generally purchase related securities and may, therefore, invest in mutual funds which own eligible mortgage-related securities. Source: Investment Securities Letter 15

vi. Lease of DPC Property – A bank may enter into a lease agreement regarding DPC property. Source: Interpretive Letter dated September 2,

vii. Lease of Public Facilities – A bank may lease a building to a municipality so long as the lease agreement provides that municipality will become owner of building upon expiration of lease. Bank may purchase or construct a municipal building and as holder of legal title lease it to a public authority having resources sufficient to make rental payments.

viii. Mortgage Banking Subsidiary – A bank may establish an operating

subsidiary as a mortgage company. Source: Interpretive Letter dated December 19, 1986 [1986 WL 143894].

ix. Mortgage Servicing – A bank may act as agent to service mortgage and may, through an operating subsidiary, be a 50% equity partner and sole general partner in limited partnership from the purpose of conducting a mortgage servicing operation. Source: 12 C.F.R. §7.7379 and Interpretive Letter dated July 23, 1986 [1986 WL 143932].

x. Purchase of Property to Secure Previously Contracted Debt – A bank may purchase real property in order to protect a partial interest or title that was acquired to secure previously contracted debt, but bank may not enter into a joint venture to operate such property. Source: Interpretive Letter 12

xi. Real Estate Management Services – An operating subsidiary may furnish real estate asset management and advisory services to other financial institutions. Source: Interpretive Letter 389

xii. Real Estate Consulting via Subsidiary – An operating subsidiary may act as finder in locating, analyzing and making recommendations regarding the purchase of property and may make recommendations concerning the sale of property, but may not act as broker in performing these activities.

xiii. Real Estate Loan via Subsidiary – A bank’s operating subsidiary may make commercial real estate loans, including construction and development loans, as originator or participant. Source: Interpretive Letter 389

xiv. Real Estate Swaps – A bank may exchange OREO for other property provided the transaction is undertaken to substantially reduce or avoid potential loss on OREO property. Source: Interpretive Letter 349

xv. Selling OREO with Bank Financing – Source: Interpretive Letter dated July 30, 1986 [1986 WL 143914]

xvi. Services for Homeowners Associations – A bank may perform various types of review and analysis required for homeowner associations and their management companies, including projections for future reserve needs, timing of contributions, and economic forecasts. Source: Interpretive Letter dated August 20, 1987 [1987 WL 149774]

xvii. Shared Appreciation Mortgage Loans – A bank may make shared appreciation loan to developer for the conversion of residential property into condominium units and receive a fixed amount or percentage of the sales price of each unit sold; and the bank may finance the acquisition or

improvement of real property on which the borrower will operate its business. Source: Interpretive Letter 244

xviii. Mortgage Related Securities – A bank may purchase mortgage relates securities and may therefore invest in mutual funds which own eligible mortgage related securities. Source: Investment Securities Letter 15

xix. Other Real Estate Owned – OREO may be an equity investment subject to the five year holding limitation. Source: 12 U.S.C §29 and 12 C.F.R. §7.3025

xx. Real Estate, Residence for Bank Officer – For the development and efficient utilization of bank personnel, a bank may purchase the residence of an employee who has been transferred to another area, in order to spare the employee a loss in the prevailing market. A bank may own real property that is to be used as a residence for bank officer when working out of town as long as IRS allows an expense deduction. Source: 12 C.F.R. §7.5230; Interpretive Letter 263

bb. Securities Activities i. Advisory and Discount Brokerage Services and Automatic Investment Services – Source: Interpretive Letter 353; Interpretive Letter 562; Interpretive Letter 360; Interpretive Letter 332; and C.F.R. 12.1-12.7

ii. Agent for Sale of Government Securities – A bank may act as agent for purchase and sale of government securities on an unsolicited basis.

iii. Closed End Collective Investment Funds – Source: Trust Interpretation

iv. Collateralized Mortgage Obligations – Issuing and Selling of - A bank may issues and sell CMOs backed by pool of conventional FHA guaranteed and VA insured residential mortgages through an unaffiliated underwriter. Source: Interpretive Letter 378; Interpretive Letter171

v. Collateralized Mortgage Obligations – Issuing Underwriting and Dealing in Via Subsidiary – A bank’s operating subsidiary may issue, underwrite and deal in bonds partially collateralized by pools of mortgages, including GNMA certificates, FNMA certificates, FHLMC certificates, and/or non- federally insured conventional residential mortgage loans. Source: Interpretive Letter 362

vi. Commercial Paper Replacement – A bank may place third party commercial paper. Source: Interpretive Letter 329

vii. Discount Brokerage Activities – A bank may acquire stock of company as operating subsidiary to perform discount brokerage services and provide investment advice. Source: Interpretive Letter 380; Interpretive Letter dated June 30, 1987, [1987 WL 149813]; Interpretive Letter 403

viii. Financial Advice and Counseling – A bank may offer strategic planning of a financial nature and market economic information to customers in general. Investment advice may be given through a subsidiary. Source: Interpretive Letter 137; Interpretive Letter 367; and Interpretive Letter 403

ix. Financial Advice and Counseling for Mutual Funds – A bank or its operating subsidiary may offer investment advice to a mutual fund.

x. Lease of Bank Lobby to Unaffiliated Entities – An unaffiliated entity may engage in brokerage activities and insurance activities with rental payments made to the bank based on a percentage of gross commissions received by the tenant; note, however, subject to Mississippi Insurance Law. Source: Interpretive Letter 562; Interpretive Letter 533; Interpretive Letter 408; Interpretive Letter 407; Interpretive Letter 406; Interpretive Letter 274

xi. Municipal Finance Consulting – Source: Interpretive Letter 122

xii. Municipal Leases and Installment Purchase Contracts – Underwriting the Sale of – A bank may underwrite the sale of municipal leases and installment purchase contracts. Source: Interpretive Letter 250

xiii. Municipal Securities Dealers, Acting as - Source: 12 U.S.C.; §78c(a)(30)(c)(B); 12 C.F.R. § §10.1-10.41

xiv. Mutual Fund Shares – Purchase and Sale of – A bank may purchase or sell shares in mutual funds as agent without recourse upon a customer’s order.

xv. Private Placement of Securities and Equity Investments – A bank may participate in private placement of investment securities with equity interest in real estate as agent for bank customer. Source: Interpretive Letter 194; Interpretive Letter 25; Interpretive Letter 463; Interpretive Letter 271; and Interpretive Letter 32

xvi. Securities Lending – A bank may lend U.S. Government securities to another bank for the second bank to pledge to state deposits, subject to the bank’s legal lending limit. Source: Interpretive Letter 376

xvii. Security Monitoring Services –A bank may provide security monitoring services to other financial institutions. Source: Interpretive Letter dated June 6, 1985 [1985 WL 143955]

xviii. Stand By Letters of Credit – A bank may issue a standby letter of credit subject to conditions and limitations. Source: Interpretive Letter dated September 5, 1985 [1985 WL 73110]; Interpretive Letter 57

xix. Stock Acquired in Lieu of DPC – A bank may acquire newly issued stock in other banks in settlement of debts previously contracted so long as stock is acquired primarily as a means of preventing or limiting loan losses.

xx. Stock Warranties (Equity Kickers) – A bank may establish an operating subsidiary that will enter into two tandem limited partnerships, one of which will make commercial loans in connection with highly leveraged transactions, while the other will hold stock warrants as “equity kickers” in connection with such loans. Source: Interpretive Letter 517

xxi. Trust Powers, Exception to Requirement of Security for Trust Funds Deposited on Commercial Side – Requirement that securities be pledged for trust funds deposited on commercial side while awaiting investment or distribution, does not apply to accounts where the bank acts in the capacity of agent and does not have investment discretion. Source: 12 C.F.R. §9.2700; 12 C.F.R. §9.3210

3. Investments a. Bank Premises – A bank may invest in bank premises or in a corporation holding the bank premises. Source: 12 U.S.C. §29; 12 U.S.C. §371(d); 12 C.F.R. §7.3005; 12 C.F.R. §7.3100

b. Bank Service Corporations – A bank may invest in bank service corporations subject to certain conditions and limitations in an amount not to exceed 10% if the bank’s paid in and unimpaired capital and unimpaired surplus in any one corporation of 5% of assets in all such investments. Source: 12 U.S.C. §1862 and 12 C.F.R. §5.35

c. Bankers Bank Stock – A bank may invest in stock of an FDIC insured bank or of a holding company which owns or controls an insured bank that is exclusively owned by depository institutions (excepting requisite directors qualifying shares), which exclusively provides depository institution related services. Source: 12 U.S.C. §24 (Seventh) and 12 U.S.C. §27(b)

d. Community Development Corporations – Allows equity interest in projects of predominantly civic, community or public nature – 2% of capital and surplus per project and 5% of capital and surplus for all projects. Source: 12 U.S.C., §24

(Eighth): 12 C.F.R. §7.740; OCC Banking Bulletin 91-18; OCC Advisory Letter number 92-3; OCC Banking Bulletin 92-37; Interpretive Letter 603

e. Equity Kickers – A bank may take as consideration for a loan share in the profit, income or earnings from a business enterprise of a borrower. Source: 12 C.F.R. §7.732

f. Equity Securities in Government Sponsored Enterprises: i. Federal Agricultural Mortgage Corporation – Source: Interpretive Letter

ii. Federal Home Loan Mortgage Corporation – Source: Interpretive Letter

iii. Federal National Mortgage Association of Stock - Source: 12 U.S.C. 1718(f)

iv. Federal Home Loan Bank – Source: 12 U.S.C. §1424 and 1426

v. Government Securities Clearing Corporation – Source: Interpretive Letter

vi. Housing Development Corporations – A bank may purchase stock for its own account and corporations pursuant Title IX of the Housing and Urban Development Act of 1968, the purpose of such corporation is to provide low and moderate income housing. Source: 12 U.S.C. §24 (Seventh)

vii. National Housing Partnership – A bank may invest in partnerships, limited partnerships and joint ventures formed pursuant to Sections 907a or 907c of the Housing and Urban Development Act of 1968 to provide low and moderate income housing. Source: 12 U.S.C. §24 (Seventh); OCC Banking Circular 21

viii. Public Purpose Corporation Stock – A bank may invest in stock of a public purpose corporation, for profit or nonprofit, to carry out activities to benefit low and moderate income areas and residence or small businesses.

ix. State Housing Corporation – A bank may invest in shares of stock issued by a State Housing Corporation up to 5% of capital and surplus. Source: 12 U.S.C. §24 (Seventh)

x. Mandatory Convertible Security – Purchase and Holding of – A bank may purchase mandatory convertible security where the corporation cannot exercise its conversion option prior to a date certain, so long as the bank disposes of the security before that date. Source: Interpretive Letter dated

April 22, 1986 [1986 WL 143927]; 12 C.F.R. §19

xi. Municipal Parking Lots – A bank may own a municipal parking lot, but expense occurred to acquire must be charged off and is not an equity investment. Source: 12 C.F.R. §7.3010

xii. Mutual Fund Shares – A bank may purchase for its own account shares of investment companies provided portfolios of such companies consist solely of obligations which are eligible for investment by a national bank.

xiii. Operating Subsidiaries – A bank may engage in banking business by means of an operating subsidiary corporation in which the parent bank owns at least eighty percent of the subsidiary voting stock. Source: 12 C.F.R. 5.34

xiv. Purchase of Debt Obligations in U.S. Government, State and Local Government and Government Sponsored Enterprises, Dealing and Underwriting of: 1. African Development Bank – Source: 12 C.F.R. §§1.3(d), 1.7

2. Asian Development Bank Obligations – Source: 12 C.F.R. §§1.3(d), 1.7

3. Bonds for Housing Purposes – Bonds issued by state agency for housing purposes, subject to limitations. Source: Interpretive Letter 167

4. Canadian Government Obligations – Source: 12 U.S.C. §24 (Seventh)

5. Environmental Financial Authority Obligations – Source: 12 U.S.C. §24 (Seventh)

6. European Bank for Reconstruction and Development Obligations -

7. Federal Farm Loan Obligations - – Source: 12 U.S.C. §24 (Seventh)

8. Federal Financing Bank Obligations - – Source: 12 U.S.C. §24 (Seventh)

9. Federal Home Loan Bank Obligations – Source: 12 U.S.C. §24 (Seventh)

10. Federal Home Loan Mortgage Corporation Mortgages and Other Security - Source: 12 U.S.C. §24 (Seventh)

11. Federal National Mortgage Association - Source: 12 U.S.C. §24 (Seventh)

12. Government National Mortgage Association - Source: 12 U.S.C. §24 (Seventh)

13. Obligations Insured by the Secretary of Housing and Urban Development (Under Title XI of the NHA) - Source: 12 U.S.C. §24 (Seventh); 12 U.S.C. §1749aaa; 12 U.S.C. §1713

14. Industrial Development Revenue Bonds – Source: Interpretive Letter 174

15. Inter-American Development Bank – Source: C.F.R. §§1.3(d) and 1.7

16. Inter-American Investment Corporation– Source: C.F.R. §§1.3(d) and 1.7

17. International Bank for Reconstruction and Development– Source: C.F.R. §§1.3(d) and 1.7

18. International Finance Corporation – Source: C.F.R. §§1.3(d) and 1.7

19. Local Public Housing Agency if Secured by an Agreement Between such Agency and HUD or by Pledge of Annual Contributions- Source: 12 U.S.C. §24 (Seventh)

20. Indirect Obligations of the United States – Source: Interpretive Letter 90

21. Original Issue Discount Municipal Bonds – Source: OCC Banking Bulletin 85-15

22. Federal Agriculture Mortgage Board – Source: Interpretive Letter

23. Small Business Administration Guaranteed Portions of Loans or Pool Certificates – Source: Interpretive Letter 373; Interpretive Letter 141

24. State and Political Subdivision Obligations – Source: 12 U.S.C. §24 (Seventh); 12 C.F.R. §1; Interpretive Letter 65

25. Student Loan Marketing Association Obligations – Source: 12 U.S.C. §24 (Seventh);12 U.S.C. §84(c)(10)

26. TDA Obligations – Source: 12 U.S.C. §24 (Seventh) and 12 C.F.R. §§ 1.3(d) and 1.7

27. U.S. Postal Service Obligations – Source: 12 U.S.C. §24 (Seventh) and 12 C.F.R. §§ 1.3(d) and 1.7

28. Safe Deposit Corporation – A bank may invest in the capital stock of a corporation organized to conduct a safe deposit business subject to a 15% of capital limitation. Source: 12 U.S.C. §24 (Seventh)

29. Small Business Investment Company Stock - An investment is subject to 5% of bank capital limit. Source: 15 U.S.C. §682(b) and 12 C.F.R. §7.7535

History

• Source: Interpretive Letter 385
• Source: 12 C.F.R. §7.7015
• Source: Interpretive Letter 565
• Source: Interpretive Letter 382
• Source: Interpretive Letter 475; Interpretive Letter 331; Interpretive Letter
• Source: Interpretive Letter 277; Letter of February 24, 1993
• Source: Interpretive Letter 316
• Source: Interpretive Letter 554
• Source: 12 U.S.C. §24 (Seventh); 12 C.F.R. §23.7; Interpretive Letter 556.
• Source: Interpretive Letter 387
• Source: 12 C.F.R. §7.7485
• Source: 12 C.F.R. §7.3300
• Source: Interpretive Letter 238
• Source: Investment Securities Letter 31
• Source: 12 U.S.C. 92a(a); Interpretive Letter 403; and Interpretive Letter 298; 12 C.F.R. §9.2105
• Source: Interpretive Letter 363
• Source: Interpretive Letter 444
• Source: OCC Banking Bulletin 92-37
• Source: OCC Banking Circular 220
• Source: 12 U.S.C. §24 (Seventh); 12 C.F.R. §§ 1.3(d)
• Source: Miss. Code Ann. §81-5-1(9); §81-12-49(r); §81-14-321; Effective date August 19, 1999

Part 2 Mortgage Company Activities

Chapter 1 Mississippi S.A.F.E. Mortgage Act

5 Miss. Admin. Code Pt. 2, R. 1.1 Purpose

The following rules are promulgated by the Commissioner of Banking and Consumer Finance under the authority granted in the Mississippi S.A.F.E. Mortgage Act, Section 81-18-1, et seq., Mississippi Code of 1972, Annotated.

History

• Source: Miss. Code Ann. § 81-18-29 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.2 Mortgage Loan Originators

Loan originators are required to be licensed per Section 81-18-7(4), Mississippi Code of 1972, Annotated, and to follow specific requirements as outlined below: 1. Under Section 81-18-9(8)(g), Mississippi Code of 1972, Annotated, loan originators must be W-2 employees or exclusively engaged to perform loan origination activities for a Mississippi-licensed company. 2. If a loan originator leaves a licensed mortgage broker or lender to be employed or exclusively engaged to work for another licensed mortgage broker or lender, then the loan originator must complete a new initial loan originator application in the Nationwide Multistate Licensing System and Registry (NMLS) system. All licenses issued by the Department are non-transferrable between licensees. 3. Under Section 81-18-14(6), if a loan originator becomes unlicensed at any point prior to completing the annual continuing education requirements for the last year in which the license was held, the loan originator must complete the remaining unmet requirements for that year prior to receiving a new or renewed license. 4. Every licensee shall maintain in paper or electronic format loan originator information for each loan that specifically states the name of each individual who engages in any task related to the loan application process, and the date and licensed location where the task is performed. This information is to be kept as part of each borrower’s loan file or may be kept as part of the required Journal of Mortgage Transactions. At a minimum, the below items are to be notated in the file: a. Taking the Mortgage Loan Application or assisting the borrower in completing the Mortgage Loan Application b. Requesting the credit report. c. Negotiating or offering to negotiate the terms of the residential mortgage loan.

History

• Source: Miss. Code Ann. §§ 81-18-7(4), 81-18-9(8)(g), 81-18-17, 81-18-21, and 81-18-29 (Rev.

5 Miss. Admin. Code Pt. 2, R. 1.3 Qualifying Individuals

A Licensee must name one (1) qualifying individual who is an owner or employee of the licensee and will be primarily responsible for the operations of the licensee. The qualifying individual must have a minimum of two (2) years’ experience directly related to mortgage activities. Proof of experience includes, but is not limited to: 1. Letter(s) from previous or current employer(s) stating the qualifying individual’s job description, and length of employment. 2. Copies of other state licenses.

Note: Resumes and W-2 forms may be included but are not sufficient proof of experience.

History

• Source: Miss. Code Ann. §§ 81-18-29 and 81-18-9(2)(g) (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.4 Surety Bond Requirements

1. The following chart contains the surety bond requirement for the renewal of all mortgage broker licenses based on the volume of Mississippi residential mortgage loans originated by the licensed mortgage broker in the previous licensing/calendar year. This only includes loans that were closed by a lender or exempt company. The amounts shown are the minimum amount of surety bond coverage required. If the licensee wishes to renew their initial bond amounts ($50,000) and forward an original Continuation Certificate for renewal to the Department, that will be acceptable.

Volume * Amt Surety Bond Coverage $1,000,000 or less $25,000 More than $1,000,000 but less than $5,000,000

$35,000 More than $5,000,0000 $50,000

2. The following chart contains the surety bond requirement for the renewal of all mortgage lender licenses based on the volume of Mississippi residential mortgage loans originated, brokered, funded, serviced, and/or owned by the licensed mortgage lender in the previous licensing/calendar year. This only includes loans that were closed by a lender or exempt company. The amounts shown are the minimum amount of surety bond coverage required. If the licensee wishes to renew their initial bond amounts ($250,000) and forward an original Continuation Certificate for renewal to the Department, that will be acceptable.

Volume ** Amt Surety Bond Coverage $10,000,000 or less $150,000 More than $10,000,000 but less than $25,000,000

History

• Source: Miss. Code Ann. §§ 81-18-11 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.5 Branch Offices

1. Wholesale lending offices having no direct contact with consumers are not required to be licensed. No origination or modification of a Mississippi residential mortgage loan may occur at such locations. A wholesale lending office/branch may accept payments on a residential mortgage loan.

2. A branch office will be considered “open” if the signage is in place, a branch license has been applied for and approved, advertising has been placed and/or there is an unlocked door or no signage on the door indicating that the branch office is closed or not yet open for business. If the branch meets the other conditions to be considered “open” without prior approval from the Department, then a civil money penalty will be issued to the company, and the branch license may be denied.

History

• Source: Miss. Code Ann. § 81-18-29 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.6 Requirements for In-State Offices

Each principal place of business and branch office in the state of Mississippi shall meet the following requirements:

1. The location shall be in compliance with local zoning ordinances; however, zoning shall not be residential. Zoning must be documented by a letter from the city or county on their official letterhead stating the zoning of the property. A privilege tax license is not sufficient proof of zoning.

2. The location may be located inside the building of another type of business; however, the required signage must indicate the presence of this office and must follow the above guidelines, as well as any guidelines required by regulation of the other business.

History

• Source: Miss. Code Ann. §§ 81-18-29, 81-18-3(c) and 81-18-25 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.7 Advertisements

Advertisements regulated under Section 81-18-31, Mississippi code of 1972, Annotated, include advertisements in print or electronic format, and include internet websites and advertisements. Business cards are considered by the Department to be a form of advertisement and must meet the requirements for such.

History

• Source: Miss. Code Ann. § 81-18-31 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.8.1 Required Contents of Individual Borrower Files

The individual borrower files of mortgage brokers and lenders shall contain the original or a

copy (unless otherwise specified below) of all documentation dated and signed by the applicant (unless otherwise specified below), including, but not limited to, the documents listed below. All documents listed below are required to be maintained by a mortgage lender, regardless of whether the company originally closed the loan or bought the loan in the secondary market. Mortgage brokers are responsible for those documents the company was required to issue or otherwise issued. The required documents must be kept in the following order or well-organized and marked for ease of identification by mortgage examiners. Please note that the use of correction fluid on any document associated with the mortgage loan is considered a fraudulent activity.

1. Promissory Note 2. Deed of Trust 3. Closing Disclosure (CD) or HUD01 4. Final Truth in Lending (when applicable) 5. Initial application signed by the loan originator at the time the application is taken. 6. Intent to Proceed Acknowledgement. Required if LE is not used or the licensee uses a GFE (Good Faith Estimate). 7. Loan Estimate (LE) provided to the applicant within three (3) working days of taking the application. If mailed, the licensee must retain a copy of the cover letter stating the date and address to which the LE was mailed. If hand delivered, the licensee must develop a separate document to be signed by the applicant acknowledging receipt of the LE. 8. Credit File (Authorizations to order credit report, verifications, credit reports, etc.) Required if a credit report is ordered. Invoices for the credit report are also required if the borrower is charged for the credit report. 9. Proof of Assignment (transfer) of loan (if applicable). Only required when the licensee is transferring servicing or if the licensee is a broker closing in the broker’s name. 10. Servicing Disclosure (if funding the loan.) If utilizing the LE, the licensee may fulfill this requirement by completing the servicing intention under the “Other Considerations” section of the LE. 11. Notice of Right to Receive Copy of Appraisal. Required only if the licensee orders an appraisal for the subject property. 12. Lock-in agreement from lender ( when applicable) 13. Multiple Role (Dual Agency) Disclosure (when applicable) 14. Affiliated Business Agreement (when applicable) 15. Credit Score Disclosure & Notice to Home Applicant 16. Initial Privacy Notice 17. Homeownership Counseling Organizations List (provided within three (3) days of application) 18. Verification that the applicant received the “Settlement Cost Booklet” (when applicable) 19. Ability to Repay documentation 20. Adjustable Rate Mortgage Program Disclosure (when applicable) 21. Two (2) copies of the Notice of Right of Rescission (when applicable) 22. Mortgage Origination Agreement containing information outlined in Section 81-18- 33(1)(a) (provided within three (3) days of application) 23. Equal Credit Opportunity Act disclosure (provided within three (3) days of application), stating in part that the creditor is prohibited from discriminating against applicants on the

basis of race, color, religion, national origin, sex, marital status, or age. The notice must also identify the federal agency that oversees compliance with this law. 24. Final Application signed and dated by the applicant(s) at the time of closing 25. Complete copy of appraisal and invoice from appraiser, not required to be signed by applicant or loan originator. Only applicable if an appraisal is conducted on the subject property. 26. Notice of Action Taken (provided within three (3) business days of receiving notice that the loan is denied or within thirty (30) calendar days of receiving an application denied by the licensee).

The following federal regulations may also be used as guides to supplement the minimum recordkeeping requirements stated above: Regulation B, Regulation X, and Regulation Z. Forms issued in compliance with federal regulations may be used as guides for compliance with the minimum recordkeeping requirements stated herein. However, the requirements outlined above are separate and apart from any record-keeping requirements stated in federal regulations. Additionally, compliance with the provisions of this policy cannot be relied upon for ensuring compliance with federal regulations.

5 Miss. Admin. Code Pt. 2, R. 1.8.2 Maintenance of Individual Borrower Files

The required mortgage company files shall be kept at the Books and Records Information address listed on the NMLS system. These records are to be maintained in a secure format separate from any and all other business records, including other state mortgage records, for a minimum of five (5) years from the date of final disposition of the loan application. The records must be kept in a secure onsite or offsite location under conditions that will not lead to their damage or destruction. An onsite secure location would include the licensed branch office of origination or the main office location of the company. If the branch office or office of origination becomes unlicensed, the mortgage records must be maintained at the same location where the main office records are maintained according to the NMLS system or another licensed branch location. The location of the records for that unlicensed branch must be updated in the Books and Records Section of NMLS at the time of the branch closure. An off-site secure location may include a storage facility and may not include a person’s home, unless this is the licensed location of the mortgage broker or lender. The records, whether kept at an onsite or offsite location, must be accessible to Department examiners during normal business hours, with or without prior notice. The Commissioner in his or her sole discretion, after giving written notice, may require records to be maintained for a longer period of time.

History

• Source: Miss. Code Ann. §§ 81-18-29 and 81-18-21 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.9 Penalties assessed by the Department

The company or loan originator, once assessed a penalty by the Department, will have thirty (30) days in order to pay the full amount of the penalty, unless otherwise noted by the Department.

History

• Source: Miss. Code Ann. §81-18-29; Effective date August 30, 2013

5 Miss. Admin. Code Pt. 2, R. 1.10 Lock-in Fee and Lock-in Agreement

1. If the broker collects the Lock In fee on the lender’s behalf and the fee is made payable to the broker, then the fee must be placed in the broker’s escrow account until it is transferred to the lender.

2. The mortgage broker may not charge or collect a lock-in fee that is not on behalf of a named lender.

3. If the lock-in fee is refundable, then the lock-in agreement is to state if the consumer will receive payment back in the form of a check or in the form of a reduction of origination fees at closing from the mortgage company.

History

• Source: Miss. Code Ann. §81-18-29; Effective date August 30, 2013

5 Miss. Admin. Code Pt. 2, R. 1.9 Penalties assessed by the Department

The company or loan originator, once assessed a penalty by the Department, will have thirty (30) days to pay the full amount of the penalty, unless otherwise directed by the Department.

History

• Source: Miss. Code Ann. § 81-18-29 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.10 Lock-in Fee and Lock-in Agreement

1. If the broker collects a lock-in fee on the lender’s behalf and the fee is made payable to the broker, then the fee must be placed in the broker’s escrow account until it is transferred to the lender.

2. The mortgage broker may not charge or collect a lock-in fee that is not on behalf of a named lender.

3. If the lock-in fee is refundable, then the lock-in agreement is to state if the consumer will receive the refund in the form of a check or in the form of a reduction of origination fees at closing from the mortgage company.

History

• Source: Miss. Code Ann. §§ 81-18-29 and 81-18-28 (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.11 Multiple Role (Dual Agency) Disclosure

A licensee acting in a dual capacity on the same transaction must clearly disclose their dual relationship to the borrower at the first substantive contact, meaning the first meaningful discussion about the transaction. Such disclosure must be made using Form 1 included in Appendix A hereto. Furthermore, said form must be signed by both the borrower and the broker/MLO and must be maintained in the individual borrower’s file pursuant to Miss. Code

Ann. Section 81-18-33(1)(i) and Rule 1.8, above.

History

• Source: Miss. Code Ann. §§ 81-18-27(1)(b), 81-18-27(1)(g), and 81-18-33(1)(i) (2026)

5 Miss. Admin. Code Pt. 2, R. 1.12 Safeguarding Standards for Remote Work

Licensees must certify on an annual basis, or on a more frequent basis if required by the Commissioner, that all loan originators performing origination activities at a remote location meet the standards and safeguards specified by Miss. Code Ann. § 81-18-57. Certification must be made by statement under oath by an officer or qualifying individual of the licensee, designated as such in NMLS system, using Form 2 included in Appendix A hereto.

History

• Source: Miss. Code Ann. § 81-18-29; Miss. Code Ann. § 81-18-57(1)(f) (Rev. 2026)

5 Miss. Admin. Code Pt. 2, R. 1.13 Financial Responsibility Standards for Covered Mortgage Servicers

This rule shall be applicable to covered institutions as defined in Rule 1.13.1, below. For entities with a holding company or affiliated group of companies, applicability shall be at the covered institution level. Not-for-profit mortgage servicers and housing finance agencies are not subject to the requirements of this rule.

1. Definitions. For purposes of this section, the following terms are defined as follows: a. “Agency” means Fannie Mae, Freddie Mac and Ginnie Mae. b. “Allowable assets for liquidity” means those assets that may be used to satisfy the liquidity requirements herein, including unrestricted cash and cash equivalents and unencumbered investment grade assets held for sale or trade (Agency MBS, obligations of GSEs, U.S. Treasury obligations). c. “Board of directors” means the formal body established by a covered institution that is responsible for corporate governance and compliance with this rule. d. “Covered institution” means a nonbank mortgage servicer required to be licensed under the Mississippi S.A.F.E. Mortgage Act, Section 81-18-1, et seq., Mississippi Code Annotated, with servicing portfolios of 2,000 or more 1 – 4-unit residential mortgage loans serviced or subserviced for others, excluding whole loans owned, and loans being “interim” serviced prior to sale as of the most recent calendar year end, reported in the NMLS Mortgage Call Report, and that operates in two (2) or more states, districts or territories of the United States either currently or as of the prior calendar year end. e. “Corporate governance” means the structure of the institution and how it is managed, including the corporate rules, policies, processes, and practices used to oversee and manage the institution. f. “External audit” means the formal report prepared by an independent certified public accountant expressing an opinion on whether the financial statements are presented fairly, in all material aspects, in accordance with the applicable financial reporting framework, and is inclusive of an evaluation of the adequacy of a company’s internal control structure. g. “FHFA” means the Federal Housing Finance Agency.

h. “GSE” means government-sponsored enterprises, or Federal National Mortgage Association (“Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). i. “Ginnie Mae” means Governmental National Mortgage Association. j. “Internal audit” means the internal activity of performing independent, objective assurance and consulting to evaluate and improve the effectiveness of company operations, risk management, internal controls and governance processes. k. “Interim serviced prior to sale” means the activity of collecting a limited number of contractual mortgage payments immediately after origination on loans held for sale but prior to the loans being sold into the secondary market. l. “Mortgage Call Report” means the quarterly or annual report of residential real estate loan origination, servicing and financial information completed by companies licensed in NMLS. m. “MSR Investor” means entities that invest in and own mortgage servicing rights and rely on subservicers to administer the loans on their behalf. MSR Investors are often referred to as “master servicers.” n. “Mortgage-backed security” or “MBS” means a financial instrument, often a debt security, collateralized by residential mortgages. o. “Mortgage servicing rights” or “MSRs” refers to the contractual right to service residential mortgage loans on behalf of the owner of the associated mortgage in exchange for specified compensation in accordance with the servicing contract. p. “Operating liquidity” means the funds necessary to perform normal business operations, such as payment of rent, salaries, interest expense and other typical expenses associated with operating the entity. q. “Residential mortgage loans serviced” means the specific portfolio or portfolios of residential mortgage loans for which a licensee is contractually responsible to the owner or owners of the mortgage loans for the defined servicing activities. r. “Reverse mortgage” means a loan collateralized by real estate, typically made to borrowers over 55 years of age, that does not require contractual monthly payments and is typically repaid upon the death of the borrower through the sale of the home or refinanced by the heirs. s. “Risk management assessment” means the functional evaluations performed under the Risk Management Program and reports provided to the board of directors under the relevant governance protocol. t. “Risk management program” means the policies and procedures designed to identify, measure, monitor and mitigate risk sufficient for the level of sophistication of the servicer. u. “Servicer” means the entity performing those activities listed in the definition of “service a mortgage loan” under Mississippi Administrative Code Section 81-18-3(ll) when those activities are performed on behalf of the owner or owner of the related mortgages under the terms of a servicing contract. v. “Servicing liquidity” or “liquidity” means the financial resources necessary to manage liquidity risk arising from servicing functions required in acquiring and financing MSRs, hedging costs (including margin calls) associated with the MSR asset and financing facilities, and advances or costs of advance financing for principal, interest, taxes, insurance and any other servicing related advances.

w. “Subservicer” means the entity performing the routine administration of residential mortgage loans as agent of a servicer or MSR investor under the terms of a subservicing contract. x. “Subservicing for others” means the contractual activities performed by subservicers on behalf of a servicer or MSR investor. y. “Tangible net worth” means total equity less receivables due from related entities less goodwill and other intangibles less pledged assets. z. “Whole loans” means those loans where a mortgage and the underlying credit risk is owned and held on the balance sheet of the entity with all ownership rights.

2. Financial Condition. A covered institution must maintain capital and liquidity in compliance with this rule, as follows: a. For the purpose of complying with the capital and liquidity requirements of this rule, all financial data must be determined in accordance with Generally Accepted Accounting Principles (GAAP). b. A covered institution that meets the FHFA Eligibility Requirements for Enterprise Single-Family Seller/Servicers for capital, net worth ratio, and liquidity, regardless of whether the servicer is approved for GSE servicing, meets the capital and liquidity requirements of this rule. Covered institutions shall maintain written policies and procedures implementing the capital and servicing liquidity requirements of this section. Such policies and procedures must include a sustainable written methodology for satisfying these requirements and be available to the Commissioner upon request. c. Covered institutions shall maintain sufficient allowable assets for liquidity in addition to the amounts required for servicing liquidity, to cover normal business operations. Covered institutions shall have in place sound cash management and business operating plans that match the size and sophistication of the institution to ensure normal business operations. Management must develop, establish, and implement plans, policies, and procedures for maintaining operating liquidity sufficient for the ongoing needs of the institution. Such plans, policies, and procedures must contain sustainable, written methodologies for maintaining sufficient operating liquidity and be available to the Commissioner upon request.

3. Corporate Governance. a. Board of Directors Required. Covered institutions shall establish and maintain a board of directors responsible for oversight of the covered institution. b. Alternative to board of directors. For covered institutions that are not approved to service loans by a GSE or Ginnie Mae, or where these federal agencies have granted approval for a board alternative, an institution may establish a similar body constituted to exercise oversight and fulfill the board of directors’ responsibilities. c. Board of directors’ responsibilities. The board of directors shall be responsible for: i. Establishing a written corporate governance framework, including appropriate internal controls designed to monitor corporate governance and assess compliance with the corporate governance framework, available to the Commissioner upon request. ii. Monitoring and ensuring institution compliance with the corporate governance

framework and this rule. iii. Accurate and timely regulatory reporting, including the requirements for filing the Mortgage Call Report. d. Internal Audit. The board of directors shall establish internal audit requirements that are appropriate for the size, complexity and risk profile of the servicer, with appropriate independence to provide a reliable evaluation of the servicer’s internal control structure, risk management and governance. Board established internal audit requirements, and the results of the internal audits shall be made available to the Commissioner upon request. e. External Audit. Covered financial institutions shall receive an external audit, including audited financial statements and audit reports conducted by an independent public accountant annually. The external audit shall be available to the Commissioner upon request and include at a minimum: i. Annual financial statements including a balance sheet, statement of operations [income statement] and cash flows, including notes and supplemental schedules prepared in accordance with GAAP. ii. Assessment of the internal control structure. iii. Computation of tangible net worth. iv. Validation of MSR valuation and reserve methodology, if applicable. v. Verification of adequate fidelity and errors and omissions (E&O) insurance. vi. Testing of controls related to risk management activities, including compliance and stress testing, where applicable. f. Risk Management. Covered institutions shall establish a risk management program under the oversight of the board of directors and available to the Commissioner upon request that identifies, measures, monitors, and controls risk sufficient for the level of sophistication of the servicer. The risk management program must have appropriate processes and models in place to measure, monitor and mitigate financial risks and changes tot eh risk profile of the servicer and assets being serviced. The Risk Management Program must be scaled to the complexity of the organization, but be sufficiently robust to manage risks in several areas, including, but not limited to: i. Credit risk: The potential that a borrower or counterparty will fail to perform on an obligation. ii. Liquidity risk: The potential that the servicer will be unable to meet its obligations as they come due because of an inability to liquidate assets or obtain adequate funding or that it cannot easily unwind or offset specific exposures. iii. Operational risk: The risk resulting from inadequate or failed internal processes, people, and systems or from external events. iv. Market risk: The risk to the servicer’s condition resulting from adverse movements in market rates or prices. v. Compliance risk: The risk of regulatory sanctions, fines, penalties or losses resulting from failure to comply with laws, rules, regulations or other supervisory requirements applicable to the servicer. vi. Legal risk: The potential that actions against the institution that result in unenforceable contracts, lawsuits, legal sanctions or adverse judgments can disrupt or otherwise negatively affect the operations or condition of the servicer. vii. Reputation risk: The risk to earnings and capital arising from negative publicity

regarding the servicer’s business practices. g. Risk Management Assessment. Covered institutions shall conduct a risk management assessment on an annual basis concluding with a formal report to the board of directors available to the Commissioner upon request. Evidence of risk management activities throughout the year must be maintained and made part of the report, including findings of issues and the response to address those findings.

4. Commissioner’s Authority to Address Risk. The Commissioner may: a. Where risk is determined by a formal review of a specific covered institution to be extremely high, order or direct the institution to satisfy additional conditions necessary to ensure that the institution will continue to operate in a safe and sound manner and be able to continue to service loans in compliance with state and federal law and/or regulation. b. Where risk is determined by a formal review of a particular covered institution or institutions to be extremely low, provide notice that all or part of this rule is not applicable to those covered institutions. c. Where economic, environmental, or societal events are determined to be of such severity to warrant a temporary suspension of all or certain sections of this rule, provide public notice of temporary suspension.

APPENDIX A: FORMS

Disclosure of Multiple Roles in a Consumer Real Estate Transaction

Borrower(s): Lender:

Broker:

MLO:

Borrower Address: Date: In connection with your efforts to identify a 1-4 family residence for purchase and your efforts to obtain financing for that purchase, I will be acting in the following roles related to your transaction (check all that are applicable): Representing you (the buyer), as your mortgage:

lender broker loan originator

As a real estate broker, agent, or salesperson for: the seller you (the buyer) you AND the seller, as an intermediary

As a __________________________ for:

the seller you (the buyer) you AND the seller

As required by law or as otherwise deemed appropriate, I may provide you other disclosures, describing in greater detail one or more of the roles described above. Acting in these multiple roles presents the potential for conflicts of interest. If an actual conflict of interest is identified, I will promptly disclose it to you. Examples of potential conflicts of interest include the possibility that services I provide to you in one capacity may affect my compensation in connection with services I provide to you in another capacity. By your execution below you acknowledge these disclosures and consent to my multiple roles. You acknowledge that you have read this disclosure and understand it, that you have been given the opportunity to ask questions, and that I have responded fully to any and all such questions.

Borrower Date Borrower Date

Borrower Date Lender Date

Broker Date Mortgage Loan Originator Date

Form 1

Mississippi Department of Banking and Consumer Finance December 2025

THIS CERTFICATION MUST BE MADE ANNUALLY CERTIFICATION OF SAFEGUARDING STANDARDS FOR MORTGAGE LOAN ORIGINATORS (Mississippi S.A.F.E. Mortgage Act, Section 81-18-1, et seq., Mississippi Code of 1972)

To Commissioner, Department of Banking and Consumer Finance, State of Mississippi: I, _______________________________________________, (name), __________________________________ (officer/qualifying individual) of _________________________________, (licensee), designated as such in the Nationwide Multistate Licensing System, hereby certify, under penalty of perjury, that all mortgage loan originators performing origination activities at a remote location as defined in Mississippi Code Annotated Section 81-18-3(rr) on behalf of ____________________________ (licensee) meet the appropriate standards and safeguards required under the Mississippi S.A.F.E. Mortgage Act, Mississippi Code Annotated Section 81-18-1, et seq., and the rules and regulations promulgated thereunder. WITNESS my signature this the __________________________day of ______________________20

____________________________(Signature)

STATE OF _________________, COUNTY OF __________________ Personally appeared before me, the undersigned authority in and for the said county and state, on this _____ day of ________________, 20, within my jurisdiction, the within named _______________________________, who acknowledged that he/she is the ___________________________________ of ________________________________ and that in said capacity he/she executed the above and foregoing after having been duly authorized to do so. Subscribed and sworn to before me this __________ day of _______________________, 20.

______________________________________ Notary Public

My commission expires the __________day of _________________________20.

History

• Source: Miss. Code Ann. §§ 81-18-9(5); 81-18-21(5); 81-18-29; 81-18-43(1)(e)(iv) (2026)

5 Miss. Admin. Code Pt. 2, R. 1.0 Form 2 Mississippi Department of Banking and Consumer Finance December 2025

Purpose of These Rules and Procedures; These rules and procedures are adopted for the purpose of providing a general guideline for the conduct of any administrative hearings for which the Commissioner of the Department of Banking and Consumer Finance, State of Mississippi (“Commissioner”) has been charged by law to conduct relating to businesses, professions, or licenses within the jurisdiction of the Mississippi Department of Banking and Consumer Finance (the “Department” or “DBCF”) pursuant to the Mississippi S.A.F.E. Mortgage Licensing Act, §§ 81-18-1 et seq., and § 81-18-29 of the Code of Mississippi of 1972, as amended.

1.1 Authority to Promulgate; These Rules and Procedures are adopted pursuant to the Mississippi S.A.F.E. Mortgage Licensing Act of 2009, §§ 81-18-1 et seq., and § 81-18-29 of the Code of Mississippi of 1972, as amended.

1.2 Severability; If any provision, section, subsection, sentence, clause or phrase of any of the Rules and Procedures, or the application of the same to any person or entity or any set of circumstances, is for any reason challenged or held to be invalid, null or void, the remaining rules, procedures or regulations or any application thereof to any person or circumstances shall remain valid.

1.3 Notice of Hearing; A written notice specifying the violation(s) or offense(s) for which the licensee (or any person or entity subject to the jurisdiction of the Department) is charged and a notice of the time and place of the hearing shall be served at least ten (10) days prior to the hearing date. Such notice may be served by mailing a copy of the notice, via certified mail postage prepaid, to the last known residential or business address of the licensee, person or entity. Service via hand-delivery, electronic communications, or other methods may also be used to perfect service of the notice upon the party or its representative. Notice to a representative shall be deemed notice to the party represented.

1.3.1 Waiver; A properly noticed party’s failure to timely respond to notice shall constitute that party’s full and complete waiver of the party’s intent to attend the noticed Hearing or otherwise defend against the charges. A properly noticed Hearing may thereafter be conducted by the Commissioner without the party charged being present or represented.

1.4; Unless expressly prohibited by statute or regulation, the Commissioner shall have discretion to control all aspects of the hearing, including any motion practice or depositions that may be authorized, in order to maintain order, maximize administrative/agency economy and to set controls for the behavior of all participants involved in any manner. All hearings shall be conducted by the Commissioner, who shall not be bound by strict rules of civil procedure or by the rules of evidence in the conduct of any phase of the hearing process.

1.5 Hearing Counsel to Commissioner; The Commissioner may appoint Hearing Counsel in order to provide legal counsel to the Commissioner on all aspects of the hearing and assist in conducting any part of the hearing or activities related thereto. Hearing Counsel shall have experience with conducting hearings that are judicial or administrative in nature and will assist and solely represent the Commissioner to ensure an orderly and fair hearing process. Hearing Counsel shall be an attorney that does not represent any other party interested in the hearing and may be an attorney from the Mississippi Attorney General’s Office. All parties shall be notified upon appointment of Hearing Counsel.

1.5.1 Authority of Hearing Counsel; Hearing Counsel shall have authority to conduct the hearing process in his/her discretion, and in consultation with the Commissioner. Hearing Counsel may make recommendations on any question or issue, but the Commissioner shall have the ultimate discretion and sole authority in all situations to make the final determination of any issue.

1.6 Administration of Oaths; At any hearing or related matter the Commissioner shall administer oaths as may be necessary for the proper conduct of the hearing. The Commissioner’s authority may be administered by a certified Court Reporter.

1.7 Extensions of time; Upon motion by any party or on his/her own initiative, the Commissioner has sole discretion to order an extension of any deadline that may be established during the hearing process.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)
• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 2.0 Enrollment of Representatives, Attorneys and Accountants;

2.0.1 Eligibility to Practice; No person shall be eligible to practice before the Commissioner unless such person is enrolled in accordance with these regulations, except that any individual may appear, without enrollment, on his own behalf or on behalf of a member of his immediate family, if such appearance is without compensation; and a member of a partnership, an officer of a corporation, or an authorized regular employee of an individual, partnership, corporation, or other business entity may likewise appear without enrollment in any matter relating to such individual or business entity.

2.0.2 Scope of Practice; Practice before the Commissioner shall be deemed to include all matters relating to the presentation of a client’s matter to the Commissioner, Deputy Commissioner, the Division Director, or an examiner, including the preparation and filing of applications, reports, systems of internal control, financial statements, or other documents submitted to the Department on behalf of such client.

2.0.3 Qualifications for Enrollment; In addition to the individuals described herein, the following persons may be admitted to practice before the Commissioner: (a) Attorneys at law admitted to practice before the Supreme Court of the State of Mississippi and who are lawfully engaged in the active practice of their profession. (b) Certified public accountants and public accountants qualified to practice under Mississippi law and who are lawfully engaged in active practice as such.

2.0.4 Procedures for Enrollment; An attorney or accountant meeting the qualifications described in the subsection above shall be deemed automatically enrolled at the time the attorney or accountant first appears for or performs any act of representation on behalf of a client in any matter before the Commissioner.

2.0.5 Enrollment for a Particular Matter; The following persons may, upon motion of an enrolled (or exempt) person, be admitted to practice before the Commissioner for the purposes of a particular case or matter: (a) Attorneys at law who have been admitted to practice before the courts of any state or territory or the District of Columbia, and who are in good standing with the court by which they are licensed. (b) Certified public accountants or public accountants who have duly qualified to practice as such in their own names, under the laws and regulations of any state or territory or the District of Columbia, and who are in good standing with the entity by which they are licensed.

No person enrolled for a particular matter may practice before the Commissioner except in association with the enrolled person who sponsored his enrollment.

2.0.6 Suspension or Revocation of Enrollment; (a) A person’s enrollment to practice before the Commissioner shall be suspended automatically without a hearing if his professional license is suspended or revoked. (b) Any person enrolled to practice before the Commissioner may have his enrollment to practice suspended or revoked if, after due consideration, the Commissioner finds that: i.) The person made a materially false or misleading statement with regard to his application for enrollment; ii.) The person willfully failed to exercise diligence in the preparation or presentation of any application, report, or other document filed with the Department, or knowingly misrepresented any material fact to the Commissioner; iii.) The person willfully violated or aided and abetted in the violation of any provision of an applicable statute or the Department’s regulations; or

iv.) The person does not possess the requisite qualifications or expertise to represent others before the Commissioner, lacks character or integrity, or has engaged in unethical or improper conduct.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 3.0 Pre-Hearing Procedures

Formal Docket Number Assigned; Each matter coming before the Commissioner shall be assigned a concise title that is descriptive and a unique cause number, and be docketed accordingly. Thereafter, all submissions related to the Hearing shall bear the title and docket number and shall be included on the Commissioner’s pre-hearing docket and made part of the Record.

3.1; Submissions to the Commissioner related to the Hearing shall be on 8 ½” x 11” standard white paper, or as otherwise deemed appropriate and allowed by the Commissioner. The parties’ submissions shall be typed and double-spaced unless impractical and otherwise allowed by the Commissioner.

3.2 Amendments; The Commissioner in his/her sole discretion, under such conditions as the Commissioner may prescribe, may allow any pleading, application, motion or other paper filed in a Hearing proceeding to be amended, corrected or otherwise supplied with an omission.

3.3 Scheduling; The Commissioner may call an in-person Scheduling Conference with counsel for the respondents and counsel for the Department in order to establish hearing guidelines, clarify issues, and set deadlines to complete any action items prior to the hearing. A scheduling order may be adopted by the Commissioner thereafter. The deadlines set are at the sole discretion of the Commissioner and may include, but are not limited to, the following: • Initial exchange of proposed witnesses • Initial exchange of proposed documents to be included in the Hearing Record • Pre-hearing conference • Final exchange of documents to be included in the record and witnesses to appear at the hearing.

Additionally, the Commissioner may consider any inquiries or requests from the parties to ensure clarity, transparency and fairness of the hearing.

3.4 Discovery; Except as provided by these Rules and Procedures, there is no right to discovery in any hearing conducted by the Commissioner.

3.4.1; An interlocutory action by any respondent filed in a Chancery Court requesting a “Bill of Discovery” or seeking any other “discovery” based on equitable relief under common law or otherwise, is an improper attempt to circumvent the Department’s Rules and Procedures and shall be summarily dismissed by the Court.

3.5 Motion Practice Prior to Hearing; The Commissioner may require all parties to submit written direct and rebuttal testimony, all documentary evidence and exhibits the parties plan to submit into evidence at the hearing, witness lists specifying the witnesses the parties plan to call and the subject matter of the testimony, and written motions and motion responses in advance of the hearing pursuant to deadlines established by a Scheduling Order or other written directive.

3.5.1; Any written motion, request, or correspondence directed to the Commissioner by a party shall be provided to all attorneys of record or directly to an unrepresented party such that there shall be no earwigging of the Commissioner. Any submission and service of same on counsel of record may submitted electronically (e.g. e-mail) or otherwise in accordance with directives from the Commissioner or Hearing Counsel.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 4.0 The Hearing

Location; A hearing shall be conducted at the offices of the Department or at an alternative location that is deemed suitable by and within the sole discretion of the Commissioner.

4.1; These Rules and Procedures are not intended to address all aspects of the hearing process. The Commissioner may determine that more specific procedural rules for the hearing of a matter are necessary and should be implemented to ensure the order, fairness and efficiency of the hearing. The Commissioner’s authority provides the sole discretion to amend and/or supplement the hearing rules as deemed necessary and upon proper notice to all parties.

4.2; The “Rules of Evidence” used in judicial proceedings and any other rules of procedure or evidence that apply in other contexts may be considered informative for all matters before the Commissioner, however, all such rules are non-binding and any standards set forth therein are relaxed for all purposes of an administrative hearing conducted by the Commissioner.

4.3 Court Reporter; Each conference presided over by the Commissioner with all parties and/or their representatives may be transcribed for the Record with costs borne by the party requesting the Court Reporter’s services. The Department shall procure the services of a competent and certified Court Reporter who shall transcribe everything done and said on the Record and shall keep and properly index all exhibits as directed by the Commissioner or the Hearing Counsel.

4.4 Deposit of Costs; The Commissioner may, in his/her sole discretion, require a deposit or other guaranty that the fees and costs of the service of process and, should the Commissioner determine that the costs of the hearing will outstrip the amount of the bond(s) maintained by a regulated entity on file with the Department, may require an additional security bond from the respondent(s).

4.5 Witnesses; Issuance of subpoenas by Commissioner; Upon proper written application of any party or its attorney, a subpoena may be issued by the Commissioner as follows:

4.5.1 Subpoenas Duces Tecum; At any time, no later than 14 days prior to hearing, at the instance of any party, the party or its attorney may make application for the issuance of a document subpoena directed to any non-party requesting documents that are or may be pertinent to the issues to be heard at the hearing of the matter. The issuance of a document subpoena is at the sole discretion of the Commissioner, and predicated upon a finding that the request sets forth as plainly as possible the documents that are sought and the purpose of the requested production. Absent extraordinary circumstances, a total of fifteen (15) separate document subpoenas is the maximum limit. Additional document subpoenas may issue only after a showing of extraordinary circumstances by the party making the requests.

4.5.2 Summons/Subpoena to appear in person; Rule 45 of the Mississippi Rules of Civil Procedure is considered instructive guidance to the parties, but it is not necessarily binding for the purposes of any matter before the Commissioner.

4.5.3 Enforcement by Commissioner; Unless otherwise prohibited by statute, the Commissioner shall have full authority to enforce any summons, subpoena or order that issues during the hearing process. The Commissioner may further request the Chancery Court in any county to assist with the enforcement of any such document.

4.5.4 Service of Process; All subpoenas, subpoenas duces tecum, summons or any other process issued in proceedings pending before the Commissioner shall extend to all parts of the state and may be served by any person authorized to serve process of courts of record in this state.

4.5.5 Costs Borne by Requestor; A process server shall be entitled to collect appropriate fees for such service as allowed in the courts of this state, with all such costs to be borne by the party requesting the service of process.

4.6 Depositions of Witnesses; In any hearing proceeding before the Commissioner, the Department or a party may request the issuance of a subpoena requiring an individual to be deposed upon a showing of good faith need to take the deponent’s testimony under oath. If the Commissioner finds that a party’s request is well-taken, that the requested deposition will not adversely affect the deponent and is not being requested for any improper purpose, he/she may issue a subpoena requiring the attendance of the deponent at a date and time certain. Any deponent is entitled to be paid an attendance fee and/or travel costs related to the deposition as allowed in Rule 45 of the Mississippi Rules of Civil Procedure. All costs shall be borne by requesting party.

4.6.1 Limit on Depositions; Unless there is an extraordinary need established by a clear and convincing showing, a party shall be granted no more than five (5) depositions. A deposition shall be limited to no more than eight (8) hours and shall be conducted at a location that is reasonably convenient to the deponent and properly noticed to all other

parties. The Commissioner has sole discretion to expand or limit the scope, content, location, environment, manner and decorum of any deposition requested by any party. The Commissioner may refuse to allow any such request or revoke a previously issued summons if the Commissioner determines that such action is necessary to prevent cumulative, repetitive or duplicative testimony, to avoid unnecessary delay or obstruction, or to prevent the harassment or embarrassment of a witness. No party shall be entitled to depose or require testimony at a deposition or at the Hearing from the Commissioner (current or former), the Hearing Counsel, or the Department’s attorney(s).

4.7 Attendance of Hearing; A witness may be summoned/subpoenaed to attend the Hearing in person for the purposes of giving live testimony before the Commissioner. A witness should be reimbursed for actual expenses incurred as a result of their attendance and the party requesting the issuance of the subpoena requiring attendance shall bear the cost of expenses such that the witness shall not incur losses as a result of compliance. A reasonable daily witness fee should also be provided to each subpoenaed witness, not to exceed the amount described in Rule 45 of the Mississippi Rules of Civil Procedure.

4.8 Exchange of Witness lists, Exhibits; The Commissioner has sole discretion to require the parties to provide and/or exchange lists of witnesses that are likely to or may be called to provide live testimony at the Hearing and may require the same for any or all exhibits that a party plans to use as affirmative evidence at the Hearing. Evidence that may be submitted solely for the purpose of impeachment or rebuttal may be excluded from this requirement.

4.9 Taking of Evidence; The Commissioner and Hearing Counsel shall maintain full control over the taking of any evidence at the hearing and may limit the number of witnesses to be called, the topics to be discussed, the documents entered and all other manner of evidence in order to maintain order, maximize administrative economy and prevent duplicative, irrelevant, superfluous or improper submissions.

Since the Hearing will not be limited to strict rules of evidence, the Commissioner may consider any evidence he/she finds to be highly probative and has a strong indicia of reliability. As the fact-finder for the Hearing, the Commissioner is empowered to assess credibility, weigh conflicting evidence and draw factual inferences from the testimony and exhibits introduced by the parties. Additionally, as the fact-finder, the Commissioner may reject the subject statements as implausible, properly countered by other evidence, or otherwise not compelling.

4.10 Taking Notice; The Commissioner may take official notice of any generally accepted information or technical or scientific matter within the fields of expertise within the purview of the Department and of any other fact which may be judicially noticed by the courts of this state. The parties must be informed of any information, matters or facts so noticed and must be given a reasonable opportunity, on request, to refute such information, matters or facts by evidence or by written or oral presentation of authorities, the manner of such refutation to be determined by the Commissioner or Hearing Counsel.

4.11 Time Limit on Hearing; The Commissioner has the discretion to limit the number of days allowed for the Hearing. Absent a showing of extraordinary circumstances, no hearing shall be

conducted for more than 40 hours of testimony or argument. The Commissioner has discretion in the scheduling of the Hearing days and may require all parties to comply with further time restrictions. Limits may be uniformly placed on all parties and/or witnesses. An opportunity for cross-examination of any live witness shall be provided to the party opposite subject to above limitations.

4.12 Failure to Appear at Hearing-Default; If the respondents fail to appear at the scheduled time and place set for the Hearing, the Commissioner may adjourn the Hearing and may thereafter proceed with the determination and final ruling based solely on the submitted Record. Failure to attend and present all defenses to the Commissioner the Hearing shall constitute waiver of the party’s ability to raise on appeal any issue that could have been raised during the Hearing Process.

4.13 Subsequent Submission of Further Written Legal Arguments/briefs; The Commissioner may direct a party to provide additional written submissions to complete or clarify legal or factual issues, following the conclusion of live Hearing. The submission of additional documents shall be only at the direction of the Commissioner and shall serve to postpone the “close” of the Hearing until after the parties’ submissions are complete. Documents that are intended to rebut testimony may likewise be submitted after the conclusion of live testimony, if directed by the Commissioner. Nothing will be accepted for consideration or entered upon the Record after the end of the Hearing, unless it is expressly allowed or directed by the Commissioner.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 5.0 Rule 5.0

Hearing Record; The Hearing Record will consist of all transcripts and documents of related proceedings including all pre-hearing motion practice, all submitted documentation, exhibits and testimony admitted as part of the Record at the Hearing, any other papers filed by the parties, all pre-filed testimony and attached exhibits and any subsequently filed briefs or supplements that are directed by the Commissioner.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 6.0 Rule 6.0

Attendance limited; Control of all attendees of the Hearing shall be vested in the discretion of Commissioner and may be restricted as needed to maintain order, while recognizing the need for transparency. The Commissioner shall further have discretion to limit the number of individuals attending on behalf of the same entity. The Commissioner may also take any necessary actions to prevent the unlawful disclosure of personal identifiers, confidential or proprietary information, or any other information that, if otherwise made available for public consumption could cause harm or injury.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

5 Miss. Admin. Code Pt. 2, R. 7.0 Rule 7.0

Final Order of Commissioner; At the close of the Hearing (as determined by the Commissioner), the Commissioner shall, within no more than 60 business days, issue a written “Final Order” memorializing the conclusions of fact and/or law and any other determinations

made by the Commissioner and based upon the Record. All parties and their representatives shall be provided with a copy of the Final Order in the typical manner and the Respondent(s) or their representatives shall further be provided the Final Order via hand-delivery or certified mail to the last known address on file with the Department. The Final Order shall be made public and enforced by the Commissioner unless expressly prohibited.

7.1 Standards of Proof; The Commissioner’s Final Order and the determinations contained therein shall be based on “clear and convincing” evidence. All other determinations made by the Commissioner and reduced to writing are subject to an “abuse of discretion” standard for the purposes of any appeal or court intervention.

7.2 Appeal of Final Order to Chancery Court; A Final Order may be appealed to the Chancery Court of Hinds County, Mississippi, First Judicial District, or any other court of competent jurisdiction as authorized by statute. An appeal shall in no way function to stay the effectiveness of the Final Order, absent express statutory authority allowing a stay or a proper order from a court of competent jurisdiction.

APPEAL OF DENIAL OF APPLICATION(S) FOR S.A.F.E. MORTGAGE ACT LICENSURE; MANDATORY APPEAL DIRECTLY TO COMMISSIONER; ABBREVIATED HEARING PROCESS

Rule 8.0; In the absence of any express authority to the contrary, and in accordance with § 81- 18-37(2) of the Mississippi Code of 1972, the following shall amend the general hearing process described above and provide a mandatory administrative appeal process for any applicant or licensee that is denied a license application or renewal application, in writing by the Department.

a) Following a denial of an application for license, the applicant must, within 30 days of the receipt of the written denial from the Department, submit an appeal in writing to the Commissioner and request a hearing be held to appeal the denial of an application by the Department.

b) All above rules shall govern the hearing of the denial application, unless expressly revised herein below.

c) Absent a showing of extraordinary circumstances, the denial hearing shall be conducted in one day and shall last no longer than 5 hours. The applicant shall be allotted two (2) hours to present evidence and/or testimony in favor of its application. The Department

shall thereafter be allotted two (2) hours to present its rebuttal in support of the denial of the application.

d) No deposition testimony shall be allowed with regard to a denial hearing. All witness testimony must be presented live at the hearing.

e) The Commissioner shall be allotted at least one (1) hour to conduct inquiry of the witnesses and/or parties.

f) A Final Order on the hearing of the denial of an application for licensure shall be published within no more than 30 days following the close of the Hearing.

g) Any Final Order that is entered by the Commissioner denying an application for any reason shall memorialize the findings of the Commissioner and the applicant may thereafter, within ten (10) days of the date of the Final Order, appeal to the Chancery Court of Hinds County, Mississippi, First Judicial District.

History

• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)
• Source: MISS. CODE ANN. §§ 81-18-1; 81-18-29; (effective date July 1, 2016)

Part 3 Consumer Finance Activities

Chapter 1 Small Loan Regulatory Law and Small Loan Privilege Tax Law:

5 Miss. Admin. Code Pt. 3, R. 1.1 Purpose - Amendment of Prior Rules- These Regulations are promulgated pursuant to Miss

Code Ann. §75-67-129 of the Small Loan Regulatory Law, Miss. Code Ann. §75-67-243 of the Small Loan Privilege Tax Law, and other applicable statutes to establish administrative procedures required by the Department of Banking and Consumer Finance and shall be applicable to Licensees under the Small Loan Privilege Tax Law and to transactions covered by the Small Loan Regulatory Law. These Regulations are not intended to create any private right, remedy, or cause of action in favor of any borrower or against any Licensee, nor are these Regulations intended to apply to any business transaction of a Licensee not covered by Mississippi Law. While these Regulations are intended to and do supersede all prior Rules, Regulations and Guidelines of the Department of Banking and Consumer Finance, these Regulations are intended only to clarify the existing law (both statutory and regulatory) governing the small loan business. These Regulations do not create any new or substantive rights in favor of any borrower or against any Licensee, regardless of whether the loan was made prior to or after the effective date of these Regulations.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.2 Definitions

The following words and phrases, when used in these Regulations or in the related statutes shall, for the purposes of these Regulations, have the meanings respectively ascribed to them in this section, except where the context clearly describes and indicates a different meaning:

1. “Actuarial Method” shall have the same meaning as it is used in the Federal Truth-In- Lending Act in determining the annual percentage rate. 2. “Commissioner” means the Commissioner of the Department of Banking and Consumer Finance of the State of Mississippi. 3. “Department” means the Department of Banking and Consumer Finance of the State of Mississippi. 4. “Licensee” means any person holding a license from the Department of Banking and Consumer Finance to conduct business under the Small Loan Privilege Tax Law and the Small Loan Regulatory Law. 5. “Loan” means a loan that is made to individuals primarily for personal, family or household purposes. Licensing under the Mississippi Small Loan Regulatory Law and Small Loan Privilege Tax Law does not apply to persons engaged in the business of extending credit to borrowers primarily for business or commercial purposes. 6. “Pre-computed Loan” means a loan on which the finance charge is calculated for the entire term of the loan and added to the State Amount Financed to determine the total amount of payments. 7. “State Amount Financed” means the amount financed as defined by the Federal Truth-In-

Lending Act and Regulation Z, plus the closing fee authorized by state law, including all charges in the amount of credit extended which are not a part of the finance charge, the total being the amount of credit which will be paid to the borrower or to another person on his behalf. The following are a part of the State Amount Financed and not a part of the finance charge: (i) actual cost of authorized insurance premiums (ii) closing costs excluded from the definition of finance charge by State law; and (iii) any reasonable fee paid to an attorney for the investigation of a title. 8. “State Contract Rate” means the annual percentage rate of the finance charge determined by the actuarial method for the term of the loan, calculated on the State Amount Financed, as defined herein. 9. “State Finance Charge” represents an amount paid by the debtor for receiving a loan that is calculated by using the State Contract Rate, the term of the note and the State Amount Financed. 10. “Term of Loan” means the period of time from the date of the loan through the scheduled date of the final payment. 11. “The Rule of 78’s” is a formula used for calculating earnings and rebates for pre-computed loans. 12. “Total Amount of Note,” “Total Amount of Loan,” “Total Payments” and “Total Amount Repayable” each mean the total sum of payments to be paid by the borrower to the lender according to the schedule of payments.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.3 Insurance: General

1. All insurance policies issued by or through a Licensee or an agent of a Licensee shall be written only through insurance companies authorized to do business in the State of Mississippi and only through an insurance agent or broker licensed by the State of Mississippi. Only licensed agents or brokers shall solicit sales of insurance coverage. The insurance license of the agent or broker shall be current and conspicuously posted in the Licensee’s office. 2. A Licensee shall not require additional insurance from or procure additional insurance for the borrower if the borrower furnishes to the lender evidence of insurance sufficient to protect the full amount of the lender's lien. Such evidence shall indicate that the premium has been paid and the certificate of insurance shall name the Licensee as loss payee. 3. A Licensee shall accept properly endorsed pre-existing insurance policies owned by the borrower at the time of the making of a loan. 4. Each Licensee shall maintain in its licensed office a copy of all insurance policies issued. Records for all policies issued by or through the Licensee or an agent of Licensee, shall indicate the name and address of the insurance company and the insured borrower, name of second beneficiary, type of insurance, premium amount, amount of coverage, term of policy, and any property covered by such policy. 5. Each Licensee shall maintain a file in its licensed office containing all pertinent information regarding claims made under any insurance sold with proof of payment made to or on behalf of the borrower or designated beneficiary, or a signed receipt from the borrower or

beneficiary acknowledging receipt of payment. 6. A copy of all documentation including the initial claim worksheet and all correspondence pertaining to an insurance claim shall be maintained for twenty-four (24) months after the date of the final transaction. 7. An original copy of the policy or certificate shall be given to the borrower and a copy shall be retained in the borrower's loan file. 8. A licensee shall maintain documentation of all insurance rates approved by the Mississippi Department of Insurance. 9. In the event of a loss, the Licensee shall, upon being notified by the borrower of such loss, promptly report such fact to the insurance company and when requested by the borrower, advise and assist the borrower in completing the necessary forms to report to the insurance company or its designated claim agent or representative. The Licensee shall exercise reasonable efforts to insure that such claim is processed without undue delay in accordance with the terms of the policy. 10. In the event of the payment of a loan in full one or more months prior to the maturity date, whether by cash, new loan renewal, or refinancing, the insurance policy(s) or certificates shall be cancelled and the borrowers shall be entitled to a refund of the unearned portion (in excess of $2.00) of the premium on any property insurance written through the Licensee. Such refund shall be calculated under the Rule of 78’s, unless the policy or certificate calls for a greater refund amount. Calculations shall be based from the date of the loan to the date the loan is paid-off. In calculating a Rule of 78’s refund, one (1) day shall constitute a full month earned.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.4 Rule 1.4

Insurance: Property - Property insurance may be written in connection with any loan on which real or personal property is taken as collateral on the following terms and conditions:

1. Personal property insurance shall be written for an amount not to exceed the lesser of the total sum of payments to be paid by the borrower to the lender according to the schedule of payments or the value of the personal property. The Licensee may rely on borrower's representation of the value of personal property; however, if a motor vehicle is part of the collateral for the loan, its value may be established by a nationally recognized evaluation guide. The borrower shall furnish a list of collateral indicating the value of each item. 2. The original term of insurance must not exceed the contractual term on the loan. If the term and loan amount of insurance is less than the term and amount of the loan, the term and amount of the insurance must be shown on the contract and on the ledger card and/or computer generated copy.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.5 Insurance Claims A Licensee shall maintain the following information and documents for all insurance claims:

1. A Fire Marshal's report or dated published public notification of the fire or loss and a list of collateral covered by insurance with an individual valuation of each item pledged at the time of the loan closing for all claims on property insurance 2. A copy of the death certificate or a dated published public notification of the death for all claims on credit life insurance 3. An original paid check issued by the Licensee to the borrower or beneficiary and/or a copy of the check issued by the insurance company to the borrower or beneficiary indicating proper endorsements or a signed receipt from the borrower or beneficiary for benefits paid by the Licensee and/or insurance company indicating the total amount of the payment or refund 4. A copy of all insurance policies written in connection with a loan and a notification or certificate of cancellation of the policy 5. Proof of refunds of any unearned premiums as of the date of the loss; In the event the insurance does not pay the loan in full, all other insurance policies may remain in effect until the loan is paid. 6. A copy of the borrower’s payment history

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.6 Fees

1. Closing Fee - A licensee may contract for and charge a closing fee as follows: (i) for loans in the amount of Ten Thousand Dollars ($10,000.00) or less, four percent (4%) of the total payments due on the loan or Twenty-five dollars ($25.00), whichever is greater; (ii) for loans in an amount greater than Ten Thousand Dollars ($10,000.00), a maximum charge of Five Hundred Dollars ($500.00). Such closing fee shall not be part of the finance charge. Miss. Code Ann. §75-17-21(3) 2. Appraisal Fee - Licensees may charge the borrower the actual fee for appraising real property taken as collateral on loans secured by an interest in real property provided the appraiser is an unrelated third party. The appraisal fee shall not be a part of the finance charge and no portion thereof is refundable in the event of a prepayment. If the appraisal fee is paid from proceeds of the loan, such fee shall be a part of the State Amount Financed. However, this fee should not exceed the maximum amount shown on the Notification of Fees Schedule that is submitted annually to the Department of Banking and Consumer Finance by the Licensee. This fee must be shown on the ledger card or on a computer generated copy. 3. Title Opinion - A Licensee may charge a borrower, on loans of One Hundred Dollars ($100.00) or more, a reasonable fee for the investigation of the title to any property given as security for a loan. This fee must be paid by the Licensee to an attorney and should not exceed the maximum amount shown on the Notification of Fees Schedule that is submitted annually to the Department of Banking and Consumer Finance by the Licensee. This fee must be shown on the ledger card or on a computer generated copy. 4. Notary Public Fee - A Licensee shall not charge or collect from a borrower any notary fee in connection with a loan.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.7 Prepayment Penalties

In the event of the prepayment of a loan secured by an interest in real estate, the Licensee may charge a prepayment penalty not exceeding the amounts authorized by Miss. Code Ann. §75-17-31. A prepayment penalty may not be applied in the event of the prepayment of a loan by insurance proceeds or as a result of the renewal or the refinancing of a loan by the same Licensee. The prepayment penalty and amount must be shown on the paid-out ledger card or on a computer generated copy. For examination purposes, the Licensee must be able to identify the customers that were charged a prepayment penalty.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.8 Rule 1.8

Refund of Unearned Finance Charges: Pre-computed Loans Only: When a pre- computed loan is paid in full prior to maturity, whether by cash, renewal, or otherwise, the borrower is entitled to a refund of $1.00 or more of the unearned finance charges based on the Rule of 78’s. The refund shall be calculated on the number of days by which the loan is paid in advance, less twenty (20) days.

1. If the prepayment is from the proceeds of insurance, the unearned finance charge may be calculated as of the date the insurance proceeds are actually received by the Licensee. 2. If there is a charge on the loan for additional days to the first payment (i.e. first payment extension charge) the following must be taken into consideration: a. If such charge was included in the first payment and the payoff is prior to the first payment due date, the first payment extension charge shall be fully refundable; or b. If such charge was included throughout the term of the note, the first payment extension charge is refundable based on the Rule of 78’s.

If a Licensee has a pre-computed loan with a term exceeding sixty-one (61) months, the Licensee is required to compute the refund based on a method that is at least as favorable to the consumer as the actuarial method. (15 U.S.C. § 1615 (b))

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30, 2006

5 Miss. Admin. Code Pt. 3, R. 1.9 Default Charges or Late Charges

A default charge shall not be assessed after the date of loss for any loan paid from the proceeds of insurance coverage. Default charges shall not be deducted from any regular payment for the purpose of creating an additional default charge. Either of the following methods may be used to assess a default charge and such charge must be disclosed on the written contract:

1. Five Percent (5%) Default Charge: any installment that is ten (10) days or more in default not to exceed the lesser of Five Dollars ($5.00) or five percent (5%) of the portion of the payment in default. Miss. Code Ann. §75-17-15 2. Four Percent (4%) Default Charge: any installment that is more than fifteen (15) days in default not to exceed the greater of Five Dollars ($5.00) or four percent (4%) of the

portion of the payment in default. This charge shall not exceed Fifty Dollars ($50.00) unless the amount of the loan exceeds One Hundred Thousand Dollars ($100,000.00) and the term of the loan exceeds five (5) years. Miss. Code Ann. §75-17-27

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.10 Records

1. Each Licensee shall maintain certain files or records at its licensed location. The required documents and information listed below shall be maintained in separate folders with an appropriate index, filed alphabetically or numerically. Such records may be in the original form, in the form of computer printouts or on electronic media, if readily accessible for viewing on a screen with the capability of being promptly printed upon request. All records shall be maintained for twenty-four (24) months after the date of the final transaction. 2. A separate file for each principal borrower shall be maintained and shall contain all pertinent information and documents including but not limited to deed of trusts, security agreements, financing statements, promissory notes, insurance policies, deferment agreements, releases, cancellations, termination statements and disclosure statements. All documents pertaining to the loan shall contain the loan number. 3. A loan register or a copy of all disclosure statements shall be maintained in order according to date of loan. 4. The following information shall be maintained on a loan ledger or on a computer generated copy: a. name and address of the borrower and each co-borrower b.date of loan and loan number c. total amount of payments d.finance charges pursuant to Miss. Code Ann. §75-17-21 e. closing fee pursuant to Miss. Code Ann. §75-17-21(3) f. State Contract Rate g.State Amount Financed h.dollar amount of default charge authorized by Section 9 of these Regulations i. deferral charge j. credit life insurance premium, coverage, and terms k.credit disability insurance premium, coverage, and terms l. other types of insurance premiums, coverage, and terms m. fees paid to public officials n.attorney fees for title search o.appraisal fees p.terms of repayment q.type of collateral r. date of maturity s. whether the loan is new, a renewal, or a remaking of a previous loan, and, if so, the account number of the previous loan t. unpaid balance u.amount and date of receipt of all payments

v.date and amount of all default charges imposed and date and amount of the payment thereof w. payments from insurance proceeds x.any information regarding litigation, repossession, or foreclosure pertaining to the loan and/or the collateral y.for terminated loans: 1. date of termination 2. whether terminated by payment, renewal or refinancing 3. any insurance claim payments z. for loans terminated by renewal, remaking or refinancing: 1. loan number of renewal, remake or refinancing 2. refunds for unearned finance charge 3. refunds of any unearned insurance premiums aa. real estate prepayment penalty 5. Any errors in records shall be corrected by a correcting entry rather than by erasure or obliteration with appropriate entries evidencing why, when, and by whom such correcting entry was made. 6. All files and records shall be maintained separately so as to readily identify business transacted under the Small Loan Regulatory Law and Small Loan Privilege Tax Law. 7. Licensee shall document all overpayments by the borrower and proof of all refunds. 8. A check register shall be maintained in numerical order and the purpose of each check issued shall be indicated. 9. Licensee shall maintain a record of the itemization of the amount financed in the borrower’s file. 10. Licensee shall maintain a register of all deferment charges which includes customer name, account number and date of deferment charge.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30, 2006

5 Miss. Admin. Code Pt. 3, R. 1.11 Loan Payoff Requests

A Licensee shall provide the loan payoff amount within three (3) business days of an oral or written request from a borrower or receipt from a third party of written proof of the borrower’s authorization to disclose the loan payoff amount. A business day does not include a Saturday, Sunday or legal holiday. No fee may be charged for providing a payoff amount.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30, 2006

5 Miss. Admin. Code Pt. 3, R. 1.12 Sale and Financing of Auto Club Memberships (Effective July 1, 2006)

1. Requirements for the Sale and Financing of Auto Club Memberships a. The sale and financing of an auto club membership is strictly voluntary and shall never be made as a condition for the extension of credit or the granting of a loan. b.Licensee may offer the borrower the opportunity to purchase an auto club membership only after the Licensee has fully approved a loan to the borrower. c. Borrower must have a valid driver’s license.

d.Borrower must certify that they own or lease at least one automobile. e. Auto club membership applications must be signed by the borrower and a copy of the application must be maintained in the borrower’s file. f. A copy of the auto club service contract must be given to the borrower and such agreement must contain the name and address of the auto club company, the various services to be provided to the customer by the auto club company and any fees to be charged to the borrower. g.Borrower shall have the option of paying the auto club membership dues by using funds other than loan proceeds. h.Auto club companies must be licensed with the Mississippi Department of Insurance. i. Auto club agents must be licensed with the Mississippi Department of Insurance and proof of such licensing must be maintained at the Licensee’s office.

2. Disclosure Statement

A disclosure statement must be given to the borrower at the time of purchase and the statement must be initialed or signed by the borrower. The disclosure statement must include the following information:

“You are entitled to pay the cost of the auto club membership by using funds other than loan proceeds.”

“If you finance the auto club membership fee with your loan, please be advised that you will pay additional interest charges as a result.”

“Do you already have an active auto club membership with this same auto club company, sold to you by this consumer finance company? If so, do you understand that you are purchasing another auto club membership and, therefore, extending the term of your existing membership?”

“You may cancel your auto club membership within thirty (30) days after the date of purchase and receive a full refund if you have not used any of the services provided through the auto club membership.”

The following statement must be in bold type immediately above the borrower’s signature: “NOTICE TO BORROWER: Purchase of this auto club membership is optional and is not required as a condition of this loan. Failure to purchase this auto club membership will not affect the lender’s approval of the loan or the receipt of the loan by the borrower.”

3. Cancellations

Members may cancel their auto club membership within thirty (30) days after the date of purchase and receive a full refund of the membership fee if the member has not used any of the services provided through the auto club membership. If canceled after thirty (30) days from the date of purchase, refunds will be pro-rated for the unused months on the membership. Records

Licensee must maintain information on all auto club memberships sold and financed that contains the borrowers name, date, number of months purchased and cumulative number of months paid as of that date.

4. Prohibited Acts

A licensee shall not sell and finance an auto club membership in conjunction with a loan which has an initial term longer than the term of the loan.

Licensee shall not sell and finance additional auto club memberships to the same borrower unless the term on their current policy is extended. Membership terms shall not exceed thirty-six (36) months from the date of the most recent loan. In no event shall the terms of the multiple autos club memberships sold by the Licensee run concurrently.

5. Reporting Requirements

Licensee shall report to the Department the total number of loans made and the total number of those loans made which the borrower chose to purchase an auto club membership. The request for this information will begin on September 30, 2006, and subsequent requests upon notification by the Commissioner. This information must be submitted to the Department within fifteen (15) days of the request. Failure to report this information will subject the Licensee to civil money penalties.

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date July 1, 2006

5 Miss. Admin. Code Pt. 3, R. 1.13 General

1. Licensees must provide a written response to the Department within thirty (30) days upon receipt of the Report of Examination. Such response must address the corrective action taken on any violations and errors noted in the report. The reports are to be maintained in the licensed office for two (2) years. 2. In the event a licensed office ceases to operate, the license shall be returned to the Department along with information regarding the location of the loan records of the closed office. 3. Licensee shall post and display a sign that measures at least twenty (20) inches by twenty (20) inches in a conspicuous place and in easy view of all persons who enter the place of business. The sign shall display bold, blocked letters, easily readable, with the following information: "This business is licensed and regulated by the Mississippi Department of Banking and Consumer Finance. If you encounter any unresolved problem with a transaction at this location, you are entitled to assistance. Please call or write: Mississippi Department of Banking and Consumer Finance, Post Office Drawer 23729, Jackson, MS 39225-3729; phone 1-800-844-2499."

History

• Source: Miss. Code Ann. § 75-67-129; Miss. Code Ann. § 75-67-243; Effective date March 30,

5 Miss. Admin. Code Pt. 3, R. 1.14 Violations

The Commissioner shall enforce these Regulations and any willful violation of and/or failure to comply with these Regulations may result in the revocation of the license and/or a civil money penalty not to exceed Five Hundred Dollars ($500.00) per violation.

History

• Source: Miss. Code Ann. §75-67-139; Miss. Code Ann. § 75-67-243; Effective date March 30,

Chapter 2 Debt Management Services Act

5 Miss. Admin. Code Pt. 3, R. 2.1 Purpose – Rescission of Prior Regulation

Section 81-22-17 (b), Miss. Code Ann., authorizes the Commissioner to adopt reasonable administrative regulations that are not inconsistent with the law in order to enforce the Mississippi Nonprofit Debt Management Services Act.

Pursuant to the Mississippi Administrative Procedures Law, §25-43-1.101 et seq., Miss. Code Ann. a regulation was adopted on June 1, 2005, governing the debt management services industry. The substance of these regulations was included in Senate Bill #2439 which was signed into law by Governor Barbour during the 2006 Legislative session, and was effective on July 1, 2006. Therefore, the prior regulation governing the Mississippi Nonprofit Debt Management Regulations was rescinded.

History

• Source: Miss. Code Ann. §81-22-17(b); Effective date July 1, 2010

Chapter 3 Mississippi Check Casher’s Act Law

5 Miss. Admin. Code Pt. 3, R. 3.1 Purpose

These regulations are promulgated pursuant to Section 75-67-501 et seq., Miss. Code Ann., known as the “Mississippi Check Cashers Act”, to establish administrative regulations required by the Department of Banking and Consumer Finance. Section 75-67- 515(1), Miss. Code Ann., authorizes the Department to adopt reasonable administrative regulations, not inconsistent with the law, in order to enforce the Mississippi Check Cashers Act. These regulations are not intended to create any private right, remedy, or cause of action in favor of any customer or against any licensee nor are these regulations intended to apply to any business transactions of a licensee not covered by Mississippi Law. While these regulations are intended to and do supersede all prior regulations issued by the Department of Banking and Consumer Finance regarding the check cashing industry, these regulations are intended only to clarify the existing law. In order to ensure compliance with the provisions set forth in the Mississippi Check Cashers Act, the following regulations have been implemented.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Effective date February 20, 2003

5 Miss. Admin. Code Pt. 3, R. 3.2 Records

“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. Records may be in the form of

traditional hard copies, computer printouts or magnetic media if readily accessible for viewing on a screen with the capability of being promptly printed upon request.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Effective date February 20, 2003

5 Miss. Admin. Code Pt. 3, R. 3.3 Delayed Deposit Transaction

1. Records a. Licensee shall maintain all files and records at its licensed office. b. Licensee shall maintain a separate file folder for each customer containing documentation for all delayed deposit transactions. c. Licensee shall maintain a daily journal containing a record of all delayed deposit transactions in consecutively numbered order. The daily journal shall include at least the customer name and transaction date and may be maintained either manually or by computer. In lieu of maintaining a daily journal, Licensee may maintain a file with a copy of each delayed deposit agreement in consecutively numbered order. This number shall be printed on the agreement. Licensee must be able to account for any voided agreements or lapse in numbering sequence. d. The check number must be clearly disclosed on each delayed deposit agreement. e. The date of the transaction and the maturity date must be stated on each delayed deposit agreement. f. A new check must be used for each delayed deposit agreement. (i.e. the same check shall not be reused on subsequent check cashing transactions).

2. Processing Fee

The Processing Fee authorized by §75-67-519(7), Miss. Code Ann., shall be disclosed in the delayed deposit agreement. Thirty Dollars ($30.00) is set as the maximum amount a licensee may charge for a check returned for any reason, including, without limitation, insufficient funds, closed account or stop payment. The Processing Fee is considered a one-time charge; regardless of the number of times the check associated with the delayed deposit agreement has been processed.

3. Processing Fee Journal

Licensee must maintain a daily journal of all Processing Fees charged along with the following information:

a. Copy of check b. Amount of Processing Fee c. Customer name d. Date of transaction e. Check number f. Amount of check g. Documentation verifying the financial institution’s refusal to pay

4. Computation of Annual Percentage Rate

Pursuant to Section 75-67-519(3), Miss. Code Ann., the fee charged in a delayed deposit transaction must be disclosed as a dollar amount and as an annual percentage rate (APR) in the delayed deposit agreement.

Example: $100.00 delayed deposit transaction due in 14 days, when a $120.00 check is held:

$20.00/$100.00 X 365/14 = 521.43 APR Fee ÷ amount financed x 365 (or 360) ÷ number of days = APR

5. Rollover Fee

Licensee shall not accept a fee to renew or extend (i.e. rollover) any delayed deposit transaction. The delayed deposit agreement shall not be renewed; the transaction must be collected in full.

6. Checks Written on Joint Bank Accounts

Each individual on a joint bank account may write checks in an amount not to exceed an aggregate total of Five Hundred Dollars ($500.00) per individual. However, a separate delayed deposit agreement must accompany each check.

7. Multiple Checks

Licensee may accept multiple checks on a customer with the aggregate amount not to exceed Five Hundred Dollars ($500.00). However, a separate delayed deposit agreement must accompany each check.

8. Payment Plan

Licensee may set up a payment plan for customers in default. If a customer defaults and Licensee agrees to accept a payment plan and customer later defaults in the payment plan, the Licensee may cash the check but may not receive more than the original amount of the check, plus the Processing Fee set forth in these regulations. Licensee shall maintain supporting evidence of all payments received.

9. Wage Assignments

Licensee shall not encumber a customer’s wages in the form of a wage assignment. However, nothing contained herein shall prevent a licensee from garnishing wages pursuant to a court order.

10. Acceptance of Credit Cards as Payment

Licensee may accept a credit card as payment on the due date. The Licensee shall not swipe the customer’s credit card at the beginning of a transaction thus encumbering the customer’s funds and later completing the transaction on the due date.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Miss. Code Ann. 75-67- 519(3); Effective date February 20, 2003

5 Miss. Admin. Code Pt. 3, R. 3.4 Checks Cashed for a Fee and Required Records

Licensee shall maintain a copy of each check cashed along with the following information:

1. Date of transaction 2. Fee charged expressed as a percentage rate, §75-67-517 Miss. Code Ann. 3. Fee charged expressed as a dollar amount 4. Customer signature acknowledging fees charged

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Miss. Code Ann. §75-67- 517; Effective date February 20, 2003

5 Miss. Admin. Code Pt. 3, R. 3.5 Disclosure of Fees and Rates

Pursuant to §75-67-515(4) Miss. Code Ann., a Licensee shall display a sign disclosing the maximum fees allowed to be charged for cashing checks. The sign must be at least 20”x 20” and the print must be large and bold in order to allow customers to easily read the information. Such sign must be displayed in a conspicuous place and in easy view of all persons who enter the place of business. The following is an example of the required sign:

The following is a list of maximum fees allowable for services that may be offered at this check cashing business: 1. Government checks: 3% of the face amount of the check or five dollars ($5.00), whichever is greater 2. Personal checks: 10% of the face amount of the check or five dollars ($5.00), whichever is greater 3. All other checks or money orders: 5% of the face amount of the check or five dollars ($5.00), whichever is greater 4. Delayed deposit transaction: $20.00 per $100.00 advanced for checks $250.00 and under $21.95 per $100.00 advanced for checks over $250.00

Amount Advanced Fee Face Amount of Check

$100.00 $20.00 $120.00 $200.00 $40.00 $240.00 $300.00 $65.85 $365.85 $400.00 $87.80 $487.80

Mississippi law prohibits this check cashing business from accepting a fee to renew or extend any delayed deposit transaction. Therefore, a delayed deposit check must be deposited or the check face value paid in full prior to entering into another delayed deposit transaction.

This check cashing business is licensed and regulated by the Mississippi Department of Banking and Consumer Finance. If you have any unresolved problem with a transaction at this location, you are entitled to assistance. Please call or write: Mississippi Department of Banking and Consumer Finance, P.O. Drawer 23729, Jackson, MS 39225-3729; Phone 1-800-844-2499.

Any of the above information that is not currently posted may be posted on a separate sign using the dimensions described above. Licensee is only required to post fees for the type of services offered.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Miss. Code Ann. §75-67- 515(4); Effective date December 1, 2012

5 Miss. Admin. Code Pt. 3, R. 3.6 Advertisement

§75-67-505(1), Miss. Code Ann., states in part that “A person may not engage in the business as a check casher or otherwise portray himself as a check casher unless the person has a valid license authorizing engagement in the business.” Therefore, the displaying of external signage outside a business, advertisement via print, broadcast or electronic media announcing or referencing a check cashing service constitutes a person’s intent to portray himself as a check casher and not incidental to any other service offered and therefore, must obtain a license to participate in a check cashing business.

Persons that are principally engaged in the retail sale of goods and exempt from licensing under §75-67-507(c), Miss. Code Ann. are prohibited from advertising they offer check cashing services.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Miss. Code Ann. §75-67- 507; Miss. Code Ann. §75-67-505(1); Effective date February 20, 2003

5 Miss. Admin. Code Pt. 3, R. 3.7 Violations

The commissioner shall enforce these regulations. Any violation of and/or failure to comply with these regulations may result in the assessment of a civil money penalty not to exceed Five Hundred Dollars ($500.00) for each violation or revocation of the Licensee’s license, or both, in accordance with Mississippi law.

History

• Source: Miss. Code Ann. §75-67-501; Miss. Code Ann. §75-67-515(1); Effective date February 20, 2003

Chapter 4 Mississippi Title Pledge Act

5 Miss. Admin. Code Pt. 3, R. 4.1 Purpose - Amendment of Prior Rules- These Regulations are promulgated pursuant to Miss

Code Ann. §75-67-405 and 75-67-407 of the Miss. Code Ann. §75-67-243 and the Mississippi Administrative Procedure Act, Section 25-43-1, et seq.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.2 Records

1. Each Title Pledge licensee shall maintain all files or records at its licensed office. In addition to the information required by Sections 75-67-405 and 75-67-407 of the Mississippi Code of 1972, Annotated, each title pledge lender shall maintain a consecutively numbered record or log of each title pledge agreement executed, with that number being placed on the corresponding Title Pledge Agreement. 2. The following information must be maintained on a ledger card or computer system that can be printed upon request:

a. Name and address of the pledgor(s) b. Date of the title pledge transaction and the title pledge transaction number c. Total amount of payments d. Title Pledge Service charge e. Terms of repayment f. Description of collateral, including VIN number g. Maturity date h. Unpaid balance i. Amount and date of receipt of all payments j. Distribution of all payments to principal and interest

3. A file(s) shall be maintained for each pledgor and shall include, the title pledge agreements and all documents pertaining to the title pledge transaction. All documents pertaining to the title pledge transaction shall contain the title pledge number. 4. Licensee shall maintain a check book register or cash journal, in numerical order, indicating the distribution of each title pledge transaction and to whom such proceeds were disbursed. 5. Records may be in the form of traditional hard copies, computer printouts or on magnetic media if readily accessible for viewing on a screen with the capability of being promptly printed upon request. Licensee shall keep all records for a period of no less than two (2) years from the date of the closing of the last transaction. 6. A record indicating the total number of accounts and the dollar value of all title pledge receivables shall be maintained and available on a monthly basis. 7. Any errors in records shall be corrected by a correcting entry rather than by erasure or obliteration with appropriate entries evidencing why, when, and by whom such correcting entry was recorded.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.3 Sale of Repossessed Vehicle

1. Licensee must maintain a repossession log or separate record of all repossessed vehicles. Such record must include the customer’s name, vehicle information (including make, model and VIN number), date of repossession, date of sale, name of purchaser, amount of sale or payment, and method of payment by purchaser. Licensee shall maintain supporting documentation of each sale by a cash ticket or a financing agreement. 2. Documentation shall be maintained on all repossessed vehicles that are sold indicating

the value of each vehicle. Such documentation shall include a written condition report and at least two (2) photographs depicting the condition of the vehicle. In the event a licensee finances a vehicle they have repossessed, the licensee must comply with the rates authorized by the Mississippi Motor Vehicle Sales Finance Law. Such sale shall not be executed on a Title Pledge Agreement. 3. In the event a licensee declares a vehicle to be salvage pursuant to Section 75-67-411 (5), Mississippi Code of 1972, as amended, licensee must obtain a “junk certificate” from the Mississippi Tax Commission pursuant to Mississippi Title Law Regulation 51 (a) (4) which is defined as “an administrative letter issued by the Tax Commission for a vehicle which has been scrapped, dismantled or destroyed and the owner has surrendered the Mississippi Certificate of Title to the Tax Commission in accordance with Section 63-21- 39, Mississippi Code of 1972, as amended .” A copy of the required documentation and “junk certificate” shall be maintained in the customers file folder. The value received from the sale of any salvage shall be evidenced by a bill of sale or cash ticket and applied to the customer’s account balance. 4. For repossessions that are not declared salvage, licensee shall maintain a record that includes: balance owed plus service charge calculated up to the date of repossession; repossession fee that consists of actual towing and storage charges paid to an unrelated third (3rd) party; charges paid to an unrelated third (3rd) party for repairs to make property operable; the allowed one hundred dollar ($100.00) sales fee; to whom sold; and the amount of sale. Licensee must maintain a copy of all bills/invoices for any charges paid to a third party in the customers file folder. To verify amount of sale, licensee must obtain two (2) bids on vehicles less than ten (10) years old or a receipt from an auction seller indicating the amount received from the sale. For vehicles that are not sold at an auction and are ten (10) years old and older, licensee must have at least two (2) photographs depicting the condition of the vehicle and any other documentation to support the value of the vehicle.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.4 Sign

Each Licensee shall post and display a sign that measures at least 20 inches by 20 inches, in a conspicuous place and in easy view of all persons who enter such place of business. The sign shall display bold, blocked letters easily readable and shall include the following information:

NOTICE TO BORROWER

Mississippi law states, “A title pledge lender shall not advance funds to a pledgor to pay off an existing title pledge agreement”. It is illegal to renew or pay off an existing title loan you have with this lender with the proceeds of a new title loan from this lender. We encourage you to report any violation to the Mississippi Department of Banking and Consumer Finance. You may be entitled to a refund if this Title Pledge Lender is found to be in violation of the law. If you have any questions or need additional information about this type of transaction or about any other activity or procedure conducted in this office, please call or write:

Mississippi Department of Banking & Consumer Finance Post Office Drawer 23729 Jackson, Mississippi 39225-3729 Phone: 1-800-844-2499

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.5 Title Pledge Office

Section 75-67-435, Mississippi Code of 1972, Annotated defines a Title Pledge Office as “the location at which, or premises in which, a title pledge lender regularly conducts business. No other business other than title pledge business shall be conducted at a Title Pledge Office.” Therefore, to meet the requirements of this provision of the law, a Title Pledge Office is one that is further defined as: a location that has a definitive U. S. Postal address and/or E911 address; meets local zoning requirements; has a minimum of 100 square feet, with walls from floor to ceiling separating the operation from any other business(es); has an outside entrance, however you may be located in an area that has a common lobby shared by another business(es); proper signage; and maintain separate books and records. All title pledge business must be conducted in this location.

Upon adoption of this regulation, a current licensee operating a configuration less than these requirements has until June 30, 2001, the end of the current licensing period, to conform or their license will not be renewed. Any new application for license, after adoption of this regulation, shall include documentation attesting to the compliance of these regulations.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.6 Other Fees/Charges

Section 75-67-413 (1) states, “A title pledge lender may contract for and receive a title pledge service charge in lieu of interest or other charges for all services, expenses, cost and losses of every nature not to exceed twenty-five percent (25%) of the principal amount, per month, advanced in the title pledge transaction.” Therefore, a licensee may not charge any additional fees such as collection fees, late fees or any other type of fees.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.7 Customer Refunds

In the event a customer has been overcharged, licensee shall make refunds to the customer in the form of cash or check. The customer’s account may not be credited for any refund amount.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

5 Miss. Admin. Code Pt. 3, R. 4.8 Violations

The Commissioner shall enforce these Regulations. Any willful violation of and/or failure to comply with these Regulations may result in the assessment of a Civil Penalty not to exceed Five Hundred Dollars ($500.00) for each violation thereof, the revocation of the

Licensee’s license, or both in accordance with Mississippi law.

History

• Source: Miss. Code Ann. §75-67-405; Miss. Code Ann. §75-67-407; Effective date December 15,

Chapter 5 General Hearing Procedures

5 Miss. Admin. Code Pt. 3, R. 1.0 Rule 1.0

Purpose of These Rules and Procedures; These rules and procedures are adopted for the purpose of providing a general guideline for the conduct of any administrative hearings for which the Commissioner of the Department of Banking and Consumer Finance, State of Mississippi (“Commissioner”) has been charged by law to conduct relating to businesses, professions, or licenses within the jurisdiction of the Mississippi Department of Banking and Consumer Finance (the “Department” or “DBCF”).

1.1; These Rules and Procedures are intended to supercede and replace only the existing Department rules at “Docket Number 25” adopted effective January 3, 1997. No other rules or regulations previously adopted by the Department are affected by these Rules and Procedures.

1.2; As of the adoption of these Rules and Procedures, the Department is charged with the oversight of fourteen (14) separate industries in the State of Mississippi. Certain industries have an existing statutory or separately adopted regulatory framework that control hearings for that given industry. There presently exist separate rules and procedures for all hearings conducted by the State Board of Banking Review; for hearings involving state-chartered banks; as well as hearings pursuant to the Mississippi Small Loan Acts, the Motor Vehicle Sales Finance Laws, and Consumer Loan Broker Laws.

Small Loan Regulatory Law §§ 75-67-101, et seq. Small Loan Privilege Tax Law §§ 75-67-201, et seq. Motor Vehicle Sales Finance Law §§ 63-19-1, et seq. Consumer Loan Broker Act §§ 81-19-1, et seq.

None of the existing statutes, rules or regulatory procedures are amended by these Rules and Procedures, however, these Rules and Procedures may supplement existing statutes or rules to provide a mandatory appeal process following the written denial of a license application or renewal application. Absent conflict with statutes or rules, these Hearing Rules and Procedures may control Hearings in any industries regulated by the Department, now or any time in the future, unless otherwise expressly provided in statute or regulation.

1.3 Authority to Promulgate; In addition to the statutory authority listed above, these Rules and Procedures are adopted pursuant to various existing sections of the Code of Mississippi (1972) including, but not limited to the following, as well as any other delineated licensing, chartering, supervisory or regulatory authority in any industry expressly vested in the Commissioner, now or in the future.:

• Money Transmitters Act §§ 75-15-1, et seq. • Insurance Premium Finance Law §§ 81-21-1, et seq. • Mississippi Pawnshop Act §§ 75-67-301, et seq. • Mississippi Title Pledge Act §§ 75-67-401, et seq. • Mississippi Check Cashers Act §§ 75-67-501, et seq. • Mississippi Debt Management Services Act §§ 81-22-1, et seq. • Credit Availability Act §§ 75-67-601 et seq.

1.4 Severability; If any provision, section, subsection, sentence, clause or phrase of any of the Rules and Procedures, or the application of the same to any person or entity or any set of circumstances, is for any reason challenged or held to be invalid, null or void, the remaining rules, procedures or regulations or any application thereof to any person or circumstances shall remain valid.

1.5 Notice of Hearing; A written notice specifying the violation(s) or offense(s) for which the licensee (or any person or entity subject to the jurisdiction of the Department) is charged and a notice of the time and place of the hearing shall be served at least ten (10) days prior to the hearing date. Such notice may be served by mailing a copy of the notice, via certified mail postage prepaid, to the last known residential or business address of the licensee, person or entity. Service via hand-delivery, electronic communications, or other methods may also be used to perfect service of the notice upon the party or its representative. Notice to a representative shall be deemed notice to the party represented.

1.5.1 Waiver; A properly noticed party’s failure to timely respond to Notice shall constitute that party’s full and complete waiver of the party’s intent to attend the noticed Hearing or otherwise defend against the charges. A properly noticed Hearing may thereafter be conducted by the Commissioner without the party charged being present or represented.

1.6; Unless expressly prohibited by statute or regulation, the Commissioner shall have discretion to control all aspects of the hearing, including any motion practice or depositions that may be authorized, in order to maintain order, maximize administrative/agency economy and to set controls for the behavior of all participants involved in any manner. All hearings shall be conducted by the Commissioner, who shall not be bound by strict rules of civil procedure or by the rules of evidence in the conduct of any phase of the hearing process.

1.7 Hearing Counsel to Commissioner; The Commissioner may appoint Hearing Counsel in order to provide legal counsel to the Commissioner on all aspects of the hearing and assist in

conducting any part of the hearing or activities related thereto. Hearing Counsel shall have experience with conducting hearings that are judicial or administrative in nature and will assist and solely represent the Commissioner to ensure an orderly and fair hearing process. Hearing Counsel shall be an attorney that does not represent any other party interested in the hearing and may be an attorney from the Mississippi Attorney General’s Office. All parties shall be notified upon appointment of Hearing Counsel.

1.7.1 Authority Hearing Counsel shall have authority to conduct the hearing process in his/her discretion, and in consultation with the Commissioner. Hearing Counsel may make recommendations on any question or issue, but the Commissioner shall have the ultimate discretion and sole authority in all situations to make the final determination of any issue.

1.8 Administration of Oaths; At any hearing or related matter the Commissioner shall administer oaths as may be necessary for the proper conduct of the hearing. The Commissioner’s authority may be administered by a certified Court Reporter.

1.9 Extensions of time; Upon motion by any party or on his/her own initiative, the Commissioner has sole discretion to order an extension of any deadline that may be established during the hearing process.

5 Miss. Admin. Code Pt. 3, R. 2.0 Enrollment of Representatives, Attorneys and Accountants;

2.0.1 Eligibility to Practice; No person shall be eligible to practice before the Commissioner unless such person is enrolled in accordance with these regulations, except that any individual may appear, without enrollment, on his own behalf or on behalf of a member of his immediate family, if such appearance is without compensation; and a member of a partnership, an officer of a corporation, or an authorized regular employee of an individual, partnership, corporation, or other business entity may likewise appear without enrollment in any matter relating to such individual or business entity.

2.0.2 Scope of Practice; Practice before the Commissioner shall be deemed to include all matters relating to the presentation of a client’s matter to the Commissioner, Deputy Commissioner, the Division Director, or an examiner, including the preparation and filing of applications, reports, systems of internal control, financial statements, or other documents submitted to the Department on behalf of such client.

2.0.3 Qualifications for Enrollment; In addition to the individuals described herein, the following persons may be admitted to practice before the Commissioner: (a) Attorneys at law admitted to practice before the Supreme Court of the State of Mississippi and who are lawfully engaged in the active practice of their profession. (b) Certified public accountants and public accountants qualified to practice under Mississippi law and who are lawfully engaged in active practice as such.

2.0.4 Procedures for Enrollment; An attorney or accountant meeting the qualifications described in the subsection above shall be deemed automatically enrolled at the time the attorney or accountant first appears for or performs any act of representation on behalf of a client in any matter before the Commissioner.

2.0.5 Enrollment for a Particular Matter; The following persons may, upon motion of an enrolled (or exempt) person, be admitted to practice before the Commissioner for the purposes of a particular case or matter: (a) Attorneys at law who have been admitted to practice before the courts of any state or territory or the District of Columbia, and who are in good standing with the court by which they are licensed. (b) Certified public accountants or public accountants who have duly qualified to practice as such in their own names, under the laws and regulations of any state or territory or the District of Columbia, and who are in good standing with the entity by which they are licensed. No person enrolled for a particular matter may practice before the Commissioner except in association with the enrolled person who sponsored his enrollment.

2.0.6 Suspension or Revocation of Enrollment; (a) A person’s enrollment to practice before the Commissioner shall be suspended automatically without a hearing if his professional license is suspended or revoked. (b) Any person enrolled to practice before the Commissioner may have his enrollment to practice suspended or revoked if, after due consideration, the Commissioner finds that: i.) The person made a materially false or misleading statement with regard to his application for enrollment; ii.) The person willfully failed to exercise diligence in the preparation or presentation of any application, report, or other document filed with the Department, or knowingly misrepresented any material fact to the Commissioner; iii.) The person willfully violated or aided and abetted in the violation of any provision of an applicable statute or the Department’s regulations; or iv.) The person does not possess the requisite qualifications or expertise to represent others before the Commissioner, lacks character or integrity, or has engaged in unethical or improper conduct.

Pre-Hearing Procedures

5 Miss. Admin. Code Pt. 3, R. 3.0 Rule 3.0

Formal Docket Number Assigned; Each matter coming before the Commissioner shall be assigned a concise title that is descriptive and a unique cause number, and be docketed accordingly. Thereafter, all submissions related to the Hearing shall bear the title and docket number and shall be included on the Commissioner’s pre-hearing docket and made part of the Record.

3.1; Submissions to the Commissioner related to the Hearing shall be on 8 ½” x 11” standard white paper, or as otherwise deemed appropriate and allowed by the Commissioner. The parties’

submissions shall be typed and double-spaced unless impractical and otherwise allowed by the Commissioner.

3.2 Amendments; The Commissioner in his/her sole discretion, under such conditions as the Commissioner may prescribe, may allow any pleading, application, motion or other paper filed in a Hearing proceeding to be amended, corrected or otherwise supplied with an omission.

3.3 Scheduling; The Commissioner may call an in-person Scheduling Conference with counsel for the respondents and counsel for the Department in order to establish hearing guidelines, clarify issues, and set deadlines to complete any action items prior to the hearing. A scheduling order may be adopted by the Commissioner thereafter. The deadlines set are at the sole discretion of the Commissioner and may include, but are not limited to, the following:

• Initial exchange of proposed witnesses • Initial exchange of proposed documents to be included in the Hearing Record • Pre-hearing conference • Final exchange of documents to be included in the record and witnesses to appear at the hearing.

Additionally, the Commissioner may consider any inquiries or requests from the parties to ensure clarity, transparency and fairness of the hearing.

3.4 Discovery; Except as provided by these Rules and Procedures, there is no right to discovery in any hearing conducted by the Commissioner.

3.4.1; An interlocutory action by any respondent filed in a Chancery Court requesting a “Bill of Discovery” or seeking any other “discovery” based on equitable relief under common law or otherwise, is an improper attempt to circumvent the Department’s Rules and Procedures and shall be summarily dismissed by the Court.

3.5 Motion Practice Prior to Hearing; The Commissioner may require all parties to submit written direct and rebuttal testimony, all documentary evidence and exhibits the parties plan to submit into evidence at the hearing, witness lists specifying the witnesses the parties plan to call and the subject matter of the testimony, and written motions and motion responses in advance of the hearing pursuant to deadlines established by a Scheduling Order or other written directive.

3.5.1; Any written motion, request, or correspondence directed to the Commissioner by a party shall be provided to all attorneys of record or directly to an unrepresented party such that there shall be no earwigging of the Commissioner. Any submission and service of same on counsel of record may be submitted electronically (e.g. e-mail) or otherwise in accordance with directives from the Commissioner or Hearing Counsel.

The Hearing

5 Miss. Admin. Code Pt. 3, R. 4.0 Rule 4.0

Location; A hearing shall be conducted at the offices of the Department or at an alternative location that is deemed suitable by and within the sole discretion of the Commissioner.

4.1; These Rules and Procedures are not intended to address all aspects of the hearing process. The Commissioner may determine that more specific procedural rules for the hearing of a matter are necessary and should be implemented to ensure the order, fairness and efficiency of the hearing. The Commissioner’s authority provides the sole discretion to amend and/or supplement the hearing rules as deemed necessary and upon proper notice to all parties.

4.2; The “Rules of Evidence” used in judicial proceedings and any other rules of procedure or evidence that apply in other contexts may be considered informative for all matters before the Commissioner, however, all such rules are non-binding and any standards set forth therein are relaxed for all purposes of an administrative hearing conducted by the Commissioner.

4.3 Court Reporter; Each conference presided over by the Commissioner with all parties and/or their representatives may be transcribed for the Record with costs borne by the party requesting the Court Reporter’s services. The Department shall procure the services of a competent and certified Court Reporter who shall transcribe everything done and said on the Record and shall keep and properly index all exhibits as directed by the Commissioner or the Hearing Counsel.

4.4 Deposit of Costs; The Commissioner may, in his/her sole discretion, require a deposit or other guaranty that the fees and costs of the service of process and, should the Commissioner determine that the costs of the hearing will outstrip the amount of the bond(s) maintained by a regulated entity on file with the Department, may require an additional security bond from the respondent(s).

4.5 Witnesses; Issuance of subpoenas by Commissioner; Upon proper written application of any party or its attorney, a subpoena may be issued by the Commissioner as follows:

4.5.1 Subpoenas Duces Tecum; At any time, no later than 14 days prior to hearing, at the instance of any party, the party or its attorney may make application for the issuance of a document subpoena directed to any non-party requesting documents that are or may be pertinent to the issues to be heard at the hearing of the matter. The issuance of a document subpoena is at the sole discretion of the Commissioner, and predicated upon a finding that the request sets forth as plainly as possible the documents that are sought and the purpose of the requested production. Absent extraordinary circumstances, a total of fifteen (15) separate document subpoenas is the maximum limit. Additional document subpoenas may issue only after a showing of extraordinary circumstances by the party making the requests.

4.5.2 Summons/Subpoena to Appear in Person; Rule 45 of the Mississippi Rules of Civil Procedure is considered instructive guidance to the parties, but it is not necessarily binding for the purposes of any matter before the Commissioner.

4.5.3 Enforcement by Commissioner; Unless otherwise prohibited by statute, the Commissioner shall have full authority to enforce any summons, subpoena or order that issues during the hearing process. The Commissioner may further request the Chancery Court in any county to assist with the enforcement of any such document.

4.5.4 Service of Process; All subpoenas, subpoenas duces tecum, summons or any other process issued in proceedings pending before the Commissioner shall extend to all parts of the state and may be served by any person authorized to serve process of courts of record in this state.

4.5.5 Costs borne by Requestor; A process server shall be entitled to collect appropriate fees for such service as allowed in the courts of this state, with all such costs to be borne by the party requesting the service of process.

4.6 Depositions of Witnesses; In any hearing proceeding before the Commissioner, the Department or a party may request the issuance of a subpoena requiring an individual to be deposed upon a showing of good faith need to take the deponent’s testimony under oath. If the Commissioner finds that a party’s request is well-taken, that the requested deposition will not adversely affect the deponent and is not being requested for any improper purpose, he/she may issue a subpoena requiring the attendance of the deponent at a date and time certain. Any deponent is entitled to be paid an attendance fee and/or travel costs related to the deposition as allowed in Rule 45 of the Mississippi Rules of Civil Procedure. All costs shall be borne by requesting party.

4.6.1 Limit on Depositions; Unless there is an extraordinary need established by a clear and convincing showing, a party shall be granted no more than five (5) depositions. A deposition shall be limited to no more than eight (8) hours and shall be conducted at a location that is reasonably convenient to the deponent and properly noticed to all other parties. The Commissioner has sole discretion to expand or limit the scope, content, location, environment, manner and decorum of any deposition requested by any party. The Commissioner may refuse to allow any such request or revoke a previously issued summons if the Commissioner determines that such action is necessary to prevent cumulative, repetitive or duplicative testimony, to avoid unnecessary delay or obstruction, or to prevent the harassment or embarrassment of a witness. No party shall be entitled to depose or require testimony at a deposition or at the Hearing from the Commissioner (current or former), the Hearing Counsel, or the Department’s attorney(s).

4.7 Attendance of Hearing; A witness may be summoned/subpoenaed to attend the Hearing in person for the purposes of giving live testimony before the Commissioner. A witness should be reimbursed for actual expenses incurred as a result of their attendance and the party requesting the issuance of the subpoena requiring attendance shall bear the cost of expenses such that the witness shall not incur losses as a result of compliance. A reasonable daily witness fee should also be provided to each subpoenaed witness, not to exceed the amount described in Rule 45 of the Mississippi Rules of Civil Procedure.

4.8 Exchange of Witness Lists, Exhibits; The Commissioner has sole discretion to require the parties to provide and/or exchange lists of witnesses that are likely to or may be called to provide live testimony at the Hearing and may require the same for any or all exhibits that a party plans to use as affirmative evidence at the Hearing. Evidence that may be submitted solely for the purpose of impeachment or rebuttal may be excluded from this requirement.

4.9 Taking of Evidence; The Commissioner and Hearing Counsel shall maintain full control over the taking of any evidence at the hearing and may limit the number of witnesses to be called, the topics to be discussed, the documents entered and all other manner of evidence in order to maintain order, maximize administrative economy and prevent duplicative, irrelevant, superfluous or improper submissions.

Since the Hearing will not be limited to strict rules of evidence, the Commissioner may consider any evidence he/she finds to be highly probative and has a strong indicia of reliability. As the fact-finder for the Hearing, the Commissioner is empowered to assess credibility, weigh conflicting evidence and draw factual inferences from the testimony and exhibits introduced by the parties. Additionally, as the fact-finder, the Commissioner may reject the subject statements as implausible, properly countered by other evidence, or otherwise not compelling.

4.10 Taking Notice; The Commissioner may take official notice of any generally accepted information or technical or scientific matter within the fields of expertise within the purview of the Department and of any other fact which may be judicially noticed by the courts of this state. The parties must be informed of any information, matters or facts so noticed and must be given a reasonable opportunity, on request, to refute such information, matters or facts by evidence or by written or oral presentation of authorities, the manner of such refutation to be determined by the Commissioner or Hearing Counsel.

4.11 Time Limit on Hearing; The Commissioner has the discretion to limit the number of days allowed for the Hearing. Absent a showing of extraordinary circumstances, no hearing shall be conducted for more than 40 hours of testimony or argument. The Commissioner has discretion in the scheduling of the Hearing days and may require all parties to comply with further time restrictions. Limits may be uniformly placed on all parties and/or witnesses. An opportunity for cross-examination of any live witness shall be provided to the party-opposite, subject to above limitations.

4.12 Failure to Appear at Hearing—Default; If the respondents fail to appear at the scheduled time and place set for the Hearing, the Commissioner may adjourn the Hearing and may thereafter proceed with the determination and final ruling based solely on the submitted Record. Failure to attend and present all defenses to the Commissioner the Hearing shall constitute waiver of the party’s ability to raise on appeal any issue that could have been raised during the Hearing Process.

4.13 Subsequent Submission of Further Written Legal Arguments/briefs; The Commissioner may direct a party to provide additional written submissions to complete or clarify legal or factual issues, following the conclusion of the live Hearing. The submission of additional documents shall be only at the direction of the Commissioner and shall serve to postpone the

“close” of the Hearing until after the parties’ submissions are complete. Documents that are intended to rebut testimony may likewise be submitted after the conclusion of live testimony, if directed by the Commissioner. Nothing will be accepted for consideration or entered upon the Record after the end of the Hearing, unless it is expressly allowed or directed by the Commissioner.

5 Miss. Admin. Code Pt. 3, R. 5.0 Rule 5.0

Hearing Record; The Hearing Record will consist of all transcripts and documents of related proceedings including all pre-hearing motion practice, all submitted documentation, exhibits and testimony admitted as part of the Record at the Hearing, any other papers filed by the parties, all pre-filed testimony and attached exhibits and any subsequently filed briefs or supplements that are directed by the Commissioner.

5 Miss. Admin. Code Pt. 3, R. 6.0 Rule 6.0

Attendance limited; Control of all attendees of the Hearing shall be vested in the discretion of Commissioner and may be restricted as needed to maintain order, while recognizing the need for transparency. The Commissioner shall further have discretion to limit the number of individuals attending on behalf of the same entity. The Commissioner may also take any necessary actions to prevent the unlawful disclosure of personal identifiers, confidential or proprietary information, or any other information that, if otherwise made available for public consumption could cause harm or injury.

5 Miss. Admin. Code Pt. 3, R. 7.0 Rule 7.0

Final Order of Commissioner; At the close of the Hearing (as determined by the Commissioner), the Commissioner shall, within no more than 60 business days, issue a written “Final Order” memorializing the conclusions of fact and/or law and any other determinations made by the Commissioner and based upon the Record. All parties and their representatives shall be provided with a copy of the Final Order in the typical manner and the Respondent(s) or their representatives shall further be provided the Final Order via hand-delivery or certified mail to the last known address on file with the Department. The Final Order shall be made public and enforced by the Commissioner unless expressly prohibited.

7.1 Standards of Proof; The Commissioner’s Final Order and the determinations contained therein shall be based on “clear and convincing” evidence. All other determinations made by the Commissioner and reduced to writing are subject to an “abuse of discretion” standard for the purposes of any appeal or court intervention.

7.2 Appeal of Final Order to Chancery Court; A Final Order may be appealed to the Chancery Court of Hinds County, Mississippi, First Judicial District, or any other court of competent jurisdiction as authorized by statute. An appeal shall in no way function to stay the effectiveness of the Final Order, absent express statutory authority allowing a stay or a proper order from a court of competent jurisdiction.

Source Authority: Money Transmitters Act §§ 75-15-1, et seq.; Insurance Premium Finance Law §§ 81-21-1, et seq.; Mississippi Pawnshop Act §§ 75-67-301, et seq.; Mississippi Title Pledge Act §§ 75-67-401, et seq.; Mississippi Check Cashers Act §§ 75-67-501, et seq.; Mississippi Debt Management Services Act §§ 81-22-1, et seq.; Credit Availability Act §§ 75-67-601 et seq.;

APPEAL OF DENIAL OF APPLICATION(S) FOR LICENSURE IN A REGULATED INDUSTRY; MANDATORY APPEAL DIRECTLY TO COMMISSIONER; ABBREVIATED HEARING PROCESS

Rule 8.0; In the absence of any express authority to the contrary, the following shall amend the general hearing process described above or elsewhere and provide a mandatory administrative appeal process for any applicant or licensee that is denied a license application or renewal application in writing by the Department. This Regulation is adopted for all regulated industries that do not expressly state an application denial appeal process in statute, and pursuant to the same statutory authorities delineated above and any subsequent statutory authority requiring the Department to consider applications and issue licenses to qualified applicants.

a) Following a denial of an application for license, the applicant must, within 10 business days of the receipt of the written denial from the Department, submit an appeal in writing to the Commissioner and request a hearing be held to appeal the denial of an application by the Department.

b) All above rules shall govern the hearing of the denial application, unless expressly revised herein below.

c) Absent a showing of extraordinary circumstances, the denial hearing shall be conducted in one day and shall last no longer than 5 hours. The applicant shall be allotted two (2) hours to present evidence and/or testimony in favor of its application. The Department shall thereafter be allotted two (2) hours to present its rebuttal in support of the denial of the application.

d) No deposition testimony shall be allowed with regard to a denial hearing. All witness testimony must be presented live at the hearing.

e) The Commissioner shall be allotted at least one (1) hour to conduct inquiry of the witnesses and/or parties.

f) A Final Order on the hearing of the denial of an application for licensure shall be published within no more than 30 days following the close of the Hearing.

g) Any Final Order that is entered by the Commissioner denying an application for any reason shall memorialize the findings of the Commissioner and the applicant may thereafter, within ten (10) days of the date of the Final Order, appeal to the Chancery Court of Hinds County, Mississippi, First Judicial District.

Source Authority: Money Transmitters Act §§ 75-15-1, et seq.; Insurance Premium Finance Law §§ 81-21-1, et seq.; Mississippi Pawnshop Act §§ 75-67-301, et seq.; Mississippi Title Pledge Act §§ 75-67-401, et seq.; Mississippi Check Cashers Act §§ 75-67-501, et seq.;

Mississippi Debt Management Services Act §§ 81-22-1, et seq.; Credit Availability Act §§ 75-67-601 et seq.; Small Loan Regulatory Law §§ 75-67-101, et seq.; Small Loan Privilege Tax Law §§ 75-67-201, et seq.; Motor Vehicle Sales Finance Law §§ 63-19-1, et seq.; Consumer Loan Broker Act §§ 81-19-1, et seq.

Part 4 Organizational Rules

5 Miss. Admin. Code Pt. 4, R. 1.1 Authority

This regulation is adopted as a rule to conform to the requirements of Section 25-43-2.104 of the Mississippi Code of 1972, Annotated as amended, regarding agency organization, method of operation, and where/how the public may obtain information.

History

• Source: Miss. Code Ann. § 25-43-2.104 (2005).

5 Miss. Admin. Code Pt. 4, R. 1.2 Authority

Authority of the Department of Banking and Consumer Finance to examine banking institutions. The Department of Banking and Consumer Finance was created and solely charged with the execution of all laws relating to corporations, carrying on a banking business in the State of Mississippi. The office of the Department of Banking and Consumer Finance shall be in the city of Jackson Mississippi, and the Secretary of State shall provide suitable quarters therefore.

Organizational Structure

1. Commissioner

The management, control and direction of the department shall be vested in the Commissioner of Banking and Consumer Finance, who shall be directly responsible for the proper functioning of the department. The commissioner shall be a banker who possesses not less than ten (10) consecutive years of active banking experience of which five (5) years' experience were performed in a major policy-making function as an executive officer, or shall be a person who possesses fifteen (15) years of active experience as a state or federal financial institutions examiner. The commissioner shall have been active in such major policy-making function or actively employed by the state or federal financial institutions regulatory authority within the previous five (5) years of his appointment. The commissioner shall be appointed by the Governor, with the advice and consent of the Senate, for a term of office of four (4) years, commencing on the day of appointment or on July 1 of the year in which the Governor is inaugurated, whichever comes first. The commissioner shall serve until his successor is appointed and qualified, but in no event shall he serve past the July 1 occurring after the end of the term of the Governor who appointed him, unless he shall be reappointed by the new Governor. If, for any cause, a vacancy occurs in the office of the commissioner, the Governor shall make the appointment for the unexpired term.

The commissioner shall be of good moral character, thoroughly understanding the theory and practice of banking, and must be a qualified elector of the State of Mississippi. The commissioner shall not be an officer, director or employee of any banking corporation during his entire term as commissioner, effective from the time of his appointment.

The commissioner may be removed by the Governor for good cause, but only after notice and a hearing.

2. Deputy commissioner

The commissioner shall appoint a deputy commissioner, with the approval of the board, who shall perform such duties as may be required of him by the commissioner. If the office of the commissioner is vacant or if the commissioner is absent or unable to act, the deputy commissioner shall be the acting commissioner. The deputy commissioner shall have five (5) years' experience as a bank officer or employee, or three (3) years' experience as a bank president or managing officer of a bank, or five (5) years' experience as a state or federal bank examiner.

Copies of papers in the office of the department may be certified by the deputy commissioner, with the seal of the department affixed thereto, with like effect as though certified by the commissioner. The commissioner shall be responsible for all acts of the deputy commissioner, and may dismiss him at his pleasure, with the reasons therefore to be reported to the board within ten (10) days of the dismissal.

3. Examiners

The commissioner shall employ such assistants, to be known as state banking examiners, as may be necessary for the efficient operation of the department, to aid him in the discharge of the duties and responsibilities imposed upon him by law. The minimum qualifications for such employment shall be possession of a bachelor's degree from a recognized college or university, or three (3) years' experience as a bank examiner, bank officer or employee, small loan company officer or employee, or other consumer finance officer or employee and such other qualifications set out for banking examiners in the plan for the state personnel system. However, notwithstanding any provisions to the contrary, any person who is serving as a state banking examiner in the former Department of Bank Supervision on March 21, 1980, shall be qualified to serve as a state banking examiner in the department. The state bank examiners shall not, directly or indirectly, be connected with any banking business in Mississippi or elsewhere during their respective terms of office, after four (4) months from the time of qualifying as an examiner.

The commissioner may employ such additional employees as may be necessary to carry out those duties and responsibilities imposed upon him by law, who shall possess such qualifications set out for their particular position in the plan for the state personnel system.

No examiner or other employee related by consanguinity or affinity to the commissioner within the third degree computed according to the civil law shall be employed by him.

The examiners and all other persons employed by the commissioner under the provisions of this section shall be compensated as provided in the compensation plan for the state personnel system, unless otherwise provided by law. The compensation for such employees shall be payable monthly out of the funds of the department.

The commissioner shall be responsible for all acts of the examiners and the other employees. Any examiner or other employee may be dismissed only in accordance with the laws, rules and regulations applicable to the state personnel system.

As a condition of employment with the department, the commissioner shall require all employees and applicants for employment with the department to be fingerprinted to determine their suitability for employment as examiners or assistants as needed. If no disqualifying record is identified at the state level, the Department of Public Safety shall forward the fingerprints to the Federal Bureau of Investigation (FBI) for a national criminal history record check. The Department of Banking and Consumer Finance shall pay all of the costs in connection with the criminal history record check procedure. These record checks shall not be used by the Department of Banking and Consumer Finance for any purpose other than to determine suitability for employment with the department.

History

• Source: Miss. Code Ann. § 81-1-59 (2001); § 81-1-61(2001); § 81-1-63(2001); § 81-1-65 (2007).

5 Miss. Admin. Code Pt. 4, R. 1.3 Departmental responsibility

1. Bank Examinations. It shall be the duty of the commissioner to apportion the work of examining banks among the examiners in such a way that each bank, under the provisions of law, shall be examined at least once during an eighteen-month period and more often, if necessary, in the discretion of the commissioner, at irregular intervals and without prior notice. However, neither the commissioner nor any examiner shall examine one (1) bank twice in succession unless the commissioner, for cause, so determines. In the event the commissioner's office, because of work load or other good sufficient cause, is unable to conduct an examination of a bank as provided for in this section, the commissioner is hereby authorized to accept the examination of any state bank performed by the Federal Deposit Insurance Corporation or the Federal Reserve Bank in lieu of the examination provided for in this section. However, in no case shall the commissioner be authorized to accept any such examination of any state bank performed by either the Federal Deposit Insurance Corporation or the Federal Reserve Bank for any two (2) consecutive eighteen- month periods.

2. Credit Union Examinations. Credit unions shall be subject to the supervision of the Department of Banking and Consumer Finance. The Commissioner of Banking and Consumer Finance is empowered with authority to promulgate from time to time rules and regulations concerning the operation of credit unions; provided that such rules and regulations shall be consistent with and in conformity with the laws of the State of Mississippi. Credit unions shall make a report of condition thereto at least annually on blank forms to be supplied by said department. Credit unions shall transmit to the department such call reports within a time limitation established by the commissioner; however, such time limitation cannot exceed that set by the National Credit Union Administration. For any failure or delay in furnishing this report, the credit union shall be subject to an administrative fine, which may be imposed by the commissioner, of Fifty Dollars ($ 50.00) a day for each day while in such default. Reports shall be verified by both the chief elected official and the treasurer and additional reports may be required by the said department.

3. Trust Companies. Commissioner shall have supervision over authorized trust institutions

and shall examine.

a. For the purposes of this article, the term "authorized trust institution" means any state trust company, trust office or representative trust office.

b. Every authorized trust institution shall be under the supervision of the commissioner. The commissioner shall execute and enforce through the department and such other agents as are now or may hereafter be created or appointed, all laws which are now or may hereafter be enacted relating to authorized trust institutions. For the more complete and thorough enforcement of the provisions of this chapter, the commissioner may promulgate such rules or regulations not inconsistent with the provisions of the chapter, as may, in its opinion, be necessary to carry out the provisions of the laws relating to authorized trust institutions and as may be further necessary to insure safe and conservative management of an authorized trust institution under its supervision taking into consideration the appropriate interest of the creditors, stockholders, participants and the public in their relations with such authorized trust institutions. All authorized trust institutions doing business under the provisions of this chapter shall conduct their business in a manner consistent with all laws relating to authorized trust institutions, and all rules, regulations, and instructions that may be promulgated or issued by the commissioner.

c. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether companies or offices are subject to the provisions of this article, may examine authorized trust institutions that have a charter, license or registration under this chapter and companies or offices that are reasonably suspected by the commissioner of conducting business that requires a charter, license or registration under this chapter, including all relevant books, records and papers employed by those companies or offices in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those companies or offices, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a charter, license or registration as required under this chapter.

4. Consumer Loan Broker Activities. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

5. Insurance Premium Finance Companies. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine

persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

6. Money Transmitter Activities. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required under this chapter.

7. Debt Management Activities. The commissioner may exercise the following powers and functions:

a. Complaint investigation. The commissioner may receive and act on complaints, take action to obtain voluntary compliance with this chapter or refer cases to the Attorney General, who shall appear for and represent the commissioner in court. b. Rules. The commissioner may adopt reasonable administrative regulations, not inconsistent with law, for the enforcement of this chapter. c. Examination of licensees. To assure compliance with the provisions of this chapter, the department may examine the books and records of any licensee without notice during normal business hours. The commissioner shall charge the licensee an examination fee in an amount not less than Three Hundred Dollars ($ 300.00) nor more than Six Hundred Dollars ($ 600.00) for each office or location within the State of Mississippi, plus any actual expenses incurred while examining the licensee's records or books that are located outside the State of Mississippi. However, in no event shall a licensee be examined more than once in a two-year period unless for cause shown based upon consumer complaint and/or other exigent reasons as determined by the commissioner. d. Examination of nonlicensees. The department, its designated officers and employees, or its duly authorized representatives, for the purposes of discovering violations of this chapter and for the purpose of determining whether any person or individual reasonably suspected by the commissioner of conducting business that requires a license under this chapter, may investigate those persons and individuals and examine all relevant books, records and papers employed by those persons or individuals in the transaction of business, and may summon witnesses and examine them under oath concerning matters as to the business of those persons, or other such matters as may be relevant to the discovery of violations of this chapter,

including, without limitation, the conduct of business without a license as required under this chapter.

8. Small Loan Companies. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

9. Pawn Shops. The Commissioner of Banking shall develop and provide any necessary forms to carry out the provisions of this article. To assure compliance with the provisions of this article, the commissioner may examine the pawn books and records of any licensee without notice during normal business hours.

Any expenses incurred for such examinations are included in the licensee's application fee; however, the commissioner may charge the licensee any actual expenses incurred while examining the licensee's pawn records or books which are located outside of the State of Mississippi.

10. Title Pledge Activity. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business that requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

11. Check Cashers. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business which requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limiting the conduct of business without a license as required under this article.

12. Motor Vehicle Sales. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this chapter and for the purpose of determining whether persons are subject to the provisions of this chapter, may examine persons licensed under this chapter and persons reasonably suspected by the commissioner of conducting business that requires a license under this chapter, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this chapter, including without limitation the conduct of business without a license as required by this chapter.

13. Credit Availability Activities. The commissioner, or his duly authorized representative, for the purpose of discovering violations of this article and for the purpose of determining whether persons are subject to the provisions of this article, may examine persons licensed under this article and persons reasonably suspected by the commissioner of conducting business which requires a license under this article, including all relevant books, records and papers employed by those persons in the transaction of their business, and may summon witnesses and examine them under oath concerning matters relating to the business of those persons, or such other matters as may be relevant to the discovery of violations of this article, including without limitation the conduct of business without a license as required under this article.

14. Mortgage Companies. The department, its designated officers and employees, or its duly authorized representatives, for the purposes of discovering violations of this chapter and for the purpose of determining whether any person or individual reasonably suspected by the commissioner of conducting business that requires a license under this chapter, may investigate those persons and individuals and examine all relevant books, records and papers employed by those persons or individuals in the transaction of business, and may summon witnesses and examine them under oath concerning matters as to the business of those persons, or other such matters as may be relevant to the discovery of violations of this chapter including, without limitation, the conduct of business without a license as required under this chapter.

History

• Source: Miss. Code Ann. § 81-1-81(1) (2016); § 81-13-15 (2001); § 81-27-7.001 (2007); § 81- 19-18 (2000); § 81-21-10 (2000); § 75-15-32 (2000); § 81-22-17 (2019); § 75-67-244 (2000); § 75-67-341 (2001); § 75-67-447 (2000); § 75-67-523 (2013); § 63-19-56 (2004); § 75-67-625 (2018); § 81-18-21(3) (Rev. 2020).

5 Miss. Admin. Code Pt. 4, R. 1.15 Public Access Information

The Department of Banking and Consumer Finance may be contacted to participate in formal and informal proceedings and related rule-making matters by mail, e-mail, or telephone, or in person during regular business hours utilizing the following contact information:

Mississippi Department of Banking and Consumer Finance Post Office Box 12129 Jackson, MS 39236-2129

Phone (601) 321-6901

Additional public information regarding the DBCF and its supervised or regulated entities may be found at the DBCF website: www.dbcf.ms.gov.

History

• Source: Miss. Code Ann. §§ 25-43-2.104; 25-43-2.105 (2005).

Chapter 2 Rulemaking Oral Proceedings Rule 2.1 Authority. These rules were promulgated pursuant to Mississippi Code Ann, § 25-43- 3.104(2)(d) of the Administrative Procedures Law, and apply to all oral proceedings held for the purpose of providing the public with an opportunity to make oral presentations on proposed new rules and amendments to rules before the Department of Banking and Consumer Finance (DBCF) pursuant to the Administrative Procedures Law.

5 Miss. Admin. Code Pt. 4, R. 2.2 Scheduling oral proceedings

Where an oral proceeding has not previously been held or scheduled, the DBCF will conduct an oral proceeding on a proposed rule or amendment if requested by a political subdivision, an agency or ten (10) persons in writing within twenty (20) days after the filing of the notice of the proposed rule.

History

• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).

5 Miss. Admin. Code Pt. 4, R. 2.3 Format of request

Each request must be printed or typewritten, or must be in legible handwriting. Each request must be submitted on standard business letter-size paper (8-1/2 inches by 11 inches). The request may be in the form of a letter addressed to DBCF or as a pleading filed with a court. Each request must include the full name, telephone number, and mailing address of the requestor(s). All requests shall be signed by the person filing the request, unless represented by an attorney, in which case the attorney may sign the request.

History

• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).

5 Miss. Admin. Code Pt. 4, R. 2.4 Notice of Oral Proceeding

The date, time and place of all oral proceedings shall be filed with the Secretary of State’s office and mailed to each requestor. The oral proceedings will be scheduled no earlier than twenty (20) days from the filing of this information with the Secretary of State. The Agency Head or designee, who is familiar with the substance of the proposed rule, shall preside at the oral proceeding on a proposed rule.

Rule 2.5. Public Participation Guidelines. Public participation shall be permitted at oral proceedings in accordance with the following: 1. At an oral proceeding on a proposed rule, persons may make oral statements and make documentary and physical submissions, which may include data, views, comments or arguments concerning the proposed rule.

2. Persons wishing to make oral presentations at such a proceeding shall notify the DBCF at least three business days prior to the proceeding and indicate the general subject of their presentations. The presiding officer in his or her discretion may allow individuals to participate that have not previously contacted the DBCF. 3. At the proceeding, those who participate shall indicate their names and addresses, identify any persons or organizations they may represent, and provide any other information relating to their participation deemed appropriate by the presiding officer. 4. The presiding officer may place time limitations on individual oral presentations when necessary to assure the orderly and expeditious conduct of the oral proceeding. To encourage joint oral presentations and to avoid repetition, additional time may be provided for persons whose presentations represent the views of other individuals as well as their own views. 5. Persons making oral presentations are encouraged to avoid restating matters that have already been submitted in writing. Written materials may, however, may be submitted at the oral proceeding. 6. There shall be no interruption of a participant who has been given the floor by the presiding officer, except that the presiding officer may in his or her discretion interrupt or end the partisan’s time where the orderly conduct of the proceeding so requires.

History

• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).
• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).

5 Miss. Admin. Code Pt. 4, R. 2.6 Conduct of Oral Proceeding

The presiding officer shall have authority to conduct the proceeding in his or her discretion for the orderly conduct of the proceeding. The presiding officer shall (i) call proceeding to order; (ii) give a brief synopsis of the proposed rule, a statement of the statutory authority for the proposed rule, and the reasons provided by the Department for the proposed rule; (ii) call on those individuals who have contacted the Department about speaking on or against the proposed rule; (iii) allow for rebuttal statements following all participants’ comments; (iv) adjourn the proceeding.

The presiding officer, where time permits and to facilitate the exchange of information, may open the floor to questions or general discussion. The presiding officer may question participants and permit the questioning of participants by other participants about any matter relating to that rule- making proceeding, including any prior written submissions made by those participants in that proceeding; but no participant shall be required to answer any question.

History

• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).

5 Miss. Admin. Code Pt. 4, R. 2.7 Submissions and Records

Physical and documentary submissions presented by participants in an oral proceeding shall be submitted to the presiding officer. Such submissions become the property of the DBCF, part of the rulemaking record, and are subject to the DBCF’s public records request procedure. The DBCF may record oral proceedings by stenographic or electronic means.

History

• Source: Miss. Code Ann. § 25-43-2.105 (Rev. 2005).

Chapter 3 Request for Declaratory Opinions Rule 3.1 Authority. This regulation to conform with requirements of Section 25-43-2.105 et seq. of the Mississippi Code of 1972, as amended

5 Miss. Admin. Code Pt. 4, R. 3.2 Requests for Opinions

Any person with a substantial interest in the subject matter may make a request to the DBCF for a declaratory opinion by following the specified procedures. The term ‘substantial interest in the subject matter’ as used in this chapter means: that a party is directly affected by the DBCF’s administration of the laws within the DBCF’s primary jurisdiction. The term ‘primary jurisdiction of the Agency’ as used in this chapter means the DBCF has a constitutional or statutory grant of authority in the subject matter at issue.

Correspondence should be submitted to the following address:

Mississippi Department of Banking and Consumer Finance Post Office Box 12129 Jackson, MS 39236-2129 Phone (601) 321-6901

Additional public information regarding the DBCF and its supervised or regulated entities may be found at the DBCF website: www.dbcf.ms.gov.

History

• Source: Miss. Code Ann. §§ 25-43-2.104; 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.3 Subjects which may be addressed

The DBCF will issue declaratory opinions regarding the application of specified facts to: (1) a statute administered or enforceable by the DBCF, (2) a rule promulgated by the DBCF, or (3) an order issued by the DBCF.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.4 Circumstances in which Declaratory Opinions will not be issued

The DBCF may, for good cause, refuse to issue a declaratory opinion. The circumstances in which declaratory opinions will not be issued include, but are not necessarily limited to: 1. The matter is outside the primary jurisdiction of the DBCF; 2. Lack of clarity concerning the question presented; 3. There is pending or anticipated litigation, administrative action, or other adjudication which may either answer the question presented by the request or otherwise make an answer unnecessary; 4. The statute, rule, or order on which a declaratory opinion is sought is clear and not in need of interpretation to answer the question presented by the request; 5. The facts presented in the request are not sufficient to answer the question presented; 6. The request fails to contain information required by these rules or the requestor failed to follow the procedure set forth in these rules;

7. The request seeks to resolve issues which have become moot, or are abstract or hypothetical such that the requestor is not substantially affected by the rule, statute or order on which a declaratory opinion is sought; 8. No controversy exists concerning the issue as the requestor is not faced with existing facts or those certain to arise which raise a question concerning the application of the statute, rule, or order; 9. The question presented by the request concerns the legal validity of a statute, rule or order; 10. The request is not based upon facts calculated to aid in the planning of future conduct, but is, instead, based on past conduct in an effort to establish the effect of that conduct; 11. No clear answer is determinable; 12. The question presented by the request involves the application of a criminal statute or sets forth facts which may constitute a crime; 13. The answer to the question presented would require the disclosure of information which is privileged or otherwise protected by law from disclosure; 14. The question is currently the subject of an Attorney General's opinion request; or, 15. The question has been answered by an Attorney General's opinion.

Additionally, a declaratory opinion will not be issued where a similar request is pending before this agency, or any other agency or a proceeding is pending on the same subject matter before any agency, administrative or judicial tribunal, or where such an opinion would constitute the unauthorized practice of law.

A declaratory opinion will not be issued if it may adversely affect the interests of the State, the DBCF, or any of their officers or employees in any litigation which is pending or may reasonably be expected to arise. Where a request for a declaratory opinion involves a question of law, the DBCF may refer the matter to the State Attorney General.

Moreover, a declaratory opinion will not be issued where the question involves eligibility for a license, permit, certificate or other approval by the DBCF or some other agency and there is a statutory or regulatory application process by which eligibility for said license, permit, or certificate or other approval may be determined.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.5 Where to send requests

All requests must be mailed or delivered to the DBCF. The request and its envelope shall clearly state that it is a request for a declaratory opinion. No oral and telephone requests will be accepted for official opinions.

Submit request to the following address:

Mississippi Department of Banking and Consumer Finance Post Office Box 12129 Jackson, MS 39236-2129

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.6 Requestor information

Each request must include the full name, telephone number, and mailing address of the requestor. All requests shall be signed by the person filing the request, unless represented by an attorney, in which case the attorney may sign the request. The signing party shall attest that the request complies with the requirements set forth in these rules, including but not limited to a full, complete, and accurate statement of relevant facts and that there are no related proceedings pending before any agency, administrative or judicial tribunal. A request must be limited to a single transaction or occurrence.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.7 Request content

Each request must contain the following:

1. A clear identification of the statute or rule at issue 2. The question for the declaratory opinion 3. A clear and concise statement of all facts relevant to the question presented 4. The identify of all other known persons involved in or impacted by the factual situation causing the request including their relationship to the facts, name, mailing address and telephone number 5. Statement sufficient to show that the person seeking relief has a substantial interest in the subject matter.

The terms of the proposed opinion suggested by the requestor may be submitted with the request or may be requested by the agency;

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.8 Memorandum of Authorities

A request may contain an argument by the requestor in support of the terms of the proposed opinion suggested by the requestor. The argument may be submitted in the form of a memorandum of authorities, containing a full discussion of the reasons and any legal authorities, in support of such position of the requestor. The agency may request that the argument and memorandum of authorities be submitted by any interested party.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.9 Agency Response

Written agency opinions prepared in response to this rule may be issued by the Commissioner, or with her authorization, by the Deputy Commissioner, or by the director of the division responsible for implementation of the statute, rule or order. Within forty-five (45) days after the receipt of a request for a declaratory opinion which complies with the requirements of these rules, the DBCF shall, in writing:

1. issue an opinion declaring the applicability of the specified statute, rule, or order to the specified circumstances; 2. decline to issue a declaratory opinion, stating the reasons for its action; or 3. agree to issue a declaratory opinion or a written statement declining to issue a

declaratory opinion, by a specified time but no later than ninety (90) days after receipt of the written request.

The forty-five (45) day period shall begin on the first State of Mississippi business day that the request is received by the DBCF.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.10 Opinion not final for thirty days

A declaratory opinion shall not become final until the expiration of sixty (60) days after the issuance of the opinion. Prior to the expiration of thirty (30) days, the DBCF may, in its discretion, withdraw or amend the declaratory opinion for any reason which is not arbitrary or capricious. Reasons for withdrawing or amending an opinion include, but are not limited to, a determination that the request failed to meet the requirements of these rules or that the opinion issued contains a legal or factual error. Each opinion must state the date when the opinion is final.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.11 Procedure After Request for Declaratory Opinion Received

The DBCF may give notice to any person that a declaratory opinion has been requested and may receive and consider data, facts, arguments and opinions from persons other than the requestor.

The requestor, or his attorney, shall append to the request for a declaratory opinion a listing of all persons, with addresses, known to the requestor who may have an interest in the declaratory opinion sought to be issued, and shall mail a copy of the request to all such persons. The requestor or his attorney shall certify that a copy of the request was mailed to all such persons together with this statement: ‘Should you wish to participate in the proceedings of this request, or receive notice of such proceedings or the declaratory opinion issued as a result of this request, you should contact the DBCF within twenty days of the date of this request.’

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.12 Hearings at the Discretion of the Agency

Provision for Hearing. If the DBCF in its sole discretion deems a hearing necessary or helpful in determining any issue concerning a request for a declaratory opinion, the DBCF may schedule such a hearing. Notice of the hearing shall be given to all interested parties unless waived. Notice mailed by first class mail 7 calendar days prior to the hearing shall be deemed appropriate.

The procedure for conducting a hearing, including but not limited to the manner of presentation, the time for presentation, and whether and how evidence may be taken, shall be within the discretion of the DBCF.

The DBCF will allow the requestor to participate in any hearing. The DBCF may allow any other persons or entities to participate in the hearing.

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 3.13 Public availability of requests and declaratory opinions

Declaratory opinions and requests for declaratory opinions shall be available for public inspection and copying at the expense of the viewer during normal business hours. All declaratory opinions and requests shall be indexed by name and subject. Declaratory opinions and requests which contain information which is confidential or exempt from disclosure under the Mississippi Public Records Act or other laws shall be exempt from this requirement and shall remain confidential.

Part 4 Chapter 4, Public Records Request Regulations

Mississippi Public Records Act Source Authority: Miss. Code Ann. § 25-61-1, et seq. (1998).

History

• Source: Miss. Code Ann. § 25-43-2.105 (2005).

5 Miss. Admin. Code Pt. 4, R. 4.4.1 General Requests for Inspection and/or Reproduction of Records pursuant to Mississippi Public Records Act

Each person has a right to inspect and reproduce any public record on file in the offices of the Mississippi Department of Banking and Consumer Finance (“DBCF”), except those records expressly exempted by statute (including but not limited to § 81-1-89 of Mississippi Code of 1972) or DBCF rule. This regulation is intended to provide general guidelines for requests to view or reproduce public records; it is not intended to replace any existing procedure for such requests specified in DBCF Regulations in Title 5, Part 5 pertaining to the State Board of Banking Review.

It is the general policy of DBCF to neither confirm nor deny any ongoing investigation.

The public records policy of the DBCF has been adopted in accordance with the Mississippi Public Records Act of 1983, Section 25-61-1, et seq, Miss. Code Ann. (1972). All records and portions of records not exempt from disclosure will be made available in accordance with these rules.

Rule 4.4.2: Definitions.

The following terms have been defined for purposes of this policy. Public Record: A public record shall mean any book, record, paper, account, letter, map, photograph, film, card, tape, recording or reproduction thereof, and any other documentary material, regardless of physical form or characteristic, having been used, being in use or prepared, possessed or retained for use in the conduct, transaction or performance of any business, transaction work, duty or function of the DBCF, or required to be maintained by the DBCF. Non-exempt Record: A non-exempt record is that part of a public record which does not fall under one of the exceptions to or exemptions from disclosure in the Public Records Act.

Identifiable Record: A record is identifiable if a reasonably specific description of the record has been given, such as the date of the record, the subject matter, division or person involved, etc. which will permit location or retrieval of the record. Working Day: A working day is any day other than a weekend, state holiday, or other day on which the DBCF is authorized to be closed or all the employees of the office are authorized to be absent. Incident Report means a narrative description, if such narrative description exists and if such narrative description does not contain investigative information, of an alleged offense, and at a minimum shall include the name and identification of each person charged with and arrested for the alleged offense, the time, date and location of the alleged offense, and the property involved, to the extent this information is known. Investigative Report means records of a law enforcement agency containing information beyond the scope of the matters contained in an incident report, and generally will include, but not be limited to, the following matters if beyond the scope of the matters contained in an incident report: (i) Records that are compiled in the process of detecting and investigating any unlawful activity or alleged unlawful activity, the disclosure of which would harm the investigation which may include crime scene reports and demonstrative evidence; (ii) Records that would reveal the identity of informants and/or witnesses; (iii) Records that would prematurely release information that would impede the public body’s enforcement, investigative or detection efforts; (iv) Records that would disclose investigatory techniques and/or results of investigative techniques; (v) Records that would deprive a person of a right to a fair trial or an impartial adjudication; (vi) Records that would endanger the life or safety of a public official or law enforcement personnel, or confidential informants or witnesses; (vii) Records pertaining to quality control or PEER review activities; or (viii) Records that would impede or jeopardize a prosecutor’s ability to prosecute the alleged offense.

Rule 4.4.3: Availability of Records.

Access to all non-exempt records of the DBCF that have been properly requested, deemed subject to disclosure under the Public Records Act, and for which applicable cost payment has been made will be allowed at a scheduled time during regular business hours (8:00 to 5:00 on

working days). These records will be made available for inspection and/or copying. If any public record which is held to be exempt from disclosure, as designated below, contains material which is not exempt, the DBCF shall separate the exempt material and make the non-exempt material available for examination and/or copying. The Commissioner or his designee has the authority to specify the mode, manner, time and place of access.

Rule 4.4.4: Procedures for Handling Public Records Requests. All requests to examine, copy or obtain public records, shall be in writing utilizing the standard Request for Public Records form, a copy of which is attached hereto as Exhibit A to these rules and is provided at www.dbcf.ms.gov. The request must identify the records, with particularity, give the name, mailing address, email address and telephone number of the requesting agency or individual, and must be signed by the requesting party. This requirement may be waived on a case by case basis by the Commissioner or his designee to facilitate the orderly and timely release of the information. Requests must be submitted by U.S. Mail to the agency’s designated Compliance Officer, Richard Rogers, at Post Office Box 12129, Jackson, Mississippi 39326-2129. An emailed or faxed request does not satisfy the written request requirements. The Office shall respond to the request in writing within 7 working days from the date of request. If the records will be disclosed, the Office will give an estimate of the total cost, if any, for compliance with the request. If the estimate is agreeable to the requestor, the DBCF will produce the records requested no later than 14 working days from the date the request and payment are received, or as mutually agreed upon by the parties. Payments must be made by money order, or cashier’s check. Denials will be handled pursuant to Rule 4.4.8.

Rule 4.4.5: Fees.

Any person desiring copies of public records as defined in the Public Records Act, shall be entitled to obtain mechanically reproduced copies at a charge of fifteen cents ($.15) per page, which represents the actual cost of such reproduction. The costs for searching, reviewing, duplicating or separating of non-exempt material from documents, etc., containing exempt material may be charged in addition to a mechanical reproduction charge of fifteen cents ($.15) per page. The charge for the hours shall be based upon the hourly salary of the lowest paid employee of the DBCF qualified and available to do the job. Mailing costs calculated at the applicable United States Postal Service rates shall be charged where appropriate. The cost of mailing a notice to third parties via certified mail, return receipt requested, shall be charged to persons requesting the public records.

Rule 4.4.6: Records Furnished by Third Parties Containing Trade Secrets, Confidential Commercial or Financial Information.

Records furnished to the DBCF by third parties, which may contain trade secrets or confidential commercial or financial information, will not be released until reasonable notice to the third parties has been given. For the purpose of providing advance notice to submitters of trade secret or confidential commercial or financial information, thirty (30) days from the submitter’s receipt of written notice shall be deemed a reasonable time for the disclosure of the requested records in the absence of a court order to the contrary.

Rule 4.4.7: Exempt Records.

Any record expressly exempt from the Public Records Act or any record specifically declared to be exempt, confidential, or privileged by any other Mississippi statute, constitutional provision, or judicial order or directive, shall not be subject to inspection and copying. Those records which are specifically exempt by law and which fall within the jurisdiction of the DBCF include, but are not limited to, the following:  Any reports of examinations or investigations, including all information obtained during the course of such examinations and investigations, conducted pursuant to any statutory authority of the DBCF (Miss. Code Ann. §§ 81-1-89(1), 81-18-21(8), and 25-61-11);  Investigative records (Miss. Code Ann. § 25-61-12(2));  Personnel records and applications for employment, except those which may be released to the person who made the application or with the prior written consent of the person who made the application. (Miss. Code Ann. § 25-1-100(1));  Test questions and answers which are to be used in employment examinations (Miss. Code Ann. § (25-1-100(2));  Letters of recommendation respecting any application for employment (Miss. Code Ann. § (25-1-100(3));  Records which represent and constitute the work product of any attorney and which are related to litigation initiated by or against the DBCF or in anticipation of prospective litigation, including all communications between such attorney made in the course of an attorney/client relationship (Miss. Code Ann. § (25-1-102));  All communications made in the course of an attorney-client relationship (Miss. Code Ann. §§ 25-1-102; 26-61-11; AG Opinion No. 2004-0170);  Appraisal information which concerns the sale or purchase of real or personal property for public purposes prior to public announcement of the purchase or sale, where the release of

such records would have a detrimental effect on such sale or purchase (Miss. Code Ann. § (31-1-27);  Any constitutional law, state or federal statutory law, or decision of a court of this state or the United States that declares a public record to be confidential or privileged, or provides that a public record shall be exempt from the Mississippi Public Records Act (Miss. Code Ann. § (25-61-11).

History

• Source: Miss. Code Ann.§§ 26-61-1.
• Source: Miss. Code Ann. § 25-61-3.
• Source: Miss. Code Ann. § 25-61-5; Miss. Ethics Comm. Model Public Records Rule 4.5(2).
• Source: Miss. Code Ann. § 26-61-5; Miss. Ethics Comm. Model Public Records Rule 3.6.
• Source: Miss. Code Ann. § 26-61-7; Miss. Ethics Comm. Model Public Records Rule 8.
• Source: Miss. Code Ann. § 26-61-9.
• Source: Miss. Code Ann. § 26-61-11.

5 Miss. Admin. Code Pt. 4, R. 4.4.8 Denials

Denials shall contain the specific reasons for the denial. Copies of all denials shall be maintained on file by the DBCF for not less than three years from the date denial is made. Petition for Internal Administrative Review of Denial: Any person who objects to the initial denial or partial denial of a records request may, within ten (10) business days of the date of such denial, petition for a review of that decision. The petition must be submitted in writing, via U.S. Mail, to the agency’s designated Compliance Officer, Richard Rogers, at Post Office Box 12129, Jackson, Mississippi 39236-2129. An emailed or faxed petition does not satisfy the written request requirement. Consideration of Petition for Review: The Compliance Officer will provide the petition and any other relevant information to the Commissioner who will either confirm or reverse the denial. Review by the Ethics Commission. Pursuant to Miss. Code Ann. § 25-61-13, if DBCF denies a requestor access to public records, the requestor may ask the Ethics Commission to review the matter. The Ethics Commission has adopted rules on such requests. They may be found at www.ethics.state.ms.us.

Judicial review. Any person whose request for public records was denied may institute a suit in the chancery court of Hinds County, seeking to reverse the denial, as set forth in Miss. Code Ann. § 25-61-13.

REQUEST FOR PUBLIC RECORDS OF THE DEPARTMENT OF BANKING AND CONSUMER FINANCE (Please note that requests for records of other state or local agencies must be directed to those agencies.)

Date of Request: _____________________________________________________

Person Requesting: _____________________________________________________

Representing: _________________________________________________________

Street/Mailing Address: __________________________________________________

City, State, Zip: ________________________________________________________

Telephone: ______________________ Email Address: ________________________

Documents Requested (Please be as clear and concise as possible): ______________ ______________________________________________________________________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________

Review Requested: ______Personally Inspect _______________Copy of Material

Electronic Copy of Material (if available): ________

Further Instructions: ____________________________________________________________ ______________________________________________________________________________

Requestor’s Signature: __________________________________________________

Please submit this request via U.S. Mail, postage prepaid, to the following (an emailed or faxed request does not satisfy the written request requirements):

Department of Banking and Consumer Finance ATTN: Richard Rogers, Compliance Officer Post Office Box 12129 Jackson, MS 39236-2129

Note: Actual costs of gathering, reviewing, and reproducing requested materials will be the responsibility of the requestor. Pursuant to Section 25-61-7 of the Mississippi Code, these costs must be paid in advance. If you do not receive a response from our office within seven business days of submitting your request, please contact our office to confirm that we have received your request.

History

• Source: Miss. Code Ann.§§ 26-61-5(3) and 25-61-13; Miss. Ethics Comm. Model Public Records Rule 9.

Part 5 Part 5: State Board of Banking Review; Official Procedures (Miss. Code Ann.§81-3-12(5))

5 Miss. Admin. Code Pt. 5 Part 5: State Board of Banking Review; Official Procedures (Miss. Code Ann.§81-3-12(5))

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TITLE 5: Banking and Consumer Finance PART 5: STATE BOARD OF BANKING REVIEW; OFFICIAL PROCEDURES ( MISS. CODE ANN. §81-3-12(5)) PUBLIC HEARINGS: APPLICATION FOR NEW BANK CHARTERS (MISS. CODE ANN. §81- 3- 13(1)); APPLICATION FOR BANK CONVERSION (MISS. CODE ANN. § 81-5- 85); PROTESTED BRANCH BANK APPLICATIONS (MISS. CODE ANN. § 81-7- 1(4)). BOARD APPROVAL OF CERTAIN ACTIONS WITHOUT PUBLIC HEARING (e.g. M ISS. CODE ANN. § 81-1- 63) (Revised and Adopted: October 14, 2014.) A. Public Hearing; Nature of Proceeding The purpose of a public hearing before the Mississippi State Board of Banking Review (the “Board”) is to obtain clarification of the factual issues concerning an application made to the Mississippi Department of Banking and Consumer Finance (the “Department”). A hearing is neither an adversarial proceeding, nor a forum for legal arguments. A public hearing is intended to allow the Board to gather information concerning an application in order to acquire sufficient information and assist the Board in rendering a decision. These procedures are intended to afford any and all interested parties a full and adequate opportunity to present testimony or additional materials in support of their positions. B. Quorum; Tie-breaking The Board shall take roll and be deemed to have a quorum and therefore authority to act as the Board should at least half or a majority of the sitting members be present at the hearing. In the event of a tie among the voting members of the Board as to any issue, the Chairperson (or member appointed to act in the Chairperson’s stead) shall break the tie. C. Notice of Public Hearing As required by statute, notice of a public hearing shall be given to each Board Member at least ten (10) days prior to the date of the scheduled hearing. Any and all other persons that have expressly stated to the Department an intention to attend or appear at the public hearing shall likewise be given written notice equal to that afforded the Board Members. Any and all other interested persons, and the public at-large, shall be afforded equal notice of the public hearing by publication of a notice of hearing in a newspaper of general circulation within the State. Notice by publication may also be made in a local newspaper that has general circulation within a particular county or geographical area that could be affected by the application at issue. D. Notification of Attendance

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Within ten (10) days of the date of the Notice of Hearing, but no fewer than five (5) days prior to the public hearing, any bank, organization, or person that intends to either attend, or appear before the Board to be heard at the hearing, shall provide the Department and the Chairperson of the Board with notice of their intent to appear and an estimate of the total number of individuals that shall attend the hearing on their behalf. Seating-capacity is limited in the hearing room and anyone not previously approved to attend may be denied access. The Board reserves the right to control the attendance of the hearing and to limit the number of individuals appearing at any one time on behalf of the same entity, regardless of prior notice. Anyone that wishes to appear before the Board may either speak on their own behalf or may be represented by their authorized agent, representative or attorney of choice. Should any attendee require special accommodations in order to appear or participate at the hearing, notice should be provided in advance. E. Notification of Proposed Testimony and Evidence to be Received

1. Witnesses to Provide Testimony Each interested party must submit to the Department, the Chairperson of the Board, and each other party to the hearing, a list of all witnesses who will testify on behalf of the party. The list must be received by the recipients at least five (5) days before the public hearing. Evidentiary standards for offering testimony are relaxed during a hearing. Generally, so long as a witness’ testimony is relevant to the application, the Chairperson shall allow the testimony, regardless of the witness’ qualifications or biases.

Exhibits All exhibits presented or referenced at the hearing must be filed, in duplicate, with the Department, and copies furnished to the Chairperson and to each other party to the hearing. The exhibits must be received by the recipients at least five (5) days before the hearing. The term “exhibits” includes all illustrative and demonstrative documentary evidence used in connection with a party’s presentation to the Board, including maps, photographs, charts, and any other visual aids. Large size exhibits may be used at the hearing, but all exhibit submissions for filing with the Department should, where possible, be on standard letter-size paper. Exhibits that do not meet the above requirements for quantity, size or timely submission may not be accepted during the hearing and reference to them may be prohibited by the Board.

F. Public File; Availability

The public file maintained by the Department with regard to each issue to be heard at a hearing shall consist of the application with supporting data and supplementary information, with the exception of material deemed to be confidential, such as trade secrets, proprietary

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information or any other information or materials normally not available to the general public through commercial disclosures or publications. In addition, the public file shall contain all data and information submitted by the interested parties in favor of, or in opposition to the application, excluding any confidential information. As to any application submitted to the Department, the public file shall be available to the public for inspection at the offices of the Department upon written request. The public file availability is limited as follows:

1. A public file will be available for inspection only by prior appointment;
2. The public file shall only be available for inspection between the hours of 9:30 a.m. and 3:30 p.m. during any day the Department is open for business;
3. A request for inspection of a public file must be in writing and be received by the Department either prior to, or at the time of prearranged inspection;
4. The public file of an application to be considered at a hearing will not be made available for inspection on the day of the scheduled hearing, except that the file shall be available for inspection during the Board’s hearing;
5. No information contained in a public file shall be provided or disseminated by telephone. Photocopying and/or electronic imaging (scanning) of the public file documents is available upon written request to the Department. The following provisions govern such requests:
6. Photocopies will be made available for an interested party upon written request to the Department and at a rate of $30.00/hr for retrieval and duplication, plus 20 cents per page for reproduction. The Department may mail the photocopied documents to an interested party at the party’s sole expense;
7. Scanning of the public file and transmission of the electronic document will be made available for an interested party upon written request to the Department and at a rate of $30.00/hr for retrieval and imaging.
8. Documents of a size up to 8” x 14” will be imaged and copied in their original form. Larger documents may be re-sized if possible. Large maps, photos and the like may be reproduced on multiple pages. Some photos may not lend themselves to copying or scanning and those documents may not be furnished.
9. The Department will process a written request at the time it is received and will attempt to respond within one (1) week. The Department is absolutely under no continuing obligation to provide a requestor with any additional documents that may be added to the public file subsequent to the time of the request. No requests that encompass an ongoing obligation on the part of the Department will be honored. The Department will not supply analysis of any public file documents, or search for a particular item located within the larger public file.

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G. The Hearing; Time Limits; Presentation of Testimony In the case of a contested application, both the applicant and collectively all respondents/opponents shall each be allotted one and one-half hours to present testimony and/or evidence in support of their respective positions. When there is more than one respondent, the respondents must agree among themselves prior to the hearing as to how they will divide the time allotted to them. The time allotted may be utilized in any manner seen fit by each presenter, who may decide how it will allocate the time among an opening statement, affirmative presentation of testimony or evidence, questioning of other parties, and a closing statement. Time may be reserved by request. The Chairperson or Vice Chairperson of the Board shall have authority to determine: the number of witnesses that may appear; the order of appearance of witnesses; what testimony, evidence, data or other materials offered shall be received; and all other procedural matters that may arise during the course of, or otherwise in connection with the hearing. No witness, other than those designated persons described below, shall be subjected to “cross-examination” without consent, except that the members of the Board reserve the right to question any witness on any matter, at any length. The Hearing shall proceed generally in the following order of presentation:

1. Statement of Commissioner : The Commissioner of the Department will present to the Board the application at issue, a brief statement regarding the application, and the Commissioner’s recommendation on disposition of the application. Should the Commissioner be unable appear at the hearing for any reason, the Deputy Commissioner, a Department Director or the Department’s Counsel may present the application and the Commissioner’s recommendation to the Board.
2. Opening Statements: Each party may make a brief opening statement describing its general position, an overview of the evidence or testimony it plans to present and the manner in which the presentation shall proceed. The applicant shall make its statement first, followed by the respondent. The Board may limit the number of opening statements in the case of multiple respondents.
3. Applicant’s Presentation: Following opening statements, the applicant shall proceed with its affirmative presentation of testimony and/or evidence. The application, any summary of information or any other data previously submitted to the Department in support of the application shall be deemed part of the applicant’s presentation. The applicant may rely upon and rest its case based solely on its previous submissions. One or more witnesses designated to speak on behalf of the applicant must be available at the hearing to answer any questions regarding the documents presented previously or at the hearing.

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4. Cross-Examination of Applicant: The designated witness(es) of the applicant shall, upon the close of the applicant’s presentation, be subject to questioning by the respondent(s) regarding any previously submitted materials and any testimony given. Any questioning conducted by a respondent shall be charged against respondent’s allotted time limit.
5. Respondent’s Presentation: The affirmative presentation of the respondent(s) will follow the cross-examination of the applicant’s designated witness(es). All documents submitted prior to the hearing will be deemed to constitute part of the respondent’s affirmative presentation and respondent may rely upon and rest on such submissions. A designated witness or witnesses who speak on the behalf of the respondents should be available at the hearing to answer any questions regarding the documents previously filed or the information provided at the hearing by respondents.
6. Cross-examination of Respondent: The designated witness(es) of the respondent shall, upon the close of the respondent’s presentation, be subject to questioning by the applicant regarding any previously submitted materials and any testimony given. Any questioning by applicant shall be charged against its allotted time limit.
7. Closing Statements: Each party may make a closing statement in order to summarize its position and/or evidence presented. The Applicant shall proceed first.
8. Post-Hearing Submissions: If any party requests at the hearing that the Public File remain open for supplementation and/or the Board so directs, written statements concerning any materials filed or discussed may be submitted no later than 21 calendar days following the hearing. An extension may be granted upon written request and upon a determination by the Board that additional time is warranted to gather facts prior to making a ruling. No new matters will be accepted or considered for filing under this provision. Materials submitted must be concurrently provided to the other parties who responded to the application or appeared at the hearing.

H. Board Consideration of Certain Actions Without Public Hearing From time-to-time, the Board may be charged with the approval of certain actions proposed or recommended by the Commissioner of the Department. (See e.g. MISS. CODE ANN. § 81-1- 63). The Board may in such a circumstance, unless expressly indicated otherwise, consider any such action or recommendation by the Commissioner without the need for a public hearing. The procedure for such consideration shall be as follows:

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1. All Board Members shall be contacted in writing (traditional correspondence or electronic mail is permissible) by the Commissioner and presented with the recommendation or action that is proposed;
2. All Board Members shall within seven (7) days respond to the Commissioner, either in writing or by telephone conference with the Commissioner, and voice their approval or disapproval of the proposal; any member that fails to timely respond shall be deemed abstaining and thereafter recused from further proceedings for the purposes of Board approval;
3. Upon receipt of written response from each member or the expiration of the allotted time without response, the Commissioner shall confirm the votes of each Member and the Board’s collective decision in writing by additional correspondence to each Member, with copy to the Department;
4. All related correspondence mentioned above shall suffice in lieu of “minutes” from a Board meeting and may be maintained in the files of the Department.