AN ACT TO AMEND SECTION 63-21-43, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A SECURITY INTEREST IN A MOTOR VEHICLE MAY NOT BE PERFECTED WHILE THE VEHICLE IS SUBJECT TO A VALID STATUTORY POSSESSORY LIEN; TO REQUIRE A SECURED PARTY SEEKING TO PERFECT A SECURITY INTEREST TO CERTIFY TO THE DEPARTMENT OF REVENUE THAT NO SUCH POSSESSORY LIEN EXISTS OR OBTAIN WRITTEN CONSENT FROM THE HOLDER OF SUCH A LIEN; TO PROVIDE THAT ANY SECURITY INTEREST FILED IN VIOLATION OF THIS ACT SHALL BE UNPERFECTED AGAINST THE HOLDER OF THE POSSESSORY LIEN AND SUBORDINATE IN PRIORITY TO THAT LIEN; TO BRING FORWARD SECTIONS 63-21-16, 75-9-333, 85-7-107 AND 85-7-251, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.
Impact
The bill could significantly affect the landscape of secured transactions involving motor vehicles in Mississippi. By stipulating these requirements, it aims to reduce disputes over lien priority, thus enhancing the protection of lienholders. This may also promote a more orderly process for financial institutions lending against motor vehicles, as they must take verified steps to ascertain the status of any possessory liens before proceeding. However, it may impose additional administrative burdens on lenders and secured parties who will need to implement processes to comply with these certification requirements.
Summary
Senate Bill 2856 seeks to amend Section 63-21-43 of the Mississippi Code of 1972, establishing that a security interest in a motor vehicle cannot be perfected if the vehicle is subject to a valid statutory possessory lien. The intent of the bill is to set clearer guidelines regarding the priority of liens on motor vehicles, ensuring that valid possessory liens take precedence over other claims. As part of its provisions, the bill requires secured parties to certify that no such possessory lien exists or to obtain written consent from the lienholder before perfecting their security interest, thereby enforcing a hierarchy among claims on a vehicle.
Contention
Notable points of contention could arise regarding the implementation of these requirements, particularly from automotive businesses and towing companies who might argue that new regulations complicate existing practices. There are potential concerns about how these changes might affect the ability of towing companies to secure their financial interests in vehicles that have been towed. Additionally, the industry might push back about the burden of proving the absence of possessory liens, which could conflict with established business models that rely on quick turnaround for asset recovery.