HS/HCS/SCS/SB 186 - This act modifies several laws pertaining to entities regulated by the Division of Finance.

FINANCIAL INSTITUTIONS - Allows Financial Institutions that pay obligations from escrow to be exempt from city or county ordinance that require property taxes to be paid by installments. (Sections 139.050, 139.052 and 139.053)

These provisions are also contained in (TAT) SS/HCS/HB 738 (2001).

BANKING LAWS - (1) This act states that, if the corporate franchise tax is repealed for Missouri corporations other than financial institutions, then:

(a) Financial institutions will be granted a tax credit, in lieu of the existing tax credit, of 1.5% of net income;

(b) S corporations can pass the tax credit through to their shareholders; and

(c) All taxes and tax credits on S corporations will be passed through to the shareholders, with certain exceptions. (Section 148.064)

Clarifies the manner in which subordinate liens on motor vehicles or trailers must be perfected. (Section 301.600)

Modifies bank stockholders' meetings laws to allow voting shareholders to transact all business required at annual or special meetings by unanimous written consent. (section 362.044)

Allows state bank and trust companies to:

(a) Hold noncontrolling equity interests in financial business entities that are owned by other financial institutions located in Missouri, and

(b) Lend money on real estate and handle real estate closings and escrows. (Section 362.105)

Allows certain bank and trust companies in communities with sufficiently small populations, as established by rule of the Division of Finance, to keep the additional powers granted to them for 5 years after they exceed the allowable population. (Section 362.105)

Allows state bank and trust companies to offer any product or service that a national bank can offer, as long as the state bank:

(a) Follows federal law while conducting these practices; and

(b) Is approved for these purposes by the Division of Finance after a prescribed notice period. (Section 362.106)

Provides that state law preempts the field of future legislation by political subdivisions as to regulation of financial institutions. (Section 362.109)

Expands the capital investment allowances granted to state banks to include holding companies authorized to do business in the state. (Section 362.119)

Clarifies that certain investment prohibitions are limited only to other allowable investments. (Section 362.170)

Allows bank and trust stockholders to appoint a chief executive officer or a president. Current law only allows presidents to be appointed. (Sections 362.270, 362.325 and 362.335)

This portion of the act is similar to SCS/HB 736 and SS/HCS/HB 738 (2001).

CONSUMER CREDIT LOANS - Redefines consumer credit loans, beginning on January 1, 2002, as unsecured loans for personal, family, or household purposes in amounts of $500 or more. (Section 367.100)

Allows persons seeking renewal of a license to provide consumer credit loans to have the option of providing a surety bond or irrevocable letter of credit in the amount of $100,000 to the Division of Finance, in lieu of the current requirement of an annual audit report. (Section 367.215)

Removes the requirement that title loan borrowers pledge their property to the title lender. The title loan lender will no longer retain the certificate of title during the length of the loan. Removes the provision stating that money borrowed under a title loan agreement is not a debt of the borrower and that the borrower is not personally liable under the agreement. (Section 367.500)

The act clarifies that all information submitted by a lender to the Director of the Division of Finance is confidential. (Section 367.503)

The act requires title lenders to be licensed with the Division of Finance. Current law only requires registration. (Section 367.506)

Requires title lenders to post a $20,000 surety bond or irrevocable letter of credit for each location, removes the requirement that title loan lenders be residents of Missouri, and retains a $1,000 investigation fee for each location upon renewal of license. (Section 367.509)

Removes the requirement that title loan borrowers pay fees at the time of renewal of the loan and requires them to reduce the principal of the loan by 10% of the total principal upon the third or any subsequent renewal. Current law requires a reduction of 10% of the original principal. (Section 367.512)

Requires title lenders to provide defaulting borrowers with the same notice and opportunity to cure defaults as other borrowers and repeals the existing requirement whereby a title loan borrower is required to deliver the property described in the loan to the borrower at the end of the first loan period. (Section 367.512)

Allows title lenders to charge only those interest rates and fees allowed to other small loan lenders. Small loan lenders may charge any interest agreed to by the parties, but may only charge fees on the initial loan contract, and those fees cannot exceed 5% of the principal or $50, whichever is less. (Section 367.515)

Requires certain additional disclosures and forms for all title loans, including informational notices to borrowers, the potential consequences of default and the maximum rates charged by the lender. (Section 367.518)

Subjects title lenders and borrowers to the same default and foreclosure proceedings as other lenders. (Sections 367.521 and 367.527)

Requires title lenders to keep records on the loans and notices given to their customers for at least 2 years and requires that all title lenders be examined by the Division of Finance prior to ceasing business. (Section 367.524)

Enacts certain notice and posting requirements for title lenders. (Section 367.525)

The act creates a procedure for revocation or suspension of title lender licenses which includes a hearing before the Director of the Division of Finance and establishes civil penalties of up to $1,000 per day or cease and desist orders for title lenders who violate the provisions of this act. (Section 367.532)

Allows bona fide fees to be collected on residential real estate loans for any actual and necessary services associated with the loan. (Section 408.052)

Allows late payment charges not to exceed 5% of the payment due or $50, whichever is less, on small loans overdue for 15 days or more. (Section 408.140)

Requires all lenders in the business of making unsecured loans under $500 ("payday lenders"), with exceptions for certain types of loans, to comply with the same principal reduction, notice and opportunity to cure, interest and fee limitations, disclosures and forms, record-keeping, examination, default collection, and penalty provisions that are applied to title lenders throughout the act, except that the principal reduction requirements for lenders making unsecured loans under $500 do not apply until the fifth renewal and no surety bond is required of these lenders. (Section 408.500)

This portion of the act is similar to SS/HCS/HB 738 (2001).

Repeals the filing requirements for insurers offering commercial property and commercial casualty coverage. Current law exempts insurers from these filing requirements only if certain financial criteria are met. (Section 379.316)

This act also requires insurers to provide at least 60 days notice to the insured when the insurer plans to increase either the premium or the deductible for a commercial property or commercial casualty policy. (Section 379.321)

This portion of the act is similar to HB 968 (2001).
JULIA SOMMER GRUS