HCS/SS/SCS/SB 346 - This act modifies a number of laws associated with banking.

The Missouri Higher Education Loan Authority is authorized to consolidate existing parent loans for undergraduate students ("PLUS"). The date for repayment of bonds issued by the Missouri Higher Education Loan Authority is extended from 30 to 40 years.

Duties of parties regarding the creation of liens on certain watercraft are modified to provide that the director of revenue shall mail the certificate of title with the new and address of the new lienholder to the owner named in the certificate of title, not the first lienholder named in the certificate.

The Director of the Division of Finance is authorized to obtain data filed with federal regulatory agencies in lieu of requiring direct filing of reports of condition from financial institutions. The Director may require verification of the data from such institutions. During the Director's examination of a bank or trust company, if the director relies upon audits by a C.P.A., the Director must be afforded access to any workpapers used as a basis for the audit. Auditors are required to keep such workpapers for a minimum of three years.

The definition of "bank" is modified to specifically include chartered commercial banks and national banks in this state. The definitions of "demand deposits" and "time deposits" are modified to provide that payment of such deposits can be required as provided in federal law. Currently, payments can be required within 30 days.

Banks are authorized to purchase or lease real property in an amount not exceeding its legal loan limit and may derive income from the renting or leasing of such property. Should the purchase or lease exceed the legal loan limit or be from an interested party, such bank must seek prior approval from the Director of the Division of Finance. Banks and trust companies, savings and loan associations and credit unions may impose fees or service charges on deposit accounts, subject to certain promulgated rules.

The act creates a definition of a "trust holding company" and authorizes the formation of a trust holding company in Missouri. The Director of the Division of Finance is required to determine if a proposed acquisition by a trust holding company of a trust company is consistent with the interests of having sound trust companies. The Director is authorized to grant or deny the proposed acquisition. The Director may examine and investigate trust holding companies.

This act modifies provisions of the Uniform Commercial Code. Any transaction that complies with Articles 3, 4 and 9 of the Code shall not be subject to common law claims other than those specifically provided for in the Code. Consumer transactions are included in the rules for secured transactions when the amount of a deficiency or surplus is in issue.

Variable rate agreements are subject to certain statutes limiting fees and charges until the extension of credit is paid off or the debtor requests an extension or refinancing. At the time of such request, the creditor may convert the credit extension to a loan contract or times sales agreement, provided the same statutes limiting fees and charges will still apply.

Property distributable in the course of a demutulization, rehabilitation or related reorganization of a mutual insurance company is considered abandoned 2 years after the property is first distributable if certain conditions regarding contact with the owner are met. The initial report for such property must be filed no later than November 1, 2003.

The act deletes certain sections in Chapter 408, RSMo, concerning variable interest rates. Sections 408.653 and 408.654 regarding fee limitations and limits for overdraft charges are also repealed.

This act increases the allowable handling fee an institution may charge for processing a refused instrument to $25. Currently, an institution may charge up to $15.

A lender on a second mortgage loan is authorized to assess a handling fee for processing a refused instrument of $25. Currently, a lender may assess a fee of up to $15.

This act modifies the allowable charge for a late payment of an installment or minimum payment to $15 or an amount not to exceed 5% of each installment or minimum payment due, whichever is greater. Currently, the allowable charge is $25 or an amount not to exceed 5% of each installment or minimum payment due, which is less.

The default charge on any second mortgage loan for any payment not paid in full within 15 days of its scheduled due date is modified to $15 or an amount not to exceed 5% of each installment or minimum payment due, whichever is greater. Currently, the allowable charge is $25 or an amount not to exceed 5% of each installment or minimum payment due, which is less.

This act allows the Division of Finance to issue biennial consumer credit licenses for certain finance companies. One-half of the fees would be paid at the time of licensing and the remaining balance one year later.

This act is similar to TAT version of SCS/HCS/HB 221 (2003)and SB 496 and SCS/SBs 364 and 365 (2003).

JIM ERTLE