House Committee Substitute

HCS/SS/SCS/SB 892 – This act allows a financial institution to charge for processing refused negotiable instruments and payment orders. This act also provides that a debtor is not entitled to receive notice of the right to cure, in the case of a second mortgage loan, after the third default before the lender can enforce the security interest. Upon the third default, the debtor may no longer cure.

This act also adds late charges and expenses of foreclosures incurred by the lender to the definition of "current obligation of the debtor," which must be paid to cure a default on a second mortgage loan.

Under current law, applicants for licensure to issue or sell checks must post a twenty-five thousand dollar corporate surety bond. This act raises that amount to one hundred thousand dollars. The bond may be used to pay costs incurred by the Division of Finance to remedy breaches of obligations by the applicant or pay examination costs not paid by the applicant.

For all licensees selling payment instruments or stored value cards, the required amount of the bond for renewal of the license shall be five times the high outstanding balance from the previous year with a minimum of one hundred thousand dollars and a maximum of on million dollars.

For all licensees receiving money for transmission, the required amount of the bond for renewal of the license shall be five times the greatest amount transmitted in a single day during the previous year with a minimum of one hundred thousand dollars and a maximum of one million dollars.

The Director of Finance may, when necessary, examine any licensee and the cost shall be paid by the licensee.

The director shall investigate the character and fitness of each licensee before initial licensure and renewal. The director may charge up to $100 for applications to amend and reissue licenses.

Under current law, financial institutions must submit a list showing all paper past due thirty days or more at their monthly meetings. This act allows the institutions, in the alternative, to submit a list of the total past due ratio for loans that are thirty days or more past due, nonaccrual loans divided by the total loans, and a list of past due loans in excess of a minimum amount set by the board not to exceed five percent of the bank's legal loan limit but the minimum amount may not be less than ten thousand dollars. Collateral to the indebtedness does not have to be described as of the date of the lists.

The act specifies that financial institutions shall be served process according to the Missouri Rules of Civil Procedure describing service of corporations. State or federally chartered banks, trust companies, and thrift institutions may appoint a service agent and register that person with the Director of Finance.

The act allows the Director of Finance to receive service of process for out-of-state banks or trust companies. Currently the Director of Revenue shall collect $2 for each copy of process. This act raises the amount to be collected by the director to $10.

This act provides for an income tax credit for shareholders of S corporation savings and loan association holding companies and credit institutions based on the pro rata share of corporate franchise tax paid by such association or institution.

The act bars industrial loan companies and industrial banks from operating in Missouri.

Under the act it is a misdemeanor for any owner or dealer of manufactured homes to convert such a home to real property with the intent to defraud lienholders, lenders, or taxing authorities. The act also outlines the lawful means of converting manufactured homes into real property. The director of revenue must notify lienholders of the surrender of title when manufactured homes are converted to real estate.

When the lienholder of a manufactured home that was properly converted to real property repossesses the home, the home shall be deemed real estate and title to the home shall be conveyed. The act outlines the manner in which a lienholder may obtain a certificate of title when the home was not properly converted.

This act is similar to SCS/SB 993, SCS/SB 781, and HB 1234 (2006).


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