SB 385 - This act modifies various provisions governing specific types of financial transactions.RETAIL INSTALLMENT CONTRACTS - MOTOR VEHICLES
This act repeals a requirement that every retail installment contract be signed by both the buyer and the seller. (Section 365.070)
The act allows the holder of a retail installment contract to charge, finance, and collect a dishonored or insufficient check fee not to exceed twenty-five dollars, plus an amount equal to the actual charge for the return of each unpaid or dishonored instrument. (Section 365.100)
Whenever a retail installment contract is paid in full, the holder shall provide the buyer proof of payment in full which may be by letter referencing the retail installment contract or by returning the original or a copy of the contract marked by the holder, paid in full. (Section 365.140)
RATES OF INTEREST IN BUSINESS, COMMERCIAL, AND AGRICULTURAL LOANS
Current law allows parties to agree in writing to any rate of interest, fees, and other terms and conditions in connection with any business loan of five thousand dollars or more. This act modifies that provision to apply to extensions of credit primarily for business, commercial, or agricultural purposes. (Section 408.035). The act additionally repeals a provision allowing any person, firm, or corporation to charge, contract for and receive interest on the unpaid principal balance at rates agreed to by the parties in connection with loans which are secured by a lien on nonprocessed farm products, livestock, farm machinery or crops or to loans to corporations. (Section 408.100)
These provisions are identical to provisions in HCS/HB 518 (2021).
PERMISSIBLE FEES INCIDENT TO EXTENSIONS OF CREDIT
The act allows a lender to:
· Charge reasonable and bona fide third-party fees paid out by the lender to any public officer for filing, recording, or releasing in any public office any instrument securing the loan;
· Charge a reasonable service charge not to exceed twenty-five dollars for processing a refused instrument, plus an amount equal to the actual charge for the return of each unpaid or dishonored instrument; and
· Collect a fee no more than once in any 12-month period for allowing a debtor to defer up to three monthly loan payments.
(Section 408.140)
DEFERMENT OF MONTHLY LOAN PAYMENTS
Current law allows a lender to collect a fee in advance for allowing a debtor to defer monthly loan payments on loans with an original amount of $600 or more. This act repeals the loan amount threshold for this provision such that a lender may collect such a fee on a loan of any amount. (Section 408.178)
SECOND MORTGAGE THRESHOLDS
The act repeals a prohibition on the issuance of a second mortgage loan in an initial principal amount of less than $2,500. (Section 408.234)
RETAIL TIME CONTRACTS
The act allows official fees or reasonable and bona fide third-party fees incurred for remote or electronic filing or recording in connection with any retail time contract. (Section 408.250)
LENDER RECOVERY UPON DEFAULT
The act modifies the amount that a lender may collect from a borrower upon default. Specifically, a lender is entitled to recover the amount due and accrued under the agreement including interest and penalties through the date of final judgment. Following a judgment, the lender may additionally recover the simple interest equivalent of the rate provided in the contract as applied to the amount of the judgment until the date the judgment is paid and satisfied. (Section 408.553)
NOTICE OF DEFAULT
Current law requires a default notice issued in the case of a second default on the same loan or transaction or a third default on the same second mortgage to contain a provision notifying the borrower that in case of further default the borrower will have no right to cure. This act repeals that provision. (Section 408.554)
This act is substantially similar to certain provisions in the truly agreed to and finally passed CCS/SS/SCS/SB 106 (2021) and HCS/HB 571 (2021).
SCOTT SVAGERA