SB 128 - The act revises the provisions of law relating to small loans. Set interest rates are removed in favor of a provision which allows the parties to set those rates. In addition, the fee charged for payments that are more than 30 days overdue is increased from two to five percent, not to exceed $50. Financial institutions may charge an annual $50 fee on open ended credit contracts. The act also repeals the 22% maximum limit on certain open-ended and close-ended credit contracts.

Cost of collection expenses, which include court costs and attorney's expenses awarded by the court in suit to recover one bad check or breach of contract shall not be considered as a fee or charge for purposes of section 408.500, RSMo.

The parties would be permitted to set the rate on second mortgage loans and the permissible origination fee is raised from two to five percent. The act also permits an annual fee of $50 for revolving loans.

Finally, for determining the legal loan limit in section 362.170, RSMo, the population of the community in which the bank or trust company is located, shall not include inmates of a correctional institution located in that community.
TOM MORTON