CCS HCS HB 1189 -- CREDIT TRANSACTIONS

This bill changes the prepayment penalty for residential real
estate loans from no more than 2% of the balance at the time of
prepayment to no more than 2% of the average daily balance for
the prior 6 months.

Small loan companies which make unsecured loans of under $500
are allowed to collect for reasonable attorney's fees and court
costs incurred by a breach of contract.

Retail companies may open charge accounts without the consumer's
signature on the application.

HCS HB 1189 -- CREDIT TRANSACTIONS (Liese)

This substitute changes the prepayment penalty for residential
real estate loans from no more than 2% of the balance at the
time of prepayment to no more than 2% of the average daily
balance for the prior 6 months.

The substitute also allows small loan companies which make
unsecured loans of under $500 to collect for reasonable
attorney's fees and court costs incurred by a breach of contract.

The substitute allows retail companies to open charge accounts
without the consumer's signature on the application.

FISCAL NOTE:  No impact on state funds.

HCS HB 1189 -- CREDIT TRANSACTIONS

SPONSORS:  Copeland (Liese)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Banks and
Financial Institutions by a vote of 26 to 2.

This substitute changes the prepayment penalty for residential
real estate from no more than 2% of the balance at the time of
prepayment to no more than 2% of the average daily balance for
the prior 6 months.

The substitute also allows small loan companies which make
unsecured loans of under $500 to collect for reasonable
attorney's fees and court costs incurred by a breach of contract.

FISCAL NOTE:  No impact on state funds.

PROPONENTS:  Supporters say that in the past there has been some
misunderstanding regarding the prepayment penalties and this
bill just clarifies the statute.

Testifying for the bill were Representative Liese; Missouri
Financial Institute; and Beneficial Finance.

OPPONENTS:  There was no opposition voiced to the committee.

Bob Dominique, Legislative Analyst

HB 1189 -- Credit Transactions

Sponsor:  Liese

This bill changes the prepayment penalty for residential real
estate from no more than 2% of the balance at the time of
prepayment to no more than 2% of the average daily balance for
the prior 6 months.

The bill also requires that retail charge agreements be deemed
accepted by the buyer if the retail charge agreement is signed
by the buyer or someone authorized to use the account.  The
retail charge agreement may also state that it shall not become
effective unless the account holder has received all disclosures
required by the federal Truth-in-Lending Act.