- Introduced -

SB 852 - This act incorporates many revisions to current law related to banking, investing and extension of credit.

Financial institutions holding state funds may invest those funds in an irrevocable standby letter of credit issued by a federal home loan bank, provided it carries the highest possible statistical rating.

For purposes of the petroleum storage tank insurance fund, creditors of tank owners or possessors of security interests on the owner's property may become successors in interest on both above ground and underground storage tanks.

Employees of the Division of Finance shall maintain the confidentiality of information revealed during the bank examination process. Such information can only be disclosed in court proceedings relating to the soundness of the financial institution, a criminal proceeding or upon court order. Testimony provided consistent with a disclosure exception shall not give rise to causes of action for libel, slander or defamation.

Stockholders of a bank or trust company may approve business by proxy and cancel a meeting if: stockholders receive notice of the meeting and proxy; stockholders have the option to approve or disapprove the cancellation; eighty percent or more of the stock is voted by proxy; and all voting stockholders vote in favor of cancellation. Effective dates for directors' elections, corporate structure changes and other changes requiring stockholder approval must be clearly stated.

Banks and trust companies would be allowed to act as an insurance agent for any licensed Missouri insurance business and may employ qualified agents or brokers to conduct agency business. The financial institution would be allowed to accept insurance policies as security for loans to the insured.

Under Section 362.170, a bank or trust company's legal loan limit is determined by the population of the community where the institution is located. The population figure shall not incorporate inmates of correctional institutions within the community.

Sections 362.245 and 362.250 are amended to remove the requirement that members of the board of directors of a bank or trust company must be stockholders in the corporation and to clarify that a director who does not own stock in the financial institution is entitled to the same rights and privileges as directors who own stock.

Section 362.413 allows a court to accept into evidence reproductions of banking documents without the necessity of the appearance of a bank officer. Such records must be accompanied by an affidavit as to authenticity and, where applicable, the form of duplication must permit the front and back of checks and drafts to be accessible. This provision shall also apply to probate proceedings.

Lost, destroyed or stolen cashier's checks, teller's checks and certified checks may be paid to the claimant upon a sworn declaration of loss by the drawer or payee. To receive payment, the claimant must provide sufficient notice to the obligated bank that the check has been lost and present reasonable identification. Claims asserted under this provision become enforceable at the later of the time of the assertion of the claim or the ninetieth day after the check's date or acceptance. If payment is made to the claimant and the check is later presented by a holder in due course, the claimant must refund the payment to the bank or pay the holder in due course.

Lenders would be allowed to collect an advance fee for giving debtors the option to defer up to three monthly loan payments provided the first installment payment has been made and only one deferral period per year is permitted. The fee can be no more than the lesser of $50 or 10% of the deferred payments.

Lenders issuing credit cards under Section 408.100 or Section 408.200 would be allowed to charge additional fees that are authorized by the statutes of a contiguous state. The lender must obtain the approval of the Director of Finance or the lender's principal regulator prior to charging the fee. Currently, only one Missouri lender issues applicable credit cards.

Default agreements between debtors and lenders pursuant to Sections 408.551 to 408.562 would only be applicable to credit transactions made primarily for personal, family or household purposes.

Collateral protection coverage placed by creditors may allow for at least sixty days for the debtor to cure the default on furnishing proof of insurance. If a creditor places such coverage, the creditor may charge the debtor a premium, but the creditor must amend the notice to the debtor to state that the insurance will be canceled upon the debtor providing proof of insurance coverage for the relevant period.

Depository financial institutions shall not conduct any manner of business on the condition or requirement that the customer obtain from, or provide to, the institution or its affiliated entities additional credit, property or service. Nor can such an institution bar a customer from dealing with a competitor as a condition to transacting business. Debtors who believe they have been subjected to unlawful tying may recover costs, fees and the greater of $500 or actual damages.

DENISE GARNIER