HCS HB 959 -- FINANCIAL SERVICES

SPONSOR:  Luetkemeyer

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Services by a vote of 17 to 2.

This substitute makes changes to the laws regarding financial
services.

The substitute expands the College Tuition Savings Plan (also
known as a "529 Plan") by allowing Missouri residents to use any
qualified 529 Plan from any state or political subdivision.
Currently, Missouri residents can use only the state-sponsored
plan, known as the Missouri Higher Education Savings Program.
The substitute also establishes an additional savings plan, to be
known as the Missouri Higher Education Deposit Program, which
allows any bank in Missouri to establish savings accounts as part
of a 529 Plan.  State employees may request automatic payroll
deductions for deposit into these accounts.  The substitute
requires the deposit program to be administered in the same
fashion as the current savings program.  The provisions governing
this program will expire six years from the effective date of the
substitute.

The substitute creates a cause of action for the deceptive use of
the name of another financial institution.  Any financial
institution may sue any person or entity that creates a
misleading advertisement or solicitation by including the name of
the financial institution without consent.  A plaintiff
prevailing in this type of action will be entitled to $10,000 in
statutory damages, plus any proven actual damages; attorney fees;
and court costs.

The substitute makes several changes to the law governing how and
when a lender must provide a deed of release when a borrower has
paid off a mortgage.  Current law requires the lender to issue a
release to the borrower within 15 business days.  The substitute
lengthens this time frame to 45 days.  The substitute also allows
the lender to have the document recorded, rather than sending it
to the borrower.  If the document cannot be recorded for any
reason, the lender will have an additional 60 days to file a
document that can be recorded.  Finally, the substitute limits
the damages that may be awarded for noncompliance to $300 per
day; $10,000 in the aggregate; or 10% of the amount of the loan,
whichever is less.

The substitute makes changes to the laws regarding small loans.
The substitute:

(1)  Increases from $6 to $15 the maximum amount which may be
charged as an expediter fee.  The expediter fee is money
collected by a third party to expedite the retrieval of a
debtor's motor vehicle title from the Department of Revenue;

(2)  Repeals a provision allowing a $10 charge as a late payment
fee; and

(3)  Allows lenders to collect a fee in advance for allowing the
debtor to defer monthly loan payments on loans of $600 or more.
The fee may be between $25 to $50, but not more than 10% of the
loan payments deferred.  This provision does not apply to
pre-computed loans.

Finally, the substitute makes changes regarding the crime of
identity theft.  The substitute:

(1)  Makes it a class A misdemeanor when the identity theft
results in the theft or appropriation of credit, money, goods,
services, or other property valued at less than $500.  Current
law sets a penalty of six months in jail for a first offense and
does not refer to the value of the stolen property;

(2)  Makes attempted identity theft a class B misdemeanor;

(3)  Makes identity theft a class D felony when the value of the
stolen property is more than $500 but does not exceed $1,000;

(4)  Makes identity theft a class C felony when the value of the
stolen property is more than $1,000 but does not exceed $10,000;

(5)  Makes identity theft a class B felony when the value of the
stolen property is more than $10,000 but does not exceed
$100,000;

(6)  Makes identity theft a class A felony when the value of the
stolen property exceeds $100,000;

(7)  Makes identity theft a class A felony when the identity
theft is performed for the purpose of committing a terrorist act;

(8)  Makes identity theft a class C felony when the identity
theft is performed for the purpose of committing an election
offense;

(9)  Makes the identity thief liable to the victim for civil
damages of up to $5,000 per incident or three times the amount of
actual damages, whichever is greater;

(10)  Allows the victim to seek a court order restraining the
identity thief from future acts that would constitute identity
theft.  In these actions, the court may award reasonable attorney
fees to the plaintiff;

(11)  Clarifies that the estate of a deceased person may pursue
civil remedies when the estate is a victim of identity theft;

(12)  Sets venue requirements for civil suits regarding identity
theft, sets a limitation on civil suits at five years, and
clarifies that a criminal conviction is not a prerequisite for a
civil claim;

(13)  Clarifies that identity theft does not include a minor's
misrepresentation of age by using an adult person's
identification;

(14)  Makes a second offense a class D felony when the value of
the property is less than $500;

(15)  Creates the crime of trafficking in stolen identities, a
class B felony; and

(16)  Expands the crime of false impersonation to include the
providing of a false identity to a law enforcement officer upon
arrest.  If the false identity is not discovered until after the
person is convicted, the prosecutor must file a motion to correct
the arrest records and court records.  The substitute also allows
the court to order the expungement of the false arrest records
for the person whose identity was used.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$57,738 to Unknown in FY 2005, $54,785 to Unknown in FY 2006, and
$56,154 to Unknown in FY 2007.  No impact on Other State Funds in
FY 2005, FY 2006, and FY 2007.

PROPONENTS:  Supporters say that the bill allows state employees
to have a payroll deduction for a tax deductible college savings
plan, making it easier for people to save.

Testifying for the bill were Representative Luetkemeyer; Missouri
Bankers Association; Missouri Financial Services Association;
Mortgage Bankers Association of Missouri; Farm Credit Services of
Missouri; College Savings Foundation; Security Industry
Association; St. Louis Region Commerce and Growth Association;
Missouri Independent Bankers Association; Missouri Chamber of
Commerce and Industry; State Farm Insurance; and Progressive Farm
Credit Services.

OPPONENTS:  Those who oppose the bill say that the bill would
essentially end the MO$T Program, because the vendor would be
unable to compete with these out-of-state funds that are outside
of the state's regulatory authority.  State law limits the fees
that the Teachers Insurance Annuity Association - College
Retirement Equities Fund (TIAA-CREF) can charge to .65 basis
points (while the national average is much higher.)  The MO$T
Program is one of the best "529 Plans" in the nation, according
to the financial industry publisher Morningstar.  No other state
has opened up their state income tax deduction allowance like
this bill proposes.  Claims that the MO$T Program is not properly
marketed are unsubstantiated.  There are more than 200 registered
brokers currently established to market the TIAA-CREF MO$T
Program, and every parent of a newborn child in Missouri receives
a postcard explaining the MO$T Program and the importance of
saving for college.

Testifying against the bill were Office of the State Treasurer;
MO$T fund manager, TIAA-CREF; and Missouri National Education
Association.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:14 am