HCS SS SCS SB 892 -- FINANCIAL INSTITUTIONS

SPONSOR:  Scott (Cunningham, 145)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Institutions by a vote of 15 to 0.

This substitute changes the laws regarding financial
institutions.  In its main provisions, the substitute:

(1)  Authorizes an income tax credit based on the pro rata share
of corporate franchise tax paid by shareholders of S corporation
savings and loan association holding companies and credit
institutions;

(2)  Prohibits industrial loan companies or industrial banks from
establishing any deposit or loan production office or bank branch
to conduct any banking business within the state;

(3)  Requires a person seeking a repossession title to a
motorboat, vessel, watercraft, or a manufactured home to present
a notice of lien receipt or the original certificate of ownership
reflecting the holder's lien.  The substitute removes the
requirement that the lienholder must present the original or
photostatic copy of the security agreement and instead requires
presentation of an affidavit that the lienholder has the written
consent of all owners or lienholders of record to repossess the
motorboat, vessel, watercraft, or manufactured home or has
provided the parties with written notice of the repossession.
The substitute also imposes specific notice requirements upon the
lienholder that are similar to the requirements for persons
repossessing motor vehicles.  The lienholder must give 10 days'
written notice by first class mail to the owners and other
lienholders;

(4)  Increases the amount of a corporate surety bond that
applicants for a license to sell travelers checks or money orders
must have from $25,000 to $100,000.  The bond will be used to
secure the faithful performance of the obligations of the
applicant and to pay the costs incurred by the Division of
Finance within the Department of Economic Development to remedy
any breach of the obligations of the applicant or to pay
examination costs of the division that have not been paid.  Upon
license renewal, the bond amount will be either five times the
highest outstanding balance or five times the greatest amount
transmitted in a single day from the previous year with a minimum
bond amount of $100,000 and a maximum of $1 million.  The
division director will be authorized to perform an examination of
any person licensed under the substitute if necessary;

(5)  Changes the reporting requirements of past due loan amounts
that the board of directors of every bank and trust company must
provide at their monthly meetings and allows lenders to
accelerate maturity of an unpaid balance, take possession of the
property, or enforce a security interest on a loan if a borrower
has defaulted on a second mortgage three times;

(6)  Requires any individual owner of a manufactured home, when
converting it to real property by attaching the home to a
permanent foundation on real estate, to surrender the certificate
of title to the Director of the Department of Revenue and to
register the home with the recorder of deeds and the tax assessor
for the county where the manufactured home is converted to real
estate; and

(7)  Requires the department director to notify each lienholder
of the surrender of any certificate of title for a manufactured
home no later than 15 business days after receiving a certificate
of title for cancellation.  Currently, the department director
mails confirmation of each notice of lien to the lienholder no
later than 15 business days after the filing of the notice of
lien.  Lienholders who file timely are also allowed to retain
their lien in the manufactured home as real estate continuously
without interruption and have priority over subsequently filed
liens.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $4,572 to
Unknown in FY 2007, $0 to Unknown in FY 2008, and $0 to Unknown
in FY 2009.  No impact on Other State Funds in FY 2007, FY 2008,
and FY 2009.

PROPONENTS:  Supporters say that the bill preserves separation of
banking and commerce.  Limiting the ability of out-of-state
industrial loan companies from opening banks in Missouri is
important.  Additionally, changing right-to-cure notices from two
to three times is important for protecting consumers.

Testifying for the bill were Senator Scott; Missouri Bankers
Association; Missouri Independent Bankers Association; Missouri
Association of Realtors; Division of Finance, Department of
Economic Development; Mortgage Bankers Association of Missouri;
Missouri Financial Services Association; Farm Credit Services of
Missouri; and Wal-mart.

OPPONENTS:  There was no opposition voiced to the committee.

OTHERS:  Others testifying on the bill say that currently
Wal-mart can have their own credit union as it is now.

Others testifying on the bill was Missouri Credit Union System.

Marc Webb, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:46 am