HB 1172 -- Payday Loans

Sponsor:  Burnett

This bill changes the laws regarding unsecured loans of $500 or
less.  The bill:

(1)  Requires lenders of unsecured loans under $500 to be
registered with the Director of the Division of Finance upon
payment of an annual fee of $300.  Lenders are required to file a
rate schedule with the director, who will approve rates
comparable to those charged in the marketplace in Missouri and
contiguous states and review the rates semiannually.  If the
director takes no action within 30 days after the filing of a
rate schedule, the rates are deemed approved.  The director may
promulgate rules regarding the computation and payment of
interest, contract statements, payment receipts, and advertising
for loans;

(2)  Repeals Section 408.505, RSMo, pertaining to payday loans,
persons determined to have entered into a transaction disguised
as a loan, persons determined to have engaged in subterfuge to
avoid this provision, and loan terms;

(3)  Repeals Section 408.506 which required the division to make
a report to the General Assembly every two years containing
information about the number of payday loan licenses issued, the
number of loans issued by licensees, the average face value of
the loans, the average number of times that the loans are
renewed, the default rate for the loans, the number and nature of
complaints made to the division, the average interest and fees
charged, and a comparison of the interest and fees charged in
this state and adjoining states; and

(4)  Repeals Section 408.510 defining "consumer installment loan"
and "consumer installment lender" to mean loans, and persons
making the loans, of any amount that is paid in no less than four
installments over no less than 120 days and requires consumer
installment lenders to follow the licensure, interest and fees,
notice, opportunity to cure, and collection procedures
established for other lenders.

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:42 am