- Perfected -

SCS/SB 1038 - This act modifies a number of laws associated with banking.

State employees are authorized to make investment deposits from their paycheck into their bank or savings and loan (Sections 33.103, 362.191 and 369.176).

This act creates the "Missouri Higher Education Deposit Program" (Sections 166.435 to 166.556). This program is a nonexclusive alternative to the Missouri Higher Education Savings Program and participants may elect to participate in both programs subject to aggregate program limitations. The program is administered by the Missouri Higher Education Savings Program Board. The Board is required to meet at least quarterly. The act adds an additional member to the Board who shall be a private member with experience in banking or deposit rate determination and placement of depository certificates of deposit (166.415).

The Board is granted certain powers to develop and implement the program, including the power to enter into agreements with financial entities for the operation of the deposit program, provided that such entity is a private for-profit or not-for-profit entity, and the power to enter into participation agreements with participants in the program. The Board may invest the funds received from participants in appropriate investment instruments held by depository institutions or directly deposit the funds in such institutions. The investment of funds may be delegated by the Board to representatives of financial entities, but the investment must be in certificates of deposit and other deposits in federally insured depository institutions. Such representatives must pass a board-approved qualification test and be certified by the Board.

The Board is responsible for establishing various deposit opportunities based on amounts deposited and time held that are uniformly available to all depository institutions that participate in the program. The various categories of fixed or variable rates shall be the only interest rates available under this program.

The Board is authorized to enter into agreements with participants on behalf of beneficiaries. The agreement must include certain terms and conditions, including the method for calculating the return on the contribution, the risks associated with the investment, the maximum amount that may be contributed annually, and an understanding that the agreement does not guarantee admittance to any eligible educational institution. The Board shall establish the maximum annual amount that may be contributed by a participant and the minimum length of time that contributions and earnings must be held by the program. Early withdrawals shall be subject to a penalty. The board shall allow participants to contribute in minimum increments of $50.

Contributions and earnings in the program may be used for qualified educational expenses. Participants may cancel a participation agreement at will. The Board shall impose a maximum 10% penalty of the earnings of the account for any distribution not used for certain purposes. The State Auditor shall, semi-annually, review the financial status and investment policy of the program as well as the participation rate and continued viability of the program. Money accruing to and deposited in individual deposit accounts shall not be part of "total state revenues" as defined by the Missouri Constitution. Personally identifiable information regarding participants and beneficiaries shall be confidential.

The recording fee for the expedited filing of title or liens is increased from $6 to $15 (Section 408.032). Currently, contracts may provide for a charge for late payment on installments in an amount not to exceed the greater of 5% of each installment due or $15, except that a minimum charge of $10 may be made. The act deletes language concerning the minimum charge of $10 (Section 408.140).

On loans of more than $600, the lender may collect a fee in advance for allowing a debtor to defer monthly loan payments, provided the debtor agrees in writing and the fee is no more than the lesser of $50 or 10% of the loan payments deferred (Section 408.178). The charging of certain fees shall be considered permitted, even if the loans are exempt from other requirements (Sections 408.190 and 408.232). Changes made in this act to sections concerning allowable fees are remedial in nature (Section 408.480).

The act creates definitions for the deceptive use of a financial institution's name in notification or solicitation and deceptive use of another's name in notification or solicitation. A financial institution whose name is deceptively used may bring a private civil action and may recover a minimum of $10,000, plus court costs and attorneys fees, plus any damages such financial institution proves at trial (Section 427.225). Debtors are prohibited from maintaining an action or defense related to a credit agreement, regardless of the legal theory advanced (Section 432.045). The act provides that secured parties receiving satisfaction for debt secured with regard to a mortgage who fail to deliver to the person making satisfaction a sufficient deed of release within 45 days shall forfeit to the mortgagor 10% of the amount of the security instrument. Currently, the time for making such delivery is 15 days. If a document is rejected for recording, the secured party shall 60 days to resubmit the document (Section 443.130).

JIM ERTLE