HB 292 Modifies provisions relating to banks, trust companies, and other financial institutions
Sponsor: Cunningham
LR Number: 0685S.08T Fiscal Notes
Committee: Insurance and Banking
Last Action: 7/11/2017 - Signed by Governor Journal Page:
Title: SS SCS HCS HB 292 Calendar Position:
Effective Date: August 28, 2017
House Handler: Crawford

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Current Bill Summary


SS/SCS/HCS/HB 292 - This act modifies provisions relating to banks, trust companies, and other financial institutions.

POWER OF BANKS AND TRUST COMPANIES - REAL ESTATE

Under this act, any bank or trust company organized under Missouri law may acquire or lease real property for the purpose of leasing that property to a public entity.

This provision is similar to a provision in SCS/SB 102 (2017).

SERVICES CONTRACTED FOR BY A BANK OR TRUST COMPANY

Under current law, banks and trust companies are limited in the types of services for which they can contract. This act stipulates that any bank or trust company may contract with any other bank or trust company, bank service corporation or other partnership, corporation, association or person to render or receive any banking or trust services authorized by law. Further, any entity that provides services to a bank or trust company shall be subject to examination by the Division of Finance, except for an entity that is:

1. Examined under federal law;

2. A founding member and represented on the executive committee of the Payment Card Industry Security Standards Council.

Banks and trust companies are also required to provide a list of all persons and entities that provide services to the bank or trust entity.

This provision is similar to a provision in SCS/SB 102 (2017).

PURCHASING OF STOCK

The act repeals a requirement that the purchase and holding of stock in a corporation by a bank or trust company receive written approval from the director of such bank or trust company.

This provision is identical to a provision in SCS/SB 102 (2017).

CONVENIENCE FEES

The act further permits banks, holders of retail time contracts, lenders of certain small loans, and holders of retail installment contracts to charge a convenience fee for accepting a payment using an alternative payment channel that accepts a debit or credit card not present, non-face-to-face payment, provided that:

1. The person making the payment is notified that they are being charged the fee; and

2. The convenience fee is fixed or flat.

This provision is substantially similar to a provision in SCS/SB 102 (2017).

ANNUAL EXAMINATIONS

Provisions requiring an annual examination of certain bank and trust companies are repealed by this act.

This provision is identical to a provision in SCS/SB 102 (2017).

FAMILY TRUST COMPANIES

This act furthermore creates new provisions relating to family trust companies. A family trust company is a corporation or limited liability company owned and exclusively controlled by, directly or indirectly, one or more family members. The company must operate exclusively for the benefit of a family member, as that term is defined in the act.

Under this act, a family trust company is not permitted to conduct business in Missouri without first registering with the Secretary of State, maintaining a capital account of not less than $250,000, and paying a origination fee of $5,000. Furthermore, the company shall also maintain a physical office in Missouri, a registered agent who maintains an office in Missouri, and a deposit account with a state-chartered or national financial institution that has a principal or branch office in Missouri. A family trust company is also thereafter required to file annual registration reports with the Secretary of State reaffirming the company's compliance with the this act. These reports must be signed under penalty of perjury. Failure to file such report may be subject to a fine of up to $100 for each day the report is overdue. Failure to file the report within 60 days will result in termination of the company's registration as a family trust company.

The act establishes the Family Trust Company Fund for the purpose of enabling the Secretary of State to perform its required functions under this act.

A family trust company may not engage in commercial banking or advertise its services to the public.

The Secretary of State, or a designee of the Secretary, is permitted to examine or investigate a family trust company at any time deemed necessary to determine if the company violated certain provisions of this act. The Secretary may additionally examine the books and records of the company as necessary to determine if the company is complying with this act. The company is responsible for paying the costs of such examinations.

The Secretary of State may issue and serve upon the family trust company or a family trust company affiliated party a notice of charges when the Secretary has reason to believe that the company, party, or any individual named in the charge is engaging or has engaged in certain actions which are contrary to the provisions of this act. Such notices issued by the Secretary shall contain a statement of the facts as well as an opportunity for a hearing. If the Secretary finds that the conduct engaged in is likely to cause substantial prejudice to the trust accounts of the company, the Secretary may issue a cease and desist order.

The CEO of a family trust company is required to notify the Secretary of State if he or she has actual knowledge that a affiliated party of the company is charged with a felony in a state or federal court. Additionally, if such a party is charged with a felony in a state or federal court, or certain crimes in foreign countries with which the United State maintains diplomatic relations, then the Secretary may enter an emergency order suspending the party.

The books and records of each family trust company are confidential and available for inspection and examination only by certain entities, including the Secretary of State. The willful unlawful disclosure of confidential information in violation of this provision is a Class E felony.

Additionally, the act outlines certain types of information held by the Secretary of State which shall remain confidential and not subject to the Sunshine law. This information may be disclosed by the Secretary under certain circumstances, but generally the willful disclosure of such information is a Class E felony.

Any person aggrieved by any order made by the Secretary of State under this act is entitled to a hearing before the Secretary.

These provisions are identical to SCS/SB 430 (2017) and substantially similar to HCS/HB 291 (2017).

RESIDENTIAL MORTGAGE LOAN BROKERS

Under this act, any residential mortgage loan broker licensed in this state, who exclusively makes loans on manufactured or modular homes, is not required to maintain a full-service office in this state. Such brokers are required to file an irrevocable consent which provides that for suits and actions commenced against the broker, the venue shall lie in Cole County.

Reasonable costs may be assessed for any investigation incurred by the Division of Finance outside the scope of annual or special investigations as a result of the broker not maintaining a full-service office in Missouri. Any such costs collected shall be paid to the Department of Insurance, Financial Institutions, and Professional Registration to the credit of the Division of Finance.

These provisions are substantially similar to SCS/SB 422 (2017) and HCS/HB 746 (2017).

MARKET CONDUCT OF INSURANCE COMPANIES

The act stipulates that if the Director of the Department of Insurance, Financial Institutions and Professional Registration determines that an insurance company should pay interest upon any claims, refunds, or payments due to an examination, investigation, settlement agreement, or other action that the interest charged shall be determined as provided under current law, but not to exceed 9%.

This provision is identical to HCS/HB 345 (2017) and a provision in HCB 10 (2017), and similar to SB 336 (2017).

SCOTT SVAGERA