HB 2571 Modifies provisions relating to the Division of Finance

     Handler: Crawford

Current Bill Summary

- Prepared by Senate Research -


SCS/HB 2571 - This act modifies and creates various new provisions relating to financial services.

MISSOURI WORKPLACE RETIREMENT SAVINGS

(Sections 285.1000 - 285.1055)

This act establishes new provisions relating to retirement savings plans for private-sector employees. These provisions are identical to the perfected HCS/HB 1732 (2022) and substantially similar to SB 1125 (2022), and SB 1213 (2022) and substantially similar to SB 298 (2021).

The act creates the Missouri Workplace Retirement Savings Plan, which is a multi-employer retirement plan. The plan is to be designed, developed, and implemented by the Missouri Workplace Retirement Savings Board in accordance with the limitations and requirements set forth by the act. Each eligible employee may opt-in to contribute a minimum of one percent or any percentage, up to the maximum, in increments of one-half of one percent, of his or her salary or wages to the plan, or may, at a later date, elect to opt-out of the plan or may contribute at a higher or lower rate, expressed as a percentage of salary or wages. The Board is permitted to provide for an annual increase in the contribution amount of each employee. Such increase shall be by not less than 0.5% per year. The plan is required to be fully implemented no later than September 1, 2024.

An annual audit is required to be conducted of the Missouri Workplace Retirement Savings Plan, the Missouri Workplace Retirement Savings Board, and the trust in which the assets of the plan are held. Such audit shall be completed by a certified public accountant and be submitted to the Governor, Treasurer, President Pro Tem of the Senate, and Speaker of the House of Representatives.

The act creates the Missouri Workplace Retirement Savings Board within the State Treasurer's office, of which the State Treasurer shall be the chair. With the exception of the Treasurer, all members of the Board are appointed by the Governor, the President Pro Tem of the Senate, or the Speaker of the House of Representatives. Such members shall serve at the pleasure of the appointing authority, but in no event longer than four years.

The Board is required to conduct outreach to individuals, employers, stakeholders, and the public in general about the program. Such outreach shall include informing them of the benefits of tax-favored retirement saving and other information, as specified in the act.

The Board is permitted to enter into intergovernmental memoranda of understanding with the state and any agency of the state for the purpose of services needed to implement the plan.

The act provides that no employer shall be liable, or bear responsibility, for an employee's decision to participate in the plan or for any result, decision, or action as a result of an employee participating in the plan.

Furthermore, the act exempts certain public entities from liability for any loss, deficiency, failure to realize gain, or other adverse consequences incurred as a result of participation in the plan by an employee.

The act provides that certain individual account information under the plan shall be confidential and may only be disclosed as otherwise required under state or federal law, or at the request of the individual.

This act modifies various provisions relating to the regulation of certain financial institutions.

DIVISION OF FINANCE REGULATIONS

The act modifies various provisions relating to the regulation of financial institutions. These provisions are substantially similar to SB 1096 (2022).

AUTHORITY OF THE DIVISION OF FINANCE

(Section 361.020)

The act stipulates that the Division of Finance is in charge of the execution of the laws relating to banks, trust companies, and the banking business of the state; laws relating to persons and entities engaged in the small loan or consumer credit business in the state; the laws relating to persons and entities engaged in the mortgage business in the state; and the laws relating to persons and entities engaged in any other financial services related to business over which the Division of Finance is granted express authority.

RESPONSIBILITIES OF THE DIVISION OF FINANCE - STATE BANKING AND SAVINGS AND LOAN BOARD

(Section 361.098)

The act provides that the compensation and necessary travel and other expenses of the members of the State Banking and Savings and Loan Board shall be paid out of the Division of Finance Fund.

Current law provides that a majority of the members of the State Banking and Savings and Loan Board constitutes a quorum. This act provides that three members of the board shall constitute a quorum.

The Division is permitted to provide administrative services to the Board to assist the Board with fulfilling its statutory responsibilities.

BULLETINS AND INDUSTRY LETTERS ISSUED BY DIVISION OF FINANCE

(Section 361.106)

The act permits the Division to issue bulletins addressing the business of individuals and entities licensed, chartered, or regulated by the Division. Bulletins do not have the force or effect of law and should not be considered statements of general applicability.

The act also permits the Division to issue industry letters. Industry letters may be issued, in the discretion of the director of the Division, at the request of an individual or entity licensed, chartered, or regulated by the Division, and that seeks the Division's position on an application of law. The act details the requirements that must be met in issuing an industry letter. Industry letters are binding on the Division and the requesting party shall not be subject to any administrative proceeding or penalty for any acts or omissions done in reliance on an industry letter, provided there is no change in any material fact or law or the discovery of a material misrepresentation or omission made by the requesting party.

REPORTS OF EXAMINATIONS OF BANKS AND TRUST COMPANIES

(Section 361.160)

The act repeals an obsolete requirement that the result of all examinations of banks and trust companies during a biennial period be embodied in a report made by the Director of the Department of Commerce and Insurance to the General Assembly, such reporting requirement having previously been repealed.

NOTICES OF CHARGES AND CEASE AND DESIST ORDERS

(Section 361.260)

The act clarifies the requirements for issuing a notice of charges with respect to a director, officer, employee, agent, or other person participating in the affairs of a bank or trust company regulated by the Division under Chapter 361. Specifically, whenever the director has reason to believe from any examination or investigation made by the director or his or her examiners, that any such corporation, foreign corporation, or director, officer, employee, agent, or other person participating in the conduct of the affairs of such corporation is engaging in, has engaged in, or is about to engage in:

· An unsafe or unsound practice in conducting the business of such corporation;

· A violation of law, rule, or director-imposed written condition;

· A violation of any written agreement entered into with the director; or

· A violation of the corporation's charter,

the director may issue and serve upon the corporation or

such director, officer, employee, agent, or other person a

notice of charges in respect thereof.

Any cease and desist order issued by the Division in response to one of the above-described charges is subject to the following:

· It may require the corporation or its directors, officers, employees, agents, and other persons participating in the conduct of the affairs of such corporation to cease and desist from such actions, violations, or practices;

· It may require the corporation or its directors, officers, employees, agents, and other persons participating in the conduct of the affairs of such corporation to take affirmative action to correct the conditions resulting from any such actions, violations, or practices;

· It shall require that, if the director determines that the capital of the corporation is impaired, the corporation make good the deficiency forthwith or within a time specified in the order;

· It may, if the director determines that the corporation does not keep adequate records, determine and prescribe such books of account as the director, in his or her discretion, shall require of the corporation for the purpose of keeping accurate and convenient records of the transactions and accounts; and

· It shall, if the director determines that wrong entries or unlawful uses of the funds of the corporation have been made, order that the entries shall be corrected, and the sums unlawfully paid out be restored by the person or persons responsible for the wrongful or illegal payment thereof.

NOTICE OF REMOVAL FROM OFFICE

(Section 361.262)

The act modifies the process for serving a notice of intention to remove a person from office in a bank or trust company regulated by the Division under Chapter 361.

FEES COLLECTED BY DIVISION OF FINANCE

(Sections 361.715, 364.030, 364.105, 365.030, 367.140, 407.640, 408.500)

The act modifies the following fees collected by the Division of Finance:

· From $300 to $350, the annual fee paid by persons seeking a license to issue checks. (Section 361.715.2);

· The maximum fee that may be charged for any application to amend and reissue an existing license to issue checks is increased from $300 to $350. (Section 361.715.3);

· From $500 to $550, the annual license fee for each place of business of a financial institution licensed under state law. (Section 364.030.3);

· From $500 to $550, the annual registration fee for a premium finance company. (Section 364.105.2);

· From $500 to $550, the annual license fee for each place of business of a sales finance company. (Section 365.030.3);

· From $500 to $550, the fee paid by lenders of consumer credit loans when filing an application for certificate of registration. (Section 367.140.1);

· The maximum fee that may be charged a credit services organization when filing a registration statement with the Director of the Division is increased from $300 to $350. (Section 407.640.5); and

· From $500 to $550, the annual license fee charged to lenders, other than banks, trust companies, credit unions, savings banks and savings and loan companies, in the business of making unsecured loans of $500 or less. (Section 408.500.1).

COMMERCIAL FINANCING DISCLOSURE ACT

(Section 427.300)

This act creates the "Commercial Financing Disclosure Act." These provisions are substantially similar to SCS/SB 963 (2022). Under this act, any person who consummates more than 5 commercial financing products, as defined in the act, to a business located in this state in a calendar year is required to make certain disclosures to the business with regard to the product. Specifically, the provider is required to disclose the following:

· The total amount of funds provided to the business under the terms of the commercial financing product;

· The total amount of funds disbursed to the business under the terms of the commercial financing product, if less than the total amount of funds provided, as a result of any fees deducted or withheld at disbursement and any amount paid to a third party on behalf of the business;

· The total amount to be paid to the provider pursuant to the commercial financing product agreement;

· The total dollar cost of the commercial financing product under the terms of the agreement, derived by subtracting the total amount of funds provided from the total of payments;

· The manner, frequency and amount of each payment;

· A statement of whether there are any costs or discounts associated with prepayment of the commercial financing product including a reference to the paragraph in the agreement that creates the contractual rights of the parties related to prepayment;

· Any amount of the funds provided to the business under the terms of the commercial financing product that the provider pays to a broker in connection with the commercial financing transaction.

Violations of this act are punishable by a fine of $500 per incident, not to exceed $20,000 for all aggregated violations. Any person who violates any provision of this act after receiving written notice of a prior violation from the Attorney General shall be punishable by a fine of $1,000 per incident, not to exceed $50,000 for all aggregated violations arising from the use of the transaction documentation or materials found to be in violation of this act.

Violation of any provision of this act does not affect the enforceability or validity of the underlying agreement.

This act does not create a private cause of action against any person or entity based upon noncompliance with this act.

The Attorney General is given authority to enforce the provisions of this act.

These provisions contain various exemptions.

EXEMPTION OF MOST SAVINGS FROM ATTACHMENT AND EXECUTION IN CERTAIN LEGAL PROCEEDINGS

(Section 513.430)

The act exempts moneys accruing to and deposited in a savings account established pursuant to the Missouri Education Savings Program, commonly referred to as MOST, from attachment and execution in certain legal proceedings, as provided in the act.

This provision is identical to HB 1940 (2022), a provision in the perfected HCS/HB 2171 (2022), a provision in the perfected HB 2493 (2022), and HB 454 (2022).

TAMPERING WITH TELLER MACHINES

(Sections 569.010 through 570.030)

This act adds to the offense of property damage in the first degree if such person knowingly damages, modifies, or destroys a teller machine or otherwise makes it inoperable.

This offense is a Class D felony unless committed for the purpose of executing any scheme or artifice to defraud or obtain any property, the value of which exceeds $750 or the damage to the teller machine exceeds $750, in which case it is a Class C felony. It shall be a Class B felony if committed for the purpose of obtaining the personal financial credentials of another person or if the person has committed a second or subsequent offense of damaging a teller machine.

This act adds that the offense of stealing shall be a Class C felony if the property stolen is a teller machine or the contents of a teller machine including cash regardless of the value or amount stolen.

These provisions are identical to SCS/SB 831 (2022) and substantially similar to provisions in the perfected HB 1637 (2022) and the perfected HCS/HB 2127 (2022).

MONEY LAUNDERING

(Section 574.105)

This act modifies the offense of money laundering to include when a person conducts a financial transaction with the purpose to promote or aid criminal activity, to disguise criminal activity, to avoid reporting requirements under federal law, or to aid any terrorist threat.

Under this act, a "financial transaction" shall include a transaction involving the movement of funds by wire; a transaction involving monetary instruments such as cryptocurrency, personal checks, bank orders, or money orders; the transfer of title to any real property; or a transfer involving the use of a financial institution as defined in federal law.

These provisions are identical to the perfected HB 1472 (2022) and substantially similar to HB 1638 (2022).

SCOTT SVAGERA


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