HCS/SCS/SB 599 - This act modifies various provisions relating to financial instruments. LINKED DEPOSITS (Sections 30.260, 30.753, and 30.758) Under current law, no more than 10% of all time deposits of state moneys can be placed with any one single banking institution. This act raises that limitation to 15% of all time deposits of state moneys authorized under the asset authorization plan. Current law additionally outlines the manner in which the State Treasurer can determine the market rate, for purposes of the Linked Deposit Program. In addition to those provisions, this act permits the Treasurer to calculate the market rate based on current market investment indicators. The act increases the total amount that the State Treasurer may invest in linked deposits from $720 million to $800 million. The act also increases the amount of that $800 million that may be invested in small businesses from $110 million to $190 million. Furthermore, the act requires the State Treasurer to give priority to the funding of renewed linked deposit applications over the funding of new linked deposit applications. These provisions identical to certain provisions in HCS/SB 587 (2020), the perfected HB 1736 (2020), HCS/HB 2092 (2020), HCS/HB 2206 (2020), HCS/HB 2461 (2020), SB 439 (2019), and HB 1029 (2019). MISSOURI LOCAL GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM (Section 70.705) Currently, member contributions for the Missouri Local Government Employees' Retirement System are 0% or 4% of compensation. This act allows each political subdivision to elect an alternative member contribution amount of 2% or 6% of compensation. If a political subdivision elected a benefit program for certain members covered concurrently by Social Security and another for those members not covered concurrently by Social Security, the political subdivision may also elect one member contribution for those members who are covered and another contribution amount for those members who are not covered. This provision is identical provisions in the truly agreed to SS/SCS/HB 1467 & HB 1934 (2020), HCS/SS/SCS/SB 594 (2020), and HCS/SCS/SB 725 (2020) and substantially similar to SCS/SB 768 (2020). MISSOURI DEVELOPMENT FINANCE BOARD (Section 100.255) The act modifies the definition of "project" for purposes of the Missouri Development Finance Board Act to include any transfer, expenditure or working capital of the state, any agency or department of the state or any development agency. MISSOURI FAMILY TRUST COMPANY ACT (Sections 362.1015 to 362.1070) Family Members The act expands the types of entities that can be served by a family trust company to include an irrevocable trust of which one or more family members are the only permissible distributees. Registration of Family Trust Companies Under current law, any family trust company that is not a foreign family trust company is required to file an organizational statement. This act repeals that requirement and instead requires a family trust company to pay a one-time $5,000 filing fee, file an initial registration with the Secretary of State, and file an application for a certificate of authority if the company is an LLC. The act additionally requires foreign family trust companies to pay a one-time $5,000 filing fee to the Secretary of State. Authority to Manage a Family Trust Company Current law provides that exclusive authority to manage a family trust company may be vested in a limited liability company if the board of directors or managers consists of three directors or managers. This act modifies that provision by allowing exclusive authority to manage a family trust company to be vested in a limited liability company if the board of directors or managers consists of at least three directors or managers. Organizational Instrument The act modifies various provisions affecting organizational instruments filed by family trust companies. An organizational instrument of a family trust company must state that the purpose for which the company is formed is to engage in any and all activities permitted under the Missouri Family Trust Company Act. Additionally, the requirement that certain relatives be designated in the organizational instrument is repealed. Such relatives are instead required to be designated in the initial and annual registration reports filed by the family trust company. Furthermore, a provision is repealed prohibiting a family trust company from having more than one designated relative. Purchases Made by Family Trust Companies While Acting as a Fiduciary The act provides that, among other criteria, a family trust company cannot, while acting as a fiduciary, make certain purchases directly from underwriters, broker-dealers, or in the secondary market unless the company discloses its intent to do so in writing to all family members for whom the investment is to be made. Furthermore, the act modifies provisions governing conflicts of interest in the course of purchasing bonds or securities when the family member served by the family trust company is a trust. A family trust company is prohibited, while acting as a fiduciary, from purchasing a bond or security issued by the family trust company, its parent, or a subsidiary company of either unless the purchase is for a fair price in compliance with the Missouri Prudent Investor Act and the family trust company is expressly authorized to do so by: · A court order; · The terms of the instrument, judgment, decree, or order establishing the fiduciary relationship; or · If the fiduciary relationship was established by a trust instrument, written consent of the settlor, or of every adult qualified beneficiary, of the trust created under that instrument for which such purchase is made. These provisions are identical to provisions in HCS/HB 2461 (2020) and substantially similar to SB 984 (2020). CREDIT UNIONS (Sections 370.010 to 370.359) Triplicate and Duplicate Filings Current law requires credit unions to make certain filings with the Director of the Division of Credit Unions (DCU) within the Department of Commerce and Insurance in triplicate or duplicate. This act modifies this provision to require a single filing, rather than three or two. Other Forms of Delivery Current law requires the DCU Director to mail copies of certain filings made with the Division as well as notice to all interested parties for certain meetings pertaining to credit union business. This act permits any other form of delivery as an alternative to mail delivery. Board of Directors Membership The act modifies provisions relating to the board membership of credit unions by repealing a provision requiring the election of a president, vice president, secretary, and treasurer and requiring instead the election of a chairman, vice chairman, secretary, and treasurer. Moreover, the positions of secretary and treasurer may be held by the same person if the bylaws of the credit union so provide. Expulsion of Members The act permits the board of directors, the president, or a designated executive officer to expel a member of the credit union pursuant to a written policy adopted by the board. A person expelled may appeal such decision pursuant to such policy. Powers of Credit Unions and Boards of Directors In addition to powers currently granted, credit unions are permitted to collect fees and other charges for extensions of credit in connection with making, closing, disbursing, extending, collecting, renewing, or enforcing a debt in the event of delinquency by a member. (Section 370.300) The act repeals a provision allowing credit unions to charge entrance fees not to exceed one dollar. (Section 370.270) In addition to powers currently granted, the board of directors of a credit union is permitted to: • Authorize the employment and compensation of the chief executive officer; • Approve annual operating budgets for the credit union; • Declare dividends on regular shares; • Accept resignations and fill vacancies of the board, credit committee, and supervisory committee; • Amend the bylaws relating to membership action; and • Hear appeals of people denied membership by the credit union. (Section 370.200) The act repeals a provision allowing the board of directors to delegate to the treasurer, or manager, the power to make loans to members. (Section 370.220) Current law allows credit unions to make a charge to a member's share account if the member fails to keep the credit union informed about his or her current address. This act modifies that to allow a quarterly charge. (Section 370.260) Electronic Ballots Current law allows a credit union to charge initial or recurring membership fees, provided such fees have been approved by a majority of the membership in attendance at any regular or special meeting or by a mail ballot. This act allows such fees to be charged if approved by an electronic ballot as well. Current law also allows the bylaws of a credit union, when approved by the membership, to provide for mail ballots for the election of officers. This act allows for the use of electronic ballots for the election of officers as well. Reports and Examinations of Credit Unions Under current law, a credit union is required to make a report of its condition on or before January 31 of each year. This act modifies this provision to require reports to follow the reporting requirements of federal credit union insurers. Furthermore, it is the responsibility of the president or the president's designee to verify that the credit union has made this report. The act creates a provision allowing the DCU Director to accept an examination of a credit union made by the federal credit union insurer instead of the Director conducting an annual examination of a credit union. The act increases the length of time a credit union has to make a report before the DCU Director revokes its certificate of approval from 15 days to 30 days. Authorization of Loans or Advances The act requires any credit committee or a credit manager that is authorized to approve a loan or advance to follow the bylaws, policies, and procedures established by the board of directors. Credit Unions May Withhold Payments A credit union may refuse to make a payment from an account to a depositor, shareholder, any trust or payable on-death account beneficiary, or any other person claiming an interest in the account under certain circumstances detailed in the act. The credit union is not liable for damages as a result of an action taken under this provision. Loans to Members The act repeals a provision allowing members to receive a loan in installments instead of one sum if the loan is for purchasing necessary supplies for growing crops. The act additionally repeals a provision allowing a borrower to repay the whole or any part of a loan on any day on which the credit union is open. These provisions are substantially similar to provisions in SCS/SB 797 (2020), HCS/HB 2092 (2020), HCS/HBs 2204 & 2257 (2020), and HCS/HB 2461 (2020). FUNDS HELD IN RESERVE FOR LIFE CARE CONTRACTS (Section 376.945) This act specifies that the "entire amount" of entrance fee funds held in reserve for a life care contract shall be earned by "and available for release to" the care provider as provided by law, provided that the reserve and interest thereon shall not exceed "one hundred percent", rather than "one and one-half times the percentage", of the annual long-term debt principal and interest payments of the provider applicable only to living units occupied under life care contracts. The requirement to hold reserve funds may be met in whole or in part by other reserve funds held for the purpose of meeting loan obligations, provided that the total amount equals or exceeds the amount otherwise required. This provision is identical to SCS/SB 804 (2020), HCS/HB 2205 (2020), and a provision in the truly agreed to SS/SCS/HCS/HB 1682 (2020). CREDIT TRANSACTION DURATION (Section 385.015) The act increases, from 10 years to 15 years, the maximum duration of credit transaction that is subject to regulation under the statutes governing credit insurance. This provision is identical to SB 669 (2020), HB 1543 (2020), the perfected HB 1736 (2020), a provision in HCS/HB 2092 (2020), a provision in HCS/HB 2461 (2020), SB 246 (2019), and HB 815 (2019). TRADITIONAL INSTALLMENT LOANS - POLITICAL SUBDIVISION REGULATIONS (Section 408.512) The act requires any fee charged to any traditional installment loan lender, which is not charged to all lenders licensed or regulated by the Division of Finance, to be a disincentive created by a political subdivision in violation of the provisions of law governing traditional installment loan lending. The act additionally allows traditional installment loan lenders to charge, in addition to any other contractual fees, a convenience fee or surcharge for payments made by a debit or credit card. Furthermore, any traditional installment loan lender who prevails against a political subdivision in an action shall receive its actually incurred costs, including attorney fees, from such political subdivision. These provisions are identical to HB 2730 (2020) and substantially similar to SB 1087 (2020). SENIOR SAVINGS PROTECTION ACT (Sections 409.605 to 409.630) Under current law, only qualified individuals, as defined by law, are permitted to: • Notify authorities of the financial exploitation of senior citizens or persons with certain disabilities; or • Refuse disbursement of funds from the account of a senior citizen or person with a certain disability. This act modifies the definition of "qualified individual" to include broker dealers and investment advisers in addition to persons associated with a broker-dealer or investment adviser. Current law permits a qualified individual to notify certain persons connected with a senior citizen or person with a certain disability of suspected financial exploitation of such person. This act additionally permits an investment adviser representative to make such notifications. Additionally, the Department of Health and Senior Services and the Commissioner of Securities may provide information regarding the senior citizen or person with a certain disability to the qualified individual or investment adviser representative upon request. Current law allows a qualified individual to refuse a request for disbursement from the account of a senior citizen or person with a certain disability if the qualified individual reasonably believes that the disbursement will result in financial exploitation of the person. This act additionally permits refusal of any request for a transaction from the account of such a person. The act provides that in the event of a refusal of a disbursement or transaction from the account of a senior citizen or person with a certain disability, a qualified individual shall notify the Department of Health and Senior Services and the Commissioner of Securities within two business days. Current law requires notification within three business days. Additionally, the act requires the qualified individual to send a written notice, in the manner described in the act, to the qualified adult within two business days. The act allows the Commissioner of Securities and the Director of the Department of Health and Senior Services to enter an order extending any refusal of a disbursement or transaction for the time necessary to protect the senior citizen or person with a certain disability. Subsequent to issuing such an order, the respective agency shall conduct a review every 30 days to determine if the extending order shall remain in effect. The act extends immunity from any civil liability under the Senior Savings Protection Act to an investment adviser representative if he or she acts in good faith and exercises reasonable care in complying with the provisions of the act. The act requires a qualified individual to provide access, and copies of records that are relevant, to any suspected financial exploitation of a senior citizen or person with a certain disability to the Department of Health and Senior Services, the Commissioner of Securities, or law enforcement, upon request. No later than September 1, 2021, the Commissioner of Securities is required to make available to investment advisers and investment adviser representatives training resources of the prevention and detection of financial exploitation of senior citizens and persons with certain disabilities. These provisions are identical to provisions in HCS/HB 1451 (2020), certain provisions in the perfected HB 1736 (2020), certain provisions in HCS/HB 2092 (2020), and certain provisions in HCS/HB 2461 (2020). These provisions are also substantially similar to provisions in SCS/SB 654 (2020), SB 142 (2019), and HB 354 (2019). THE MISSOURI SECURITIES ACT OF 2003 (Sections 409.3-302 to 409.6-604) This act allows rules promulgated under Missouri Securities Act of 2003 to require certain federal covered securities under Section 18(b)(3) or 18(b)(4) of the Federal Securities Act of 1933 to make certain notice filings. Any late filing shall be accompanied by a fee of $50. The Commissioner of Securities may impose a civil penalty up to $25,000 rather than $5,000 for each violation of the Missouri Securities Act and may impose an additional penalty of $15,000 in certain circumstances, if the victim was an elderly or disabled person. These provisions are similar to provisions in SCS/SB 654 (2020), HB 1736 (2020), certain provisions in HCS/HB 2092 (2020), SB 142 (2019) and HB 354 (2019). MORTGAGE BROKER LICENSING (Sections 443.717 to 443.855) Current law requires mortgage loan originators to satisfy a prelicensing education requirement through approved education courses. This act provides that a prelicensing education course that is completed by an individual shall not satisfy this requirement if the course precedes an application by a certain time period established by the Nationwide Mortgage Licensing System and Registry (NMLSR). The act requires persons with various financial relationships with an applicant for a residential mortgage loan broker license to furnish fingerprints to the NMLSR to submit to the FBI and any governmental agency or person authorized to receive such information. The act further allows the Director of the Division of Finance to waive the requirement that residential mortgage loan brokers maintain at least one full-service office in the state of Missouri for any person that provides mortgage loan servicing or that is exclusively engaged in the business of loan processing or underwriting. These provisions are identical to provisions in the perfected HB 1736 (2020), HCS/HB 2092 (2020), and HCS/HB 2461 (2020), and substantially similar to the perfected SB 553 (2020), SB 339 (2019), certain provisions in HCS/HB 2092 (2020), and HB 757 (2019). DIVISION OF SECURITIES (Section 476.419) The act provides that a court shall not divide securities among multiple recipients in such a way that negotiable securities become nonnegotiable securities. Securities may be divided by a court into increments equal to a multiple of an allowable tradeable amount, as defined in the act. This provision is identical to HCS/HB 1702 (2020), a provision in the perfected HB 1736 (2020), a provision in HCS/HB 2092 (2020), and a provision in HCS/HB 2461 (2020). SCOTT SVAGERA