HB 1975 -- FINANCIAL INSTITUTIONS

SPONSOR:  Cunningham (145)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Institutions by a vote of 14 to 0.

Currently, applicants for a license to sell travelers checks or
money orders must include a corporate surety bond in an amount of
$25,000.  This bill increases that amount to $100,000.  The bond
will be used to secure the faithful performance of the
obligations of the applicant and to pay the costs incurred by the
Division of Finance within the Department of Economic Development
to remedy any breach of the obligations of the applicant or to
pay examination costs of the division that have not been paid.

Upon license renewal, the bond amount will be either five times
the highest outstanding balance or five times the greatest amount
transmitted in a single day from the previous year with a minimum
bond amount of $100,000 and a maximum of $1 million.  The
division director will be authorized to perform an examination of
any person licensed under the bill if necessary.

The bill changes reporting requirements of past due loan amounts
that the board of directors of every bank and trust company must
provide at their monthly meetings and allows lenders to
accelerate maturity of an unpaid balance, take possession of the
property, or enforce a security interest on a loan if a borrower
has defaulted on a second mortgage three times.

FISCAL NOTE:  No impact on state funds in FY 2007, FY 2008, and
FY 2009.

PROPONENTS:  Supporters say that the bill increases consumer
protections regarding money service businesses.  The bill will
also reduce the regulatory burden on banks and will clarify
confusion on the reporting requirements of financial
institutions.

Testifying for the bill were Representative Cunningham (145);
Division of Finance, Department of Economic Development; Missouri
Bankers Association; Mortgage Bankers Association of Missouri;
and Missouri Financial Services Association.

OPPONENTS:  There was no opposition voiced to the committee.

Marc Webb, Legislative Analyst

Missouri House of Representatives
93rd General Assembly, 2nd Regular Session
Last Updated November 29, 2006 at 9:45 am