FIRSTREGULARSESSION
HOUSEBILLNO.1325
103RDGENERALASSEMBLY
INTRODUCEDBYREPRESENTATIVEFOGLE.
1451H.01I JOSEPHENGLER,ChiefClerk
ANACT
Torepealsections367.515,408.500,408.505,and408.510,RSMo,andtoenactinlieu
thereofsixnewsectionsrelatingtosmallloans,withpenaltyprovisionsanda
referendumclause.
BeitenactedbytheGeneralAssemblyofthestateofMissouri,asfollows:
SectionA.Sections367.515,408.500,408.505,and408.510,RSMo,arerepealed
2andsixnewsectionsenactedinlieuthereof,tobeknownassections367.105,367.515,
3408.101,408.500,408.505,and408.510,toreadasfollows:
367.105.Anypersonmakingorofferingaconsumercreditloanshallcontract
2forandreceiveinterestandfeesinaccordancewithsections408.100,408.101,408.140,
3and408.170,andsuchloanshallbesubjecttoallprovisionsofsections408.100,408.101,
4408.140,and408.170.
367.515.Atitlelendershallcontractforandreceivesimpleinterestandfeesin
2accordancewithsections408.100, 408.101,and408.140, andsuchinterestandfeesshallbe
3subjecttoallprovisionsofsections408.100,408.101,and408.140.
408.101.1.Onanyloansubjecttothissection,anyperson,firm,orcorporation
2maycharge,contractfor,andreceiveinterestontheunpaidprincipalbalanceatrates
3agreedtobytheparties,providedthatthecombinedinterest,fees,andfinancecharges
4shallnotexceedanannualpercentagerateofthirty-sixpercent.
5 2.Noperson,firm,orcorporationshalluseanydeviceorsubterfugeto
6intentionallyevadetherequirementsofthischapterto:
7 (1)Offer,make,assistaborrowerinobtaining,orbrokeraloanatanannual
8percentagerateprohibitedbythissection;
EXPLANATION—Matterenclosedinbold-facedbrackets[thus] intheabovebillisnotenactedandis
intendedtobeomittedfromthelaw.Matterinbold-facetypeintheabovebillisproposedlanguage. 9 (2)Makealoandisguisedasapersonalpropertysaleandleasebacktransaction;
10 (3)Disguiseloanproceedsascashrebatesforthepretextualinstallmentsaleof
11goodsorservices;
12 (4)Make,assistaborrowerinobtaining,orbrokeranofferofcredit,inwholeor
13inpart,fromathirdpartyorwhileactingasanagentforathirdparty,regardlessof
14whetherthethirdpartyisexemptfromlicensingoriftheapproval,acceptance,or
15ratificationbythethirdpartyisnecessarytocreatealegalobligationforthethird
16party;or
17 (5)Charge,ifauthorizedunderanyapplicablesectionofMissourilaw,any
18applicationfeeforprovidingcreditoranyfeeforparticipationinacreditplanwithout
19includingthefeeinthecalculationoftheannualpercentageraterequiredunderthis
20section.
408.500.1.Lenders,otherthanbanks,trustcompanies,creditunions,savingsbanks
2andsavingsandloancompanies,inthebusinessofmakingunsecuredloansoffivehundred
3dollarsorlessshallobtainalicensefromthedirectorofthedivisionoffinance.Anannual
4licensefeeofsixhundreddollarsperlocationshallberequired.Thelicenseyearshall
5commenceonJanuaryfirsteachyearandthelicensefeemaybeproratedforexpiredmonths.
6Thedirectormayestablishabienniallicensingarrangementbutinnocaseshallthefeesbe
7payableformorethanoneyearatatime.Theprovisionsofthissectionshallnotapplyto
8pawnbrokerloans,consumercreditloansasauthorizedunderchapter367,nortoacheck
9acceptedanddepositedorcashedbythepayeebusinessonthesameorthefollowingbusiness
10day.ThedisclosuresrequiredbythefederalTruthinLendingAct,15U.S.C.Section1601et
11seq.,andregulationZshallbeprovidedonanyloan,renewalorextensionmadepursuantto
12thissectionandtheloan,renewalorextensiondocumentsshallbesignedbytheborrower.
13 2.Entitiesmakingloanspursuanttothissectionshallcontractforandreceivesimple
14interestandfeesinaccordancewithsections408.100,408.101,and408.140, andsuchloans
15shallbesubjecttoallprovisionsofsections408.100,408.101,and408.140. Anycontract
16evidencinganyfeeorchargeofanykindwhatsoever,exceptforbonafideclericalerrors,in
17violationofthissectionshallbevoid.Anyperson,firmorcorporationwhoreceivesor
18imposesafeeorchargeinviolationofthissectionshallbeguiltyofaclassAmisdemeanor.
19 3.Notwithstandinganyotherlawtothecontrary,costofcollectionexpenses,which
20includecourtcostsandreasonableattorneysfees,awardedbythecourtinsuittorecoverona
21badcheckorbreachofcontractshallnotbeconsideredasafeeorchargeforpurposesofthis
22section.
23 4.Lenderslicensedpursuanttothissectionshallconspicuouslypostinthelobbyof
24theoffice,inatleastfourteen-pointboldtype,themaximumannualpercentageratessuch
25licenseeiscurrentlychargingandthestatement:
HB1325 2 26 NOTICE:
27 Thislenderoffersshort-termloans.Pleasereadandunderstand
28 thetermsoftheloanagreementbeforesigning.
29 5.Thelendershallprovidetheborrowerwithanoticeinsubstantiallythefollowing
30formsetforthinatleastten-pointboldtype,andreceiptthereofshallbeacknowledgedby
31signatureoftheborrower:
32 (1)Thislenderoffersshort-termloans.Pleasereadandunderstandthetermsofthe
33loanagreementbeforesigning.
34 (2)Youmaycancelthisloanwithoutcostsbyreturningthefullprincipalbalanceto
35thelenderbythecloseofthelender'snextfullbusinessday.
36 6.Thelendershallrenewtheloanupontheborrower'swrittenrequestandthe
37paymentofanyinterestandfeesdueatthetimeofsuchrenewal;however,uponthefirst
38renewaloftheloanagreement,andeachsubsequentrenewalthereafter,theborrowershall
39reducetheprincipalamountoftheloanbynotlessthanfivepercentoftheoriginalamountof
40theloanuntilsuchloanispaidinfull.However,noloanmayberenewedmorethansix
41times.
42 7.Whenmakingornegotiatingloans,alicenseeshallconsiderthefinancialabilityof
43theborrowertoreasonablyrepaytheloaninthetimeandmannerspecifiedintheloan
44contract.Allrecordsshallberetainedatleasttwoyears.
45 8.Alicenseewhoceasesbusinesspursuanttothissectionmustnotifythedirectorto
46requestanexaminationofallrecordswithintenbusinessdayspriortocessation.Allrecords
47mustberetainedatleasttwoyears.
48 9.Anylenderlicensedpursuanttothissectionwhofails,refusesorneglectsto
49complywiththeprovisionsofthissection,oranylawsrelatingtoconsumerloansorcommits
50anycriminalactmayhaveitslicensesuspendedorrevokedbythedirectoroffinanceaftera
51hearingbeforethedirectoronanorderofthedirectortoshowcausewhysuchorderof
52suspensionorrevocationshouldnotbeenteredspecifyingthegroundsthereforwhichshallbe
53servedonthelicenseeatleasttendayspriortothehearing.
54 10.Wheneveritshallappeartothedirectorthatanylenderlicensedpursuanttothis
55sectionisfailing,refusingorneglectingtomakeagoodfaithefforttocomplywiththe
56provisionsofthissection,oranylawsrelatingtoconsumerloans,thedirectormayissuean
57ordertoceaseanddesistwhichordermaybeenforceablebyacivilpenaltyofnotmorethan
58onethousanddollarsperdayforeachdaythattheneglect,failureorrefusalshallcontinue.
59Thepenaltyshallbeassessedandcollectedbythedirector.Indeterminingtheamountofthe
60penalty,thedirectorshalltakeintoaccounttheappropriatenessofthepenaltywithrespectto
HB1325 3 61thegravityoftheviolation,thehistoryofpreviousviolations,andsuchothermattersas
62justicemayrequire.
408.505.1.Thissectionshallapplyto:
2 (1)Unsecuredloansmadebylenderslicensedorwhoshouldhavebeenlicensed
3pursuanttosection408.500;
4 (2)AnypersonthattheMissouridivisionoffinancedeterminesthathasenteredintoa
5transactionthat,insubstance,isadisguisedloan;and
6 (3)AnypersonthattheMissouridivisionoffinancedetermineshasengagedin
7subterfugeforthepurposeofavoidingtheprovisionsofthissection.
8 2.Allloansmadepursuanttothissectionandsection408.500,shallhaveaminimum
9termoffourteendaysandamaximumtermofthirty-onedays,regardlessofwhethertheloan
10isanoriginalloanorrenewedloan.
11 3.Alendermayonlychargesimpleinterestandfeesinaccordancewithsections
12408.100, 408.101,and408.140, andsuchinterestandfeesshallbesubjecttoall
13provisionsofsections408.100,408.101,and408.140. Nootherchargesofanynatureshall
14bepermittedexceptasprovidedbythissection,includinganychargesforcashingtheloan
15proceedsiftheyaregivenincheckform.[However,noborrowershallberequiredtopaya
16totalamountofaccumulatedinterestandfeesinexcessofseventy-fivepercentoftheinitial
17loanamountonanysingleloanauthorizedpursuanttothissectionfortheentiretermofthat
18loanandallrenewalsauthorizedbysection408.500andthissection.]
19 4.Aloanmadepursuanttotheprovisionsofsection408.500andthissectionshallbe
20deemedcompletedandshallnotbeconsideredarenewedloanwhenthelenderpresentsthe
21instrumentforpaymentorthepayeeredeemstheinstrumentbypayingthefullamountofthe
22instrumenttothelender.Oncethepayeehascompletedtheloan,thepayeemayenterintoa
23newloanwithalender.
24 5.Exceptasprovidedinsubsection3ofthissection,noloanmadepursuanttothis
25sectionshallberepaidbytheproceedsofanotherloanmadebythesamelenderoranyperson
26orentityaffiliatedwiththelender.Alender,personorentityaffiliatedwiththelendershall
27nothavemorethanfivehundreddollarsinloansmadepursuanttosection408.500andthis
28sectionoutstandingtothesameborroweratanyonetime.Alendercomplieswiththis
29subsectionif:
30 (1)Theconsumercertifiesinwritingthattheconsumerdoesnothaveanyoutstanding
31smallloanswiththelenderwhichintheaggregateexceedsfivehundreddollars,andisnot
32repayingtheloanwiththeproceedsofanotherloanmadebythesamelender;and
33 (2)Thelenderdoesnotknow,orhavereasontobelieve,thattheconsumer'swritten
34certificationisfalse.
HB1325 4 35 6.Onaconsumerloantransactionwherecashisadvancedinexchangeforapersonal
36check,areturncheckchargemaybechargedintheamountsprovidedbysections408.653
37and408.654,asapplicable.
38 7.Nostateorpublicemployeeorofficial,includingajudgeofanycourtofthisstate,
39shallenforcetheprovisionsofanycontractforpaymentofmoneysubjecttothissection
40whichviolatestheprovisionsofsection408.500andthissection.
41 8.Apersondoesnotcommitthecrimeofpassingabadcheckpursuanttosection
42570.120ifatthetimethepayeeacceptsacheckorsimilarsightorderforthepaymentof
43money,heorshedoessowiththeunderstandingthatthepayeewillnotpresentitforpayment
44untillaterandthepayeeknowsorhasreasontobelievethatthereareinsufficientfundson
45depositwiththedraweeatthetimeofacceptance.However,thissectionshallnotapplyifthe
46person'saccountonwhichtheinstrumentwaswrittenwasclosedbytheconsumerbeforethe
47agreed-upondateofnegotiationortheconsumerhasstoppedpaymentonthecheck.
48 9.Alendershallnotuseadeviceoragreementthatwouldhavetheeffectofcharging
49orcollectingmorefees,charges,orinterestthanallowedbythissection,including,butnot
50limitedto:
51 (1)Enteringintoadifferenttypeoftransaction;
52 (2)Enteringintoasalesleasebackarrangement;
53 (3)Catalogsales;
54 (4)Enteringintoanyothertransactionwiththeconsumerthatisdesignedtoevadethe
55applicabilityofthissection.
56 10.Theprovisionsofthissectionshallonlyapplytoentitiessubjecttotheprovisions
57ofsection408.500andthissection.
408.510.[Notwithstandinganyotherlawtothecontrary,]1.Forpurposesofthis
2section,the[phrase] followingtermsmean:
3 (1)"Consumerinstallmentlender",apersonlicensedtomakeconsumer
4installmentloans;
5 (2)"Consumerinstallmentloans"[means], securedorunsecuredloansofanyamount
6andpayableinnotlessthanfoursubstantiallyequalinstallmentsoveraperiodofnotlessthan
7onehundredtwentydays.[Thephrase"consumerinstallmentlender"meansaperson
8licensedtomakeconsumerinstallmentloans.]
9 2.Aconsumerinstallmentlendershallbelicensedinthesamemanneranduponthe
10sametermsasalendermakingconsumercreditloans.[Such]
11 3.Aconsumerinstallment[lenders] lendershallcontractforandreceiveinterestand
12feesinaccordancewithsections408.100,408.101,408.140,and408.170[. Consumer
13installmentlenders], andsuchinterestandfeesshallbesubjectto[the]allprovisionsof
14sections408.100,408.101,408.140,and408.170andsections408.551to408.562.
HB1325 5 SectionB.Thisactisherebysubmittedtothequalifiedvotersofthisstatefor
2approvalorrejectionatanelection,whichisherebyorderedandwhichshallbeheldand
3conductedontheTuesdayimmediatelyfollowingthefirstMondayinNovember,2026,orata
4specialelectiontobecalledbythegovernorforthatpurpose,pursuanttothelawsand
5constitutionalprovisionsofthisstateapplicabletogeneralelectionsandthesubmissionof
6referendummeasuresbyinitiativepetition,anditshallbecomeeffectivewhenapprovedbya
7majorityofthevotescastthereonatsuchelectionandnototherwise.
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HB1325 6