HCS SCS SB 777 -- SALE OF CERTAIN FINANCIAL PRODUCTS AND PLANS
ASSOCIATED WITH LOAN TRANSACTIONS

SPONSOR:  Pearce (Jones, 89)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Institutions by a vote of 12 to 0.

This substitute allows lending institutions to offer, sell, and
finance automobile club memberships, certain service contracts
and vehicle protection devices issued by providers, and other
plans and services providing a benefit to the borrower if the
cost is disclosed separately from the loan contract, the lender
does not require the purchase of the plan as a condition for the
approval of the loan, the plan can be canceled within 30 days and
a refund received, and the plan has a written acknowledgment of
the intent to purchase the plan by the customer.  However, no
plan may include reimbursement for a deductible on a property
insurance claim, and all optional products must be clearly
identified as optional.

The sale of a deficiency waiver addendum, guaranteed asset
protection, or a similar product purchased as part of a loan
transaction with collateral and at the borrower's consent is
authorized if the cost of the product is disclosed in the loan
contract, is reasonable, and meets specified requirements.  A
debtor may cancel an addendum, protection, or other similar
product within 15 days of its purchase and must receive a full
refund.

FISCAL NOTE:  No impact on state funds in FY 2011, FY 2012, and
FY 2013.

PROPONENTS:  Supporters say that the bill will clarify current
practice with regard to the sale of automobile club memberships,
home and auto security plans, and other plans and services
providing a benefit to borrowers while also providing consumer
protections.

Testifying for the bill were Senator Pearce; Missouri Bankers
Association; Missouri Credit Union Association; Missouri
Financial Services Association; and Financial Insurance Marketing
Cooperative.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:15 pm