MORTGAGE BANKERS ASSOCIATION OF MISSOURI
101 East High, Jefferson City, Missouri 65101 Phone: (573) 634-3244 - Fax: (573) 634-7429
MISSOURI LEGISLATIVE UPDATE – April 21, 2006
TO: MORTGAGE BANKERS ASSOCIATION OF MISSOURI
HEARINGS FOR THE WEEK OF APRIL 24th
MONDAY - 04/24/06
House-Rules
Upon Adj., Afternoon, HR 6
SB 892 Scott Modifies the process for curing second mortgage loans
Senate-Financial and Governmental Organization and Elections
1:00 PM, Senate Lounge
HB 1411 Smith-150 Changes the laws regarding licensure of real estate brokers
WEEK 16 OVERVIEW
The Missouri General Assembly returned on Tuesday April 18, 2006 from Easter Break and made
significant progress working on their floor calendars. Only three weeks remain in the 2006 Regular
Session, House and Senate floor action is likely to speed up substantially when the legislators return to
work next week.
The Missouri Senate passed their version of the fiscal year 2007 state budget this week with little fanfare
and now the Appropriations Bills will be headed to a Conference Committee. In Conference next week,
a committee composed of 5 House members and 5 Senate members will begin working out any
differences between the House and Senate passed bills. One major obstacle that the Committee must
deal with at the onset is the fact that the Senate is working off of a much higher revenue projection for
fy2007 than the House and Governor’s office.
The Missouri Senate debated several issues on the floor this week including: Election Reform;
Healthcare; Dam and Reservoir Safety; Motor Vehicle Law; Tax Increment Financing Reform and
Gaming. The Missouri House debated numerous issues this week such as Project Labor Agreements;
Campaign Finance Reform; DNA testing; Funding for the Office of the Office of Public Counsel and an
income tax credit for donations to food pantries.
FRANCHISE TAXES
On Wednesday April 19, 2006 the Missouri House of Representatives gave first round approval of
House Bill 1619 sponsored by Representative Mike Sutherland (R-Warrenton). HB 1619 changes the
annual franchise tax rates and income threshold amounts for corporations beginning with tax year 2007.
By tax year 2011, the tax rate will be zero. This bill will need to be read a “third time and passed”
before it can proceed to the Missouri Senate.
MISSOURI UNIFORM RESIDENTIAL MORTGAGE ACT
HB 1717, sponsored by Rep. Tim Flook (R-Liberty), was presented to the House Judiciary Committee
on April 18th. This bill establishes the Missouri Uniform Residential Mortgage Satisfaction Act. In its
main provisions, the bill: (1) Defines "address for giving a notification," "document of rescission,"
"notification," "payoff statement," "security instrument," and "sign"; (2) Allows a person recording a
satisfaction or affidavit of satisfaction of a security instrument in error to record a document of
rescission canceling the erroneous satisfaction. A recorded document of rescission will not affect the
rights of a person that acquired interest in the property prior to it being recorded; (3) Allows an entitled
person or his or her agent to request a payoff statement from the creditor including information on the
payoff amount, applicable fees, payoff calculation, daily interest charge, and payment cutoff time. If the
payoff statement amount was understated, the creditor can send a corrected payoff statement in a timely
fashion. However, if the entitled person reasonably relied on the original payoff amount, the creditor
cannot deny its accuracy; (4) Requires creditors to submit a satisfaction for recording stating that a
secured obligation has been fully satisfied. A secured obligation cannot be fully performed until all
lines of credit are terminated. If a satisfaction for recording is not submitted within 45 days of receipt,
the creditor will be liable to the landowner for any actual damages caused by the failure plus an
additional amount equal to the lesser of $300 per day o10% of the original principal amount of the
security instrument; (5) Specifies that secured creditors are not liable if they established reasonable
procedures to comply with their obligations, complied in good faith, and were unable to comply due to
circumstances beyond their control; (6) Allows title insurance companies and licensed attorneys to
serve as satisfaction agents; (7) Allows a satisfaction agent to submit an affidavit of satisfaction for the
landowner if the secured creditor has not submitted for recording a satisfaction of a security instrument.
The satisfaction agent will notify the secured creditor of his or her intent. An affidavit of satisfaction
may not be completed if the secured obligation remains unsatisfied; (8) Specifies the information that
must be included in a satisfaction or an affidavit of satisfaction; (9) Makes any satisfaction agent liable
to the secured creditor for any actual damage caused by knowingly recording an affidavit of satisfaction
erroneously and subject to enforcement of any criminal statute prohibiting this conduct and any punitive
damages as a result; and (10) Requires that consideration be given to the need to promote uniformity of
law with respect to its subject matter among the states that enact a uniform residential satisfaction act.
The act may modify, limit, and supercede the Federal Electronic Signatures in Global and National
Commerce Act, 15 U.S.C. Section 7001, but may not modify, limit, or supercede Section 101(c) of the
federal act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any notice described in
Section 103(b) of the federal act, 15 U.S.C. Section 7003(b).
Professor Wilson Friarmooth, of the University of Missouri gave testimony in favor of this bill.
Catherine Barrie, the Missouri Bar Association, and a representative from the Missouri Land Title
Association, gave informational testimony. No action was taken.
MECHANICS LIENS
HB 1953, sponsored by Rep. Rex Rector (R-Harrisonville), was presented to the House Judiciary
Committee on April 18th. This bill extends the time period for a rental company to provide a written
notice to a landowner that rental equipment is being used on the landowner's property. No testimony
was given and no action was taken.
VOLUNTARY NO CALL AND NO FAX LISTING
On Wednesday April 19, 2006 the House Utilities Committee held a public hearing on Senate Bill 613
sponsored by Senator Kevin Engler (R-Farmington). SB 613 allows both residential and business cell
phone users and fax subscribers to voluntarily sign up with the Missouri Attorney General’s no call list.
A provision was added to the bill on the Senate floor by Senator Maida Coleman (D-St. Louis City) that
mandates retail shops notify customers if their merchandise contains a radio controlled tags. Testifying
in support were the American Association of Retired Persons; Missouri Attorney General’s Office; and
the Missouri Telecommunications Industry Association. Testifying in opposition was EDS (Information
Technology Company); the Missouri Retailers Association and the Direct Marketing Association.
Following the public hearing, the committee entered into executive session on the bill and the
Committee Chair Rex Rector (R-Harrisonville) offered a House Committee Substitute which stripped all
the provisions of the bill except those which were similar to House Bill 1632 for which the committee
has already passed out. The HCS for SB 613 creates the crime of knowingly receiving, selling, or
obtaining land-line or cellular telephone records without a customer's consent. Exemptions include the
Department of Corrections, state agencies with authority to regulate telecommunications, law
enforcement officers performing their official duties, lawful use of the records in order to provide
service, use of records pursuant to the Victims of Child Abuse Act of 1990, and the emergency use of
records to prevent death or serious injury.
Customers and telecommunications companies can recover actual damages, illicit profits, and punitive
damages from persons who violate these provisions. There is a two-year statute of limitation on the civil
actions. The substitute does not create any new cause of action against telecommunications companies,
but does require them to establish reasonable procedures to guard against the theft of telephone records.
Several Democrat members of the committee were very upset with the Committee Chair for removing
the “no call” language from the bill. The committee voted HCS for SB 613 out of committee “do pass”
to the House floor on a strictly party line vote.
“UNIFORM REAL PROPERTY ELECTRONIC RECORDING ACT”
On Thursday April 20, 2006 the Missouri Senate voted 33-0 to “third read and pass” Senate Bill 924
sponsored by Senator David Klindt (R-Bethany). SB 924 establishes the "Uniform Real Property
Electronic Recording Act" that allows for the recording of an electronic format document rather than a
paper document. It also allows an electronic signature to qualify as a sufficient signature. Such
electronic signature also satisfies the requirement that a document be notarized, verified, or taken under
oath. The county recorder of deeds may convert paper documents into electronic form for the purpose of
indexing, storing, and archiving and may accept fees and documents electronically. This act also
establishes the Electronic Recording Commission to adopt standards for implementing this act. This bill
has been sent to the Missouri House of Representatives and has been first read.
RIGHT TO CURE AND NSF ELECTRONIC DRAFTS
On April 18th, 2006 the House Financial Institutions Committee held a public hearing on Senate Bill 892
sponsored by Sen. Delbert Scott (R-Lowry City). SB 892 allows a financial institution to charge for
reversing an electronic funds transfer. This legislation also provides that a debtor is not entitled to
receive notice of the right to cure, in the case of a second mortgage loan, after the third default before
the lender can enforce the security interest. Upon the third default, the debtor may no longer cure.
SB 892 also adds late charges and expenses of foreclosures incurred by the lender to the definition of
"current obligation of the debtor", which must be paid to cure a default on a second mortgage loan.
Testifying in support were Bill Ratliff, Missouri Bankers Association; Harry Gallagher; and Peggy
Nalls, Missouri Credit Union System. No public testimony was received in opposition. The bill was
voted do pass in executive session.
CONSUMER DATA THEFT
On Thursday April 20, 2006 the Missouri House of Representatives adopted House Concurrent
Resolution 10 offered by Representative Clint Zweifel (D-Florissant). This resolution pertains to
consumer credit data theft. Below is a copy of the resolution adopted by the Missouri House.
SECOND REGULAR SESSION
House Concurrent Resolution No. 10
93RD GENERAL ASSEMBLY
4084L.02I
Whereas, today 40 million credit cardholders are exposed to the risk of fraud by data
thieves; and
Whereas, in 2005, a credit card processing company, CardSystems Solutions, improperly
retained masses of data in vulnerable files and data thieves moved in, resulting in approximately
200,000 credit card accounts being reported stolen; and
Whereas, other incidents in 2005 included CitiFinancial disclosing that unencrypted
computer tapes for 3.9 million customers were lost by a package deliverer and ChoicePoint, the nation's
largest broker of personal information were the target of thieves who were easily able to buy the data of
145,000 consumers; and
Whereas, in the hands of thieves, consumer data becomes liquid assets and must be
guarded as such by companies; and
Whereas, with California's passage of a law requiring notice to affected consumers, the
entire nation became aware that consumers' assets and identities are increasingly at risk of fraud because
of the remarkable success of data thieves
Whereas, several pieces of legislation have been introduced in the United States
Congress, including a bill proposing a national requirement for consumer notification with civil
penalties for negligent companies, and a comprehensive bill to begin regulating data merchants by
requiring registration with the Federal Trade Commission and to impose stronger safeguards, stop the
easy access to Social Security numbers, and help identity theft victims regain their fiscal balance:
Now, therefore, be it resolved that the members of the House of
Representatives of the Ninety-third General Assembly, Second Regular Session, the Senate concurring
therein, hereby urge the United States Congress to adopt a comprehensive federal law that protects
consumer information from data thieves; and
Be it further resolved that the Chief Clerk of the Missouri House of
Representatives be instructed to prepare a properly inscribed copy of this resolution for each member of
the Missouri Congressional Delegation.