Effective - 28 Aug 2002
408.505. Term of loans, charges permitted, repayment, return check charge. — 1. This section shall apply to:
(1) Unsecured loans made by lenders licensed or who should have been licensed pursuant to section 408.500;
(2) Any person that the Missouri division of finance determines that has entered into a transaction that, in substance, is a disguised loan; and
(3) Any person that the Missouri division of finance determines has engaged in subterfuge for the purpose of avoiding the provisions of this section.
2. All loans made pursuant to this section and section 408.500, shall have a minimum term of fourteen days and a maximum term of thirty-one days, regardless of whether the loan is an original loan or renewed loan.
3. A lender may only charge simple interest and fees in accordance with sections 408.100 and 408.140. No other charges of any nature shall be permitted except as provided by this section, including any charges for cashing the loan proceeds if they are given in check form. However, no borrower shall be required to pay a total amount of accumulated interest and fees in excess of seventy-five percent of the initial loan amount on any single loan authorized pursuant to this section for the entire term of that loan and all renewals authorized by section 408.500 and this section.
4. A loan made pursuant to the provisions of section 408.500 and this section shall be deemed completed and shall not be considered a renewed loan when the lender presents the instrument for payment or the payee redeems the instrument by paying the full amount of the instrument to the lender. Once the payee has completed the loan, the payee may enter into a new loan with a lender.
5. Except as provided in subsection 3 of this section, no loan made pursuant to this section shall be repaid by the proceeds of another loan made by the same lender or any person or entity affiliated with the lender. A lender, person or entity affiliated with the lender shall not have more than five hundred dollars in loans made pursuant to section 408.500 and this section outstanding to the same borrower at any one time. A lender complies with this subsection if:
(1) The consumer certifies in writing that the consumer does not have any outstanding small loans with the lender which in the aggregate exceeds five hundred dollars, and is not repaying the loan with the proceeds of another loan made by the same lender; and
(2) The lender does not know, or have reason to believe, that the consumer's written certification is false.
6. On a consumer loan transaction where cash is advanced in exchange for a personal check, a return check charge may be charged in the amounts provided by sections 408.653 and 408.654, as applicable.
7. No state or public employee or official, including a judge of any court of this state, shall enforce the provisions of any contract for payment of money subject to this section which violates the provisions of section 408.500 and this section.
8. A person does not commit the crime of passing a bad check pursuant to section 570.120 if at the time the payee accepts a check or similar sight order for the payment of money, he or she does so with the understanding that the payee will not present it for payment until later and the payee knows or has reason to believe that there are insufficient funds on deposit with the drawee at the time of acceptance. However, this section shall not apply if the person's account on which the instrument was written was closed by the consumer before the agreed-upon date of negotiation or the consumer has stopped payment on the check.
9. A lender shall not use a device or agreement that would have the effect of charging or collecting more fees, charges, or interest than allowed by this section, including, but not limited to:
(1) Entering into a different type of transaction;
(2) Entering into a sales lease back arrangement;
(3) Catalog sales;
(4) Entering into any other transaction with the consumer that is designed to evade the applicability of this section.
10. The provisions of this section shall only apply to entities subject to the provisions of section 408.500 and this section.
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(L. 2002 S.B. 884)
Structure Missouri Revised Statutes
Title XXVI - Trade and Commerce
Chapter 408 - Legal Tender and Interest
Section 408.010 - Silver a legal tender.
Section 408.015 - Definitions.
Section 408.020 - When no rate of interest is agreed upon, nine percent allowed as legal interest.
Section 408.031 - Fee in lieu of interest may be charged on loan — exception.
Section 408.032 - Recording fees.
Section 408.035 - Unlimited interest, when allowed.
Section 408.050 - Excess interest paid recoverable with costs and attorney fee.
Section 408.070 - Usurious interest — security agreement invalid.
Section 408.081 - Validity of certain existing contract not to be affected, when.
Section 408.083 - Credit contracts, prepayment before maturity, computation of interest.
Section 408.090 - Demand loans where only securities are pledged not subject to usury laws.
Section 408.092 - Attorney fees, enforcement of credit agreements, limitations.
Section 408.095 - Charging interest of more than two percent per month a misdemeanor, exceptions.
Section 408.096 - Loan arrangement, excess fee prohibited for certain transactions — penalty.
Section 408.100 - Applicability of section — rate of interest.
Section 408.105 - Precomputed loans, extensions, fee, limitations.
Section 408.110 - Short title — applicability of sections 408.120 to 408.190.
Section 408.120 - Interest computed and paid, how.
Section 408.145 - Fees for credit cards issued in contiguous states.
Section 408.160 - False advertising prohibited.
Section 408.175 - Interest rate when maturity of note or contract accelerated.
Section 408.178 - Deferral of monthly loan payments, fee authorized for certain loans.
Section 408.180 - Authority of director to verify interest rates charged.
Section 408.190 - Certain loans exempt from sections 408.120 to 408.180, and 408.200.
Section 408.200 - Borrower not to be indebted on two or more contracts with same lender, when.
Section 408.210 - Assignment of wages or compensation — excess over loan deemed interest.
Section 408.213 - Changes to certain sections remedial only.
Section 408.231 - Definitions.
Section 408.232 - Rates and terms.
Section 408.233 - Additional charges authorized.
Section 408.234 - Collateral — prepayment rights, method of computation.
Section 408.235 - Director may examine certain lenders.
Section 408.237 - Applicability of sections 408.231 to 408.241.
Section 408.241 - Prepayment fee, second mortgage loans, allowed when.
Section 408.250 - Definitions.
Section 408.280 - Insurance purchased to secure retail time contract, regulation.
Section 408.290 - Retail charge agreement — form — delivery to buyer — contents.
Section 408.320 - Buyer may pay retail time contract debt before maturity — refund of charges.
Section 408.340 - Applicability to prior transactions.
Section 408.350 - Waiver of provisions void.
Section 408.360 - Citation of law.
Section 408.370 - Violation, penalty — effect on time and other charges — correction.
Section 408.375 - Retail installment agreement, deemed signed or accepted, when.
Section 408.400 - Definitions.
Section 408.410 - Exempt transactions.
Section 408.415 - Chapter 400 is modified by provisions of sections 408.400 to 408.415.
Section 408.455 - Variable rate agreements subject to certain provisions.
Section 408.505 - Term of loans, charges permitted, repayment, return check charge.
Section 408.506 - Report to the general assembly, contents.
Section 408.510 - Licensure of consumer installment lenders — interest and fees allowed.
Section 408.512 - Loans by traditional installment loan lenders.
Section 408.550 - Discrimination prohibited — damages recoverable.
Section 408.551 - Applicability of sections 408.551 to 408.562 — credit transaction defined.
Section 408.552 - Enforceability of default provisions.
Section 408.553 - Recovery limitation.
Section 408.554 - Notice of default, contents, form, delivery.
Section 408.557 - Notice required before deficiency action may be commenced.
Section 408.558 - Security interests not to be taken, when.
Section 408.560 - Unenforceable provisions in note or credit contract.
Section 408.562 - Damages recoverable for violation.
Section 408.570 - Definitions.
Section 408.575 - Denial of loans prohibited, when, reasons for.
Section 408.585 - Limitation on requirements of sections 408.570 to 408.600.
Section 408.590 - Division directors, report to governor and department director, contents.
Section 408.595 - Financial institutions to make other annual report, contents.
Section 408.675 - Citation of law — definitions.
Section 408.677 - Government access to records, when — requirements.
Section 408.680 - Financial institution may not disclose, exceptions, requirements.
Section 408.682 - Customer authorization, requirements.
Section 408.683 - Subpoena, government may obtain records with, when — procedure — notice required.
Section 408.685 - Delay of notice, allowed when — postdisclosure notice, form of.
Section 408.686 - Challenge to subpoena — procedure, appeals.
Section 408.689 - Transfer of records to additional agency, allowed when — notice.
Section 408.690 - Nonprohibited disclosure activities.
Section 408.692 - Law not applicable to government authority, when — procedure.
Section 408.693 - Fee paid to financial institution, amount, how determined.
Section 408.695 - Statute of limitations.
Section 408.697 - Injunctive relief, allowed when.
Section 408.699 - Statute of limitations, tolled when.
Section 408.700 - Subpoena issued under authority of grand jury, records, use of.
Section 408.800 - Definitions.
Section 408.805 - Savings promotion program authorized, conditions.
Section 408.810 - Compliance with federal American Savings Promotion Act.
Section 408.815 - Programs not gambling, gaming, lottery, raffle, or sweepstake.