Publications and Reports

The following is a summary of the legislation that went into effect last week. You can review the text of Senate Bill 98 and House Bill 754 to see what specific additions and changes were made. As to the subjects outlined below, there is no need to review both bills as the provisions are identical.

Board Meetings:

Section 362.247.2 was amended to expand when directors may participate virtually in board meetings. Previously, a bank or trust company had to be 1 or 2 rated to do so. Virtual director participation is now permitted regardless of rating unless “otherwise prohibited by statute or an order or memorandum of understanding entered into with the director of finance.” 

Section 362.275.1 was amended to eliminate the requirement that banks and trust companies give board members a list of its directors, officers, and employees that have loans with the institution as well as amounts of those debts at each board meeting.

Single Bank Pooled Collateral Program:

Previously, public pledging laws required banks and trust companies holding public funds to directly pledge securities to secure such deposits, which means an individual security must be assigned to an individual public entity. Section 362.490 was amended to give public depositaries and government entities another pledging option whereby a bank is now permitted to pool its collateral against its entire portfolio of public deposits. This pooled collateral concept was taken from a similar law passed a few years ago in Nebraska.

Proponents of the bill believe that by allowing collateral to be aggregated, over-pledging will be reduced, which decreases a bank’s liquidity position and lending capacity, both of which are detrimental to banks and to the communities they serve.

The legislation also gives the Commissioner the exclusive authority to appoint the administrator of the pool, which may be a bank, trust company, or association for Missouri banks which is chartered or incorporated in Missouri. The administrator will act the bank’s agent and the public entity’s nominee. The single pooled method may only be used if an administrator has been appointed. To date, no administrator has been named.

The aggregate market value of the pool of securities pledged must always be at least equal to 102% of the amount on deposit in excess of the amount insured by the FDIC.

Dormant Accounts: 

Section 447.200 was repealed, so the treatment of dormant accounts will now be exclusively governed by § 447.505 of the Missouri Unclaimed Property Act.

Publication of Financial Reports:

Section 362.295 was amended to repeal the requirement that banks must publish call reports filed with the Division in local newspapers.

Articles of Agreement:

Section 362.020.1 was amended to allow banks and trust companies to include in their articles of agreement, the authority to issue additional shares under the same procedure as described in § 351.180. 

Trusted Contacts:

The legislation created § 362.424, which allows customers of a bank to designate a “trusted contact” who can be contacted by the bank/credit union when suspicious activity is observed. A bank/credit union that reports such activity to law enforcement is immune from civil liability and an individual designated as a trusted contact is also immune from liability (as long as acting in good faith). 

Financial Institutions Accounts Fraud:

Creates the specific criminal offense of “financial institutions account fraud.” See § 570.148.

Legislation Affecting Consumer Credit Section 

Certified Funds

• §381.410(2)
• Amends the definition of “certified funds” to include funds conveyed through FedNow and RTP payment platforms.
• §361.909
• Exempts payroll processors from the Money Transmission Modernization Act of 2024.
• Virtual Currency Kiosk Consumer Protection
  • §361.1100
  • This subject establishes regulatory oversight and compliance requirements for virtual currency kiosk operators. These operators will be licensed and subject to examination by DOF. Additionally, licensees must provide specific consumer disclosures, implement fraud detection policies, name a designated compliance officer, name a designated consumer protection officer, and provide DOF with a quarterly update of each kiosk’s location and status. The subject also contains specialized definitions that clarify terms specific to virtual currency kiosk transactions.
• Commercial Financial Disclosure Law
  • §427.300
  • Exempts Premium Finance Companies from the Commercial Financing Disclosure Law.