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Reminder of Fee Changes for Certain Missouri Loans

As you may be aware, Section 408.140 of the Missouri Revised Statutes, concerning loan fees for small loans, has recently been modified.  We previously blogged about the changes regarding short term cash advance fees.  As we indicated, with respect to open-end credit tied to a transaction account, the maximum credit advance fee that may be charged by a lender is now the lesser of $75 or 10% of the amount advanced.  This change became effective August 28, 2013.

The statute was further revised effective October 10, 2013, with respect to closed-end loans of 30 days or longer.  Under the revised statute the maximum fee that a lender may charge for these closed-end loans is the lesser of $75 or 10% of the principal loan amount.  Previously, such fees were limited to the lesser of $75 or 5% of the principal loan amount. The revisions are a result of a legislative override of Governor Jay Nixon’s veto in which he expressed concerns about the impact on consumers.

We recommend your bank carefully weigh the risks before altering your existing fee structure in response to these revisions.  Our previous blog discusses some of those risks, as well as applicable regulatory guidance.