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Missouri Low-Income Housing Tax Credit Outlook – 2019 Legislative Update

The Missouri Housing Development Commission Board (“MHDC Board”) failed to authorize state low-income housing tax credits (“MO LIHTC”) in 2018 due in large part to the political position and maneuverings of former Missouri Governor Eric Greitens.  The MHDC Board is composed of the Governor, Lt. Governor, Treasurer, Attorney General, and six commissioners appointed by the Governor.  For much of 2018 the MHDC Board lacked a quorum which led to the delay in issuing a Qualified Allocation Plan (“QAP”).  While current Missouri Governor Mike Parsons voted against not allocating MO LIHTC in 2018 he also acknowledged a position supporting reforms and has been consistent on that message though specifics have not been publicly provided.

Missouri Legalizes Medical Marijuana – Implications for Banks

On November 6, 2018, Missourians voted to amend the Missouri constitution to allow the use of marijuana for medical purposes. Amendment 2 allows the use of marijuana for ten medical conditions and imposes a four percent tax on the retail sale of marijuana, with the funds to be used for the health care needs of military veterans. Missouri joins over 30 other states in legalizing marijuana in some form. Despite Missouri’s and other states’ laws, the manufacture, distribution, and dispensing of marijuana remains illegal at the federal level under the Controlled Substances Act. Banks and other financial institutions must navigate this conflict between state and federal law with limited guidance from regulators.

Bankruptcy Rule Changes: What You Need to Know

Nearly every year, there are changes to the Federal Rules of Bankruptcy Procedure. 2017 was no exception, and new rules went into effect on December 1, 2017. Creditors should be aware of the new timeframe for filing claims and new relief that can be sought in Chapter 12 and Chapter 13 plans. Below is a summary of some of the new rule changes.

What property owners need to know about new registration requirements

Missouri Governor Greitens recently signed into law, RSMO §347.048, a new registration requirement affecting limited liability companies (LLCs) that own and either rent or lease real property, or own vacant real property, located in Kansas City, Missouri or Independence, Missouri.

Document Retention Policy for Banks

Document retention sounds like a boring topic until you realize that your bank can be subject to huge monetary damages and possible regulatory action if it doesn’t handle document retention correctly. In the old days, banks could simply keep every document forever to be on the safe side. That isn’t a practical alternative in today’s environment. Nowadays, retaining documents after their useful date can actually harm the bank.

Yet Another Data Sheriff In Town: CFPB Issues Its First Data Security Enforcement Action

On March 2, 2016, the CFPB finalized a Consent Order with Dwolla, an online payment platform, for violations of the CFPA.  It is the CFPB’s first enforcement action related to data privacy and security.  It is notable because Dwolla appears to have become an enforcement target due solely to its robust claims about security, and not due to any data breach.  It also places obligations on Dwolla’s Board to become responsible for data privacy and security in the company.

Have you revised your Reg E disclosures to take advantage of the recent changes in Kansas Law?

Effective July 1, 2015, a Kansas bank can reduce its liability for fraudulent electronic fund transfers on a consumer account by revising its Reg E disclosures.

Proceeds from Insurance Settlement Outside the Scope of Article 9

The Bankruptcy Appellate Panel for the First Circuit recently held that a creditor holding a perfected security interest in accounts and payment intangibles did not have a perfected security interest in the proceeds of an insurance settlement.

Supreme Court Issues Opinion on TILA Rescission Rights

We previously provided an update on developments concerning the right of rescission granted under the Truth in Lending Act (“TILA”). The United States Supreme Court recently issued a consumer-friendly decision regarding the rescission process.

Pat Whalen Publishes Data Breach Notification Article in BankNews

Spencer Fane Chairman Pat Whalen was featured as a guest author in this month’s issue of BankNews magazine providing insights and updates on the protocol for handling data breach notifications. The article, titled “When to Send a Data Breach Notification,” discusses the laws surrounding security breaches and the responsibility of companies to determine when notification of customers is both necessary and required by law.

Missouri Supreme Court Rules that Lenders and Servicers are Subject to the MMPA

The Missouri Supreme Court recently issued two decisions (Conway v. Citi Mortgage, Inc. and Federal National Mortgage Association and Watson v. Wells Fargo Home Mortgage, Inc.) holding originators and servicers of mortgage loans may be subject to causes of action for unfair or deceptive practices under the Missouri Merchandise Practices Act (MMPA).

Eighth Circuit Issues ECOA Decision

The Eighth Circuit recently issued a decision regarding the Equal Credit Opportunity Act (“ECOA”) that may change your bank’s approach to spousal guaranties.

A New Bill Could Pave the Way for the Post Office to Join the Financial Services Industry

On July 23, 2014, Representative Cedric Richmond introduced the Providing Opportunities for Savings, Transactions, and Lending Act of 2014 (also referred to as the POSTAL Act of 2014).  The bill proposes that the United States Postal Service (“USPS”) be allowed to provide some financial services, including small-dollar loans, checking accounts, and interest-bearing savings accounts.

CFPB Issues Policy Regarding Same-Sex Marriages

CFPB Director Richard Cordray recently issued a memorandum clarifying the CFPB’s policy with respect to same-sex marriages. The memorandum clarifies that the CFPB recognizes all lawful marriages that were valid at the time of the marriage in the jurisdiction where the marriage was celebrated.

How Small is Small?

Lenders that participate in Small Business Administration (“SBA”) loan programs should be aware that the SBA recently issued an interim final rule to increase monetary based small business size standards.  These standards are based on criteria such as receipts, assets, net worth and income.

Debunking the Rumor that Directors Should Not Have Access to Information in Suspicious Activity Reports

Do you remember that children’s game called “Telephone” that you played long ago at birthday parties, on car trips or around campfires?  You know — the game where one person passes a message to the next, and then to the next?  The message evolves as it travels, inevitably surprising and confounding everyone by the time it reaches the end of the circle.

Perfecting a Security Interest in a Limited Liability Company Ownership Interest – Not a Simple Task

Many loans to small (and not-so-small) businesses include the requirement that the owners pledge to the lender their ownership interests in the prospective borrower. When the borrower is a corporation, the standard approach under the Uniform Commercial Code calls for the lender to perfect its security interest by obtaining physical possession of the certificates representing the stock, along with a “stock power” (separate endorsement by the owner that would allow the lender to transfer the stock to any purchaser in foreclosure). So long as the lender retains possession, it has a perfected, first-priority security interest in the pledged stock.