Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 1140 - Division of Finance › Chapter 29 - Title Loan Companies › Section 20 CSR 1140-29.010 - Licensing, Record Keeping and General Provisions

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: Title loan companies (title lenders) are
				  subject to examination by the Division of Finance for the purpose of
				  determining that these companies are complying with the provisions of sections
				  367.500 to
				  367.533,
				  RSMo, and the laws relating to title lending. This rule establishes minimum
				  record keeping requirements to facilitate examination and regulation and other
				  general provisions.
(1)
				Display of Notice. The notice required by section 367.525.3, RSMo shall be
				prominently displayed at a place in the title lending office. The notice shall
				be clearly readable from any place in the title lending office where loans are
				closed and shall include the name, address, and telephone number of the
				Division of Finance.
(2) Locations.
				The conduct of other business on the premises will not bar the issuance of a
				title loan license, but the records of the title lender must be kept strictly
				separate from those of any other enterprise. Further, there should be enough of
				a distinction, through the use of signage or other means, that the customer can
				determine that s/he is dealing with a separate company. Under no circumstances
				will more than one (1) title loan license be issued to the same
				address.
(3) Contract Copies. A
				title lender shall provide the borrower with a copy of the signed title loan
				agreement at the time the loan is made and at each renewal. The title lender
				shall also retain a copy for the borrower's file.
(4) Interest-Loan Origination Fee-When
				Earned. Section 367.518.1(5), RSMo provides that a loan repaid by the close of
				the title lender's next full business day shall be at no cost to the borrower.
				Title loans which are not so repaid shall bear daily interest to be determined
				by applying the contract rate of interest to the principal balance and dividing
				that result by the number of days in the year. The loan origination fee
				permitted by 408.140.1(1), RSMo is earned in full at the close of the lender's
				next full business day.
(5) Fees. A
				title lender shall not charge, contract for or receive, either directly or
				indirectly, fees not expressly permitted by section 408.140.1, RSMo.
(6) Jointly Owned Titled Personal Property.
				Whenever a certificate of title evidences more than one (1) owner of the titled
				personal property being used to secure a title loan agreement or renewal, the
				title lender shall obtain signatures authorizing the pledge of the titled
				personal property from each owner, whether or not obligated on the title loan
				agreement or renewal.
(7) Renewals.
(A) The General Assembly has clearly
				indicated that no borrower is to be indebted to a title lender for any great
				period of time. This is evidenced by use of language that prohibits the debt
				being renewed by payment of interest no more than two (2) times after which the
				minimum payment must be the interest due plus at least ten percent (10%) of the
				original principal. This would, of course, accomplish a payoff at a specific
				time. In determining whether a renewal or something else which does not count
				as a renewal has occurred, the Division of Finance will insist upon absolute
				good faith from its licensees and will look to substance rather than form.
				Generally, if the customer enters the office indebted and leaves the office
				indebted, a renewal will be assumed to have taken place. A new loan, rather
				than a renewal, will be recognized where the customer's debt ceases to exist
				for at least the interval from the end of the business day the loan was paid in
				full to the beginning of the next business day.
(B) A title lender is required by section
				367.525.4, RSMo to consider at the inception of the loan the borrower's ability
				to repay. This requires the title lender to consider the borrower's ability to
				make the required principal reductions when necessary. Exceptions to this
				requirement may result in enforcement as provided in section
				367.532,
				RSMo which may include fines and/or revocation or suspension of the
				license.
(C) If a loan is renewed
				for a third or subsequent time without the required principal reduction, the
				title lender shall reduce the principal of the loan to an amount that is
				consistent with the requirements of section 367.512.1(4), RSMo.
(D) It is recognized that on rare occasions a
				borrower may be unable to pay the entire amount necessary to renew a loan. In
				this event, a title lender may 1) demand payment in full, 2) do nothing, 3)
				waive a portion of the interest due in order for the loan to be renewed, or 4)
				on a very limited basis, accept the payment of accrued interest without
				renewing the loan. The acceptance of accrued interest-only payments by a title
				lender is forbidden, by section 367.512.1(4), RSMo to become a pattern or
				practice.