Deposit Advance Products are Now Available to Missouri Banks . . . But Mind Your Regulatory Ps & Qs

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Missouri’s Senate Bill 254, which will become effective on August 28, 2013, will permit Missouri banks to charge the lesser of $75 or ten percent of the loan amount on short-term, direct deposit cash advance products. Although existing Missouri law already allows state-chartered banks to offer similar products, the fees in relation to those short-term loans were previously capped at the lesser of $25 or five percent of the loan. Due to the lower fee cap, most Missouri banks did not offer these products, presumably because the potential fees did not compensate for the related risks.

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Published In: Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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