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MCUA Testifies as MMPA Bill Heard in Committee

Testimony on a bill addressing the Missouri Merchandising Practices Act (MMPA) dominated the first Missouri House Banking Committee meeting of the 2015 legislative session. The Missouri Credit Union Association (MCUA) is working in support of the bill, HB 256, which is designed to address a growing number of attempts by plaintiffs’ attorneys to apply the MMPA to exempt financial institutions. 

Financial institutions, including credit unions, are exempt from the MMPA because state authorities already closely supervise, regulate and examine them. In addition, remedies for consumers are already available under the Uniform Commercial Code (UCC) and other regulations. Despite consistent judgments in federal courts upholding the MMPA exemption, there are several recent cases on the state level where judges have allowed an MMPA penalty.

MCUA’s Director of State Legislative Affairs David Kent testified on behalf of the bill on January 26.

“Although the intent of the language in the statute has not changed, financial institutions are experiencing an increase in the attempt by plaintiffs’ attorneys to apply the MMPA’s penalty provision," said Kent. "Credit union cases center on alleged violations of the Uniform Commercial Code. Without the clarifications proposed in HB 256, there will be a chilling effect on financial services. This will have a drastic impact on consumers needing loans.”

HB 256 is sponsored by Representative Tony Dugger (R-District 141). It makes two changes to the MMPA. One makes it clear that entities – including credit unions – have an existing exemption from the MMPA’s penalty provision (section 407.025.1).  The second is additional clarification that credit unions and banks are exempted from the MMPA (section 407.020.2(3)) – as long as they fall under a regulatory authority and regular periodic examinations. 

A representative from the Missouri Attorney General’s office testified in opposition of the bill, citing concerns with perceived limitations on the office’s ability to address consumer complaints in the bill language. Efforts are underway to address the Attorney General’s concerns raised in the hearing.

Caption: David Kent (far right) testifies on behalf of the MMPA bill on Monday, January 26, 2015. 

Other Bills of Interest

Click here for an overview of the bills with potential impact to credit unions.  MCUA will provide this information each week.  It will be updated regularly as more bills are introduced and tracked.