SF 1043

as introduced - 89th Legislature (2015 - 2016) Posted on 03/03/2015 04:15pm

A bill for an act
relating to financial institutions; providing for savings promotion raffles;
amending Minnesota Statutes 2014, sections 48.15, subdivision 1; 52.04,
subdivision 1; 325F.755, subdivision 6; 609.75, by adding subdivisions; 609.761,
by adding a subdivision; repealing Minnesota Statutes 2014, section 609.75,
subdivision 13.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 48.15, subdivision 1, is amended to read:

Subdivision 1.

Authority.

In addition to the inherent and granted powers of
corporations in general, any such bank shall have power to exercise, by its board of
directors, or duly authorized officers and agents, subject to law, all such powers as
shall be necessary to carry on the business of banking by discounting bills, notes, and
other evidences of debt, by receiving deposits, by buying and selling gold and silver
bullion, foreign coin, promissory notes, mortgages, and other evidences of debt legal
for investment, and foreign and inland bills of exchange, by lending money on real and
personal securities and receiving interest on any of the same in advance, new text begin by conducting
savings promotion raffles in the manner and subject to the requirements set forth in
sections 609.75, subdivision 13, and 609.761, subdivision 6, new text end and by exercising all the
usual and incidental powers and privileges belonging to the business; but it shall not
transact any business, except such as is incidental and necessarily preliminary to its
establishment, until authorized by the commissioner to commence business.

Sec. 2.

Minnesota Statutes 2014, section 52.04, subdivision 1, is amended to read:

Subdivision 1.

Generally.

A credit union has the following powers:

(1) to offer its members and other credit unions various classes of shares, share
certificates, deposits, or deposit certificates;

(2) to receive the savings of its members either as payment on shares or as
deposits, including the right to conduct Christmas clubs, vacation clubs, and other thrift
organizations within its membership. Trust funds received by a real estate broker or the
broker's salespersons in trust may be deposited in a credit union;

(3) to make loans to members for provident or productive purposes as provided in
section 52.16;

(4) to make loans to a cooperative society or other organization having membership
in the credit union;

(5) to deposit in state and national banks and trust companies authorized to receive
deposits;

(6) to invest in any investment legal for savings banks or for trust funds in the state
and, notwithstanding clause (3), to invest in and make loans of unsecured days funds
(federal funds or similar unsecured loans) to financial institutions insured by an agency
of the federal government and a member of the Federal Reserve System or required to
maintain reserves at the Federal Reserve;

(7) to borrow money as hereinafter indicated;

(8) to adopt and use a common seal and alter the same at pleasure;

(9) to make payments on shares of and deposit with any other credit union chartered
by this or any other state or operating under the provisions of the Federal Credit Union
Act, in amounts not exceeding in the aggregate 25 percent of its unimpaired assets.
However, payments on shares of and deposit with credit unions chartered by other states
are restricted to credit unions insured by the National Credit Union Administration. The
restrictions imposed by this clause do not apply to share accounts and deposit accounts
of the Minnesota corporate credit union in United States central credit union or to share
accounts and deposit accounts of credit unions in the Minnesota corporate credit union;

(10) to contract with any licensed insurance company or society to insure the lives
of members to the extent of their share accounts, in whole or in part, and to pay all or a
portion of the premium therefor;

(11) to indemnify each director, officer, or committee member, or former director,
officer, or committee member against all expenses, including attorney's fees but excluding
amounts paid pursuant to a judgment or settlement agreement, reasonably incurred in
connection with or arising out of any action, suit, or proceeding to which that person is a
party by reason of being or having been a director, officer, or committee member of the
credit union, except with respect to matters as to which that person is finally adjudged in
the action, suit, or proceeding to be liable for negligence or misconduct in the performance
of duties. The indemnification is not exclusive of any other rights to which that person
may be entitled under any bylaw, agreement, vote of members, or otherwise;

(12) upon written authorization from a member, retained at the credit union, to make
payments to third parties by withdrawals from the member's share or deposit accounts or
through proceeds of loans made to such member, or by permitting the credit union to make
those payments from the member's funds prior to deposit; to permit draft withdrawals
from member accounts, but a credit union proposing to permit draft withdrawals shall
notify the commissioner of commerce, in the form prescribed, of its intent not less than
90 days prior to authorizing draft withdrawals. The board of directors of a credit union
may restrict one class of shares to the extent that it may not be redeemed, withdrawn, or
transferred except upon termination of membership in the credit union;

(13) to inform its members as to the availability of various group purchasing plans
which are related to the promotion of thrift or the borrowing of money for provident and
productive purposes by means of informational materials placed in the credit union's
office, through its publications, or by direct mailings to members by the credit union;

(14) to facilitate its members' voluntary purchase of types of insurance incidental
to promotion of thrift or the borrowing of money for provident and productive purposes
including, but not limited to the following types of group or individual insurance:
Fire, theft, automobile, life and temporary disability; to be the policyholder of a group
insurance plan or a subgroup under a master policy plan and to disseminate information
to its members concerning the insurance provided thereunder; to remit premiums to an
insurer or the holder of a master policy on behalf of a credit union member, if the credit
union obtains written authorization from the member for remittance by share or deposit
withdrawals or through proceeds of loans made by the members, or by permitting the
credit union to make the payments from the member's funds prior to deposit; and to
accept from the insurer reimbursement for expenses incurred or in the case of credit
life, accident and health, and involuntary unemployment insurance within the meaning
of chapter 62B commissions for the handling of the insurance. The amount reimbursed
or the commissions received may constitute the general income of the credit union. The
directors, officers, committee members and employees of a credit union shall not profit on
any insurance sale facilitated through the credit unions;

(15) to contract with another credit union to furnish services which either could
otherwise perform. Contracted services under this clause are subject to regulation and
examination by the commissioner of commerce like other services;

(16) in furtherance of the twofold purpose of promoting thrift among its members
and creating a source of credit for them at legitimate rates of interest for provident
purposes, and not in limitation of the specific powers hereinbefore conferred, to have all
the powers enumerated, authorized, and permitted by this chapter, and such other rights,
privileges and powers incidental to, or necessary for, the accomplishment of the objectives
and purposes of the credit union;

(17) to rent safe deposit boxes to its members if the credit union obtains adequate
insurance or bonding coverage for losses which might result from the rental of safe
deposit boxes;

(18) notwithstanding the provisions of section 52.05, to accept deposits of public
funds in an amount secured by insurance or other means pursuant to chapter 118A or
section 9.031 or other applicable law and to receive deposits of trust funds provided that
either the provider or the beneficial owner of the funds is a member of the credit union
accepting the deposit;

(19) to accept and maintain treasury tax and loan accounts of the United States and
to pledge collateral to secure the treasury tax or loan accounts, in accordance with the
regulations of the Department of Treasury of the United States;

(20) to accept deposits pursuant to section 149A.97, subdivision 5, notwithstanding
the provisions of section 52.05, if the deposits represent funding of prepaid funeral
plans of members;

(21) to sell, in whole or in part, real estate secured loans provided that:

(a) the loan is secured by a first lien;

(b) the board of directors approves the sale;

(c) if the sale is partial, the agreement to sell a partial interest shall, at a minimum:

(i) identify the loan or loans covered by the agreement;

(ii) provide for the collection, processing, remittance of payments of principal and
interest, taxes and insurance premiums and other charges or escrows, if any;

(iii) define the responsibilities of each party in the event the loan becomes subject
to collection, loss or foreclosure;

(iv) provide that in the event of loss, each owner shall share in the loss in proportion
to its interest in the loan or loans;

(v) provide for the distribution of payments of principal to each owner proportionate
to its interest in the loan or loans;

(vi) provide for loan status reports;

(vii) state the terms and conditions under which the agreement may be terminated or
modified; and

(d) the sale is without recourse or repurchase unless the agreement:

(i) requires repurchase of a loan because of any breach of warranty or
misrepresentation;

(ii) allows the seller to repurchase at its discretion; or

(iii) allows substitution of one loan for another;

(22) in addition to the sale of loans secured by a first lien on real estate, to sell,
pledge, discount, or otherwise dispose of, in whole or in part, to any source, a loan or
group of loans, other than a self-replenishing line of credit; provided, that within a calendar
year beginning January 1 the total dollar value of loans sold, other than loans secured by
real estate or insured by a state or federal agency, shall not exceed 25 percent of the dollar
amount of all loans and participating interests in loans held by the credit union at the
beginning of the calendar year, unless otherwise authorized in writing by the commissioner;

(23) to designate the par value of the shares of the credit union by board resolution;

(24) to exercise by resolution the powers set forth in United States Code, title
12, section 1757. Before exercising each power, the board must submit a plan to the
commissioner of commerce detailing implementation of the power to be used;

(25) to offer self-directed individual retirement accounts and Keogh accounts and
act as custodian and trustee of these accounts if:

(1) all contributions of funds are initially made to a deposit, share or share certificate
account in the credit union;

(2) any subsequent transfer of funds to other assets is solely at the direction of
the member and the credit union exercises no investment discretion and provides no
investment advice with respect to plan assets; and

(3) the member is clearly notified of the fact that National Credit Union Share
Insurance Fund coverage is limited to funds held in deposit, share or share certificate
accounts of National Credit Union Share Insurance Fund-insured credit unions;

(26) to impose reasonable charges for the services it provides to its members;

(27) to impose financing charges and reasonable late charges in the event of default
on loans, and recover reasonable costs and expenses, including, but not limited to, actual
collection costs and attorneys' fees incurred both before and after judgment, incurred in the
collection of sums due, if provided for in the note or agreement signed by the borrower; deleted text begin and
deleted text end

(28) to acquire, lease, hold, assign, pledge, sell, or otherwise dispose of interests in a
loan or groups of loans other than a self-replenishing line of credit deleted text begin . deleted text end new text begin ; and
new text end

new text begin (29) to conduct savings promotion raffles in the manner and subject to the
requirements set forth in sections 609.75, subdivision 13, and 609.761, subdivision 6.
new text end

Sec. 3.

Minnesota Statutes 2014, section 325F.755, subdivision 6, is amended to read:

Subd. 6.

Exemptions for regulated activities.

This section does not apply to
advertising permitted and regulated under chapter 82A, concerning membership camping
practices; advertising permitted and regulated under chapter 83, concerning subdivided
lands and interests in subdivided lands; pari-mutuel betting on horse racing permitted and
regulated under chapter 240; lawful gambling permitted and regulated under chapter 349;
new text begin savings promotion raffles permitted and regulated under chapter 609; new text end or the state lottery
created and regulated under chapter 349A.

Sec. 4.

Minnesota Statutes 2014, section 609.75, is amended by adding a subdivision
to read:

new text begin Subd. 14. new text end

new text begin Savings promotion raffle. new text end

new text begin A "savings promotion raffle" means a contest
or promotion in which a chance of winning designated prizes is obtained by the deposit
of a specified amount of money in a savings account, share account, savings association,
share certificate, or other savings program.
new text end

Sec. 5.

Minnesota Statutes 2014, section 609.75, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Qualifying account. new text end

new text begin "Qualifying account" means a savings account,
share account, savings association, share certificate, or other savings program through
which depositors may obtain chances to win prizes in a savings promotion raffle by
depositing specified sums of money.
new text end

Sec. 6.

Minnesota Statutes 2014, section 609.75, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Nonqualifying account. new text end

new text begin "Nonqualifying account" means a savings
account, share account, savings association, share certificate, or other savings program
that is not a qualifying account.
new text end

Sec. 7.

Minnesota Statutes 2014, section 609.75, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin Applicability of definitions. new text end

new text begin For the purposes of sections 609.75 to
609.762, the terms defined in this section have the meanings given, unless the context
clearly indicates otherwise.
new text end

Sec. 8.

Minnesota Statutes 2014, section 609.761, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Savings promotion raffles. new text end

new text begin Sections 609.755 and 609.76 do not prohibit
the conduct of or participation in a savings promotion raffle, as defined in section 609.75,
subdivision 14, if the following conditions are complied with:
new text end

new text begin (1) participants in a savings promotion raffle shall not be required to provide any
consideration, other than the deposit of a sum of money in a qualifying account, to obtain
chances to win prizes in a savings promotion raffle. For purposes of this clause, participants
shall not be deemed to have provided such consideration merely because the interest rate,
if any, associated with a qualifying account is lower than the interest rate associated
with comparable nonqualifying accounts. Participants shall not be deemed to have given
consideration as a consequence of paying any fees associated with a qualifying account, so
long as such fees are approximately of a kind and in an amount charged in connection with
comparable nonqualifying accounts, if any, offered by the savings promotion raffle sponsor;
new text end

new text begin (2) a savings promotion raffle shall be conducted so that each entry in the savings
promotion raffle has an equal chance of being drawn; and
new text end

new text begin (3) participants in a savings promotion raffle shall not be required to be present at
a prize drawing in order to win.
new text end

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 609.75, subdivision 13, new text end new text begin is repealed.
new text end