HF 1375

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to civil actions; regulating liability for 
  1.3             issuing dishonored checks; regulating charges, civil 
  1.4             penalties, and time limits; modifying certain notice 
  1.5             requirements; amending Minnesota Statutes 2000, 
  1.6             section 332.50, subdivisions 2 and 3. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2000, section 332.50, 
  1.9   subdivision 2, is amended to read: 
  1.10     Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
  1.11  that is dishonored is liable for the following penalties:  
  1.12     (a) A service charge of up to $20, or actual costs of 
  1.13  collection not to exceed $30, $25 may be imposed immediately on 
  1.14  any dishonored check, regardless of mailing a notice of 
  1.15  dishonor, if notice of the service charge was conspicuously 
  1.16  displayed on the premises when the check was issued.  If a law 
  1.17  enforcement agency obtains payment of a dishonored check, a 
  1.18  service charge not to exceed $25 may be imposed if the service 
  1.19  charge is retained by the law enforcement agency for its 
  1.20  expenses.  Only one service charge may be imposed under this 
  1.21  paragraph for each dishonored check. 
  1.22     (b) If the amount of the dishonored check is not paid 
  1.23  within 30 60 days after the payee or holder has mailed notice of 
  1.24  dishonor pursuant to section 609.535 and a description of the 
  1.25  penalties contained in this subdivision, whoever issued the 
  1.26  dishonored check is liable to the payee or holder of the check 
  2.1   for: 
  2.2      (1) the amount of the check, the service charge as provided 
  2.3   in paragraph (a), plus a civil penalty of up to $100 or the 
  2.4   value of the check, whichever is greater to be determined by a 
  2.5   court of competent jurisdiction.  In determining the amount of 
  2.6   the penalty to be imposed, the court shall consider the amount 
  2.7   of the check and the reason for the nonpayment.  The civil 
  2.8   penalty may not be imposed until 30 60 days following the 
  2.9   mailing of both the notice of dishonor and a separate notice 
  2.10  written in language easily readable and understandable by a 
  2.11  person of average intelligence and education explaining how the 
  2.12  penalty can be avoided as set forth in this section.  A payee or 
  2.13  holder of the check may make a written demand for payment of the 
  2.14  civil liability by sending a copy of this section and a 
  2.15  description of the liability contained in this section and the 
  2.16  notice required by this clause explaining how the penalty can be 
  2.17  avoided to the issuer's last known address.  Notice as provided 
  2.18  in paragraph (a) must also include notification that additional 
  2.19  civil penalties will be imposed for dishonored checks for 
  2.20  nonpayment after 30 60 days, the amount of the additional civil 
  2.21  penalty that may be imposed pursuant to this section, and how 
  2.22  the penalty can be avoided; 
  2.23     (2) interest at the rate payable on judgments pursuant to 
  2.24  section 549.09 on the face amount of the check from the date of 
  2.25  dishonor; and 
  2.26     (3) reasonable attorney fees if the aggregate amount of 
  2.27  dishonored checks issued by the issuer to all payees within a 
  2.28  six-month period is over $1,250. 
  2.29     (c) The civil penalty can be avoided if the person who 
  2.30  issued the dishonored check either: 
  2.31     (1) pays the amount of the check and service charge 
  2.32  described in paragraph (a) within the 60-day period; 
  2.33     (2) pays the amount of the check within 45 days of the 
  2.34  notice of dishonor and offers a reasonable payment plan to pay 
  2.35  the service charge described in paragraph (a) within 30 
  2.36  additional days; or 
  3.1      (3) pays the amount of the check, the service charge 
  3.2   provided in paragraph (a), court costs, and a reasonable 
  3.3   attorney fee if provided for under paragraph (b), clause (3), 
  3.4   after notice has been sent, but before an action under this 
  3.5   section is heard by the court. 
  3.6      (d) This subdivision prevails over any provision of law 
  3.7   limiting, prohibiting, or otherwise regulating service charges 
  3.8   authorized by this subdivision, but does not nullify charges for 
  3.9   dishonored checks, which do not exceed the charges in paragraph 
  3.10  (a) or terms or conditions for imposing the charges which have 
  3.11  been agreed to by the parties in an express contract. 
  3.12     (d) (e) A sight draft may not be used as a means of 
  3.13  collecting the civil penalties provided in this section without 
  3.14  prior consent of the issuer. 
  3.15     (e) (f) The issuer of a dishonored check is not liable for 
  3.16  the penalties described in paragraph (b) if a pretrial diversion 
  3.17  program under section 628.69 has been established in the 
  3.18  jurisdiction where the dishonored check was issued, the issuer 
  3.19  was accepted into the program, and the issuer successfully 
  3.20  completes the program. 
  3.21     Sec. 2.  Minnesota Statutes 2000, section 332.50, 
  3.22  subdivision 3, is amended to read: 
  3.23     Subd. 3.  [NOTICE OF DISHONOR REQUIRED.] Notice of 
  3.24  nonpayment or dishonor that includes a citation to this section 
  3.25  and section 609.535, and a description of the penalties 
  3.26  contained in these sections, shall and a notice written in 
  3.27  language easily readable and understandable by a person of 
  3.28  average intelligence and education explaining how the penalties 
  3.29  can be avoided, must be sent by the payee or holder of the check 
  3.30  to the drawer by certified mail, return receipt requested, or by 
  3.31  regular mail, supported by an affidavit of service by mailing, 
  3.32  to the address printed or written on the check.  The issuance of 
  3.33  a check with an address printed or written on it is a 
  3.34  representation by the drawer that the address is the correct 
  3.35  address for receipt of mail concerning the check.  Failure of 
  3.36  the drawer to receive a regular or certified mail notice sent to 
  4.1   that address is not a defense to liability under this section, 
  4.2   if the drawer has had actual notice for 30 90 days that the 
  4.3   check has been dishonored. 
  4.4      An affidavit of service by mailing shall must be retained 
  4.5   by the payee or holder of the check.  
  4.6      Sec. 3.  [EFFECTIVE DATE.] 
  4.7      Sections 1 and 2 are effective the day following final 
  4.8   enactment.