SF 2739

Introduction - 94th Legislature (2025 - 2026)

Posted on 03/21/2025 09:52 a.m.

A bill for an act
relating to higher education; requiring minimum standards for certain higher
education student banking accounts; proposing coding for new law in Minnesota
Statutes, chapter 135A.

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

Section 1.

new text begin [135A.146] REGULATION OF STUDENT BANKING PRACTICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
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new text begin (b) "Higher education institution" means a public postsecondary institution, private
postsecondary institution, or Tribal college that operates in Minnesota.
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new text begin (c) "Financial institution" means a bank, credit union, or other entity offering consumer
financial services, including checking or savings accounts, debit cards, or other consumer
financial products.
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new text begin (d) "Student banking service" means a consumer financial product or service other than
student loans, including checking or deposit accounts, prepaid cards, debit cards, or credit
cards provided by a financial institution to an individual through a partnership, agreement,
or contract with a higher education institution where the individual is enrolled as a student.
new text end

new text begin (e) "Tier 1 service" means a student banking service that is used to disburse financial
aid.
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new text begin (f) "Tier 2 service" means a student banking service that is not used to disburse financial
aid.
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new text begin Subd. 2. new text end

new text begin Student banking services. new text end

new text begin A higher education institution must not enter into
a partnership, agreement, or contract with a financial institution to offer a student banking
service that does not comply with the requirements of subdivisions 3 to 5. The Board of
Regents of the University of Minnesota is requested to comply with this section.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited fees. new text end

new text begin (a) A higher education institution must not permit a financial
institution to charge the following fees in connection with a tier 1 or tier 2 service:
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new text begin (1) nonsufficient fund or overdraft fees;
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new text begin (2) monthly, annual, or other maintenance fees; or
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new text begin (3) account closure fees.
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new text begin (b) A higher education institution must not permit a financial institution to charge the
following fees in connection with a tier 1 service:
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new text begin (1) deposit or withdrawal fees; or
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new text begin (2) dormant account fees.
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new text begin Subd. 4. new text end

new text begin Transparency. new text end

new text begin A higher education institution must require a financial institution
to provide clear, plain-language terms of service for the student banking service to ensure
that a student fully understands account terms and associated conditions.
new text end

new text begin Subd. 5. new text end

new text begin Prevailing market terms. new text end

new text begin A higher education institution must require partner
financial institutions to offer terms and conditions in connection with student banking
services that are at least as favorable to the student as prevailing market norms for comparable
financial services, including by providing competitive interest rates.
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new text begin Subd. 6. new text end

new text begin Reporting requirements. new text end

new text begin By January 15 of each year, a higher education
institution must report to the commissioner the following information related to student
banking services:
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new text begin (1) the total number of service accounts maintained by students at the higher education
institution broken out by tier 1 service and tier 2 service accounts;
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new text begin (2) how much money the higher education institution receives from financial institutions
in connection with student banking service accounts broken out by tier 1 and tier 2 service
accounts;
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new text begin (3) the identity of partner financial institutions; and
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new text begin (4) a summary of terms and conditions offered to students in connection with the tier 1
and tier 2 service accounts, including whether such terms and conditions comply with the
requirements of this section.
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