HF 3448
Introduction - 94th Legislature (2025 - 2026)
Posted on 03/23/2026 06:23 p.m.
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A bill for an act
relating to commerce; clarifying that consumer small and short-term loans include
an earned wage access payday loan; amending Minnesota Statutes 2024, sections
47.60, subdivisions 1, 3; 47.601, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 47.60, subdivision 1, is amended to read:
Subdivision 1.
Definitions.
For purposes of this section, the terms defined have the
meanings given them:
(a) "Consumer small loan" is a loan transactionnew text begin , whether recourse or nonrecourse,new text end in
which cash is advanced to a borrower for the borrower's own personal, family, or household
purpose. A consumer small loan is a short-term, unsecured loan to be repaid in a single
installment. The cash advance of a consumer small loan is equal to or less than $350. A
consumer small loan includes an indebtedness evidenced by but not limited to a promissory
note deleted text begin ordeleted text end new text begin ,new text end agreement to defer the presentation of a personal check deleted text begin for a feedeleted text end new text begin , or authorization
or preauthorization of an account transfernew text end .
(b) "Consumer small loan lender" is a financial institution as defined in section 47.59
or a business entity registered with the commissioner and engaged in the business ofnew text begin offering,
soliciting, arranging,new text end makingnew text begin , or facilitatingnew text end consumer small loans.new text begin Consumer small loan
lender business activity includes but is not limited to any substantial involvement to market,
generate leads for, underwrite, service, or collect a consumer small loan. A consumer small
loan lender includes an entity without a physical location in Minnesota that makes a consumer
small loan to a resident of Minnesota electronically via the Internet or through a mobile
application.
new text end
(c) "Annual percentage rate" means a measure of the cost of credit, expressed as a yearly
rate, that relates the amount and timing of value received by the consumer to the amount
and timing of payments made. Annual percentage rate includes all interest, finance charges,
and fees. The annual percentage rate must be determined in accordance with either the
actuarial method or the United States Rule method.
new text begin
(d) "Fee" means an amount, other than interest or a finance charge, in addition to the
loan principal that is charged, demanded, solicited, requested, or paid by the borrower to
the consumer small loan lender in connection with the transaction. Fee includes but is not
limited to a membership, subscription, participation, convenience, or expediting fee, or a
tip, contribution, or donation.
new text end
Sec. 2.
Minnesota Statutes 2024, section 47.60, subdivision 3, is amended to read:
Subd. 3.
Filing.
Before a business entity other than a financial institution as defined by
section 47.59 engages in the business of making consumer small loans to Minnesota residents,
the business entity shall file with the commissioner as a consumer small loan lender. The
filing must be on a form prescribed by the commissioner together with a fee of $250 for
each place of business and contain the following information in addition to the information
required by the commissioner:
(1) evidence that the filer has available for the operation of the business at the location
specified, liquid assets of at least $50,000; and
(2) a biographical statement on the principal person responsible for the operation and
management of the business to be certified.
Revocation of the filing is the same as in the case of a regulated lender license in section
56.09.
deleted text begin
For purposes of this subdivision, "business entity" includes one that does not have a
physical location in Minnesota that makes a consumer small loan electronically via the
Internet.
deleted text end
Sec. 3.
Minnesota Statutes 2024, section 47.601, subdivision 1, is amended to read:
Subdivision 1.
Definitions.
(a) For the purposes of this section, the terms defined in this
subdivision have the meanings given.
(b) "Annual percentage rate" has the meaning given in section 47.60, subdivision 1.
(c) "Borrower" means an individual who obtains a consumer short-term loan primarily
for personal, family, or household purposes.
(d) "Commissioner" means the commissioner of commerce.
(e) "Consumer short-term loan" means a loannew text begin , whether recourse or nonrecourse,new text end to a
borrower which has a principal amount, or an advance on a credit limit, of $1,300 or less
and requiresnew text begin , schedules, or sets a default expectation through authorization, preauthorization,
or otherwise ofnew text end a minimum payment within 60 days of loan origination or credit advance
of more than 25 percent of the principal balance or credit advance. For the purposes of this
section, each new advance of money to a borrower under a consumer short-term loan
agreement constitutes a new consumer short-term loan. A "consumer short-term loan" does
not include any transaction made under chapter 325J or a loan made by a consumer short-term
lender where, in the event of default on the loan, the sole recourse for recovery of the amount
owed, other than a lawsuit for damages for the debt, is to proceed against physical goods
pledged by the borrower as collateral for the loan.
(f) "Consumer short-term lender" means an individual or entity engaged in the business
of new text begin offering, soliciting, facilitating, new text end makingnew text begin ,new text end or arranging consumer short-term loans, other
than a state or federally chartered bank, savings bank, or credit union. deleted text begin For the purposes of
this paragraph, arranging consumer short-term loansdeleted text end new text begin Consumer short-term lender business
activitynew text end includes but is not limited to any substantial involvement in deleted text begin facilitating,deleted text end marketing,
lead-generating, underwriting, servicing, or collecting consumer short-term loans.new text begin A
consumer short-term lender includes an entity without a physical location in Minnesota that
makes a consumer short-term loan to a resident of Minnesota electronically via the Internet
or through a mobile application.
new text end
new text begin
(g) "Fee" means an amount, other than interest or a finance charge, in addition to the
loan principal that is charged, demanded, solicited, requested, or paid by the borrower to
the consumer short-term lender in connection with the transaction. Fee includes but is not
limited to a membership, subscription, participation, convenience, or expediting fee, or a
tip, contribution, or donation.
new text end