HF 1278

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to financial institutions; providing for 
  1.3             reasonable account fees; amending Minnesota Statutes 
  1.4             1996, sections 9.031, subdivision 13; 47.76; 48.512, 
  1.5             subdivision 7; 50.17, subdivision 11; 51A.21, 
  1.6             subdivision 28; 118A.02, subdivision 1; 427.01; and 
  1.7             427.02; proposing coding for new law in Minnesota 
  1.8             Statutes, chapters 427; and 469. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1996, section 9.031, 
  1.11  subdivision 13, is amended to read: 
  1.12     Subd. 13.  [REQUIRED COMMUNITY REINVESTMENT RATING AND 
  1.13  AFFORDABLE ACCOUNTS.] Banks and trust companies designated as 
  1.14  depositories must have received ratings of "outstanding" or 
  1.15  "satisfactory" as their most recent rating under United States 
  1.16  Code, title 12, section 2906 and must comply with sections 47.76 
  1.17  and 48.512, subdivision 7.  If a state depository receives a 
  1.18  rating that is below "satisfactory," or fails to comply with 
  1.19  sections 47.76 and 48.512, subdivision 7, the executive council 
  1.20  shall revoke its designation as a depository.  The executive 
  1.21  council may delay the effective date of the revocation if 
  1.22  necessary to allow a reasonable period of time to arrange for a 
  1.23  replacement depository.  
  1.24     Sec. 2.  Minnesota Statutes 1996, section 47.76, is amended 
  1.25  to read: 
  1.26     47.76 [REQUIRED SAVINGS ACCOUNT LIFELINE ACCOUNTS.] 
  1.27     (a) A federal or state chartered financial institution, 
  2.1   including, but not limited to, a bank, savings association, 
  2.2   savings bank, or credit union, shall offer to a Minnesota 
  2.3   resident: 
  2.4      (1) a savings account to promote thrift that has no service 
  2.5   charge or fee, if such an account has an average monthly balance 
  2.6   of more than $50., and from which money orders may be purchased 
  2.7   for a charge of 50 cents or less; and 
  2.8      (2) a checking account that: 
  2.9      (i) has a charge of not more than $10 per dishonored 
  2.10  overdraft and not more than $15 per honored overdraft; 
  2.11     (ii) has a monthly maintenance fee of not more than $3 if 
  2.12  no minimum balance is maintained; 
  2.13     (iii) provides optional overdraft protection with a limit 
  2.14  as low as $200 to qualified applicants; and 
  2.15     (iv) processes checks drawn against the account in a manner 
  2.16  that is not based upon debiting the largest checks first. 
  2.17     (b) Financial institutions shall actively promote the 
  2.18  accounts required under this section in their service areas 
  2.19  determined for purposes of the federal community reinvestment 
  2.20  act. 
  2.21     (c) The accounts required under this section must be 
  2.22  designated by financial institutions as the lifeline savings 
  2.23  account and the lifeline checking account. 
  2.24     Sec. 3.  Minnesota Statutes 1996, section 48.512, 
  2.25  subdivision 7, is amended to read: 
  2.26     Subd. 7.  [TRANSACTION ACCOUNT SERVICE CHARGES AND CHARGES 
  2.27  RELATING TO DISHONORED CHECKS.] (a) The establishment of 
  2.28  transaction account service charges and the amounts of the 
  2.29  charges not otherwise limited or prescribed by law or rule is a 
  2.30  business decision to be made by each financial intermediary 
  2.31  according to sound business judgment and safe, sound financial 
  2.32  institution operational standards must be submitted to the 
  2.33  commissioner for prior approval.  In establishing determining 
  2.34  whether to approve transaction account service charges, 
  2.35  the financial intermediary commissioner may consider, but is not 
  2.36  limited to considering: 
  3.1      (1) costs incurred by the institution, plus a profit 
  3.2   margin, in providing the service; 
  3.3      (2) the deterrence of misuse by customers of financial 
  3.4   institution services; 
  3.5      (3) the establishment of the competitive position of the 
  3.6   financial institution in accordance with the institution's 
  3.7   marketing strategy; and 
  3.8      (4) maintenance of the safety and soundness of the 
  3.9   institution. 
  3.10     (b) Transaction account service charges must be reasonable 
  3.11  in relation to these considerations and should be arrived at 
  3.12  submitted for the commissioner's approval by each financial 
  3.13  intermediary on a competitive basis and not on the basis of any 
  3.14  agreement, arrangement, undertaking, or discussion with other 
  3.15  financial intermediaries or their officers. 
  3.16     (c) A financial intermediary may not impose a service 
  3.17  charge in excess of $4 for a dishonored check on any person 
  3.18  other than the issuer of the check. 
  3.19     (d) The commissioner shall not approve any proposed charges 
  3.20  under this section unless the financial intermediary complies 
  3.21  with section 47.76, including the active promotion of the 
  3.22  accounts required by that section. 
  3.23     Sec. 4.  Minnesota Statutes 1996, section 50.17, 
  3.24  subdivision 11, is amended to read: 
  3.25     Subd. 11.  [SERVICE CHARGES.] A savings bank may contract 
  3.26  with depositors for service charges in connection with the 
  3.27  opening and maintaining of deposit accounts and for providing 
  3.28  services ancillary to the opening and maintaining of deposit 
  3.29  accounts.  The service charges are a matter of contract between 
  3.30  the savings bank and the depositor, and the contract will be 
  3.31  fully enforceable in accordance with its stated terms subject to 
  3.32  section 48.512, subdivision 7. 
  3.33     Sec. 5.  Minnesota Statutes 1996, section 51A.21, 
  3.34  subdivision 28, is amended to read: 
  3.35     Subd. 28.  [SERVICE CHARGES.] To contract with depositors 
  3.36  for service charges in connection with the opening and 
  4.1   maintaining of deposit accounts and for providing services 
  4.2   ancillary to the opening and maintaining of deposit accounts.  
  4.3   Service charges are a matter of contract between the association 
  4.4   and the depositor, and any such contract is fully enforceable 
  4.5   according to its stated terms subject to section 48.512, 
  4.6   subdivision 7. 
  4.7      Sec. 6.  Minnesota Statutes 1996, section 118A.02, 
  4.8   subdivision 1, is amended to read: 
  4.9      Subdivision 1.  [DESIGNATION; DELEGATION.] (a) The 
  4.10  governing body of each government entity shall designate, as a 
  4.11  depository of its funds, one or more financial institutions.  
  4.12  The governing body may authorize the treasurer or chief 
  4.13  financial officer to: 
  4.14     (1) designate depositories of the funds; 
  4.15     (2) make investments of funds under sections 118A.01 to 
  4.16  118A.06 or other applicable law; or 
  4.17     (3) both designate depositories and make investments as 
  4.18  provided in this subdivision. 
  4.19     (b) A depository designated under paragraph (a) must comply 
  4.20  with sections 47.76 and 48.512, subdivision 7. 
  4.21     Sec. 7.  Minnesota Statutes 1996, section 427.01, is 
  4.22  amended to read: 
  4.23     427.01 [DEPOSIT OF PUBLIC FUNDS.] 
  4.24     The council of any statutory city or of any city of the 
  4.25  fourth class shall designate as a depository of city funds such 
  4.26  national, state, or private banks as it may deem proper.  A 
  4.27  depository must comply with sections 47.76 and 48.512, 
  4.28  subdivision 7.  Except as to deposits insured by the federal 
  4.29  deposit insurance corporation or protected by collateral or a 
  4.30  corporate surety bond furnished under section 118A.03, each 
  4.31  shall give bond to the municipality in at least double the 
  4.32  amount authorized to be deposited therein, to be approved by the 
  4.33  council, conditioned to repay all sums deposited therein upon 
  4.34  proper demand therefor or at such time, not exceeding one year, 
  4.35  as fixed by the terms of the deposit, and for the performance of 
  4.36  such other duties as the council may require.  The council shall 
  5.1   require the city treasurer to deposit all or any part of the 
  5.2   public funds in hand in such banks and to withdraw the same when 
  5.3   so directed.  All the terms and conditions of deposit shall be 
  5.4   set forth in the resolution designating the several 
  5.5   depositories, which resolution shall be filed with the clerk or 
  5.6   recorder.  The treasurer shall not be liable on the treasurer's 
  5.7   bond for any money so deposited by direction of the council and 
  5.8   lost through the failure, bankruptcy, or other default of the 
  5.9   bank.  All interest accruing upon these deposits shall belong to 
  5.10  the city.  
  5.11     Sec. 8.  Minnesota Statutes 1996, section 427.02, is 
  5.12  amended to read: 
  5.13     427.02 [DEPOSITORIES.] 
  5.14     The council of any city in this state, but not including 
  5.15  cities when governed under a charter adopted under and pursuant 
  5.16  to the Constitution of the state of Minnesota, article IV, 
  5.17  section 36, and sections 410.03 to 410.24, and 441.01 to 441.09, 
  5.18  and all acts supplemental thereto, in which charter the matter 
  5.19  of designating depositories for city funds and the protection 
  5.20  thereof is provided for, or in which charter it shall hereafter 
  5.21  be provided for, shall have the power and authority to designate 
  5.22  or redesignate at the beginning of each calendar year, or from 
  5.23  time to time, the banks or other legal depositories of any city 
  5.24  in which the treasurer of the city shall deposit and keep the 
  5.25  moneys of the city, designating in each instance the maximum 
  5.26  amount which may at any time be kept in any one of these 
  5.27  depositories, which maximum amount shall in no case exceed 25 
  5.28  percent of the paid-up capital and surplus of the depository, 
  5.29  unless the depository shall deposit with the treasurer of the 
  5.30  city United States government bonds to secure the deposit of the 
  5.31  funds of the city; and, in that event, the amount so deposited 
  5.32  shall not exceed the amount of the United States government 
  5.33  bonds so deposited.  No depository shall deposit United States 
  5.34  government bonds which mature within one year from the date such 
  5.35  bonds were first considered as a part of the bank's reserve and 
  5.36  which reserves are required by section 48.221.  The council of 
  6.1   each city shall, at all times, designate depositories in the 
  6.2   city, or elsewhere in the United States, sufficient for the 
  6.3   depository of all funds which are likely to be in the hands of 
  6.4   the treasurer of the city at any one time and shall, so far as 
  6.5   consistent with the best interest of the city, designate these 
  6.6   depositories in the city and require from these depositories 
  6.7   good and sufficient bonds payable to the city in a penal sum not 
  6.8   to exceed the amount designated as the limit of deposit therein, 
  6.9   and conditioned for the safekeeping and payment of funds so 
  6.10  deposited, or, in lieu thereof, good and sufficient collateral 
  6.11  as provided for by section 118A.03.  A depository must comply 
  6.12  with sections 47.76 and 48.512, subdivision 7. 
  6.13     Sec. 9.  [427.025] [DEPOSITORIES; HOME RULE CHARTER 
  6.14  CITIES.] 
  6.15     Home rule charter cities may designate as depositories only 
  6.16  financial institutions that comply with sections 47.76 and 
  6.17  48.512, subdivision 7.  This section applies regardless of any 
  6.18  provision of a home rule charter to the contrary. 
  6.19     Sec. 10.  [469.32] [LOAN PROGRAMS; FINANCIAL INSTITUTIONS.] 
  6.20     No financial institution is eligible to participate in a 
  6.21  loan program sponsored or funded by the state or by any of its 
  6.22  political subdivisions unless the financial institution complies 
  6.23  with sections 47.76 and 48.512, subdivision 7. 
  6.24     Sec. 11.  [EFFECTIVE DATE.] 
  6.25     Sections 1 to 10 are effective January 1, 1998.