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HF 1507

1st Division Engrossment - 91st Legislature (2019 - 2020) Posted on 04/29/2020 09:32am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
 relating to economic development; modifying certain financial intermediary
regulations; extending repayment terms of certain loans during public health
emergency; appropriating money for small business emergency loans; amending
Minnesota Statutes 2018, section 48.512, subdivisions 2, 3.

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

Section 1.

Minnesota Statutes 2018, section 48.512, subdivision 2, is amended to read:


Subd. 2.

Required information.

Before opening or authorizing signatory power over
a transaction account, a financial intermediary shall require one applicant to provide the
following information on an application document signed by the applicant:

(a) full name;

(b) birth date;

(c) address of residence;

(d) address of current employment, if employed;

(e) telephone numbers of residence and place of employment, if any;

(f) Social Security number;

(g) driver's license or identification card number issued pursuant to section 171.07. If
the applicant does not have a driver's license or identification card, the applicant may provide
an identification document number issued for identification purposes by any state, federal,
or foreign government if the document includes the applicant's photograph, full name, birth
date, and signaturedeleted text begin . A valid Wisconsin driver's license without a photograph may be accepted
in satisfaction of the requirement of this paragraph until January 1, 1985deleted text end ;

(h) whether the applicant has had a transaction account at the same or another financial
intermediary within 12 months immediately preceding the application, and if so, the name
of the financial intermediary;

(i) whether the applicant has had a transaction account closed by a financial intermediary
without the applicant's consent within 12 months immediately preceding the application,
and if so, the reason the account was closed; and

(j) whether the applicant has been convicted of a criminal offense because of the use of
a check or other similar item within 24 months immediately preceding the application.

A financial intermediary may require an applicant to disclose additional information.

An applicant who makes a false material statement that the applicant does not believe
to be true in an application document with respect to information required to be provided
by this subdivision is guilty of perjury. The financial intermediary shall notify the applicant
of the provisions of this paragraph.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end

Sec. 2.

Minnesota Statutes 2018, section 48.512, subdivision 3, is amended to read:


Subd. 3.

deleted text begin Confirm no involuntary closingdeleted text end new text begin Confirmationnew text end .

Before opening or authorizing
signatory power over a transaction account, the financial intermediary shall attempt to verify
the information disclosed for subdivision 2, clause (i). Inquiries made to verify this
information through persons in the business of providing such information must include an
inquiry based on the applicant's identification number provided under subdivision 2, clause
(g). deleted text begin The financial intermediary may not open or authorize signatory power over a transaction
account if (i) the applicant had a transaction account closed by a financial intermediary
without consent because of issuance by the applicant of dishonored checks within 12 months
immediately preceding the application, or (ii) the applicant has been convicted of a criminal
offense because of the use of a check or other similar item within 24 months immediately
preceding the application.
deleted text end

If the transaction account is refused deleted text begin pursuant to this subdivisiondeleted text end new text begin due to information
obtained in subdivision 2, clauses (i) and (j)new text end , the reasons for the refusal shall be given to
the applicant in writing and the applicant shall be allowed to provide additional information.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end

Sec. 3. new text begin REPAYMENT OF CONSUMER SMALL LOANS AND CONSUMER
SHORT-TERM LOANS DURING PUBLIC HEALTH EMERGENCY.
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 terms defined in this
subdivision have the meanings given.
 new text end

new text begin (b) "Borrower" means an individual who obtains a consumer small loan or a consumer
short-term loan and who resides in the jurisdiction covered by the public health emergency
at the time the loan is originated.
 new text end

new text begin (c) "Consumer small loan lender" has the meaning given in Minnesota Statutes, section
47.60, subdivision 1, paragraph (b).
 new text end

new text begin (d) "Consumer small loan" has the meaning given in Minnesota Statutes, section 47.60,
subdivision 1, paragraph (a).
 new text end

new text begin (e) "Consumer short-term lender" has the meaning given in Minnesota Statutes, section
47.601, subdivision 1, paragraph (e).
 new text end

new text begin (f) "Consumer short-term loan" has the meaning given in Minnesota Statutes, section
47.601, subdivision 1, paragraph (d).
 new text end

new text begin (g) "Public health emergency" means a peacetime emergency declared under Minnesota
Statutes, section 12.31, subdivision 2, by the governor in an executive order that relates to
the infectious disease COVID-19.
 new text end

new text begin Subd. 2. new text end

new text begin Repayment terms during public health emergency. new text end

new text begin (a) Notwithstanding any
other law to the contrary, a consumer small loan or consumer short-term loan made by a
consumer small loan lender or consumer short-term lender to a borrower executed while
this section is in effect must extend the repayment period for the loan, including applicable
interest, fees, penalties, and charges to allow the borrower to repay the loan in equal
installments over a period of 12 months.
 new text end

new text begin (b) The total dollar amount of interest, fees, penalties, and charges for a loan covered
by this section cannot exceed the total dollar amount of interest, fees, penalties, and charges
that would be owed if the loan had been made pursuant to Minnesota Statutes, section 47.60
or 47.601, and outside of a public health emergency
 new text end

new text begin (c) A violation of this section is a violation of Minnesota Statutes, section 325F.69, and
enforceable by the attorney general under Minnesota Statutes, section 8.31. In addition, the
commissioner of commerce has all the authority provided under Minnesota Statutes, section
45.027, to ensure compliance with this section.
 new text end

new text begin (d) A consumer small loan or consumer short-term loan that violates this section is void
and unenforceable against the borrower.
 new text end

new text begin (e) A consumer small loan lender or consumer short-term lender who violates this
subdivision is liable to the borrower for all money collected or received in connection with
the loan, a civil penalty of $500, and reasonable attorney fees and court costs.
 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to loans executed between that date and February 15, 2021.
 new text end

Sec. 4. new text begin SMALL BUSINESS EMERGENCY LOAN PROGRAM; TRANSFER.
new text end

new text begin $5,000,000 in fiscal year 2020 is transferred from the loan guarantee trust fund account
in the special revenue fund under Minnesota Statutes, section 116J.881, subdivision 4, to
the commissioner of employment and economic development for deposit in the small
business emergency loan account in the special revenue fund under Minnesota Statutes,
section 116M.18, subdivision 9, to make loans as set forth in governor's Executive Order
20-15, Providing Immediate Relief to Small Businesses During the COVID-19 Peacetime
Emergency.
 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end

Sec. 5. new text begin SMALL BUSINESS EMERGENCY LOAN PROGRAM; APPROPRIATIONS.
new text end

new text begin (a) $50,000,000 in fiscal year 2020 is appropriated from the federal funds received by
the state of Minnesota under the Coronavirus Aid, Relief, and Economic Security Act,
Public Law 116-136, Title V, to the commissioner of employment and economic development
for loans under paragraph (c). The appropriation in this paragraph is reduced by any amount
appropriated in paragraph (b). Funds are available until December 31, 2020.
 new text end

new text begin (b) If the appropriation in paragraph (a) is unable to be made before May 15, 2020, then
$50,000,000 in fiscal year 2020 is appropriated from the general fund to the commissioner
of employment and economic development for loans under paragraph (c). Funds are available
until December 31, 2020.
 new text end

new text begin (c) Money appropriated under paragraph (a) or (b) shall be used to make loans as set
forth in governor's Executive Order 20-15, Providing Immediate Relief to Small Businesses
During the COVID-19 Peacetime Emergency. Of the $50,000,000 appropriated:
 new text end

new text begin (1) $11,000,000 is for making loans as specified in paragraph (d);
 new text end

new text begin (2) $8,000,000 is for making loans as specified in paragraph (e); and
 new text end

new text begin (3) $10,000,000 is for making loans as specified in paragraph (f).
 new text end

new text begin (d) Loans under this paragraph are available only to businesses employing no more than
the equivalent of six full-time persons in Minnesota. The terms of these loans must be the
same as those under Executive Order 20-15, except that:
 new text end

new text begin (1) the maximum loan amount is $15,000;
 new text end

new text begin (2) payments on loans are deferred for 12 months instead of six; and
 new text end

new text begin (3) up to 100 percent of the loan may be forgiven if the commissioner approves and the
business continues operating in the community at substantially the same levels for two years
following loan disbursement.
 new text end

new text begin (e) Loans under this paragraph are available only to businesses employing the equivalent
of at least seven but not more than 20 full-time persons in Minnesota. The terms of these
loans must be the same as those under Executive Order 20-15, except that:
 new text end

new text begin (1) the maximum loan amount is $20,000;
 new text end

new text begin (2) payments on loans are deferred for 12 months instead of six; and
 new text end

new text begin (3) up to an additional 25 percent of the loan may be forgiven if the commissioner
approves and the business continues operating in the community at substantially the same
levels for a third year following loan disbursement.
 new text end

new text begin (f) Loans under this paragraph are available only to:
 new text end

new text begin (1) minority business enterprises, as defined in Minnesota Statutes, section 116M.14,
subdivision 5; or
 new text end

new text begin (2) operators of permanent indoor retail space that has a strong ethnic cultural orientation
and is leased primarily to very small businesses.
 new text end

new text begin The terms of these loans must be the same as those under Executive Order 20-15, except
that for loans under clause (2):
 new text end

new text begin (i) there is no maximum loan amount;
 new text end

new text begin (ii) payments on loans are deferred for 12 months instead of six;
 new text end

new text begin (iii) up to an additional 25 percent of the loan may be forgiven if the commissioner
approves and the business continues operating in the community at substantially the same
levels for a third year following loan disbursement, however, no part of the loan may be
forgiven unless the loan recipient has offered forgiveness of at least 50 percent of rent due
from existing vendors during the COVID-19 peacetime emergency; and
 new text end

new text begin (iv) loan funds must be used primarily for maintaining existing vendors as tenants, such
as through full or partial forgiveness of rent during the COVID-19 peacetime emergency.
 new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end