2nd Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to financial institutions; regulating savings 1.3 banks; modifying and clarifying statutory provisions 1.4 relating to the structure and functions of savings 1.5 banks; making technical changes; amending Minnesota 1.6 Statutes 1994, sections 9.031, subdivision 8; 46.047, 1.7 subdivision 2; 47.01, subdivisions 2 and 3; 47.015, 1.8 subdivision 1; 47.02; 47.10, subdivision 1; 47.12; 1.9 47.20, subdivisions 1 and 9; 47.201, subdivision 1; 1.10 47.205, subdivision 1; 47.209, subdivision 1; 47.27, 1.11 subdivision 2; 47.28; 47.29, subdivisions 1 and 2; 1.12 47.30, subdivisions 1, 2, 3, and 5; 47.32; 47.62, 1.13 subdivision 4; 47.64, subdivision 1; 47.65, 1.14 subdivisions 1 and 2; 48.01, subdivision 2; 48.15, by 1.15 adding a subdivision; 49.01, by adding a subdivision; 1.16 49.42; 50.01; 50.04; 50.05; 50.06; 50.11; 50.13; 1.17 50.14, subdivisions 1, 5, 7, and 8; 50.145; 50.146; 1.18 50.1465; 50.148; 50.155; 50.17; 50.175, subdivision 1; 1.19 50.19; 50.21; 50.22; 50.23; 50.245; 50.25; 51A.02, 1.20 subdivisions 6, 26, and 40; 51A.21, by adding a 1.21 subdivision; 61A.09, subdivision 3; 62B.04, 1.22 subdivisions 1 and 2; and 300.20; proposing coding for 1.23 new law in Minnesota Statutes, chapters 46; 47; and 1.24 50; repealing Minnesota Statutes 1994, sections 1.25 47.095; 47.30, subdivisions 4 and 6; 48.67; 50.02; 1.26 50.07; 50.08; 50.09; 50.10; 50.12; 50.15; 50.16; 1.27 50.21; and 50.22. 1.28 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.29 Section 1. Minnesota Statutes 1994, section 9.031, 1.30 subdivision 8, is amended to read: 1.31 Subd. 8. [ACTIVE AND INACTIVE DEPOSITORIES.] Depositories 1.32 shall be divided into two classes to be known as active and 1.33 inactive. A depository may be designated as a depository of 1.34 both classes. 1.35 All state funds deposited in active depositories are 1.36 subject to withdrawal by the state treasurer upon demand and no 2.1 interest shall be charged on these deposits. 2.2 Surplus funds not required to meet the state's current 2.3 disbursements shall be deposited for a definite period in 2.4 inactive depositories and interest shall be paid on these 2.5 deposits at a rate of not less than one percent per annum nor 2.6 more than the maximum rate authorized to be paid by Minnesota 2.7 state banks other thanmutualsavings banks. This rate shall be 2.8 fixed by the executive council in accordance with the current 2.9 rate upon similar deposits. 2.10 Sec. 2. Minnesota Statutes 1994, section 46.047, 2.11 subdivision 2, is amended to read: 2.12 Subd. 2. [BANKING INSTITUTION.] The term "banking 2.13 institution" means a bank, trust company, bank and trust 2.14 company,mutualsavings bank, or thrift institution, that is 2.15 organized under the laws of this state, or a holding company 2.16 which owns or otherwise controls the banking institution. 2.17 Sec. 3. [46.35] [INTERPRETATIONS.] 2.18 The commissioner of commerce may upon request from an 2.19 interested party give an interpretive opinion in connection with 2.20 the administration of chapters 45 to 56. No penalty provision 2.21 in these chapters or of any other chapter to which chapters 45 2.22 to 56 may refer applies to any act done or not done in 2.23 conformity with a written interpretive opinion of the 2.24 commissioner, notwithstanding that the written interpretive 2.25 opinion may, after the act or omission, be amended or rescinded 2.26 or be determined by judicial or other authority to be invalid 2.27 for any reason. 2.28 Sec. 4. Minnesota Statutes 1994, section 47.01, 2.29 subdivision 2, is amended to read: 2.30 Subd. 2. [BANK.] A bank is a corporation under public 2.31 control, having a place of business where credits are opened by 2.32 the deposit or collection of money and currency, subject to be 2.33 paid or remitted upon draft, check, or order, and where money is 2.34 advanced, loaned on stocks, bonds, bullion, bills of exchange, 2.35 and promissory notes, and where the same are received for 2.36 discount or sale; and all persons and copartnerships, 3.1 respectively, so operating, are bankers. The term does not 3.2 include a savings bank. 3.3 Sec. 5. Minnesota Statutes 1994, section 47.01, 3.4 subdivision 3, is amended to read: 3.5 Subd. 3. [SAVINGS BANK.] A savings bank isan institution3.6under like control, managed by disinterested trustees solely,3.7authorized to receive and safely invest the savings of small3.8depositorsa corporation authorized to do business under chapter 3.9 50. 3.10 Sec. 6. Minnesota Statutes 1994, section 47.015, 3.11 subdivision 1, is amended to read: 3.12 Subdivision 1. [FINANCIAL INSTITUTIONS.] As used in this 3.13 section the term "financial institution" shall include banks, 3.14 trust companies, banks and trust companies,mutualsavings 3.15 banks, industrial loan and thrift companies having outstanding 3.16 certificates of indebtedness for investment, savingsand loan3.17 associations, national banking associations, federal reserve 3.18 banksand, federal savingsand loanassociations, and federal 3.19 savings banks doing business in this state, and includes any 3.20 branch or detached facility of any of them. 3.21 Sec. 7. Minnesota Statutes 1994, section 47.02, is amended 3.22 to read: 3.23 47.02 ["BANK" AND "SAVINGS BANK."] 3.24 A "bank" is a corporation having a place of business in 3.25 this state, where credits are opened by the deposit of money or 3.26 currency, or the collection of the same, subject to be paid or 3.27 remitted on draft, check, or order; and where money is loaned or 3.28 advanced on stocks, bonds, bullion, bills of exchange, or 3.29 promissory notes, and where the same are received for discount 3.30 or sale. A "savings bank" is a corporationmanaged by3.31disinterested trustees, solely authorized to receive and safely3.32invest the savings of small depositorsauthorized to do business 3.33 under chapter 50. Every "bank" or "savings bank" in this state 3.34 shall at all times be under the supervision and subject to the 3.35 control of the commissioner of commerce, and when so conducted 3.36 the business shall be known as "banking." 4.1 Sec. 8. Minnesota Statutes 1994, section 47.10, 4.2 subdivision 1, is amended to read: 4.3 Subdivision 1. [AUTHORITY, APPROVAL, LIMITATIONS.] (a) 4.4 Except as otherwise specially provided, the net book value of 4.5 land and buildings for the transaction of the business of the 4.6 corporation, including parking lots and premises leased to 4.7 others, shall not be more than as follows: 4.8 (1) for a bank, trust company, savings bank, or stock 4.9 savings association, if investment is for acquisition and 4.10 improvements to establish a new bank, or is for improvements to 4.11 existing property or acquisition and improvements to adjacent 4.12 property, approval by the commissioner of commerce is not 4.13 required if the total investment does not exceed 50 percent of 4.14 its existing capital stock and paid-in surplus. Upon written 4.15 prior approval of the commissioner of commerce, a bank, trust 4.16 company, savings bank, or stock savings association may invest 4.17 in the property and improvements in clause (1) or for 4.18 acquisition of nonadjacent property for expansion or future use, 4.19 if the aggregate of all such investments does not exceed 75 4.20 percent of its existing capital stock and paid-in surplus; 4.21 (2)for a savings bank, 50 percent of its net surplus;4.22(3)for a mutualbuilding and loansavings association, 4.23 five percent of its net assets. 4.24 (b) For purposes of this subdivision, an intervening 4.25 highway, street, road, alley, other public thoroughfare, or 4.26 easement of any kind does not cause two parcels of real property 4.27 to be nonadjacent. 4.28 Sec. 9. Minnesota Statutes 1994, section 47.12, is amended 4.29 to read: 4.30 47.12 [FINANCIAL CORPORATIONS.] 4.31 Corporations may be formed for any one of the following 4.32 purposes: 4.33 (1) Carrying on the business of banking, by receiving 4.34 deposits, buying, selling, and discounting notes, bills, and 4.35 other evidences of debt legal for investment, domestic or 4.36 foreign, dealing in gold and silver bullion and foreign coins, 5.1 issuing circulating notes, and loaning money upon real estate or 5.2 personal security or upon the creditworthiness of the borrower; 5.3 (2) Establishing and conducting clearing houses, for 5.4 effecting, in one place, the speedy and systematic daily 5.5 exchange and adjustment of balances between banks and bankers in 5.6 any municipality, town, or county, establishing and enforcing 5.7 uniform methods of conducting the banking business in such 5.8 locality, and adjusting disputes or misunderstandings between 5.9 members of such clearing house engaged in the banking business; 5.10 (3) Creating and conducting savings banks for the 5.11 reception, on deposit, of money offered for that purpose, the 5.12 investment thereof, and the declaring, crediting, and paying of 5.13 dividends or interest thereon, as authorized and provided by 5.14 law; 5.15 (4) Transacting business as a trust company in conformity 5.16 with the laws relating thereto; and 5.17 (5) Carrying on, in accordance with law, the business of 5.18building, loan, andsavings associations. 5.19 Sec. 10. Minnesota Statutes 1994, section 47.20, 5.20 subdivision 1, is amended to read: 5.21 Subdivision 1. Pursuant to rules the commissioner of 5.22 commerce finds to be necessary and proper, if any, banks, 5.23 savings banks,mutual savings banks, building and loan5.24associations,and savingsand loanassociations organized under 5.25 the laws of this state or the United States, trust companies, 5.26 trust companies acting as fiduciaries, and other banking 5.27 institutions subject to the supervision of the commissioner of 5.28 commerce, and mortgagees or lenders approved or certified by the 5.29 secretary of housing and urban development or approved or 5.30 certified by the administrator of veterans affairs, or approved 5.31 or certified by the administrator of the farmers home 5.32 administration, or approved or certified by the federal home 5.33 loan mortgage corporation, or approved or certified by the 5.34 federal national mortgage association, are authorized: 5.35 (1) To make loans and advances of credit and purchases of 5.36 obligations representing loans and advances of credit which are 6.1 insured or guaranteed by the secretary of housing and urban 6.2 development pursuant to the national housing act, as amended, or 6.3 the administrator of veterans affairs pursuant to the 6.4 servicemen's readjustment act of 1944, as amended, or the 6.5 administrator of the farmers home administration pursuant to the 6.6 consolidated farm and rural development act, Public Law Number 6.7 87-128, as amended, and to obtain the insurance or guarantees; 6.8 (2) To make loans secured by mortgages on real property and 6.9 loans secured by a share or shares of stock or a membership 6.10 certificate or certificates issued to a stockholder or member by 6.11 a cooperative apartment corporation which the secretary of 6.12 housing and urban development, the administrator of veterans 6.13 affairs, or the administrator of the farmers home administration 6.14 has insured or guaranteed or made a commitment to insure or 6.15 guarantee, and to obtain the insurance or guarantees; 6.16 (3) To make, purchase, or participate in such loans and 6.17 advances of credit as would be eligible for purchase, in whole 6.18 or in part, by the federal national mortgage association or the 6.19 federal home loan mortgage corporation, but without regard to 6.20 any limitation placed upon the maximum principal amount of an 6.21 eligible loan; 6.22 (4) To make, purchase or participate in such loans and 6.23 advances of credit secured by mortgages on real property which 6.24 are authorized or allowed by thefederal home loan bank board6.25 office of thrift supervision or the office of the comptroller of 6.26 the currency, or any successor to these federal agencies. 6.27 Sec. 11. Minnesota Statutes 1994, section 47.20, 6.28 subdivision 9, is amended to read: 6.29 Subd. 9. (1) For purposes of this subdivision the term 6.30 "mortgagee" shall mean all state banks and trust companies, 6.31 national banking associations, state and federally chartered 6.32 savingsand loanassociations, mortgage banks,mutualsavings 6.33 banks, insurance companies, credit unions or assignees of the 6.34 above. Each mortgagee requiring funds of a mortgagor to be paid 6.35 into an escrow, agency or similar account for the payment of 6.36 taxes or insurance premiums with respect to a mortgaged 7.1 one-to-four family, owner occupied residence located in this 7.2 state, unless the account is required by federal law or 7.3 regulation or maintained in connection with a conventional loan 7.4 in an original principal amount in excess of 80 percent of the 7.5 lender's appraised value of the residential unit at the time the 7.6 loan is made or maintained in connection with loans insured or 7.7 guaranteed by the secretary of housing and urban development, by 7.8 the administrator of veterans affairs, or by the administrator 7.9 of the farmers home administration, shall calculate interest on 7.10 such funds at a rate of not less than five percent per annum. 7.11 Such interest shall be computed on the average monthly balance 7.12 in such account on the first of each month for the immediately 7.13 preceding 12 months of the calendar year or such other fiscal 7.14 year as may be uniformly adopted by the mortgagee for such 7.15 purposes and shall be annually credited to the remaining 7.16 principal balance on the mortgage, or at the election of the 7.17 mortgagee, paid to the mortgagor or credited to the mortgagor's 7.18 account. If the interest exceeds the remaining balance, the 7.19 excess shall be paid to the mortgagor or vendee. The 7.20 requirement to pay interest shall apply to such accounts created 7.21 prior to June 1, 1976, as well as to accounts created after June 7.22 1, 1976. 7.23 (2) A mortgagee offering the following option (c) to a 7.24 mortgagor but not requiring maintenance of escrow accounts as 7.25 described in clause (1), whether or not the accounts were 7.26 required by the mortgagee or were optional with the mortgagor, 7.27 shall offer to each of such mortgagors the following options: 7.28 (a) the mortgagor may personally manage the payment of 7.29 insurance and taxes; 7.30 (b) the mortgagor may open with the mortgagee a passbook 7.31 savings account carrying the current rate of interest being paid 7.32 on such accounts by the mortgagee in which the mortgagor can 7.33 deposit the funds previously paid into the escrow account; or 7.34 (c) the mortgagor may elect to maintain a noninterest 7.35 bearing escrow account as described in clause (1) to be serviced 7.36 by the mortgagee at no charge to the mortgagor. 8.1 A mortgagee that is not a depository institution offering 8.2 passbook savings accounts shall instead of offering option (b) 8.3 above notify its mortgagors (1) that they may open such accounts 8.4 at a depository institution and (2) of the current maximum legal 8.5 interest rate on such accounts. 8.6 A mortgagee offering option (c) above to a mortgagor but 8.7 not requiring the maintenance of escrow accounts shall notify 8.8 its mortgagor of the options under (a), (b) and (c). The notice 8.9 shall state the option and state that an escrow account is not 8.10 required by the mortgagee, that the mortgagor is legally 8.11 responsible for the payment of taxes and insurance, and that the 8.12 notice is being given pursuant to this subdivision. 8.13 Notice shall be given within 30 days after the effective 8.14 date of the provisions of Laws 1977, chapter 350 amending the 8.15 subdivision, as to mortgagees offering option (c) above to 8.16 mortgagors but not requiring escrow accounts as of the effective 8.17 date, or within 30 days after a mortgagee's decision to 8.18 discontinue requiring escrow accounts if the mortgagee continues 8.19 to offer option (c) above to mortgagors. If no reply is 8.20 received within 30 days, option (c) shall be selected for the 8.21 mortgagor but the mortgagor may, at any time, select another 8.22 option. 8.23 A mortgagee making a new mortgage and offering option (c) 8.24 above to a prospective mortgagor shall, at the time of loan 8.25 application, notify the prospective mortgagor of options (a), 8.26 (b) and (c) above which must be extended to the prospective 8.27 mortgagor. The mortgagor shall select one of the options at the 8.28 time the loan is made. 8.29 Any notice required by this clause shall be on forms 8.30 approved by the commissioner of commerce and shall provide that 8.31 at any time a mortgagor may select a different option. The form 8.32 shall contain a blank where the current passbook rate of 8.33 interest shall be entered by the mortgagee. Any option selected 8.34 by the mortgagor shall be binding on the mortgagee. 8.35 This clause does not apply to escrow accounts which are 8.36 excepted from the interest paying requirements of clause (1). 9.1 (3) A mortgagee shall be prohibited from charging a direct 9.2 fee for the administration of the escrow account. 9.3 Sec. 12. Minnesota Statutes 1994, section 47.201, 9.4 subdivision 1, is amended to read: 9.5 Subdivision 1. [DEFINITIONS.] For the purposes of this 9.6 section, the terms defined in this subdivision shall have the 9.7 meanings given them: 9.8 (1) "Financial institution" means a state bank or trust 9.9 company, a national banking association, a state or federally 9.10 chartered savingsand loanassociation, a mortgage bank, or 9.11mutualsavings bank. 9.12 (2) "Graduated payment home loan" means a conventional or 9.13 cooperative apartment loan made pursuant to section 47.20 and 9.14 subject to the provisions therein, whereunder initial periodic 9.15 repayments are lower than those under the standard conventional 9.16 or cooperative apartment loan having equal periodic repayments, 9.17 and gradually rise to a predetermined point after which they 9.18 remain constant. 9.19 Sec. 13. Minnesota Statutes 1994, section 47.205, 9.20 subdivision 1, is amended to read: 9.21 Subdivision 1. [DEFINITIONS.] For the purposes of this 9.22 section, the terms defined in this subdivision have the meanings 9.23 given them. 9.24 (a) "Lender" means all state banks and trust companies, 9.25 national banking associations, state and federally chartered 9.26 savingsand loanassociations, mortgage banks,mutualsavings 9.27 banks, insurance companies, credit unions making a loan, or any 9.28 person making a conventional loan as defined under section 9.29 47.20, subdivision 2, clause (3) or cooperative apartment loan 9.30 as defined under section 47.20, subdivision 2, clause (4). A 9.31 "selling lender" is a lender who sells, assigns, or transfers 9.32 the servicing of a loan, to a "purchasing lender or a servicing 9.33 agent." 9.34 (b) "Loan" means all loans and advances of credit 9.35 authorized under section 47.20, subdivision 1, clauses (1) to 9.36 (4) and conventional loans as defined under section 47.20, 10.1 subdivision 2, clause (3) or cooperative apartment loan as 10.2 defined under section 47.20, subdivision 2, clause (4). 10.3 (c) "Escrow account" means escrow, agency, or similar 10.4 account for the payment of taxes or insurance premiums with 10.5 respect to a mortgaged one-to-four family, owner occupied 10.6 residence located in this state. 10.7 (d) "Person" means an individual, corporation, business 10.8 trust, partnership or association, or any other legal entity. 10.9 Sec. 14. Minnesota Statutes 1994, section 47.209, 10.10 subdivision 1, is amended to read: 10.11 Subdivision 1. [APPLICABILITY.] This section applies to 10.12 any agreement entered into after December 31, 1992, for the 10.13 financing or refinancing of a purchase of a manufactured home. 10.14 As used in this section and section 277.17, "lender" includes a 10.15 state bank and trust company, national banking association, 10.16 state or federally chartered savingsand loanassociation, 10.17 mortgage bank,mutualsavings bank, insurance company, credit 10.18 union, or a dealer as defined in section 327B.01, subdivision 7, 10.19 that enters into an agreement for financing or refinancing a 10.20 purchase of a manufactured home. 10.21 Sec. 15. Minnesota Statutes 1994, section 47.27, 10.22 subdivision 2, is amended to read: 10.23 Subd. 2. "Savings bank" shall have the meaning set forth 10.24 in sections 47.01 and 47.02and shall also mean a mutual savings10.25bank. 10.26 Sec. 16. Minnesota Statutes 1994, section 47.28, is 10.27 amended to read: 10.28 47.28 [SAVINGS BANKS MAY CONVERT INTO SAVINGS, BUILDING AND10.29LOANASSOCIATIONS.] 10.30 Subdivision 1. Any savings bank organized and existing 10.31 under and by virtue of the law of this state may amend its 10.32 articles of incorporation so as to convert itself into a 10.33 savings, building and loanassociation, by complying with the 10.34 following requirements and procedure: 10.35 The savings bank by a two-thirds vote of the entire board 10.36 oftrusteesdirectors, at any regular or special meeting of said 11.1 board duly called for that purpose, shall (a) pass a resolution 11.2 declaring their intention to convert the savings bank into a 11.3 savings, building and loanassociation, and (b) cause an 11.4 application in writing to be executed, by such persons as the 11.5trusteesdirectors may direct, in the form prescribed by the 11.6 department of commerce, requesting a certificate of 11.7 authorization (charter) as a savings, building and loan11.8 association to transact business at the place and in the name 11.9 stated in the application. The amendments proposed to the 11.10 articles of incorporation and bylaws shall be included as part 11.11 of the application. 11.12 The application shall be submitted to, considered and acted 11.13 upon by the department of commerce in the same manner and by the 11.14 same standards as applications are submitted, considered and 11.15 acted upon under section 51.08. 11.16 Subd. 2. If the certificate of authorization (charter) be 11.17 issued, the articles of incorporation may then be amended so as 11.18 to convert the savings bank into a savings, building and loan11.19 association by following the procedure prescribed for amending 11.20 articles of incorporation of savings banks; provided, that11.21before any such conversion shall take place the secretary of the11.22savings bank shall cause 30 days written notice of such intended11.23conversion (which notice, before mailing, shall be submitted to11.24and approved by the commissioner of commerce) to be mailed11.25prepaid to each depositor, at the depositor's last known address11.26according to the records of the bank, and after such notice each11.27depositor may, prior to the time the conversion becomes final11.28and complete, on demand and without prior notice, withdraw the11.29full amount of deposit or such part thereof as the depositor may11.30request, and upon such withdrawal the depositor shall receive11.31interest to the date of withdrawal at the same rate last paid or11.32credited by the bank, notwithstanding the provisions of any law,11.33bylaw, or rule to the contrary. 11.34 Subd. 3.At any time after the expiration of the 30 day11.35period specified in subdivision 2, (which fact shall be11.36evidenced by the secretary of the savings bank filing an12.1affidavit to that effect with the commissioner of commerce and12.2the secretary of state,)Upon receipt of the fees required for 12.3 filing and recording amended articles of incorporation of 12.4 savings banks, the secretary of state shall record the amended 12.5 articles of incorporation and certify that fact thereon, 12.6 whereupon the conversion of such savings bank into a savings,12.7building and loanassociation shall become final and complete 12.8 and thereafter said corporation shall have the powers and be 12.9 subject to the duties and obligations prescribed by the laws of 12.10 this state applicable to savings, building and loanassociations. 12.11Subd. 4. When the conversion of any savings bank into a12.12savings, building and loan association becomes final and12.13complete, the surplus fund of the bank shall become the12.14contingent or reserve fund of the association and every person12.15who was a depositor of the savings bank at the time of the12.16conversion shall cease to be a depositor and shall thereafter be12.17a shareholder of the savings, building and loan association and12.18be credited with payments on that person's share account equal12.19to the full amount on deposit with the savings bank at the time12.20of conversion, plus interest to the date of conversion at the12.21same rate last paid or credited by the bank, notwithstanding the12.22provisions of any law, bylaw, or rule to the contrary.12.23 Subd. 5. The resulting association shall as soon as 12.24 practicable and within such time not extending beyond three 12.25 years from the date the conversion becomes final and complete 12.26 and by such methods as the department of commerce shall direct, 12.27 cause its organization, its securities and investments, the 12.28 character of its business, and the methods of transacting the 12.29 same to conform to the laws applicable to savings, building and12.30loanassociations. 12.31 Sec. 17. Minnesota Statutes 1994, section 47.29, 12.32 subdivision 1, is amended to read: 12.33 Subdivision 1. Any savings bank organized and existing 12.34 under and by virtue of the laws of this state, is hereby 12.35 authorized and empowered, by a two-thirds vote of the entire 12.36 board oftrusteesdirectors, at any regular or special meeting 13.1 of said board duly called for that purpose to convert itself 13.2 into a federal association whenever said conversion is 13.3 authorized by any act of the Congress of the United States: 13.4 Provided, that before any such conversion shall become final and13.5complete, (a) the secretary of the savings bank shall cause 3013.6days' written notice of such intended conversion (which notice,13.7before mailing, shall be submitted to and approved by the13.8commissioner of commerce) to be mailed prepaid to each13.9depositor, at their last known address, according to the records13.10of the bank, and after such notice each depositor may, prior to13.11the time the conversion becomes final and complete, on demand13.12and without prior notice, withdraw the full amount of the13.13deposit or such part thereof as the depositor may request, and13.14upon such withdrawal the depositor shall receive interest to the13.15date of withdrawal at the same rate last paid or credited by the13.16bank, notwithstanding the provisions of any law, bylaws, or rule13.17to the contrary, and (b)that such conversion be approved in 13.18 writing by the commissioner of commerce. 13.19 Sec. 18. Minnesota Statutes 1994, section 47.29, 13.20 subdivision 2, is amended to read: 13.21 Subd. 2.At any time after the expiration of the 30 day13.22period specified in subdivision 1, clause (a), (which fact shall13.23be evidenced by the secretary of the savings bank filing an13.24affidavit to that effect with the commissioner of commerce and13.25the secretary of state of this state),Upon filing a copy of the 13.26 federal charter, certified by the issuing federal agency with 13.27 the secretary of state of this state, the secretary of state 13.28 shall record said charter and certify that fact thereon, 13.29 whereupon the conversion shall be final and complete and the 13.30 savings bank shall at that time cease to be a savings bank 13.31 supervised by this state, and shall thereafter be a federal 13.32 association. 13.33 Sec. 19. Minnesota Statutes 1994, section 47.30, 13.34 subdivision 1, is amended to read: 13.35 Subdivision 1. Any capital stock savings, building and13.36loanassociation organized and existing under and by virtue of 14.1 the laws of this state may amend its articles of incorporation 14.2 so as to convert itself into a savings bank, by complying with 14.3 the following requirements and procedure: 14.4 A meeting of the shareholders shall be held upon not less 14.5 than 15 days written notice to each shareholder, served either 14.6 personally or by mail prepaid, directed to the shareholder's 14.7 last known post office address according to the records of the 14.8 association, stating the time, place and purpose of such meeting. 14.9 At such meeting, the shareholders may by two-thirds vote 14.10 (according to the book value of said shares) of those present in 14.11 person or by proxy pass a resolution declaring their intention 14.12 to convert such association into a savings bank and setting 14.13 forth the names of the proposed first board oftrustees14.14 directors. A copy of the minutes of such meeting verified by 14.15 the affidavit of the chair and the secretary of the meeting, 14.16 shall be filed in the office of the department of commerceand14.17with the secretary of statewithin ten days after the meeting. 14.18 Such copy, when so filed, shall be evidence of the holding of 14.19 such meeting and of the action taken. 14.20 Sec. 20. Minnesota Statutes 1994, section 47.30, 14.21 subdivision 2, is amended to read: 14.22 Subd. 2. An application for a certificate authorizing a 14.23 savings bank to transact business, in the form required by 14.24 sections 46.041 and 46.046, shall be submitted to, considered 14.25 and acted upon by the department of commerce in the same manner 14.26 and by the same standards as applications are submitted, 14.27 considered and acted upon under sections 46.041, 46.044, 46.046, 14.28 and 50.01and 50.02. The fees required by section 46.041 shall 14.29 be paid and the amendments proposed to the articles of 14.30 incorporation and bylaws shall be included as part of the 14.31 application. 14.32 Sec. 21. Minnesota Statutes 1994, section 47.30, 14.33 subdivision 3, is amended to read: 14.34 Subd. 3. If the department of commerce grants the 14.35 application, the certificate of authorization (charter) shall be 14.36 issued as provided by section 46.041, and the articles of 15.1 incorporation may then be amended so as to convert the savings,15.2building and loanassociation into a savings bank by following 15.3 the procedure prescribed for amending articles of incorporation 15.4 of savings, building and loanassociations: Provided, that the 15.5 proposed amended articles shall contain the names of, and be 15.6 signed by, the proposed first board oftrusteesdirectors. 15.7 Sec. 22. Minnesota Statutes 1994, section 47.30, 15.8 subdivision 5, is amended to read: 15.9 Subd. 5.At any time after the expiration of the 30 day15.10period specified in subdivision 4, (which fact shall be15.11evidenced by the secretary of the association filing an15.12affidavit to that effect with the commissioner of commerce and15.13the secretary of state),Upon receipt of the fees required for 15.14 filing and recording amended articles of incorporation of 15.15 savings, building and loanassociations, the secretary of state 15.16 shall record the amended articles of incorporation and certify 15.17 that fact thereon, whereupon the conversion of such savings,15.18building and loanassociation into a savings bank shall become 15.19 final and complete and thereafter the signers of said amended 15.20 articles and their successors shall be a corporation, and have 15.21 the powers and be subject to the duties and obligations 15.22 prescribed by the laws of this state applicable to savings banks. 15.23 Sec. 23. Minnesota Statutes 1994, section 47.32, is 15.24 amended to read: 15.25 47.32 [CONVERTING INSTITUTION DEEMED CONTINUANCE; TRANSFER 15.26 OF PROPERTY AND RIGHTS.] 15.27 Upontheconversion of any savings bank into a savings,15.28building and loanassociation or into a federal association,and15.29of a savings, building and loan association or federal15.30association into a savings bank, the corporate existence of the15.31converting savings bank or association shall not terminate, and15.32the resulting association or savings bank shall be a continuance15.33of the converting savings bank or association; and all the15.34property of the converting savings bank or association15.35(including its rights) shall by operation of law vest in the15.36resulting association or savings bank as of the time when the16.1conversion becomes final and complete, and all of the16.2obligations of the converting savings bank or association become16.3those of the resulting association or savings bank. Actions and16.4other judicial proceedings to which the converting savings bank16.5or association is a party may be prosecuted and defended as if16.6the conversion had not been madethe detached facilities of the 16.7 savings bank shall become branches of the savings association or 16.8 federal association. Upon conversion of any savings association 16.9 or federal association into a savings bank, the branches of the 16.10 savings association or federal association shall become detached 16.11 facilities of the savings bank, notwithstanding the limitations 16.12 on the number of facilities, distance limitations, geographic 16.13 limitation, notice requirements, and consent requirements 16.14 contained in sections 47.51 to 47.57. 16.15 Sec. 24. [47.325] [APPEAL AND JUDICIAL REVIEW.] 16.16 A savings bank aggrieved by any action or inaction of the 16.17 commissioner under sections 47.27 to 47.32 may appeal under 16.18 sections 14.63 to 14.69. The scope of judicial review in the 16.19 proceedings is as provided in those sections. 16.20 Sec. 25. Minnesota Statutes 1994, section 47.62, 16.21 subdivision 4, is amended to read: 16.22 Subd. 4. When more than one electronic financial terminal 16.23 is established and maintained at a single place of business by 16.24 the same person, or if a person wishes to make an application 16.25 that encompasses more than one place of business or location, a 16.26 single application and fee shall be sufficient. For each 16.27 application, a $100 fee shall be paid to the commissioner, and 16.28 for each application for a change in pricing structure, a $10 16.29 fee shall be paid to the commissioner. If the $100 fee or the 16.30 $10 fee is less than the costs incurred by the commissioner in 16.31 approving or disapproving the application, the fee shall be 16.32 equal to those costs. 16.33 Sec. 26. Minnesota Statutes 1994, section 47.64, 16.34 subdivision 1, is amended to read: 16.35 Subdivision 1. (a) Any person establishing and maintaining 16.36 an electronic financial terminal located separate and apart from 17.1 a financial institution's principal office, branch, or detached 17.2 facility for use by one type of financial institution shall, 17.3 upon written request, make its services available to any 17.4 requesting financial institution of similar type on a fair, 17.5 equitable, and nondiscriminatory basisapproved by the17.6commissioner. A financial institution requesting use of an 17.7 electronic financial terminal shall be permitted its use only if 17.8 the financial institution conforms to reasonable technical 17.9 operation standards which have been established by the 17.10 electronic financial terminal provideras approved by the17.11commissioner. For purposes of this subdivision, the types of 17.12 financial institutions are: (1) commercial banks andmutual17.13 savings banks; (2) credit unions, industrial loan and thrift 17.14 companies, and regulated lenders under chapter 56; and (3) 17.15 savingsand loanassociations. The services of an electronic 17.16 financial terminal may be made available to any type of 17.17 financial institution. After March 1, 1979, or earlier if 17.18 determined by the commissioner to be technically feasible, an 17.19 electronic financial terminal which is used by or made available 17.20 to one type of financial institution shall be made available, 17.21 upon request, to other types of financial institutions on a 17.22 fair, equitable and nondiscriminatory basisas approved by the17.23commissioner. The charges required to be paid to any person 17.24 establishing and maintaining an electronic financial terminal 17.25 shall be related to an equitable proportion of the direct costs 17.26 of establishing, operating, and maintaining the terminal plus a 17.27 reasonable return on those costs to the owner of the terminal. 17.28 The charges may provide for amortization of development costs 17.29 and capital expenditures over a reasonable period of time. 17.30 (b) Any person establishing and maintaining an electronic 17.31 financial terminal located on and as a part of a financial 17.32 institution's principal office, branch,ordetached facility, or 17.33 lending office where deposits are not taken may, at the 17.34 financial institution's option, (1) maintain the electronic 17.35 financial terminal for the exclusive use of the financial 17.36 institution's customers; or (2) maintain the electronic 18.1 financial terminal for the use of the financial institution's 18.2 customers and make some or all of the electronic financial 18.3 terminal's services available to any other requesting financial 18.4 institution on a fair, equitable, and nondiscriminatory 18.5 basisapproved by the commissioner. 18.6 Sec. 27. Minnesota Statutes 1994, section 47.65, 18.7 subdivision 1, is amended to read: 18.8 Subdivision 1. Any person may establish a transmission 18.9 facility in this state upon approval by the commissioner 18.10 pursuant to the provisions of this section, except that a 18.11 financial institution may establish a transmission facility in 18.12 this state after giving the commissioner written notice of its 18.13 intent to do so, provided that the commissioner does not issue 18.14 an order disallowing such establishment within 15 days after 18.15 receiving a completed notice. Any such notice must be made 18.16 using a form prescribed by the commissioner. A transmission 18.17 facility which is used by, or made available to, any financial 18.18 institution must be made available to all other financial 18.19 institutions upon request of such financial institution and 18.20 agreement by the financial institution to pay fees on a fair, 18.21 equitable, and nondiscriminatory basisapproved by the18.22commissioner. A person requesting use of a transmission 18.23 facility shall be permitted its use only if the person conforms 18.24 to reasonable technical operating standards which have been 18.25 established by the transmission facility provideras approved by18.26the commissioner. The charges required to be paid to any person 18.27 establishing a transmission facility shall be related to an 18.28 equitable proportion of the direct costs of establishing, 18.29 operating and maintaining such facility plus a reasonable return 18.30 on those costs to the owner of the facility. The charges may 18.31 provide for amortization of development costs and capital 18.32 expenditures over a reasonable period of time. 18.33 Sec. 28. Minnesota Statutes 1994, section 47.65, 18.34 subdivision 2, is amended to read: 18.35 Subd. 2. Before installation and operation, a transmission 18.36 facility application by a person who is required to submit an 19.1 application under subdivision 1 shall be submitted to the 19.2 commissioner on a form provided by the commissioner which states: 19.3 (a) The location where the transmission facility will be 19.4 operated; 19.5 (b) The ownership of the transmission facility; 19.6 (c) If applicable, the bonding or insurance company which 19.7 has provided the bond for the transmission facility; and 19.8 (d) Such other information as the commissioner requires. 19.9 If the commissioner finds that (a) the facility will be 19.10 properly and safely managed, (b) the applicant is financially 19.11 sound, (c) there is a reasonable probability of success for the 19.12 facility, (d) the proposed charges for making the services of 19.13 the facility available to financial institutions are fair, 19.14 equitable and nondiscriminatory, and (e) all information has 19.15 been furnished by the applicant, the commissioner shall approve 19.16 the application within 90 days. If the commissioner has not 19.17 denied the application within 90 days of the submission of the 19.18 application, the authorization shall be deemed granted. For 19.19 each application, a $500 fee shall be paid to the commissioner. 19.20 For each application for change in pricing structure, a $50 fee 19.21 shall be paid to the commissioner. If the $500 fee or the $50 19.22 fee is less than the costs incurred by the commissioner in 19.23 approving or disapproving the application, the application fee 19.24 shall be equal to those costs. 19.25 Sec. 29. Minnesota Statutes 1994, section 48.01, 19.26 subdivision 2, is amended to read: 19.27 Subd. 2. [BANKING INSTITUTION.] The term "banking 19.28 institution" means any bank, trust company, bank and trust 19.29 company, ormutualsavings bank which is now or may hereafter be 19.30 organized under the laws of this state. For purposes of 19.31 sections 48.38, 48.84, and 501B.10, subdivision 6, and to the 19.32 extent permitted by federal law, "banking institution" includes 19.33 any national banking association or affiliate exercising trust 19.34 powers in this state. 19.35 Sec. 30. Minnesota Statutes 1994, section 48.15, is 19.36 amended by adding a subdivision to read: 20.1 Subd. 2a. [AUTHORIZED ACTIVITIES.] The commissioner may 20.2 authorize a state bank to undertake any activities, exercise any 20.3 powers, or make any investments that are authorized activities, 20.4 powers, or investments as of the date of final enactment of this 20.5 subdivision for any state savings bank doing business in this 20.6 state, or that become authorized activities, powers, or 20.7 investments for state savings banks after the date of final 20.8 enactment of this subdivision. The commissioner may not 20.9 authorize state banks to engage in any banking activity 20.10 prohibited by the laws of this state. 20.11 Sec. 31. Minnesota Statutes 1994, section 49.01, is 20.12 amended by adding a subdivision to read: 20.13 Subd. 7. [STATE BANK.] "State bank" for the purposes of 20.14 sections 49.02 to 49.41, shall mean any bank, savings bank, 20.15 trust company, or bank and trust company which is now or may 20.16 hereafter be organized under the laws of this state. 20.17 Sec. 32. Minnesota Statutes 1994, section 49.42, is 20.18 amended to read: 20.19 49.42 [STATE BANK.] 20.20 As used in sections 49.42 to 49.46 "state bank" means any 20.21 bank(other than a mutual savings bank), savings bank, trust 20.22 company, or bank and trust company which is now or may hereafter 20.23 be organized under the laws of this state. 20.24 Sec. 33. [50.001] [APPLICATION FOR CERTIFICATE OF 20.25 AUTHORITY; PROCEDURE.] 20.26 The procedures for the application and issuance of a 20.27 certificate of authority to a savings bank organized pursuant to 20.28 section 300.025 shall be those applicable to a state bank in 20.29 sections 46.041 to 46.045. 20.30 Sec. 34. Minnesota Statutes 1994, section 50.01, is 20.31 amended to read: 20.32 50.01 [EXPEDIENCY ASCERTAINED.] 20.33 To enable the commissioner of commerce to determine the 20.34 expediency of the organization of a savings bank, as in this 20.35 chapter prescribed, the commissioner shall investigate and 20.36 ascertain: 21.1 (1) Whether greater convenience of access to a savings bank 21.2 will be afforded to any considerable number of depositors by 21.3 opening the proposed bank; 21.4 (2) Whether the population in the vicinity of the location 21.5 of the bank affords reasonable promise of adequate support 21.6 therefor; and 21.7 (3) Whether the responsibility, character, and general 21.8 fitness of the persons named astrusteesdirectors in the 21.9 certificate are such as to command the confidence of the 21.10 community in the proposed bank. 21.11 Sec. 35. Minnesota Statutes 1994, section 50.04, is 21.12 amended to read: 21.13 50.04 [BONDS OF TRUSTEES OR DIRECTORS.] 21.14 Everytrusteedirector, before entering upon any duties, 21.15 shall give bond to the state in a penal sum of not less than 21.16 $5,000, with sureties approved bya judge ofthedistrict21.17courtcommissioner of commerce, conditioned for the faithful 21.18 discharge of those duties, and file the samefor recordwith the 21.19county recorder of the county, who, after record, shall transmit21.20it to thecommissioner of commerce. An action may be maintained 21.21 on this bond by any person aggrieved by breach of any of its 21.22 conditions, upon leave granted by anysuchjudge of the district 21.23 court, for such damages as the plaintiff may be entitled to, not 21.24 exceeding its amount; and like successive actions may be 21.25 maintained until such amount is exhausted. 21.26 Sec. 36. Minnesota Statutes 1994, section 50.05, is 21.27 amended to read: 21.28 50.05 [BOND OF TREASURERBONDS OF OFFICERS AND EMPLOYEES.] 21.29Before entering upon any duties, the treasurer shall give21.30bond to the bank in such sum, not less than $10,000, as the21.31board of trustees shall prescribe, for the faithful discharge of21.32those duties, and at any time thereafter may be required by the21.33board to furnish additional security. The board may also21.34require, at any time, from any other officer, employee, or21.35agent, such security as it deems necessary.A savings bank 21.36 shall be protected against loss by reason of the unlawful act of 22.1 its officers or employees by a surety bond in an amount approved 22.2 by the board of directors and issued by a solvent corporate 22.3 surety in good standing authorized to do business in this state, 22.4 or by a fidelity insurance policy written by a solvent insurance 22.5 company in good standing authorized to do business in this 22.6 state. The commissioner of commerce or the board of directors 22.7 of the savings bank may require an increase of the amount of the 22.8 bond whenever either deems it necessary. This section shall not 22.9 require the bonding or insuring of officers or directors of a 22.10 savings bank not having active management or control of the 22.11 savings bank or of employees of a savings bank not holding 22.12 positions of trust. Any bond given or contract of insurance 22.13 secured shall be in favor of the savings bank. 22.14 Sec. 37. Minnesota Statutes 1994, section 50.06, is 22.15 amended to read: 22.16 50.06 [TRUSTEESDIRECTORS; FIRST BOARD.] 22.17 The business of every such stock savings bank shall be 22.18 managed by a board of not less than seventrusteesdirectors. 22.19 The persons named in the certificate of authorization shall 22.20 constitute the first board. Each vacancy shall be filled by the 22.21 board as soon as practicable, at a regular meeting thereof, 22.22 except when a resolution reducing the number oftrustees22.23 directors named in its charter to a number not less than seven 22.24 shall have been incorporated into its bylaws, and a copy thereof 22.25 filed with the commissioner of commerce, in which case vacancies 22.26 shall not be filled until the number has been reduced to that 22.27 specified in this resolution. The number may be increased to any 22.28 number specified in a like resolution, consented to, in writing, 22.29 by the commissioner of commerce. 22.30 Sec. 38. [50.085] [POWERS.] 22.31 Subdivision 1. [GENERALLY.] Every savings bank 22.32 incorporated pursuant to or operating under this chapter shall 22.33 be a body corporate; shall have all the powers enumerated, 22.34 authorized, and permitted by this chapter and other applicable 22.35 law; shall have other rights, privileges, and powers as may be 22.36 incidental to or reasonably necessary or appropriate for the 23.1 accomplishment of the objects and purposes of the savings bank; 23.2 and shall have those powers possessed by corporations organized 23.3 under chapter 300. 23.4 Subd. 2. [BORROWING.] A savings bank may borrow money and 23.5 issue its obligations for the borrowed money, including, but not 23.6 limited to, obligations, bonds, notes, or other debt securities, 23.7 except as otherwise provided by this chapter or by rules of the 23.8 commissioner of commerce. An obligation, bond, note, or other 23.9 debt security may include a written provision subordinating the 23.10 debt to claims of other creditors or of depositors. Borrowings 23.11 may be secured by property of the savings bank. 23.12 Subd. 3. [FACILITATING ORGANIZATIONS.] A savings bank may 23.13 become a member of, purchase stock or securities in, deposit 23.14 money with, deal with, make reasonable payments or contributions 23.15 to, or comply with any other conditions of membership or credit 23.16 from any corporation or agency of the United States or of this 23.17 state, or of any other organization to the extent the 23.18 corporation, agency, or organization assists in furthering or 23.19 facilitating the saving bank's purposes, powers, or community 23.20 responsibilities. 23.21 Subd. 4. [LOANS, CONTRACTS, AND LEASES.] A savings bank 23.22 may make, sell, purchase, invest in, and participate or 23.23 otherwise deal in loans and installment sale contracts and other 23.24 forms of indebtedness, and take any manner of security for the 23.25 loans and contracts. A savings bank may also acquire and lease 23.26 or participate in the acquisition and leasing of personal 23.27 property. 23.28 Subd. 5. [SAVINGS, LOANS, INVESTMENT.] A savings bank may 23.29 acquire deposits in the form of demand accounts, checking 23.30 accounts, negotiable order of withdrawal accounts, savings 23.31 accounts, time deposits, money market deposit accounts, treasury 23.32 tax and loan accounts, and other types of deposits, and pay 23.33 interest or dividends on those accounts, except that interest or 23.34 dividends must not be paid on demand deposit accounts. No 23.35 capital stock savings bank shall accept deposits in a sum 23.36 exceeding 30 times the amount of its capital stock and its 24.1 actual surplus. 24.2 Subd. 6. [INSURANCE OF ACCOUNTS.] A savings bank may 24.3 obtain and maintain insurance of its deposit accounts by the 24.4 federal deposit insurance corporation or any other federal 24.5 agency established for the purpose of insuring deposit accounts 24.6 in savings banks. 24.7 Subd. 7. [SAFE DEPOSIT BOXES.] A savings bank may maintain 24.8 and let safes, boxes, or other receptacles for the safekeeping 24.9 of personal property upon agreed upon terms and conditions. 24.10 This subdivision does not supersede any inconsistent provision 24.11 of statute. 24.12 Subd. 8. [DRAFTS.] A savings bank may issue drafts and 24.13 similar instruments drawn on the savings bank to aid in 24.14 effecting withdrawals and for other purposes of the savings 24.15 bank; accept for payment at a future date drafts drawn upon it 24.16 by its customers; and issue, advise, or confirm letters of 24.17 credit authorizing holders to draw drafts upon it or its 24.18 correspondents. 24.19 Subd. 9. [FISCAL AGENT.] A savings bank may act as fiscal 24.20 agent of the United States, and, when so designated by the 24.21 Secretary of Treasury, perform, under regulations the secretary 24.22 prescribes, all reasonable duties as fiscal agent of the United 24.23 States as the secretary may require; and act as agent for any 24.24 instrumentality of the United States and as agent of this state 24.25 and any instrumentality of it. 24.26 Subd. 10. [SERVICING.] A savings bank may service loans 24.27 and investments for others. 24.28 Subd. 11. [INSURANCE AGENCY.] (a) A savings bank located 24.29 and doing business in any place where the population does not 24.30 exceed 5,000 inhabitants as shown by the last preceding 24.31 decennial census may, directly or through a subsidiary, subject 24.32 to any rules adopted by the commissioner, act as an agent for 24.33 any property-casualty, life, or other insurance company 24.34 authorized by the commissioner to do business in this state. 24.35 Except as provided in paragraph (c), a savings bank may not 24.36 directly or through a subsidiary act as an agent for any 25.1 property-casualty, life, or other insurance company in any place 25.2 where the population exceeds 5,000 inhabitants as shown by the 25.3 last preceding decennial census. 25.4 (b) To the extent allowed under paragraphs (a) and (c), a 25.5 savings bank or its subsidiary may solicit or sell insurance and 25.6 collect premiums on policies issued by the insurance company and 25.7 may receive for these services the fees and commissions agreed 25.8 upon between the savings bank and the insurance company. 25.9 (c) A savings bank may, directly or through a subsidiary, 25.10 act as an agent for any property-casualty, life, or other 25.11 insurance company in a place where the population exceeds 5,000 25.12 inhabitants as shown by the last preceding decennial census, if: 25.13 (1) the savings bank is a direct or indirect subsidiary of 25.14 a state or federal savings association or of a state or federal 25.15 savings association holding company that, prior to the date of 25.16 enactment of this subdivision, had a license from the 25.17 commissioner to solicit or sell insurance of the type in 25.18 question, or directly or indirectly controlled a subsidiary that 25.19 held such a license; or 25.20 (2) the savings bank is a successor to a state or federal 25.21 savings association as a result of merger, charter conversion, 25.22 or otherwise, which association, prior to the date of enactment 25.23 of this subdivision, held a license from the commissioner to 25.24 solicit or sell insurance of the type in question, or directly 25.25 or indirectly controlled a subsidiary that held such a license. 25.26 Subd. 12. [LIMITED TRUSTEESHIP.] A savings bank may act as 25.27 trustee or custodian of a self-employed retirement plan under 25.28 the federal Self-Employed Individual Tax Retirement Act of 1962, 25.29 as amended, and of an individual retirement account under the 25.30 federal Employee Retirement Income Security Act of 1974, as 25.31 amended, to the same extent permitted for state banks under 25.32 section 48.15. All funds held in a fiduciary capacity by the 25.33 savings bank under the authority of this subdivision may be 25.34 commingled and consolidated for appropriate purposes of 25.35 investment if records reflecting each separate beneficial 25.36 interest are maintained by the fiduciary unless the 26.1 responsibility is lawfully assumed by another appropriate party. 26.2 Subd. 13. [ESCROW.] A savings bank may engage in an escrow 26.3 business. 26.4 Subd. 14. [TRUST POWERS.] Upon application to and approval 26.5 by the commissioner of commerce, a savings bank may act as 26.6 trustee, executor, administrator, personal representative, 26.7 conservator, custodian, guardian, or in any other fiduciary 26.8 capacity in which state banks, trust companies, or other 26.9 corporations are permitted to act, and receive reasonable 26.10 compensation for it. A savings bank that has complied with 26.11 sections 48.36 to 48.43 and 48.475, and holds a certificate as 26.12 provided in section 48.37, may exercise the powers and 26.13 privileges set forth in sections 48.38, 48.475, 48.84, 48.841, 26.14 48.846, and 48.86. A savings bank that has qualified and 26.15 obtained a certificate, as provided in sections 48.36 to 48.43, 26.16 may use in its corporate name or title, in addition to the words 26.17 "savings bank" or other words permitted by law, the words 26.18 "trust" or "trust company," and may display and make use of 26.19 signs, symbols, tokens, letterheads, cards, circulars, and 26.20 advertising stating or indicating that it is authorized to 26.21 transact the business authorized by those sections, and a 26.22 savings bank using the words "trust" or "trust company" is not 26.23 required to use the word "state" in its corporate name. A 26.24 savings bank may not invest, pursuant to section 50.1465, in a 26.25 corporation that engages in activities described in this 26.26 subdivision, without first obtaining the approval of the 26.27 commissioner of commerce. 26.28 Subd. 15. [SECURING DEPOSITS.] In addition to the 26.29 authority conferred in subdivision 2, a savings bank may pledge, 26.30 hypothecate, assign or transfer, or create a lien upon or charge 26.31 against its assets to secure: (1) public funds, including money 26.32 or deposits of the United States or any instrumentality of it 26.33 and of this state or any instrumentality of it; (2) money or 26.34 deposits of a trustee in bankruptcy; (3) money borrowed in good 26.35 faith from other banks, trust companies, financial institutions, 26.36 or any financial agency created by act of Congress; (4) the 27.1 acquisition of real estate to be carried as an asset as provided 27.2 in section 47.10; (5) a liability that arises from a transfer of 27.3 a direct obligation of, or obligations that are fully guaranteed 27.4 as to principal and interest by, the United States government or 27.5 an agency of it that the savings bank is obligated to 27.6 repurchase; (6) money and deposits held in escrow; (7) money and 27.7 deposits if acting as a corporate fiduciary; and (8) treasury 27.8 tax and loan accounts as provided in section 50.171. 27.9 Subd. 16. [DATA PROCESSING SERVICES.] A savings bank may 27.10 provide data processing services to others and act as a 27.11 custodian of records for others on a for-profit basis and 27.12 utilize data processing services and place records of the 27.13 savings bank for storage and safekeeping with another person for 27.14 a fee. 27.15 Subd. 17. [ELECTRONIC FINANCIAL TERMINALS.] A savings bank 27.16 may directly or indirectly acquire, place, and operate, or 27.17 participate in the acquisition, placement, and operation of, 27.18 electronic financial terminals and transmission facilities, in 27.19 accordance with the requirements of sections 47.61 to 47.74. 27.20 Subd. 18. [ADDITIONAL POWERS AUTHORIZED FOR STATE 27.21 BANKS.] A savings bank may exercise the powers that are 27.22 specifically enumerated by law for banks authorized to do 27.23 business under chapter 48. 27.24 Subd. 19. [PARITY PROVISION.] (a) In addition to other 27.25 investments authorized by law and the powers conferred by this 27.26 chapter, and subject to the regulation of the commissioner of 27.27 commerce, a savings bank may, directly or through a subsidiary, 27.28 undertake any activities, exercise any powers, or make any 27.29 investments that any state bank or national bank located or 27.30 doing business in this state may undertake, exercise, or make as 27.31 of the date of enactment of this subdivision. 27.32 (b) The commissioner may authorize a savings bank to 27.33 undertake any activities, exercise any powers, or make any 27.34 investments that become authorized activities, powers, or 27.35 investments after the date of final enactment of this 27.36 subdivision for any state bank or national bank located or doing 28.1 business in this state. 28.2 (c) Subject to rules adopted by the commissioner, and 28.3 subject to the investment limits in section 50.1465, a 28.4 subsidiary of a savings bank may undertake any activities, 28.5 exercise any powers, or make any investments not authorized for 28.6 any state bank or national bank but authorized as of the date of 28.7 final enactment of this subdivision for any state bank or 28.8 national bank subsidiary located and doing business in this 28.9 state. 28.10 (d) The commissioner may authorize a subsidiary of a 28.11 savings bank to undertake any activities, exercise any powers, 28.12 or make any investments that become authorized activities, 28.13 powers, or investments after the date of final enactment of this 28.14 subdivision for any state bank or national bank subsidiary 28.15 located and doing business in this state. 28.16 (e) The commissioner at any time may limit any activity, 28.17 power, or investment for any savings bank or savings bank 28.18 subsidiary under this subdivision or section 50.1465, 28.19 subdivision 1, clauses (2) and (3), for supervisory, legal, or 28.20 safety and soundness reasons. A savings bank aggrieved by an 28.21 action of the commissioner under this subdivision may appeal the 28.22 action, and the proceedings shall be conducted pursuant to 28.23 sections 14.63 to 14.69. 28.24 Sec. 39. Minnesota Statutes 1994, section 50.11, is 28.25 amended to read: 28.26 50.11 [SECURITIES HELD FOR SAFEKEEPING; SAFE DEPOSIT BOXES; 28.27 LIMITATION OF LIABILITY.] 28.28 Amutualsavings bank may receive for safekeeping for its 28.29 depositors obligations of the United States or its possessions 28.30 or of a state or territory of the United States, or of any 28.31 political subdivision of any such state or territory, and it may 28.32 provide for, and hire to, its depositors safe deposit boxes in 28.33 which to keep securities and valuable papers, but the liability 28.34 of a savings bank to any person or association of persons on 28.35 account of hiring such safe deposit box or boxes shall in no 28.36 event exceed $20,000. 29.1 Sec. 40. Minnesota Statutes 1994, section 50.13, is 29.2 amended to read: 29.3 50.13 [REAL ESTATE.] 29.4Any suchA savings bank may purchase, hold, or convey land 29.5 sold upon foreclosure of mortgages owned by it, or upon 29.6 judgments or decrees in its favor, or in settlement of debts, or 29.7 received in exchange as part of the consideration of real estate 29.8 sold by it. Real estate so received in exchange shall not be 29.9 carried on the books of the bank at a price exceeding the cost 29.10 of that exchanged, less the cash payment, and all real estate so 29.11 acquired shall be sold within ten years after its acquirement, 29.12 unless the time is extended by the commissioner of commerce on 29.13 application of the board oftrusteesdirectors. 29.14 Sec. 41. Minnesota Statutes 1994, section 50.14, 29.15 subdivision 1, is amended to read: 29.16 Subdivision 1. Except as it relates to the investment of 29.17 trust funds by corporate trustees or by individual trustees, the 29.18 term "authorized securities" whenever used in the statutes and 29.19 laws of this state shall be understood as referring to the 29.20 following described securities in which thetrusteesdirectors 29.21 of any savings bank shall invest the money deposited therein and 29.22 which at the time of the purchase thereof are included in one or 29.23 more of the following classes. 29.24 Sec. 42. Minnesota Statutes 1994, section 50.14, 29.25 subdivision 5, is amended to read: 29.26 Subd. 5. (1) Class four shall be: 29.27 (a) Notes or bonds secured by mortgages or trust deeds on 29.28 unencumbered real estate, whether in fee or in a leasehold of a 29.29 duration not less than ten years beyond the maturity of the 29.30 loan, in any state of the United States, worth at leasttwice29.31 the amount loaned thereon; 29.32 (b) Notes or bonds secured by mortgages or trust deeds on 29.33 unencumbered real estate in clause (1)(a) where the notes or 29.34 bonds do not exceed 80 percent of the appraised value of the 29.35 security for the same, provided that the notes or bonds are 29.36 payable in installments aggregating not less than five percent 30.1 of the original principal a year in addition to the interest; 30.2 or, are payable on a regular amortization basis in equal 30.3 installments, including principal and interest, these 30.4 installments to be payable monthly in amounts that the debt will 30.5 be fully paid in not to exceed 30 years if the security is 30.6 nonagricultural real estate, and these installments to be 30.7 payable annually or semiannually in amounts that the debt will 30.8 be fully paid in not to exceed 25 years if the security is 30.9 agricultural real estate. A construction loan is deemed 30.10 amortized as required by this clause if the first installment 30.11 thereon is payable not later than 18 months after the date of 30.12 the first advance in the case of residential construction or not 30.13 later than 36 months after the date of the first advance in the 30.14 case of nonresidential construction; and 30.15 (c) Notes or bonds secured by mortgages or trust deeds on 30.16 unencumbered real estate in clause (1)(a) which are in an 30.17 original principal amount of $100,000 or more and which do not 30.18 exceed 95 percent of the appraised value of the security for the 30.19 same which may be payable in the manner as thetrustees30.20 directors of the savings bank prescribe, provided that 30.21 construction loans made by a savings bank pursuant to this 30.22 clause (1)(c) do not exceed in the aggregate five percent of the 30.23 assets of the savings bank. 30.24 (2) Class four investments shall be made only on report of 30.25 a committee directed to investigate the same and report its 30.26 value, according to the judgment of its members, and its report 30.27 shall be preserved among the bank's records. 30.28 (3) Notwithstanding anything to the contrary in clause 30.29 (1)(b), amutualsavings bank organized under the laws of this 30.30 state may invest in notes or bonds secured by mortgages or trust 30.31 deed where the notes or bonds do not exceed 95 percent of the 30.32 appraised value of the security for the same. Except as 30.33 modified herein, the other provisions of clause (1)(b) apply. 30.34 (4) For purposes of this subdivision, real estate is deemed 30.35 unencumbered if the only existing mortgage or lien against the 30.36 real estate is a first mortgage lien in favor of the savings 31.1 bank making a second mortgage loan or if the total unpaid 31.2 aggregate of all outstanding liens against the same real estate 31.3 does not exceed 80 percent of its appraised value. 31.4 (5) Renegotiable rate notes or bonds secured by mortgages 31.5 or trust deeds where the notes or bonds do not exceed 95 percent 31.6 of the appraised value of the security for the same. 31.7 For the purposes of this clause, a renegotiable rate 31.8 mortgage loan is a loan issued for a term of three years to five 31.9 years, secured by a mortgage maturing in not to exceed 30 years, 31.10 and automatically renewable at equal intervals after the 31.11 original loan term which may be up to six months shorter or 31.12 longer than subsequent terms. The loan must be repayable in 31.13 equal monthly installments of principal and interest during the 31.14 loan term, in an amount at least sufficient to amortize a loan 31.15 with the same principal and at the same interest rate over the 31.16 remaining life of the mortgage. 31.17 In the mortgage documents, the savings bank must grant to 31.18 the borrower an option to renew the loan for a new term, but not 31.19 beyond the maturity date of the mortgage, at a new interest rate 31.20 which shall be the savings bank's current market rate of 31.21 interest on similar loans determined 60 days before the due date 31.22 of the loan: provided, that the maximum interest rate increase 31.23 shall be equal to one-half of one percent per year multiplied by 31.24 the number of years in the loan term with a maximum net increase 31.25 of five percent over the life of the mortgage. Interest rate 31.26 increases are optional with the savings bank; net decreases from 31.27 the previous loan term are mandatory. 31.28 The borrower may not be charged costs connected with the 31.29 renewal of the loan. 31.30 Sixty days before the due date of the loan, the savings 31.31 bank shall send a written notification to the borrower 31.32 containing the following information: (i) The date on which the 31.33 entire balance of borrower's loan is due and payable; (ii) a 31.34 statement that the loan will be renewed automatically by the 31.35 savings bank at the rate specified in the notice unless the 31.36 borrower pays the loan by the due date; (iii) the amount of the 32.1 monthly payment, calculated according to the new rate determined 32.2 at the time of notice; (iv) a statement that the borrower may 32.3 prepay the loan without penalty at any time after the original 32.4 loan becomes due and payable; and (v) the name and phone number 32.5 of a savings bank employee who will answer the borrowers' 32.6 questions concerning the information in the notice. 32.7 An applicant for a renegotiable rate mortgage loan must be 32.8 given, at the time an application is requested, written 32.9 disclosure materials prepared in reasonably simple terms that 32.10 contain at least the following information: (i) An explanation 32.11 of how a renegotiable rate mortgage differs from a standard 32.12 fixed rate mortgage; (ii) an example of a renegotiable rate 32.13 mortgage indicating the maximum possible interest rate increase 32.14 and monthly payment calculated on that rate at the time of the 32.15 first renewal; and (iii) an explanation of how the savings bank 32.16 determines what the rate will be at the end of each loan term. 32.17 (6) An investment in notes or bonds secured by mortgages or 32.18 trust deeds on real estate in fee or in a leasehold may exceed 32.19 the 80 percent requirement in paragraph (1), clause (b), and the 32.20 95 percent requirement in paragraph (2), if the amount of the 32.21 loan in excess of those limits is insured or guaranteed by a 32.22 private mortgage insurer that the Federal Home Loan Mortgage 32.23 Corporation or the Federal National Mortgage Association has 32.24 determined to be a qualified private insurer. 32.25 Sec. 43. Minnesota Statutes 1994, section 50.14, 32.26 subdivision 7, is amended to read: 32.27 Subd. 7. Class six shall be the "eligible obligations" of 32.28 "qualifying railroad corporations," both as hereinafter defined. 32.29 (A) A "qualifying railroad corporation" shall be one which 32.30 at the time of investment 32.31 (1) Shall have been incorporated under the laws of the 32.32 United States or of any state thereof or of the District of 32.33 Columbia, and 32.34 (2) Shall own or operate within the United States not less 32.35 than 500 miles of standard gauge railroad lines exclusive of 32.36 sidings, or shall have had, for its five preceding fiscal years, 33.1 average gross railway operating revenues of at least $10,000,000 33.2 annually, or shall own or operate railroad terminal property 33.3 located in a city within the United States having at least 33.4 200,000 population, and 33.5 (3) Shall not have been in default in the payment of any 33.6 part of the principal or interest owing by it upon any part of 33.7 its funded indebtedness, at any times during its current fiscal 33.8 year and its five consecutive fiscal years immediately prior 33.9 thereto, except that if the corporation shall have been 33.10 reorganized in receivership or bankruptcy within such period 33.11 such corporation shall not have been in such default since the 33.12 effective date of reorganization, and 33.13 (4) Shall not have fixed interest obligations in excess of 33.14 60 percent of the total sum of (a) its fixed interest 33.15 obligations, (b) obligations, if any, bearing interest on a 33.16 contingent basis, (c) preferred stock, if any, at par or stated 33.17 value, (d) common stock at par or stated value and (e) earned 33.18 surplus, and 33.19 (5) Shall have had net earnings (a) in its five fiscal 33.20 years immediately preceding time of purchase, of an average 33.21 annual amount not less than 1-1/2 times the fixed charges of the 33.22 year immediately preceding time of purchase, and (b) in four of 33.23 its five fiscal years immediately preceding time of purchase and 33.24 in its fiscal year immediately preceding time of purchase, not 33.25 less than the fixed charges of those respective years, except 33.26 that if the corporation shall have been reorganized in 33.27 receivership or bankruptcy within such period, its net earnings 33.28 for each year shall have been not less than the fixed charges of 33.29 the reorganized company. As used herein "net earnings" shall be 33.30 defined as gross operating and nonoperating income of a railroad 33.31 corporation or its predecessor corporation, minus traffic and 33.32 transportation expenses, maintenance, depreciation, rent of 33.33 equipment and joint facilities, and other operating expenses, 33.34 and taxes excluding income and profits taxes. As used herein 33.35 "fixed charges" shall be defined as interest on debt on which 33.36 there is an unqualified obligation to pay interests, leased line 34.1 rentals and amortization of debt discount and expense, except 34.2 that if a corporation has been reorganized in receivership or 34.3 bankruptcy within five years prior to time of purchase "fixed 34.4 charges" shall be the fixed charges of the reorganized company. 34.5 (B) "Eligible obligations" shall be bonds, notes or other 34.6 obligations which 34.7 (1) Shall have been issued by a qualifying railroad 34.8 corporation, or shall have been assumed or guaranteed as to 34.9 principal and interest by a qualifying railroad corporation, and 34.10 (2) Shall bear interest at a fixed rate, and 34.11 (3) Shall have a definite maturity date, and 34.12 (4) Shall be secured by either (a) a lien upon railroad 34.13 lines which shall be a first lien upon at least two-thirds of 34.14 the total mileage covered by such lien and upon at least 100 34.15 miles of main lines or (b) a first mortgage or lien on railroad 34.16 terminal property and assumed or guaranteed as to principal and 34.17 interest by two or more qualifying railroad corporations. 34.18 (C) Nosuchsavings bank shall invest in securities of 34.19 Class Six to an amount exceeding in the aggregate 15 percent of 34.20 its deposits; nor in securities of Class Six secured by lien 34.21 upon railroad lines, issued, guaranteed, or assumed by any one 34.22 railroad corporation to an amount exceeding two percent of its 34.23 deposits; nor in securities of Class Six secured by lien upon 34.24 any one railroad terminal property to an amount exceeding one 34.25 percent of its deposits. 34.26 The requirements set forth herein governing investments in 34.27 securities under this subdivision shall affect only those 34.28 securities acquired after the effective date of Laws 1945, 34.29 chapter 140. 34.30 Sec. 44. Minnesota Statutes 1994, section 50.14, 34.31 subdivision 8, is amended to read: 34.32 Subd. 8. Class seven shall be farm loan bonds issued by 34.33 any federal land bank, or by a joint stock land bank in the 34.34 Federal Reserve district in which Minnesota is situated, in 34.35 accordance with the provisions of an act of Congress of the 34.36 United States of July 17, 1916, known and designated as "The 35.1 Federal Farm Loan Act," and acts amendatory thereto; stocks, 35.2 bonds, and obligations of the Federal Home Loan Banks 35.3 established by act of Congress known as the Federal Home Loan 35.4 Bank Act approved July 22, 1932, and acts amendatory thereto; 35.5 and bonds issued by the federal land banks, federal intermediate 35.6 credit banks, and the banks for cooperatives in accordance with 35.7 the provisions of an act of Congress of the United States known 35.8 as the Farm Credit Act of 1971, and acts amendatory thereto. 35.9 Sec. 45. Minnesota Statutes 1994, section 50.145, is 35.10 amended to read: 35.11 50.145 [AUTHORIZED INVESTMENTS.] 35.12 Anymutualsavings bank subject to the supervision of the 35.13 commissioner of commerce of the state of Minnesota shall in 35.14 addition to other investments authorized by law have the power 35.15 to purchase and hold as investments such bonds and securities as 35.16 are legal investments for state banks and trust companies in 35.17 Minnesota, but subject however to any limitation in such power 35.18 that may be imposed by the commissioner of commerce, and the 35.19 total amount of the investments made by any bank pursuant to 35.20 this section and held at any one time shall not exceed 20 35.21 percent of the deposit liability of such bank, and not to exceed 35.22 three-fourths of one percent of the deposit liability of such 35.23 bank may be invested pursuant hereto in the securities or 35.24 obligations of any one obligor. 35.25 Sec. 46. Minnesota Statutes 1994, section 50.146, is 35.26 amended to read: 35.27 50.146 [AUTHORIZED INVESTMENTS; CORPORATIONS.] 35.28 Subdivision 1. In addition to other investments authorized 35.29 by law, amutualsavings bank may invest in the following: 35.30 (a) The preferred stocks of any corporation organized under 35.31 the laws of the United States or of any state, except banks, 35.32 bank holding companies and trust companies, provided the net 35.33 earnings of such corporation available for its fixed charges for 35.34 five fiscal years next preceding the date of investment shall 35.35 have averaged per year not less than 1-1/2 times the sum of its 35.36 annual fixed interest charges, if any, its annual maximum 36.1 contingent interest, if any, and its annual preferred dividend 36.2 requirements; and during either of the last two years of such 36.3 period, such net earnings shall have been not less than 1-1/2 36.4 times the sum of its fixed interest charges, if any, contingent 36.5 interest, if any, and preferred dividend requirements for such 36.6 year. 36.7 (b) The common stocks of any corporation organized under 36.8 the laws of the United States or of any state, except banks, 36.9 bank holding companies and trust companies, provided such stocks 36.10 are registered on a national securities exchange, and such 36.11 corporation shall have earned and paid cash dividends on its 36.12 common stocks in each year for a period of ten fiscal years next 36.13 preceding the date of investment. 36.14 (c) The stocks and bonds, notes, debentures or any other 36.15 obligation of any corporation organized under the laws of the 36.16 United States or of any state, except the stock of banks, bank 36.17 holding companies and trust companies located in the Ninth 36.18 Federal Reserve District, provided such investment shall be made 36.19 with such prudence, discretion, and intelligence as will protect 36.20 the safety of the principal of such investment as well as the 36.21 income to be derived therefrom. 36.22 Subd. 2. No investment shall be made by amutualsavings 36.23 bank pursuant to subdivision 1 in any corporation if the total 36.24 amounts so invested by it exceeds an amount equal to 15 percent 36.25 of its assets, or if the total investment in any one corporation 36.26 exceeds (1) in amount, one-half of one percent of the assets of 36.27 the savings bank, or (2) in number of shares, one percent of the 36.28 total issued and outstanding shares of stock of such 36.29 corporation, or if the total investment pursuant to the 36.30 provisions of paragraph (c) of subdivision 1 exceeds an amount 36.31 equal to three percent of the assets of the savings bank, nor 36.32 shall any investment be made in any corporation with assets of 36.33 less than ten million dollars. 36.34 Subd. 3. Investments made pursuant to subdivision 1 shall 36.35 be limited tomutualsavings banks organized under the laws of 36.36 this state. 37.1 Sec. 47. Minnesota Statutes 1994, section 50.1465, is 37.2 amended to read: 37.3 50.1465 [AUTHORIZED INVESTMENTS; SERVICE CORPORATIONS.] 37.4 Subdivision 1. [GENERALLY.] In addition to other 37.5 investments authorized by law, amutualsavings bank may invest 37.6 in thefollowing:37.7Thecapital stock, obligations, or other securities of any 37.8 corporation organized under the laws of this state if all or a 37.9 majority of the capital stock of the corporation is owned by the 37.10mutualsavings bank, and if substantially all of the activity of 37.11 the corporation consists oforiginating, making, purchasing,37.12selling and servicing loans, and participation in loans, secured37.13by real estate including brokerage and warehousing of the real37.14estate loans: 37.15 (1) activities in which the savings bank could engage 37.16 directly; 37.17 (2) activities in which a state bank or national bank, or a 37.18 subsidiary of a state bank or national bank, is authorized to 37.19 engage as of the date of final enactment of this section; and 37.20 (3) activities in which any state bank or national bank 37.21 becomes authorized to engage after the date of final enactment 37.22 of this section, which are authorized by the commissioner. 37.23 Subd. 2. [RESTRICTION.] Nomutualsavings bank may make 37.24 any investment under subdivision 1 in a subsidiary that engages 37.25 primarily in activities in which the savings bank could not 37.26 engage directly if its aggregate outstanding investment under 37.27 this section in all subsidiaries that engage in activities in 37.28 which the savings bank could not engage directly exceedsthree37.29 25 percent of theassetscapital stock and surplus of themutual37.30 savings bank. 37.31 Sec. 48. Minnesota Statutes 1994, section 50.148, is 37.32 amended to read: 37.33 50.148 [AUTHORIZED INVESTMENTS; MANUFACTURED HOME LOANS.] 37.34 In addition to other investments authorized by law, a 37.35 savings bank organized and operated pursuant to this chapter, 37.36 may make loans upon the security of manufactured homes, and any 38.1 equipment installed or to be installed therein, in an amount not 38.2 exceeding$25,000$30,000 repayable in installments,and may38.3make a charge for such loan computed at a rate not exceeding 1238.4percent per annum upon the unpaid principal balance of the38.5amount financed,and the installment payments shall not exceed 38.61215 years and 32 days from the date of the loan, 38.7 notwithstanding that such loan is required to be repaid in 38.8 installments or that the loan is secured by mortgage, pledge, or 38.9 other collateral.The provisions of sections 48.154 to38.1048.157Section 50.1485, subdivision 2,shall applyapplies to 38.11 all manufactured home loans made pursuant to the authority 38.12 granted by this section. The authority granted by this section 38.13 shall not extend to loans which finance the acquisition of 38.14 inventory by a manufactured home dealer. A savings bank may 38.15 purchase or invest in notes, bonds and retail installment sales 38.16 contracts secured by or constituting first liens upon 38.17 manufactured homes. 38.18 Sec. 49. [50.1485] [LENDING AUTHORITY.] 38.19 Subdivision 1. [GENERALLY.] In addition to other 38.20 investments authorized by law, a savings bank may make, 38.21 purchase, or invest in: 38.22 (a) loans secured by the pledge of policies of life 38.23 insurance, the assignment of which is properly acknowledged by 38.24 the insurer; 38.25 (b) consumer loans, which may be unsecured or secured by 38.26 personal or real property. Consumer loans include, but are not 38.27 limited to, closed-end installment loans, single payment loans, 38.28 nonamortizing loans, open-end revolving line of credit loans, 38.29 credit card loans and extensions of credit, and overdraft 38.30 protection loans. For the purpose of this paragraph, "consumer 38.31 loan" means a loan made by the savings bank in which: (1) the 38.32 debtor is a person other than an organization; (2) the debt is 38.33 incurred primarily for personal, family, or household purpose; 38.34 and (3) the debt is payable in installments or a finance charge 38.35 is made; 38.36 (c) secured and unsecured loans to organizations and 39.1 natural persons for business or commercial purposes. For the 39.2 purpose of this paragraph, "organization" means a corporation, 39.3 government or governmental subdivision, or agency, trust, 39.4 estate, partnership, limited liability partnership, limited 39.5 liability company, joint venture, cooperative, or association. 39.6 "Business or commercial purpose" means a purpose other than 39.7 personal, family, household, or agricultural purpose; 39.8 (d) secured and unsecured loans for agricultural purposes. 39.9 For the purpose of this paragraph, "agricultural purpose" means 39.10 a purpose relating to the production, harvest, exhibition, 39.11 marketing, transportation, processing, or manufacture of 39.12 agricultural products. "Agricultural products" includes 39.13 agricultural, horticultural, viticultural, and dairy products, 39.14 livestock, wildlife, poultry, bees, and forest products, and 39.15 products raised or produced on farms, including processed or 39.16 manufactured products; 39.17 (e) credit sale contracts, which means a sale of goods, 39.18 services, or an interest in land in which credit is granted by a 39.19 seller who regularly engages as a seller in credit transactions 39.20 of the same kind, and the debt is payable in installments or a 39.21 finance charge is made; 39.22 (f) loans on the security of deposit accounts; 39.23 (g) real estate loans, subject to the conditions applicable 39.24 to savings associations under sections 51A.38 and 51A.385. 39.25 "Real estate loans" include a loan or other obligation secured 39.26 by a first lien on real estate in fee or in a leasehold 39.27 extending or renewable automatically for a period of at least 39.28 ten years beyond the date scheduled for the final principal 39.29 payment of the loan or obligation, or a transaction out of which 39.30 a first lien or claim is created against the real estate, 39.31 including the purchase of the real estate in fee by a savings 39.32 bank and the concurrent or immediate sale of it on installment 39.33 contract; 39.34 (h) secured or unsecured loans for the purpose of repair, 39.35 improvement, rehabilitation, or furnishing of real estate; 39.36 (i) loans for the purpose of financing or refinancing an 40.1 ownership interest in certificates of stock, certificates of 40.2 beneficial interest, or other evidence of an ownership interest 40.3 in, or a proprietary lease from, a corporation, limited 40.4 liability company, trust, limited liability partnership, or 40.5 partnership formed for the purpose of the cooperative ownership 40.6 of real estate, secured by the assignment or transfer of 40.7 certificates or other evidence of ownership of the borrower; 40.8 (j) loans guaranteed or insured, in whole or in part, by 40.9 the United States or any of its instrumentalities; 40.10 (k) issuance of letters of credit or other similar 40.11 arrangements; and 40.12 (l) any other type of loan authorized by rules adopted by 40.13 the commissioner. 40.14 Subd. 2. [LOANS AND EXTENSIONS OF CREDIT.] (a) A savings 40.15 bank may extend credit and make loans under section 47.59 on the 40.16 same terms and subject to the same conditions as apply to other 40.17 lenders under that chapter. A person may enter into a credit 40.18 sale or service contract for sale to a savings bank, and a 40.19 savings bank may purchase and enforce the contract, under the 40.20 terms and conditions set forth in section 47.59, subdivisions 1 40.21 and 4 to 14. 40.22 (b) A savings bank may make or purchase extensions of 40.23 credit authorized by sections 47.20, subdivision 1, 3, or 4a; 40.24 47.204; 47.21; 47.60; 48.153 to 48.155; 48.185; 48.195; 59A.15; 40.25 168.66 to 168.77; 334.01; 334.011; 334.012, and any other 40.26 applicable law. The extensions of credit or purchases of 40.27 extensions of credit may, but need not, be made under those 40.28 sections in lieu of the authority set forth in subdivision 2, 40.29 and if so, are subject to those sections, and not subdivision 40.30 2. A savings bank may also charge an organization any rate of 40.31 interest and any charges agreed to by the organization and may 40.32 calculate and collect finance and other charges in any manner 40.33 agreed to by that organization. Except for extensions of credit 40.34 the savings bank elects to make under section 334.01, 40.35 subdivision 2, 334.011, or 334.012, chapter 334 does not apply 40.36 to extensions of credit made pursuant to this section or the 41.1 sections mentioned in this subdivision. 41.2 Subd. 3. [LIMIT ON TOTAL LIABILITIES.] The total 41.3 liabilities to a savings bank, as principal, guarantor, or 41.4 endorser of an individual, including the liabilities of a 41.5 corporation which the individual owns or controls a majority 41.6 interest in, a partnership, limited liability partnership, 41.7 limited liability company, or unincorporated association, and in 41.8 case of a corporation, of all subsidiaries of it in which the 41.9 corporation owns or controls a majority interest, shall never 41.10 exceed the limit provided for state banks under section 48.24. 41.11 Subd. 4. [REAL ESTATE LOANS.] In the case of any 41.12 investment made by a savings bank in a loan secured by a 41.13 mortgage on real property, including a real estate loan, in the 41.14 event the ownership of the real estate security or any part of 41.15 it becomes vested in a person other than the party or parties 41.16 originally executing the security instruments, and provided 41.17 there is not an agreement in writing to the contrary, a savings 41.18 bank may, without notice to the other party or parties, deal 41.19 with the successor or successors in interest with reference to 41.20 the mortgage and the debt secured in the same manner as with the 41.21 party or parties, and may forbear to sue or may extend time for 41.22 payment of or otherwise modify the terms of the debt secured, 41.23 without discharging or in any way affecting the original 41.24 liability of the party or parties upon the debt secured. 41.25 Subd. 5. [LEASES OF PERSONAL PROPERTY.] A savings bank may 41.26 acquire and lease or participate in the acquisition and leasing 41.27 of personal property to customers, and may incur additional 41.28 obligations incidental to becoming an owner and lessor of the 41.29 property to the same extent, and subject to the same conditions, 41.30 as state banks under section 48.152. 41.31 Sec. 50. Minnesota Statutes 1994, section 50.155, is 41.32 amended to read: 41.33 50.155 [PURCHASE OF CERTAIN MORTGAGE LOANS.] 41.34 Savings banksand mutual savings banksthat are subject to 41.35 the supervision of the commissioner of commerce are authorized 41.36 to make or purchase loans secured by real estate mortgage the 42.1 payment of which is guaranteed in whole or in part by the United 42.2 States or any instrumentality thereof under the Servicemen's 42.3 Readjustment Act of 1944 and amendments thereof provided that 42.4 the unguaranteed portion of such loan does not exceed 70 percent 42.5 of the appraised value of the security. 42.6 Sec. 51. Minnesota Statutes 1994, section 50.17, is 42.7 amended to read: 42.8 50.17 [DEPOSITS, DIVIDENDS, INTEREST, BONUS, BENEFITS.] 42.9 Subdivision 1. [DEPOSIT ACCOUNTS.]Every deposit and all42.10dividends credited thereto shall be repaid, after demand, in42.11such manner, at such times, and after such previous notice as42.12the board of trustees shall prescribe, but the savings bank42.13shall not be required to pay a greater dividend than four42.14percent per annum. Depositors shall receive, as nearly as may42.15be, all the profits after deducting necessary expenses, and42.16setting aside annually such sum as the board deems expedient,42.17for a surplus fund for the security of its depositors, and to42.18meet contingencies, until this fund shall amount to 15 percent42.19of its deposits. No interest shall be allowed on any money for42.20a longer time than the same is actually on deposit; except that42.21deposits made not later than the tenth business day of the month42.22commencing any semiannual or quarterly interest period, or the42.23tenth business day of any other month, or withdrawn within the42.24last three business days of the month ending a quarterly or42.25semiannual interest period, may be treated as on deposit for the42.26entire period or month in which it was so deposited or42.27withdrawn. No dividend shall be declared, credited, or paid42.28unless authorized by yea and nay vote of the board duly entered42.29upon its minutes, and when any dividend in excess of that earned42.30and on hand shall be declared or credited, the trustees voting42.31therefor shall be jointly and severally liable to the bank for42.32the excess. The board of every such bank whose surplus amounts42.33to 15 percent of its deposits shall, at least once in three42.34years, divide proportionately the excess among its depositors as42.35an extra dividend, and for that purpose may classify them42.36according to character, amount and duration of dealings, and so43.1regulate the dividend that each of the same class shall receive43.2the same ratable proportion.A deposit account with a savings 43.3 bank is subject to a lien for the payment of charges that may 43.4 accrue on the account under this chapter. A deposit account is 43.5 subject to a debt offset for the debts of the deposit account 43.6 holder to the savings bank. Deposit accounts may not be 43.7 assessed for any debts or losses of the savings bank. 43.8 Subd. 2. [DIVIDENDSINTEREST.]Every such savings bank may43.9also enter into agreements with depositors designed to promote43.10systematic thrift by providing for regular deposits over agreed43.11periods of time and in connection with any such plan to provide43.12thrift incentive may classify depositors generally according to43.13character, amount, regularity or duration of deposits or type of43.14agreement, and may agree to pay and provide for different rates43.15of interest, bonuses and benefits based on any such43.16classification. All depositors of the same class shall be43.17entitled to receive interest, bonuses and benefits of43.18substantially the same value. When it shall appear to the43.19commissioner from an examination, or otherwise, that the43.20classification of depositors as to character, amount, regularity43.21or duration of deposits or type of agreement and the different43.22rates of interest, bonuses and benefits based on any such43.23classification are not in the best interests of the bank and its43.24depositors, the commissioner may by written order direct that43.25changes be made and thereafter such changes shall be43.26incorporated in any agreements entered into by the bank.The 43.27 savings bank shall determine the rate and amount of interest, if 43.28 any, to be paid on or credited to deposit accounts. The savings 43.29 bank may establish reasonable classifications of accounts based 43.30 on the types of accounts, the length of time accounts are 43.31 continued in effect, the size of initial deposits into accounts, 43.32 the minimum balances of accounts required for payment of 43.33 interest, the frequency and extent of the activity on accounts, 43.34 or location of the account, or on other classifications the 43.35 savings bank considers appropriate. 43.36 Subd. 3. [DEPOSIT ACCOUNTS.] Deposit accounts must be 44.1 represented only by the account of each deposit account holder 44.2 on the books of the savings bank, and the accounts or any 44.3 interest is transferable only on the books of the savings bank 44.4 and upon proper written application by the transferee. The 44.5 savings bank may treat the holder of record of a deposit account 44.6 as the owner of it for all purposes without being affected by 44.7 any notice to the contrary unless the savings bank has 44.8 acknowledged in writing notice of a pledge of the deposit 44.9 account. A savings bank may also offer negotiable time deposits. 44.10 Subd. 4. [DEPOSIT ACCOUNTS FOR MINORS.] A savings bank may 44.11 issue deposit accounts to or in the name of a minor, which shall 44.12 be held for the exclusive right and benefit of the minor, free 44.13 from the control or lien of all other persons, except creditors, 44.14 and, together with interest or dividends, shall be paid to the 44.15 minor. The minor's receipt, draft, negotiable order of 44.16 withdrawal, or acquittance in any form, is sufficient release 44.17 and discharge of the savings bank for withdrawal, until a 44.18 guardian appointed in this state for the minor has delivered a 44.19 certificate of appointment to the savings bank. 44.20 Subd. 5. [SCHOOL OR INSTITUTION THRIFT SAVINGS PLAN.] A 44.21 savings bank may contract with the proper authorities of any 44.22 public or nonpublic elementary or secondary school or 44.23 institution of higher learning, or any public or charitable 44.24 institution caring for minors, for the participation and 44.25 implementation by the savings bank in any school or institution 44.26 thrift or savings plan, and it may accept savings accounts at 44.27 the school or institution, either by its own collector or by any 44.28 representative of the school or institution which becomes the 44.29 agent of the association for this purpose. 44.30 Subd. 6. [P.O.D. DEPOSITS.] When a deposit is made in the 44.31 names of two or more persons jointly, or by a person payable on 44.32 death (P.O.D.) to another, or by a person in trust for another, 44.33 the rights of the parties and the savings bank are determined by 44.34 sections 524.6-201 to 524.6-214. 44.35 Subd. 7. [DEPOSIT ACCOUNTS IN JOINT TENANCY.] The pledge 44.36 or hypothecation to a savings bank of all or part of a deposit 45.1 account in joint tenancy signed by a tenant or tenants whether 45.2 minor or adult, upon whose signature or signatures withdrawals 45.3 may be made from the account must, unless the terms of the 45.4 deposit account provide specifically to the contrary, be a valid 45.5 pledge and transfer to the savings bank of that part of the 45.6 account pledged or hypothecated, and must not operate to sever 45.7 or terminate the joint and survivorship ownership of all or any 45.8 part of the account. 45.9 Subd. 8. [FIDUCIARY DEPOSITS.] A savings bank may accept 45.10 deposits in the name of any administrator, executor, custodian, 45.11 conservator, guardian, trustee, or other fiduciary for a named 45.12 beneficiary or beneficiaries. The fiduciary may open, make 45.13 additions to, and withdraw the account in whole or in part. The 45.14 withdrawal value of the account, and interest, or other rights 45.15 relating to it may be paid or delivered, in whole or in part, to 45.16 the fiduciary without regard to any notice to the contrary as 45.17 long as the fiduciary is living. The payment or delivery to the 45.18 fiduciary or a receipt or acquittance signed by the fiduciary to 45.19 whom the payment or any delivery of rights is made is a valid 45.20 and sufficient release and discharge of a savings bank for the 45.21 payment or delivery so made. Whenever a person holding an 45.22 account in a fiduciary capacity dies and no written notice of 45.23 the revocation or termination of the fiduciary relationship has 45.24 been given to a savings bank and the savings bank has no written 45.25 notice of any other disposition of the beneficial estate, the 45.26 withdrawal value of the account, and interest or dividends, or 45.27 other rights relating to it may, at the option of a savings 45.28 bank, be paid or delivered, in whole or in part, to the 45.29 beneficiary or beneficiaries. The payment or delivery to the 45.30 beneficiary, beneficiaries, or designated person, or a receipt 45.31 or acquittance signed by the beneficiary, beneficiaries, or 45.32 designated person, for the payment or delivery is a valid and 45.33 sufficient release and discharge of a savings bank for the 45.34 payment or delivery. This section does not apply to P.O.D. 45.35 accounts under sections 524.6-201 to 524.6-214. 45.36 Subd. 9. [PAYMENTS TO GUARDIAN.] When a deposit account is 46.1 held in a savings bank by a person who becomes incompetent and 46.2 an adjudication of incompetency has been made by a court of 46.3 competent jurisdiction, the savings bank may pay or deliver the 46.4 withdrawal value of the deposit account and any earnings that 46.5 may have accrued on it to the guardian for the person upon proof 46.6 of appointment and qualification. If the savings bank has 46.7 received no written notice and is not on actual notice that the 46.8 deposit account holder has been adjudicated incompetent, it may 46.9 pay or deliver the funds to the holder in accordance with the 46.10 provisions of the deposit account contract, and the receipt or 46.11 acquittance of the holder is a valid and sufficient release and 46.12 discharge of the savings bank for the payment or delivery so 46.13 made. 46.14 Subd. 10. [INVESTMENT BY CERTAIN ENTITIES.] 46.15 Administrators, executors, custodians, conservators, guardians, 46.16 trustees, and other fiduciaries of every kind and nature, 46.17 insurance companies, business and manufacturing companies, 46.18 banks, trust companies, credit unions, and other types of 46.19 similar financial organizations, charitable, educational, 46.20 eleemosynary, and public corporations authorized by law, funds, 46.21 and organizations, are specifically authorized and empowered to 46.22 invest funds held by them, without any order of any court, in 46.23 deposit accounts of a savings bank, and the investments are 46.24 considered legal investments for the funds. 46.25 Subd. 11. [SERVICE CHARGES.] A savings bank may contract 46.26 with depositors for service charges in connection with the 46.27 opening and maintaining of deposit accounts and for providing 46.28 services ancillary to the opening and maintaining of deposit 46.29 accounts. The service charges are a matter of contract between 46.30 the savings bank and the depositor, and the contract will be 46.31 fully enforceable in accordance with its stated terms. 46.32 Sec. 52. Minnesota Statutes 1994, section 50.175, 46.33 subdivision 1, is amended to read: 46.34 Subdivision 1. [AUTHORIZATION.] Any savings bank organized 46.35 and operating pursuant to this chapter, may establish negotiable 46.36 order of withdrawal accounts on which it may or may not pay 47.1 interest or dividends. Withdrawals from the accounts are 47.2 subject to the right of the savings bank to require the 47.3 depositor or account holder to give notice of an intended 47.4 withdrawal not less than3014 days before the withdrawal is 47.5 made, even though in practice the notice is not regularly 47.6 required and the depositor or account holder is allowed to make 47.7 withdrawals by negotiable or transferable instruments for the 47.8 purpose of making payments to third persons or otherwise. 47.9 Sec. 53. Minnesota Statutes 1994, section 50.19, is 47.10 amended to read: 47.11 50.19 [ANNUAL REPORT; ASSETSREPORTS TO THE COMMISSIONER.] 47.12On or before February first, each year, the trustees of any47.13savings bank shall cause to be made a thorough examination of47.14all its books, vouchers, and other papers and of its assets,47.15liabilities, and affairs generally by an experienced and47.16competent accountant, and make a written report upon the form47.17prescribed by the commissioner of commerce, showing accurately47.18its condition at the close of the preceding calendar year and47.19specifying, as to that year, the amounts and particulars47.20following:47.21(1) The amount loaned upon notes secured by mortgages, with47.22the names of the states or localities in which the mortgaged47.23premises are located and the amounts paid on the principal of47.24mortgage notes, and the amount of mortgages, if any, which have47.25been foreclosed;47.26(2) The cost, par value, and estimated market value of all47.27bond investments, stated separately, and the amount of principal47.28on bonds received by payment, redemption, sale, or otherwise;47.29(3) The amount of all loans upon pledge of securities, with47.30a statement of the nature and amount of these securities and the47.31amount paid upon the principal of the loans;47.32(4) The amount of the notes and of the bonds upon which47.33interest was in default at the close of the preceding calendar47.34year;47.35(5) The amount invested in real estate, giving the47.36description and the cost of each tract;48.1(6) The amount of cash on hand and on deposit in banks or48.2trust companies, giving the name of each, and the amount of each48.3depositor; and48.4(7) Such other information as the commissioner of commerce48.5may requireEach savings bank shall submit the reports required 48.6 of state banks pursuant to section 48.48 and such other 48.7 information as the commissioner of commerce may require. 48.8 Sec. 54. Minnesota Statutes 1994, section 50.21, is 48.9 amended to read: 48.10 50.21 [VERIFICATION OF REPORT.] 48.11 The report shall be verified by the oath of the two 48.12 principal officers of the institution and the statement of 48.13 assets shall be verified by the oath of at least two of the 48.14trusteesdirectors and of the person who made the examination; 48.15 and any willful false swearing in regard to these reports shall 48.16 be deemed perjury and be punishable accordingly. 48.17 Sec. 55. [50.212] [SAVINGS BANK REGULATION.] 48.18 Subdivision 1. [COMMERCE DEPARTMENT TO CONTROL.] The 48.19 commissioner of commerce shall have charge of the execution of 48.20 all laws relating to the savings banks chartered under the laws 48.21 of Minnesota and relating to the business of those savings banks. 48.22 Subd. 2. [COMMISSIONER SUPERVISION.] The commissioner 48.23 shall supervise the books, records, and affairs of all savings 48.24 banks doing business in the state as provided in section 46.04. 48.25 Subd. 3. [OFFICIAL COMMUNICATIONS REFERRED TO 48.26 DIRECTORS.] Each official communication from the commissioner to 48.27 a savings bank relating to any examination conducted by the 48.28 commissioner or containing suggestions and recommendations as to 48.29 the conduct of business of the savings bank, shall be submitted 48.30 by the officer receiving it to the board of directors at the 48.31 next meeting of the board and noted in the meeting minutes. 48.32 Sec. 56. Minnesota Statutes 1994, section 50.22, is 48.33 amended to read: 48.34 50.22 [PROCEEDINGS UPON VIOLATION.] 48.35 When it shall appear, from an examination made by the 48.36 commissioner of commerce or otherwise, that any such corporation 49.1 has violated the law, or is conducting its business in an unsafe 49.2 or unauthorized manner, the commissioner shall, by written 49.3 order, direct such methods to be discontinued and that its 49.4 business be conducted in conformity with law. If any such 49.5 corporation refuses or neglects to comply with this order, or to 49.6 make any report required by law or by the commissioner of 49.7 commerce, or if it shall appear to the commissioner of commerce 49.8 that it is unsafe or inexpedient for any such corporation to 49.9 continue to transact business, the commissioner shall report the 49.10 facts to the attorney general, who shall take such action 49.11 thereon as the case requires. This action may be for the 49.12 removal of one or more of thetrusteesdirectors of the 49.13 corporation, the transfer of its corporate powers to other 49.14 persons, its merger and consolidation with another like 49.15 corporation willing to accept the trust, or such other 49.16 appropriate action as the facts may require; and the court may 49.17 grant any such relief in the interests of justice and, to 49.18 protect the rights of the parties, may, from time to time, 49.19 revoke or modify its orders made in the matter. 49.20 Sec. 57. Minnesota Statutes 1994, section 50.23, is 49.21 amended to read: 49.22 50.23 [CHANGE OF NAME.] 49.23 When a resolution shall be adopted by thetrustees49.24 directors of the bank expressing their purpose to change its 49.25 name, they shall cause notice of this purpose, containing the 49.26 present and proposed names, to be published in the manner 49.27 provided for publication of notice of intention to organize. On 49.28 completion of this publication, thetrusteesdirectors shall 49.29 make application to the commissioner of commerce to change the 49.30 name of the bank, as specified in the resolution and 49.31 publication, accompanied by proof of the adoption of the 49.32 resolution and publication of notice. If this change be 49.33 approved by the commissioner of commerce, the commissioner shall 49.34 authorize and direct the same by a signed order under seal, and 49.35 designate a day, not more than 30 days from its date, when the 49.36 change shall take effect. The commissioner shall execute the 50.1 order in triplicate, one to be filed with the county recorder of 50.2 the county where the bank is situated, one delivered to the 50.3 bank, and the other filed in the commissioner's office. From 50.4 the date named in this order, the bank shall be known and 50.5 designated by its new name, and under this name shall have the 50.6 same rights and powers and be subject to the same liabilities as 50.7 before the change. 50.8 Sec. 58. Minnesota Statutes 1994, section 50.245, is 50.9 amended to read: 50.10 50.245 [DETACHED FACILITIES; MUTUAL SAVINGS BANKS;50.11AUTHORIZATIONBRANCHES; ACQUISITIONS.] 50.12 Subdivision 1. [AUTHORITY FOR BRANCH OFFICES.] Amutual50.13 savings bank may establish five detached facilities pursuant to 50.14 sections 47.51 to 47.57 in the territories of Hennepin and Anoka 50.15 counties. The savings bank shall not change the location of a 50.16 detached facility without prior written approval of the 50.17 commissioner of commerce. A savings bank may establish a loan 50.18 production office, without restriction as to geographical 50.19 location, upon written notice to the commissioner of commerce. 50.20 Subd. 2. [AUTHORITY FOR BRANCH OFFICES INRECIPROCATING50.21STATEOTHER STATES.] The authorization contained in subdivision 50.22 1 is in addition to the authority grantedmutualsavings banks 50.23 in section 47.52. A savings bank chartered in this state, 50.24 whether or not the subsidiary of a savings bank holding company, 50.25 may, by acquisition, merger, purchase, and assumption of some or 50.26 all assets and liabilities, consolidation, or de novo formation, 50.27 establish or operate detached facilities in another state on the 50.28 same terms and conditions and subject to the same limitations 50.29 and restrictions as are applicable to the establishment of 50.30 branches by national banks located in Minnesota, except that 50.31 approval of the comptroller of the currency shall not be 50.32 required for such detached facilities. 50.33 Subd. 3. [RECIPROCATING STATE ACQUISITIONS.]This section50.34shall not apply to any bank with a stock form of ownership.A 50.35 savings bank chartered in this state and a savings bank holding 50.36 company with its principal offices in this state may acquire 51.1 control of a financial institution chartered in a reciprocating 51.2 state or, subject to applicable federal law, any other state or 51.3 a financial institution holding company with principal offices 51.4 in a reciprocating state or, subject to applicable federal law, 51.5 any other state. A savings bank chartered in a reciprocating 51.6 state or, subject to applicable federal law, any other state and 51.7 a savings bank holding company with principal offices in a 51.8 reciprocating state or, subject to applicable federal law, any 51.9 other state may acquire control of a savings bank chartered in 51.10 this state or a savings bank holding company with principal 51.11 offices in this state. 51.12 Subd. 4. [PROCEDURAL REQUIREMENTS.] Procedural 51.13 requirements equivalent to those contained in sections 48.90 to 51.14 48.991 apply to reciprocal interstate branching and acquisitions 51.15 by savings banks and savings bank holding companies. 51.16 Subd. 5. [DEFINITIONS.] For the purpose of this section, 51.17 the terms defined in this subdivision have the meanings given 51.18 them. 51.19 (a) "Financial institution" means a bank, savings bank, 51.20 savings association, trust company, or credit union, whether 51.21 chartered under the laws of this state, another state or 51.22 territory, or under the laws of the United States. 51.23 (b) "Loan production office" means a place of business at 51.24 which a savings bank provides lending if the loans are approved 51.25 at the main office or detached facility of the savings bank, but 51.26 at which a savings bank may not accept deposits except through a 51.27 remote service unit. 51.28 (c) "Reciprocating state" means a state that authorizes the 51.29 acquisition of control of financial institutions chartered in 51.30 that state and financial institution holding companies with 51.31 principal offices in that state by a savings bank chartered in 51.32 this state or savings bank holding company with principal 51.33 offices in this state under conditions substantially similar to 51.34 those imposed by the laws of Minnesota, as determined by the 51.35 commissioner of commerce. 51.36 (d) "Remote service unit" means an electronic financial 52.1 terminal as defined in section 47.61. 52.2 Subd. 6. [COMMISSIONER'S AUTHORITY.] The authority of the 52.3 commissioner of commerce to approve a transaction under this 52.4 section is in addition to that provided for in section 49.48. 52.5 Sec. 59. Minnesota Statutes 1994, section 50.25, is 52.6 amended to read: 52.7 50.25 [BANKS ORGANIZED UNDER THE LAWS OF MINNESOTA; CAPITAL 52.8 STOCK; AMENDMENT OF ARTICLES.] 52.9 A corporation which was incorporated and organized under 52.10 the laws of Minnesota for the purpose of doing a savings bank 52.11 business, may have capital stock of $100 per share, par value; 52.12 provided, the minimum required capital shall not be less than 52.13 $500,000., and may amend its articles or certificate of52.14incorporation so as to provide for this capital stock conversion52.15by adopting a resolution specifying the proposed amendment at a52.16regular meeting or a special meeting called for that expressly52.17stated purpose. The conversion must be approved by at least a52.18two-thirds affirmative vote of its entire board of directors,52.19trustees, or other managers. The resolution approving the52.20conversion shall be embraced in a certificate duly executed by52.21its president and secretary, or other presiding and recording52.22officers, under its corporate seal, and approved, filed,52.23recorded, and published in the manner now prescribed for the52.24execution, approval, filing, recording, and publishing of a like52.25original certificate.52.26The resolution specifying the proposed amendment of52.27articles or certificate of incorporation shall set forth a plan52.28of conversion from a mutual savings bank to a capital stock52.29savings bank. The plan of conversion shall provide that all52.30capital stock shall have voting powers, including the power to52.31elect the board of directors, trustees, or other managers who52.32shall have the power to sell, convey, mortgage, or otherwise52.33dispose of any part of the corporation's real or personal52.34property. The plan and issuance of capital stock shall be52.35subject to the commissioner of commerce's approval provided the52.36plan is fair and equitable to all parties concerned and is in53.1the public interest.The capital funds of a proposed savings 53.2 bank shall be in such greater amount which the commissioner 53.3 considers necessary, having in mind the deposit potential for 53.4 such a proposed bank and current industry standards of capital 53.5 adequacy. 53.6 Sec. 60. [50.28] [DECLARATORY JUDGMENTS.] 53.7 At any time after a controversy has arisen between the 53.8 commissioner of commerce and a savings bank with respect to a 53.9 question of law or rule or with respect to a question involving 53.10 immeasurable or irreparable damage to the savings bank, and 53.11 before an administrative or judicial hearing, the savings bank 53.12 or the commissioner may apply to a court of competent 53.13 jurisdiction in the county in which the home office of the 53.14 savings bank is located for a declaratory judgment as to the 53.15 question. 53.16 Sec. 61. Minnesota Statutes 1994, section 51A.02, 53.17 subdivision 6, is amended to read: 53.18 Subd. 6. [ANNUAL PERCENTAGE RATE.] "Annual percentage 53.19 rate" has the meaning given the term in the Code of Federal 53.20 Regulations, title 12, part 226, but using the definition of 53.21 "finance charge" used in this section. 53.22 Sec. 62. Minnesota Statutes 1994, section 51A.02, 53.23 subdivision 26, is amended to read: 53.24 Subd. 26. [FINANCE CHARGE.] "Finance charge" has the 53.25 meaning given the term in the Code of Federal Regulations, title 53.26 12, part 226, except that the following will not in any event be 53.27 considered a finance charge: 53.28 (1) a charge as a result of default or delinquency under 53.29 section 51A.385 if made for actual unanticipated late payment, 53.30 delinquency, default, or other similar occurrence, unless the 53.31 parties agree that these charges are finance charges; 53.32 (2) any additional charge under section 51A.385, 53.33 subdivision 5; or 53.34 (3) a discount, if an association purchases a contract 53.35 evidencing acontractcredit sale or loan at less than the face 53.36 amount of the obligation or purchases or satisfies obligations 54.1 of a cardholder pursuant to a credit card and the purchase or 54.2 satisfaction is made at less than the face amount of the 54.3 obligation. 54.4 Sec. 63. Minnesota Statutes 1994, section 51A.02, 54.5 subdivision 40, is amended to read: 54.6 Subd. 40. [OFFICIAL FEES.] "Official fees" means: 54.7 (1) fees and charges which actually are or will be paid to 54.8 public officials for determining the existence of or for 54.9 perfecting, releasing, terminating, or satisfying a security 54.10 interest or mortgage related to a loan or credit sale, and any 54.11 separate fees or charges that actually are or will be paid to 54.12 public officials for recording a notice described in section 54.13 580.032, subdivision 1; and 54.14 (2) premiums payable for insurance in lieu of perfecting a 54.15 security interest or mortgage otherwise required by an 54.16 association in connection with a loan or credit sale, if the 54.17 premium does not exceed the fees and charges described in clause 54.18 (1) which would otherwise be payable. 54.19 Sec. 64. Minnesota Statutes 1994, section 51A.21, is 54.20 amended by adding a subdivision to read: 54.21 Subd. 28. [SERVICE CHARGES.] To contract with depositors 54.22 for service charges in connection with the opening and 54.23 maintaining of deposit accounts and for providing services 54.24 ancillary to the opening and maintaining of deposit accounts. 54.25 Service charges are a matter of contract between the association 54.26 and the depositor, and any such contract is fully enforceable 54.27 according to its stated terms. 54.28 Sec. 65. Minnesota Statutes 1994, section 61A.09, 54.29 subdivision 3, is amended to read: 54.30 Subd. 3. Group life insurance policies may be issued to 54.31 cover groups of not less than ten debtors of a creditor written 54.32 under a master policy issued to a creditor to insure its debtors 54.33 in connection with real estate mortgage loans, in an amount not 54.34 to exceed the actual amount of their indebtedness plus an amount 54.35 equal to two monthly payments or scheduled amount of their 54.36 indebtedness, plus an amount equal to two monthly payments, 55.1 whichever is greater. If the mortgage loan provides for a 55.2 variable rate of finance charge or interest, the initial rate or 55.3 the scheduled rates based on the initial index must be used in 55.4 determining the scheduled amount of indebtedness. Each 55.5 application for group mortgage insurance offered prior to or at 55.6 the time of loan closing shall contain a clear and conspicuous 55.7 notice that the insurance is optional and is not a condition for 55.8 obtaining the loan. Each person insured under a group insurance 55.9 policy issued under this subdivision shall be furnished a 55.10 certificate of insurance which conforms to the requirements of 55.11 section 62B.06, subdivision 2, and which includes a conversion 55.12 privilege permitting an insured debtor to convert, without 55.13 evidence of insurability, to an individual policy of decreasing 55.14 term insurance within 30 days of the date the insured debtor's 55.15 group coverage is terminated for any reason other than the 55.16 nonpayment of premiums. The initial amount of coverage under 55.17 the individual policy shall be an amount equal to the amount of 55.18 coverage terminated under the group policy and shall decrease 55.19 over a term that corresponds with the scheduled term of the 55.20 insured debtor's mortgage loan. The premium for the individual 55.21 policy shall be the same premium the insured debtor was paying 55.22 under the group policy. 55.23 Sec. 66. Minnesota Statutes 1994, section 62B.04, 55.24 subdivision 1, is amended to read: 55.25 Subdivision 1. [CREDIT LIFE INSURANCE.] (1) The initial 55.26 amount of credit life insurance shall not exceed the amount of 55.27 principal repayable under the contract of indebtedness. 55.28 Thereafter, if the indebtedness is repayable in substantially 55.29 equal installments according to a predetermined schedule, the 55.30 amount of insurance shall not exceed the scheduled or actual 55.31 amount of indebtedness, whichever is greater. If the contract 55.32 of indebtedness provides for a variable rate of finance charge 55.33 or interest, the initial rate or the scheduled rates based on 55.34 the initial index must be used in determining the scheduled 55.35 amount of indebtedness and subsequent changes to the rate must 55.36 be disregarded in determining whether the contract is repayable 56.1 in substantially equal installments according to a predetermined 56.2 schedule. 56.3 (2) Notwithstanding clause (1), the amount of credit life 56.4 insurance written in connection with credit transactions 56.5 repayable over a specified term exceeding 63 months shall not 56.6 exceed the greater of: (i) the actual amount of unpaid 56.7 indebtedness as it exists from time to time; or (ii) where an 56.8 indebtedness is repayable in substantially equal installments 56.9 according to a predetermined schedule, the scheduled amount of 56.10 unpaid indebtedness, less any unearned interest or finance 56.11 charges, plus an amount equal to two monthly payments. If the 56.12 credit transaction provides for a variable rate of finance 56.13 charge or interest, the initial rate or the scheduled rates 56.14 based on the initial index must be used in determining the 56.15 scheduled amount of unpaid indebtedness and subsequent changes 56.16 in the rate must be disregarded in determining whether the 56.17 contract is repayable in substantially equal installments 56.18 according to a predetermined schedule. 56.19 (3) Notwithstanding clauses (1) and (2), insurance on 56.20 educational, agricultural, and horticultural credit transaction 56.21 commitments may be written on a nondecreasing or level term plan 56.22 for the amount of the loan commitment. 56.23 Sec. 67. Minnesota Statutes 1994, section 62B.04, 56.24 subdivision 2, is amended to read: 56.25 Subd. 2. [CREDIT ACCIDENT AND HEALTH INSURANCE.] The total 56.26 amount of periodic indemnity payable by credit accident and 56.27 health insurance in the event of disability, as defined in the 56.28 policy, shall not exceed the aggregate of the periodic scheduled 56.29 unpaid installments of the indebtedness; and the amount of each 56.30 periodic indemnity payment shall not exceed the original 56.31 indebtedness divided by the number of periodic installments. If 56.32 the credit transaction provides for a variable rate of finance 56.33 charge or interest, the initial rate or the scheduled rates 56.34 based on the initial index must be used in determining the 56.35 aggregate of the periodic scheduled unpaid installments of the 56.36 indebtedness. 57.1 Sec. 68. Minnesota Statutes 1994, section 300.20, is 57.2 amended to read: 57.3 300.20 [BOARD OF DIRECTORS.] 57.4 Subdivision 1. [ELECTION.] The business of savings banks 57.5 must be managed by a board of at least seventrustees,57.6 directors, all residents of this state, each of whom, before 57.7 being authorized to act, must file a written acceptance of 57.8 thetrustposition. The business of other corporations must be 57.9 managed by a board of at least three directors, unless a greater 57.10 number is otherwise required by law, elected by ballot by the 57.11 stockholders or members. A board of directors of a financial 57.12 institution referred to in section 47.12 which has less than 57.13 five members may be increased to not more than five members by 57.14 order of the commissioner of commerce. 57.15 Subd. 2. [VACANCIES.] If the certificate of incorporation 57.16 or the bylaws so provides, a vacancy in the board of directors 57.17 may be filled by the remaining directors. Not more than 57.18 one-third of the members of the board may be so filled in any 57.19 one year except any number may be appointed to provide for at 57.20 least three directors until any subsequent meeting of the 57.21 stockholders. 57.22 Subd. 3. [QUORUM TO DO BUSINESS.] A majority of the 57.23 directorsor trusteesconstitutes a quorum for the transaction 57.24 of business. 57.25 Subd. 4. [ACTION WITHOUT MEETING.] Any action which might 57.26 be taken at a meeting of the board of directors, trustees, or 57.27 managers may be taken without a meeting if done in writing 57.28 signed by all of the directors, trustees, or managers. 57.29 Sec. 69. [RELATIONSHIP TO OTHER LEGISLATION; REVISOR 57.30 INSTRUCTION.] 57.31 (a) This act is interrelated with 1995 House File 1184 and 57.32 its companion bill 1995 Senate File 1134, which may or may not 57.33 be enacted at the time of enactment of this act and which may or 57.34 may not be subsequently enacted in the 1995 legislative session. 57.35 (b) References in this act to "section 47.59" or "section 57.36 47.60" are to the sections of House File 1184 and Senate File 58.1 1134 that contain those proposed statutory codings. If that 58.2 section 47.59 is not enacted in the 1995 legislative session, 58.3 references in this act to that section shall be interpreted as 58.4 referring to Minnesota Statutes 1994, section 51A.385, which is 58.5 the current statutory section most similar to, and which is the 58.6 principal source of, the proposed new section 47.59. If the 58.7 section 47.60 referred to earlier in this paragraph is not 58.8 enacted in the 1995 legislative session, references in this act 58.9 to that section are null and void and of no effect. 58.10 (c) References in this act to "section 51A.385" are 58.11 intended to refer to that section of Minnesota Statutes 1994, as 58.12 amended by any other acts enacted in the 1995 legislative 58.13 session. The related legislation referenced in paragraph (a) 58.14 would repeal section 51A.385. If that related legislation is 58.15 enacted and it repeals section 51A.385, the intent of the 58.16 references in this act to that section is as stated in this 58.17 paragraph. 58.18 (d) The revisor of statutes shall, in preparing the 1995 58.19 Supplement to Minnesota Statutes, change the cross references 58.20 made in this act to the extent necessary to achieve the 58.21 intentions stated in this section. 58.22 Sec. 70. [REPEALER.] 58.23 Minnesota Statutes 1994, sections 47.095; 47.30, 58.24 subdivisions 4 and 6; 48.67; 50.02; 50.07; 50.08; 50.09; 50.10; 58.25 50.12; 50.15; 50.16; 50.21; and 50.22, are repealed.