HF 1756

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to commerce; debt prorating agencies; 
  1.3             permitting electronic business records; providing a 
  1.4             rule for determining whether a creditor objects to a 
  1.5             plan of distribution; permitting debt prorating 
  1.6             agencies to impose and collect the same penalties for 
  1.7             bad checks permitted for other businesses; amending 
  1.8             Minnesota Statutes 1994, sections 332.22, subdivision 
  1.9             1; 332.23, subdivisions 2 and 6; and 332.50, 
  1.10            subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 332.22, 
  1.13  subdivision 1, is amended to read: 
  1.14     Subdivision 1.  [RECORDS RETENTION.] Every licensee shall 
  1.15  keep, and use in the licensee's business, such books, accounts, 
  1.16  and records as will enable the commissioner to determine whether 
  1.17  such licensee is complying with the provisions of sections 
  1.18  332.12 to 332.29 and of the rules, orders and directives 
  1.19  promulgated by the commissioner pursuant to sections 332.12 to 
  1.20  332.29.  Every licensee shall preserve such books, accounts and 
  1.21  records for at least five years after making the final entry on 
  1.22  any transaction recorded therein.  The licensee may preserve the 
  1.23  books, accounts, and records in electronic form acceptable to 
  1.24  the commissioner, and any examination or audit must be conducted 
  1.25  in electronic form at the request of the licensee.  Examinations 
  1.26  of the books, records and method of operations as shall be 
  1.27  conducted under the supervision of the commissioner herein shall 
  1.28  be done at the cost of the licensee.  The cost shall be assessed 
  2.1   as determined pursuant to section 46.131, as amended from time 
  2.2   to time.  
  2.3      Sec. 2.  Minnesota Statutes 1994, section 332.23, 
  2.4   subdivision 2, is amended to read: 
  2.5      Subd. 2.  [WITHDRAWAL OF FEE.] The licensee may withdraw 
  2.6   and retain as partial payment of the licensee's total fee not 
  2.7   more than 15 percent of any sum deposited with the licensee by 
  2.8   the debtor for distribution.  The remaining 85 percent must be 
  2.9   disbursed to listed creditors pursuant to and in accordance with 
  2.10  the contract between the debtor and the licensee within 35 days 
  2.11  after receipt.  Total payment to licensee for services rendered, 
  2.12  excluding the origination fee, shall not exceed 15 percent of 
  2.13  funds deposited with licensee by debtor for distribution.  This 
  2.14  section does not limit the licensee's right to exercise its 
  2.15  remedies under section 332.50, relating to dishonored checks, 
  2.16  and the service charge permitted under section 332.50, 
  2.17  subdivision 2, paragraphs (d) and (f), may be imposed by the 
  2.18  licensee in addition to fees and other charges otherwise 
  2.19  permitted under this section.  The licensee may collect that 
  2.20  service charge from sums deposited by the debtor with the 
  2.21  licensee for distribution, in addition to the other withdrawals 
  2.22  permitted to the licensee under this subdivision, or may collect 
  2.23  it by any other method permitted by law. 
  2.24     Sec. 3.  Minnesota Statutes 1994, section 332.23, 
  2.25  subdivision 6, is amended to read: 
  2.26     Subd. 6.  [CONSENT OF CREDITORS.] The licensee shall 
  2.27  actively seek to obtain the consent of all creditors to the plan 
  2.28  of distribution set forth in the contract. Failure to obtain 
  2.29  such consent of all such creditors within 60 days of the date 
  2.30  upon which the contract is executed shall entitle the debtor to 
  2.31  cancel the contract within 120 days of the date of such 
  2.32  execution without liability to pay any cancellation fee.  
  2.33  Consent by a creditor may be express and in writing, or may be 
  2.34  evidenced by acceptance of a payment made pursuant to the plan 
  2.35  of distribution set forth in the contract.  A creditor is 
  2.36  considered to have consented to the plan of distribution 45 days 
  3.1   after the creditor receives a copy of it by certified mail, 
  3.2   unless the licensee receives from the creditor within that 
  3.3   45-day period a written objection to the plan specifying the 
  3.4   feature or features of the plan to which the creditor objects.  
  3.5   The licensee shall notify the debtor within ten days after the 
  3.6   expiration of the 60 day period prescribed in this subdivision 
  3.7   of any failure to obtain the required consent and of the 
  3.8   debtor's right to cancel without penalty.  Such notice shall be 
  3.9   in such form as the commissioner shall prescribe.  Nothing 
  3.10  contained in this section shall be deemed to require the return 
  3.11  of any origination fee and any fees earned by the licensee prior 
  3.12  to cancellation or default. 
  3.13     Sec. 4.  Minnesota Statutes 1994, section 332.50, 
  3.14  subdivision 2, is amended to read: 
  3.15     Subd. 2.  [ACTS CONSTITUTING.] (a) Whoever issues any check 
  3.16  that is dishonored and is not paid within 30 days after mailing 
  3.17  a notice of dishonor that includes a citation to this section 
  3.18  and section 609.535, and a description of the penalties 
  3.19  contained in these sections, in compliance with subdivision 3, 
  3.20  is liable to the holder for:  (1) the amount of the check plus a 
  3.21  civil penalty of up to $100 or up to 100 percent of the value of 
  3.22  the check, whichever is greater; (2) interest at the rate 
  3.23  payable on judgments pursuant to section 549.09 on the face 
  3.24  amount of the check from the date of dishonor; and (3) 
  3.25  reasonable attorney fees if the aggregate amount of dishonored 
  3.26  checks issued by the issuer to all payees within a six-month 
  3.27  period is over $1,250. 
  3.28     (b) If the amount of the dishonored check plus any service 
  3.29  charges that have been incurred under paragraph (d) or (e) have 
  3.30  not been paid within 30 days after having mailed a notice of 
  3.31  dishonor in compliance with subdivision 3 but before bringing an 
  3.32  action, a payee may make a written demand for payment for the 
  3.33  liability imposed by paragraph (a) by sending a copy of this 
  3.34  section and a description of the liability contained in this 
  3.35  section to the issuer's last known address. 
  3.36     (c) After notice has been sent but before an action under 
  4.1   this section is heard by the court, the plaintiff shall settle 
  4.2   the claim if the defendant gives the plaintiff the amount of the 
  4.3   check plus court costs, any service charge owed under paragraph 
  4.4   (d), and reasonable attorney fees if provided for under 
  4.5   paragraph (a), clause (3).  
  4.6      (d) A service charge may be imposed immediately on any 
  4.7   dishonored check, regardless of mailing a notice of dishonor, if 
  4.8   written notice of the service charge was conspicuously displayed 
  4.9   on the premises when the check was issued.  The service charge 
  4.10  may not exceed $20, except that if the payee uses the services 
  4.11  of a law enforcement agency to obtain payment of a dishonored 
  4.12  check, a service charge of up to $25 may be imposed if the 
  4.13  service charge is used to reimburse the law enforcement agency 
  4.14  for its expenses.  A payee may impose only one service charge 
  4.15  under this paragraph for each dishonored check.  
  4.16     (e) This subdivision prevails over any provision of law 
  4.17  limiting, prohibiting, or otherwise regulating service charges 
  4.18  authorized by this subdivision, but does not nullify charges for 
  4.19  dishonored checks, which do not exceed the charges in paragraph 
  4.20  (d) or the actual cost of collection, but in no case more than 
  4.21  $30, or terms or conditions for imposing the charges which have 
  4.22  been agreed to by the parties to an express contract. 
  4.23     (f) This subdivision applies when the payee is a debt 
  4.24  prorating agency licensed under sections 332.12 to 332.29, on 
  4.25  the same basis as for any other payee.  Paragraph (d) applies to 
  4.26  checks written by a debtor to a debt prorating agency as payee, 
  4.27  regardless of whether the debtor was on the agency's premises 
  4.28  when the debtor issued the check, if the debt prorating agency 
  4.29  previously provided to the debtor written notice that it would 
  4.30  impose the service charge provided in paragraph (d) in the event 
  4.31  of a dishonored check. 
  4.32     Sec. 5.  [EFFECTIVE DATE.] 
  4.33     Sections 1 to 4 are effective August 1, 1995.