HF 220

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to commerce; abolishing the time-price
doctrine; requiring compliance with truth-in-lending
laws for business lending; amending Minnesota Statutes
2004, sections 47.59, subdivisions 12, 13; 334.01, by
adding a subdivision.

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

Section 1.

Minnesota Statutes 2004, section 47.59,
subdivision 12, is amended to read:

Subd. 12.

Consumer protections.

(a) Financial
institutions shall comply with the requirements of the federal
Truth in Lending Act, United States Code, title 15, sections
1601 to 1693, as the same may be amended from time to time deleted text begin , deleted text end new text begin : (1)
new text end in connection with a consumer loan or credit sale for a consumer
purpose where the federal Truth in Lending Act is applicable new text begin ;
and (2) in connection with a business loan or credit sale for a
business purpose where the federal Truth in Lending Act would be
applicable if the loan or credit sale were a loan or credit sale
to a consumer new text end . A financial institution shall give the following
disclosure to the borrower in writing at the time an open-end
credit account is established if the financial institution
imposes a loan fee, points, or similar charge that relates to
the opening of the account which is not included in the annual
percentage rate given pursuant to the federal Truth in Lending
Act: "YOU HAVE BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH
ARE NOT INCLUDED IN THE ANNUAL PERCENTAGE RATE. THESE CHARGES
MAY BE REFUNDED, IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR
LINE OF CREDIT OR IF YOU REPAY YOUR LINE OF CREDIT EARLY. THESE
CHARGES INCREASE THE COST OF YOUR CREDIT."

(b) Financial institutions shall comply with the following
consumer protection provisions in connection with a consumer
loan or credit sale for a consumer purpose: sections 325G.02 to
325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to
325G.36, and Code of Federal Regulations, title 12, part 535,
where those statutes or regulations are applicable.

(c) An assignment of a consumer's earnings by the consumer
to a financial institution as payment or as security for payment
of a debt arising out of a consumer loan or consumer credit sale
is unenforceable by the financial institution except where the
assignment: (1) by its terms is revocable at the will of the
consumer; (2) is a payroll deduction plan or preauthorized
payment plan, beginning at the time of the transaction, in which
the consumer authorizes a series of wage deductions as a method
of making each payment; or (3) applies only to wages or other
earnings already earned at the time of the assignment.

Sec. 2.

Minnesota Statutes 2004, section 47.59,
subdivision 13, is amended to read:

Subd. 13.

Loans and contracts other than consumer loans
and contracts.

Loans and credit sale contracts other than
consumer loans and consumer credit sale contracts are not
subject to the provisions and limitations of subdivisions 9; 10;
11, paragraph (b); and 12 new text begin , paragraphs (b) and (c) new text end .

Sec. 3.

Minnesota Statutes 2004, section 334.01, is
amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Time-price doctrine abolished. new text end

new text begin The doctrine of
common law known as the time-price doctrine is abolished in this
state.
new text end

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective January 1, 2006, and apply to
transactions entered into on or after that date.
new text end