HF 2391

as introduced - 90th Legislature (2017 - 2018) Posted on 02/26/2018 03:54pm

A bill for an act
relating to financial institutions; regulating retirement, health savings, and medical
savings accounts; providing asset protection; amending Minnesota Statutes 2016,
sections 47.75, subdivision 1; 48.15, subdivision 4.

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

Section 1.

Minnesota Statutes 2016, section 47.75, subdivision 1, is amended to read:

Subdivision 1.

Retirement, health savings, and medical savings accounts.

(a) A
commercial bank, savings bank, savings association, credit union, or industrial loan and
thrift company may act as trustee or custodian:

(1) under the federal Self-Employed Individuals Tax Retirement Act of 1962, as amended;

(2) of a medical savings account under the federal Health Insurance Portability and
Accountability Act of 1996, as amended;

(3) of a health savings account under the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, as amended; and

(4) under the federal Employee Retirement Income Security Act of 1974, as amended.

new text begin (b) Assets in an account described in paragraph (a), clauses (2) and (3), must be used
for the reimbursement of health care expenses and are not assignable or subject to execution,
levy, attachment, garnishment, or other legal process, except as provided in section 518.58,
518.581, or 518A.53.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end The trustee or custodian may accept the trust funds if the funds are invested only
in savings accounts or time deposits in the commercial bank, savings bank, savings
association, credit union, or industrial loan and thrift company, except that health savings
accounts may also be invested in transaction accounts. Health savings accounts invested in
transaction accounts shall not be subject to the restrictions in section 48.512, subdivision
3. All funds held in the fiduciary capacity may be commingled by the financial institution
in the conduct of its business, but individual records shall be maintained by the fiduciary
for each participant and shall show in detail all transactions engaged under authority of this
subdivision.

Sec. 2.

Minnesota Statutes 2016, section 48.15, subdivision 4, is amended to read:

Subd. 4.

Retirement, health savings, and medical savings accounts.

(a) A state bank
may act as trustee or custodian:

(1) of a self-employed retirement plan under the federal Self-Employed Individuals Tax
Retirement Act of 1962, as amended;

(2) of a medical savings account under the federal Health Insurance Portability and
Accountability Act of 1996, as amended;

(3) of a health savings account under the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, as amended; and

(4) of an individual retirement account under the federal Employee Retirement Income
Security Act of 1974, as amended, if the bank's duties as trustee or custodian are essentially
ministerial or custodial in nature and the funds are invested only (i) in the bank's own savings
or time deposits, except that health savings accounts may also be invested in transaction
accounts. Health savings accounts invested in transaction accounts shall not be subject to
the restrictions in section 48.512, subdivision 3; or (ii) in any other assets at the direction
of the customer if the bank does not exercise any investment discretion, invest the funds in
collective investment funds administered by it, or provide any investment advice with respect
to those account assets.

new text begin (b) Assets in an account described in paragraph (a), clauses (2) and (3), must be used
for the reimbursement of health care expenses and are not assignable or subject to execution,
levy, attachment, garnishment, or other legal process, except as provided in section 518.58,
518.581, or 518A.53.
new text end

deleted text begin (b) deleted text end new text begin (c) new text end Affiliated discount brokers may be utilized by the bank acting as trustee or
custodian for self-directed IRAs, if specifically authorized and directed in appropriate
documents. The relationship between the affiliated broker and the bank must be fully
disclosed. Brokerage commissions to be charged to the IRA by the affiliated broker should
be accurately disclosed. Provisions should be made for disclosure of any changes in
commission rates prior to their becoming effective. The affiliated broker may not provide
investment advice to the customer.

deleted text begin (c) deleted text end new text begin (d) new text end All funds held in the fiduciary capacity may be commingled by the financial
institution in the conduct of its business, but individual records shall be maintained by the
fiduciary for each participant and shall show in detail all transactions engaged under authority
of this subdivision.

deleted text begin (d) deleted text end new text begin (e) new text end The authority granted by this section is in addition to, and not limited by, section
47.75.