HF 2632

as introduced - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to commerce; providing relief from civil 
  1.3             penalties for issuing dishonored checks under certain 
  1.4             circumstances; amending Minnesota Statutes 1997 
  1.5             Supplement, section 332.50, subdivision 2. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1997 Supplement, section 
  1.8   332.50, subdivision 2, is amended to read: 
  1.9      Subd. 2.  [ACTS CONSTITUTING.] (a) Whoever issues any check 
  1.10  that is dishonored is liable for the following penalties:  
  1.11     (a) (1) A service charge of up to $20, or actual costs of 
  1.12  collection not to exceed $30, may be imposed immediately on any 
  1.13  dishonored check, regardless of mailing a notice of dishonor, if 
  1.14  notice of the service charge was conspicuously displayed on the 
  1.15  premises when the check was issued.  If a law enforcement agency 
  1.16  obtains payment of a dishonored check, a service charge not to 
  1.17  exceed $25 may be imposed if the service charge is retained by 
  1.18  the law enforcement agency for its expenses.  Only one service 
  1.19  charge may be imposed under this paragraph for each dishonored 
  1.20  check. 
  1.21     (b) (2) If the amount of the dishonored check is not paid 
  1.22  within 30 days after the payee or holder has mailed notice of 
  1.23  dishonor pursuant to section 609.535 and a description of the 
  1.24  penalties contained in this subdivision, whoever issued the 
  1.25  dishonored check is liable to the payee or holder of the check 
  2.1   for: 
  2.2      (1) (i) the amount of the check, the service charge as 
  2.3   provided in paragraph (a) clause (1), plus a civil penalty of up 
  2.4   to $100 or the value of the check, whichever is greater.  The 
  2.5   civil penalty may not be imposed until 30 days following the 
  2.6   mailing of the notice of dishonor.  A payee or holder of the 
  2.7   check may make a written demand for payment of the civil 
  2.8   liability by sending a copy of this section and a description of 
  2.9   the liability contained in this section to the issuer's last 
  2.10  known address.  Notice as provided in paragraph (a) clause (1) 
  2.11  must also include notification that additional civil penalties 
  2.12  will be imposed for dishonored checks for nonpayment after 30 
  2.13  days; 
  2.14     (2) (ii) interest at the rate payable on judgments pursuant 
  2.15  to section 549.09 on the face amount of the check from the date 
  2.16  of dishonor; and 
  2.17     (3) (iii) reasonable attorney fees if the aggregate amount 
  2.18  of dishonored checks issued by the issuer to all payees within a 
  2.19  six-month period is over $1,250. 
  2.20     (b) The penalties provided in paragraph (a), clause (2), 
  2.21  must not be imposed upon the issuer of the check if the issuer 
  2.22  is an inpatient in a hospital, nursing home, or other health 
  2.23  care facility at the time of mailing the notice of dishonor, 
  2.24  until 30 days after the issuer is either discharged from the 
  2.25  facility or has actual knowledge of the notice, whichever is 
  2.26  earlier.  The notice of dishonor must include notice of this 
  2.27  paragraph.  The payee or holder of the check may require 
  2.28  reasonable proof of the issuer's eligibility under this 
  2.29  paragraph. 
  2.30     (c) This subdivision prevails over any provision of law 
  2.31  limiting, prohibiting, or otherwise regulating service charges 
  2.32  authorized by this subdivision, but does not nullify charges for 
  2.33  dishonored checks, which do not exceed the charges in paragraph 
  2.34  (a), clause (1), or terms or conditions for imposing the charges 
  2.35  which have been agreed to by the parties in an express contract. 
  2.36     (d) A sight draft may not be used as a means of collecting 
  3.1   the civil penalties provided in this section without prior 
  3.2   consent of the issuer. 
  3.3      Sec. 2.  [EFFECTIVE DATE.] 
  3.4      Section 1 is effective August 1, 1998, and applies to 
  3.5   checks written on or after that date.