Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

HF 319

as introduced - 91st Legislature (2019 - 2020) Posted on 01/31/2019 03:47pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

Line numbers 1.1 1.2 1.3 1.4
1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24
4.25 4.26 4.27 4.28
5.1 5.2 5.3 5.4 5.5 5.6
5.7 5.8

A bill for an act
relating to loans; federal employees; creating a loan guarantee program for
furloughed federal employees.

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

Section 1. new text beginFEDERAL EMPLOYEE PERSONAL LOAN GUARANTEE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Affected employee" means a federal employee who during the shutdown is:
new text end

new text begin (1) a resident of this state; and
new text end

new text begin (2) furloughed from federal employment without pay or is required to work as a federal
employee without pay.
new text end

new text begin (c) "Commissioner" means the commissioner of employment and economic development.
new text end

new text begin (d) "Federal employee personal loan guarantee program" or "program" is the program
created under this section to guarantee personal loans to affected employees.
new text end

new text begin (e) "Financial institution" means a bank, bank and trust, trust company with banking
powers, savings bank, savings association, or credit union, organized under the laws of this
state, any other state, or the United States; an industrial loan and thrift under Minnesota
Statutes, chapter 53; or a regulated lender under Minnesota Statutes, chapter 56. The term
"financial institution" also includes a subsidiary or operating subsidiary of a financial
institution or of a bank holding company as defined in the federal Bank Holding Company
Act, United States Code, title 12, section 1841, et seq., if the subsidiary or operating
subsidiary can demonstrate to the satisfaction of the commissioner of commerce that it is
regulated and subject to active and ongoing oversight and supervision by a federal banking
agency, as defined in the Federal Deposit Insurance Act, United States Code, title 12, section
1811, et seq., or the commissioner.
new text end

new text begin (f) "Grace period" means the 90-day period after an affected employee's federal agency
is funded and the shutdown ends.
new text end

new text begin (g) "Loan guarantee" means a guarantee of 100 percent of the amount of a personal loan.
new text end

new text begin (h) "Personal loan" means an unsecured loan made by a financial institution to an affected
employee that complies with the requirements of this section.
new text end

new text begin (i) "Shutdown" means the federal fiscal year 2019 partial government shutdown that
began December 22, 2018.
new text end

new text begin Subd. 2. new text end

new text begin Loan guarantee program. new text end

new text begin A personal loan guarantee program to support
affected employees by providing guaranteed personal loans is created in the Department of
Employment and Economic Development. The commissioner shall administer the personal
loan guarantee program in accordance with this section.
new text end

new text begin Subd. 3. new text end

new text begin Duties of commissioner. new text end

new text begin (a) The commissioner must approve or disapprove
an application from a financial institution to participate in the loan guarantee program within
one day of receiving the application.
new text end

new text begin (b) The commissioner must keep administrative records regarding the personal loan
guarantee program.
new text end

new text begin (c) The commissioner must review requests for payments of loan guarantees under
subdivision 4 and disallow any request for guarantees that do not comply with the
requirements of this section.
new text end

new text begin (d) The commissioner must pay loan guarantees that comply with this section to a
financial institution from the federal employee personal loan account in the special revenue
fund.
new text end

new text begin (e) The commissioner must cease accepting personal loan information from financial
institutions the day after the shutdown ends.
new text end

new text begin (f) The commissioner must cease accepting applications and approving claims for loan
guarantees if the number of loan guarantees requested exceed ten percent of the total number
of personal loans issued. The commissioner must inform financial institutions that have
applied to the programs within two days of ceasing to accept applications or approve claims
under this paragraph.
new text end

new text begin (g) The commissioner must wind-down and terminate operation of the program by July
31, 2020.
new text end

new text begin Subd. 4. new text end

new text begin Financial institutions. new text end

new text begin (a) A financial institution may apply to the commissioner
to participate in the program. Upon approval by the commissioner, a financial institution
may make personal loans and receive loan guarantees.
new text end

new text begin (b) In order to participate in the program, a financial institution must be in good standing,
meaning it is not subject to:
new text end

new text begin (1) a formal agreement with the Office of the Comptroller of the Currency;
new text end

new text begin (2) a consent order or cease and desist order issued by the Federal Deposit Insurance
Corporation;
new text end

new text begin (3) a consent order or cease and desist order from the commissioner of commerce;
new text end

new text begin (4) a letter of understanding and agreement or consent order issued by the National
Credit Union Administration; or
new text end

new text begin (5) a finding by the commissioner that the financial institution has failed to comply with
any requirement of this section.
new text end

new text begin (c) A financial institution must document a personal loan with the following information:
new text end

new text begin (1) evidence of the affected employee's employment status, income, and residence; and
new text end

new text begin (2) the amount of unemployment compensation benefits the affected employee has
received or is eligible to receive during the shutdown.
new text end

new text begin (d) A financial institution must notify the commissioner within one day of making a
personal loan. This notification must be in a form and manner acceptable to the commissioner.
new text end

new text begin (e) A financial institution must provide an affected employee with information regarding
credit counseling services offered by the financial institution or nonprofit credit counselors.
new text end

new text begin (f) If a financial institution has made a good-faith effort to collect on a personal loan
180 days after the grace period has concluded, the financial institution may submit a request
for payment of a loan guarantee from the commissioner.
new text end

new text begin (g) The commissioner shall prepare a form for financial institutions to use in applying
for loan guarantees. The form shall include the following information:
new text end

new text begin (1) the name and contact information of the financial institution, including the name and
title of a contact person;
new text end

new text begin (2) evidence that the financial institution's efforts to collect the personal loan have been
in accordance with the financial institution's collection policies;
new text end

new text begin (3) the amount of the personal loan provided to the affected employee; and
new text end

new text begin (4) the loan guarantee amount that is being requested from the program.
new text end

new text begin Subd. 5. new text end

new text begin Personal loan; terms. new text end

new text begin (a) A personal loan shall:
new text end

new text begin (1) not require an affected employee to repay in part or in full the personal loan earlier
than the end of the grace period;
new text end

new text begin (2) not require an affected employee to repay the loan in full earlier than 180 days after
the end of the grace period;
new text end

new text begin (3) allow an affected employee to repay the personal loan in equal installments of no
less than three and no more than six; and
new text end

new text begin (4) not charge interest on the principal or charge fees until 180 days after the grace
period.
new text end

new text begin (b) A loan to an affected employee must not exceed the lesser of:
new text end

new text begin (1) $5,000;
new text end

new text begin (2) the affected employee's most recent monthly net pay; or
new text end

new text begin (3) four times the amount the affected employee has reported to the financial institution
in weekly unemployment compensation benefits that the employee has received or is eligible
to receive.
new text end

new text begin (c) An affected employee is eligible for an additional personal loan for each 30-day
period that the shutdown continues. An affected employee may have up to three personal
loans.
new text end

Sec. 2. new text beginFEDERAL EMPLOYEE PERSONAL LOAN GUARANTEE PROGRAM
ACCOUNT.
new text end

new text begin There is created in the special revenue fund the federal employee personal loan guarantee
program account.
new text end

Sec. 3. new text beginFEDERAL EMPLOYEE PERSONAL LOAN GUARANTEE PROGRAM;
TRANSFER.
new text end

new text begin $....... for fiscal year 2019 is transferred from the general fund to the federal employee
personal loan guarantee program account in the special revenue fund. This is a onetime
transfer. Any amount remaining in the account as of August 1, 2020, shall be transferred
to the general fund.
new text end

Sec. 4. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 3 are effective the day following final enactment.
new text end