HF 3511

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to financial institutions; regulating consumer small loan lender charges;
amending Minnesota Statutes 2007 Supplement, section 47.60, subdivision 2.

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

Section 1.

Minnesota Statutes 2007 Supplement, section 47.60, subdivision 2, is
amended to read:

Subd. 2.

Authorization, terms, conditions, and prohibitions.

(a) deleted text begin In lieu of the
interest, finance charges, or fees in any other law, deleted text end A consumer small loan lender may
charge the following:

(1) on any amount up to and including $50, a charge of $5.50 may be added;

(2) on new text begin all other new text end amounts deleted text begin in excess of $50, but not more than $100, a charge may be
added equal to ten percent of the loan proceeds plus a $5 administrative fee;
deleted text end

deleted text begin (3) on amounts in excess of $100, but not more than $250, a charge may be
added equal to seven percent of the loan proceeds with a minimum of $10 plus a $5
administrative fee;
deleted text end

deleted text begin (4) for amounts in excess of $250 and not greater than the maximum in subdivision
1, paragraph (a), a charge may be added equal to six percent of the loan proceeds with a
minimum of $17.50 deleted text end new text begin , interest not to exceed 36 percent, when expressed as an annual
percentage rate, new text end plus a $5 administrative fee.

(b) The term of a loan made under this section shall be for no more than 30 calendar
days.

(c) After maturity, the contract rate must not exceed 2.75 percent per month of the
remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly
rate in the contract for each calendar day the balance is outstanding.

(d) No insurance charges or other charges must be permitted to be charged, collected,
or imposed on a consumer small loan except as authorized in this section.

(e) On a loan transaction in which cash is advanced in exchange for a personal
check, a return check charge may be charged as authorized by section 604.113, subdivision
2, paragraph (a). The civil penalty provisions of section 604.113, subdivision 2, paragraph
(b), may not be demanded or assessed against the borrower.

(f) A loan made under this section must not be repaid by the proceeds of another
loan made under this section by the same lender or related interest. The proceeds from a
loan made under this section must not be applied to another loan from the same lender or
related interest. No loan to a single borrower made pursuant to this section shall be split or
divided and no single borrower shall have outstanding more than one loan with the result
of collecting a higher charge than permitted by this section or in an aggregate amount of
principal exceed at any one time the maximum of $350.