SF 1469

1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to financial institutions; regulating savings 
  1.3             banks; modifying and clarifying statutory provisions 
  1.4             relating to the structure and functions of savings 
  1.5             banks; making technical changes; amending Minnesota 
  1.6             Statutes 1994, sections 9.031, subdivision 8; 46.047, 
  1.7             subdivision 2; 47.01, subdivisions 2 and 3; 47.015, 
  1.8             subdivision 1; 47.02; 47.10, subdivision 1; 47.12; 
  1.9             47.20, subdivisions 1 and 9; 47.201, subdivision 1; 
  1.10            47.205, subdivision 1; 47.209, subdivision 1; 47.27, 
  1.11            subdivision 2; 47.28; 47.29, subdivisions 1 and 2; 
  1.12            47.30, subdivisions 1, 2, 3, and 5; 47.32; 47.62, 
  1.13            subdivision 4; 47.64, subdivision 1; 47.65, 
  1.14            subdivisions 1 and 2; 48.01, subdivision 2; 48.15, by 
  1.15            adding a subdivision; 49.01, by adding a subdivision; 
  1.16            49.42; 50.01; 50.04; 50.05; 50.06; 50.11; 50.13; 
  1.17            50.14, subdivisions 1, 5, 7, and 8; 50.145; 50.146; 
  1.18            50.1465; 50.148; 50.155; 50.17; 50.175, subdivision 1; 
  1.19            50.19; 50.21; 50.22; 50.23; 50.245; 50.25; 51A.02, 
  1.20            subdivisions 6, 26, and 40; 51A.21, by adding a 
  1.21            subdivision; 61A.09, subdivision 3; 62B.04, 
  1.22            subdivisions 1 and 2; and 300.20; proposing coding for 
  1.23            new law in Minnesota Statutes, chapters 46; 47; and 
  1.24            50; repealing Minnesota Statutes 1994, sections 
  1.25            47.095; 47.30, subdivisions 4 and 6; 47.67; 48.67; 
  1.26            50.01; 50.02; 50.07; 50.08; 50.09; 50.10; 50.12; 
  1.27            50.15; 50.16; 50.21; and 50.22. 
  1.28  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.29     Section 1.  Minnesota Statutes 1994, section 9.031, 
  1.30  subdivision 8, is amended to read: 
  1.31     Subd. 8.  [ACTIVE AND INACTIVE DEPOSITORIES.] Depositories 
  1.32  shall be divided into two classes to be known as active and 
  1.33  inactive.  A depository may be designated as a depository of 
  1.34  both classes.  
  1.35     All state funds deposited in active depositories are 
  1.36  subject to withdrawal by the state treasurer upon demand and no 
  2.1   interest shall be charged on these deposits.  
  2.2      Surplus funds not required to meet the state's current 
  2.3   disbursements shall be deposited for a definite period in 
  2.4   inactive depositories and interest shall be paid on these 
  2.5   deposits at a rate of not less than one percent per annum nor 
  2.6   more than the maximum rate authorized to be paid by Minnesota 
  2.7   state banks other than mutual savings banks.  This rate shall be 
  2.8   fixed by the executive council in accordance with the current 
  2.9   rate upon similar deposits.  
  2.10     Sec. 2.  Minnesota Statutes 1994, section 46.047, 
  2.11  subdivision 2, is amended to read: 
  2.12     Subd. 2.  [BANKING INSTITUTION.] The term "banking 
  2.13  institution" means a bank, trust company, bank and trust 
  2.14  company, mutual savings bank, or thrift institution, that is 
  2.15  organized under the laws of this state, or a holding company 
  2.16  which owns or otherwise controls the banking institution. 
  2.17     Sec. 3.  [46.35] [INTERPRETATIONS.] 
  2.18     The commissioner of commerce may upon request from an 
  2.19  interested party give an interpretive opinion in connection with 
  2.20  the administration of chapters 45 to 56.  No penalty provision 
  2.21  in these chapters or of any other chapter to which chapters 45 
  2.22  to 56 may refer applies to any act done or not done in 
  2.23  conformity with a written interpretive opinion of the 
  2.24  commissioner, notwithstanding that the written interpretive 
  2.25  opinion may, after the act or omission, be amended or rescinded 
  2.26  or be determined by judicial or other authority to be invalid 
  2.27  for any reason. 
  2.28     Sec. 4.  Minnesota Statutes 1994, section 47.01, 
  2.29  subdivision 2, is amended to read: 
  2.30     Subd. 2.  [BANK.] A bank is a corporation under public 
  2.31  control, having a place of business where credits are opened by 
  2.32  the deposit or collection of money and currency, subject to be 
  2.33  paid or remitted upon draft, check, or order, and where money is 
  2.34  advanced, loaned on stocks, bonds, bullion, bills of exchange, 
  2.35  and promissory notes, and where the same are received for 
  2.36  discount or sale; and all persons and copartnerships, 
  3.1   respectively, so operating, are bankers.  The term does not 
  3.2   include a savings bank. 
  3.3      Sec. 5.  Minnesota Statutes 1994, section 47.01, 
  3.4   subdivision 3, is amended to read: 
  3.5      Subd. 3.  [SAVINGS BANK.] A savings bank is an institution 
  3.6   under like control, managed by disinterested trustees solely, 
  3.7   authorized to receive and safely invest the savings of small 
  3.8   depositors a corporation authorized to do business under chapter 
  3.9   50.  
  3.10     Sec. 6.  Minnesota Statutes 1994, section 47.015, 
  3.11  subdivision 1, is amended to read: 
  3.12     Subdivision 1.  [FINANCIAL INSTITUTIONS.] As used in this 
  3.13  section the term "financial institution" shall include banks, 
  3.14  trust companies, banks and trust companies, mutual savings 
  3.15  banks, industrial loan and thrift companies having outstanding 
  3.16  certificates of indebtedness for investment, savings and loan 
  3.17  associations, national banking associations, federal reserve 
  3.18  banks and, federal savings and loan associations, and federal 
  3.19  savings banks doing business in this state, and includes any 
  3.20  branch or detached facility of any of them. 
  3.21     Sec. 7.  Minnesota Statutes 1994, section 47.02, is amended 
  3.22  to read: 
  3.23     47.02 ["BANK" AND "SAVINGS BANK."] 
  3.24     A "bank" is a corporation having a place of business in 
  3.25  this state, where credits are opened by the deposit of money or 
  3.26  currency, or the collection of the same, subject to be paid or 
  3.27  remitted on draft, check, or order; and where money is loaned or 
  3.28  advanced on stocks, bonds, bullion, bills of exchange, or 
  3.29  promissory notes, and where the same are received for discount 
  3.30  or sale.  A "savings bank" is a corporation managed by 
  3.31  disinterested trustees, solely authorized to receive and safely 
  3.32  invest the savings of small depositors authorized to do business 
  3.33  under chapter 50.  Every "bank" or "savings bank" in this state 
  3.34  shall at all times be under the supervision and subject to the 
  3.35  control of the commissioner of commerce, and when so conducted 
  3.36  the business shall be known as "banking."  
  4.1      Sec. 8.  Minnesota Statutes 1994, section 47.10, 
  4.2   subdivision 1, is amended to read: 
  4.3      Subdivision 1.  [AUTHORITY, APPROVAL, LIMITATIONS.] (a) 
  4.4   Except as otherwise specially provided, the net book value of 
  4.5   land and buildings for the transaction of the business of the 
  4.6   corporation, including parking lots and premises leased to 
  4.7   others, shall not be more than as follows:  
  4.8      (1) for a bank, trust company, savings bank, or stock 
  4.9   savings association, if investment is for acquisition and 
  4.10  improvements to establish a new bank, or is for improvements to 
  4.11  existing property or acquisition and improvements to adjacent 
  4.12  property, approval by the commissioner of commerce is not 
  4.13  required if the total investment does not exceed 50 percent of 
  4.14  its existing capital stock and paid-in surplus.  Upon written 
  4.15  prior approval of the commissioner of commerce, a bank, trust 
  4.16  company, savings bank, or stock savings association may invest 
  4.17  in the property and improvements in clause (1) or for 
  4.18  acquisition of nonadjacent property for expansion or future use, 
  4.19  if the aggregate of all such investments does not exceed 75 
  4.20  percent of its existing capital stock and paid-in surplus; 
  4.21     (2) for a savings bank, 50 percent of its net surplus; 
  4.22     (3) for a mutual building and loan savings association, 
  4.23  five percent of its net assets.  
  4.24     (b) For purposes of this subdivision, an intervening 
  4.25  highway, street, road, alley, other public thoroughfare, or 
  4.26  easement of any kind does not cause two parcels of real property 
  4.27  to be nonadjacent. 
  4.28     Sec. 9.  Minnesota Statutes 1994, section 47.12, is amended 
  4.29  to read: 
  4.30     47.12 [FINANCIAL CORPORATIONS.] 
  4.31     Corporations may be formed for any one of the following 
  4.32  purposes: 
  4.33     (1) Carrying on the business of banking, by receiving 
  4.34  deposits, buying, selling, and discounting notes, bills, and 
  4.35  other evidences of debt legal for investment, domestic or 
  4.36  foreign, dealing in gold and silver bullion and foreign coins, 
  5.1   issuing circulating notes, and loaning money upon real estate or 
  5.2   personal security or upon the creditworthiness of the borrower; 
  5.3      (2) Establishing and conducting clearing houses, for 
  5.4   effecting, in one place, the speedy and systematic daily 
  5.5   exchange and adjustment of balances between banks and bankers in 
  5.6   any municipality, town, or county, establishing and enforcing 
  5.7   uniform methods of conducting the banking business in such 
  5.8   locality, and adjusting disputes or misunderstandings between 
  5.9   members of such clearing house engaged in the banking business; 
  5.10     (3) Creating and conducting savings banks for the 
  5.11  reception, on deposit, of money offered for that purpose, the 
  5.12  investment thereof, and the declaring, crediting, and paying of 
  5.13  dividends or interest thereon, as authorized and provided by 
  5.14  law; 
  5.15     (4) Transacting business as a trust company in conformity 
  5.16  with the laws relating thereto; and 
  5.17     (5) Carrying on, in accordance with law, the business of 
  5.18  building, loan, and savings associations.  
  5.19     Sec. 10.  Minnesota Statutes 1994, section 47.20, 
  5.20  subdivision 1, is amended to read: 
  5.21     Subdivision 1.  Pursuant to rules the commissioner of 
  5.22  commerce finds to be necessary and proper, if any, banks, 
  5.23  savings banks, mutual savings banks, building and loan 
  5.24  associations, and savings and loan associations organized under 
  5.25  the laws of this state or the United States, trust companies, 
  5.26  trust companies acting as fiduciaries, and other banking 
  5.27  institutions subject to the supervision of the commissioner of 
  5.28  commerce, and mortgagees or lenders approved or certified by the 
  5.29  secretary of housing and urban development or approved or 
  5.30  certified by the administrator of veterans affairs, or approved 
  5.31  or certified by the administrator of the farmers home 
  5.32  administration, or approved or certified by the federal home 
  5.33  loan mortgage corporation, or approved or certified by the 
  5.34  federal national mortgage association, are authorized: 
  5.35     (1) To make loans and advances of credit and purchases of 
  5.36  obligations representing loans and advances of credit which are 
  6.1   insured or guaranteed by the secretary of housing and urban 
  6.2   development pursuant to the national housing act, as amended, or 
  6.3   the administrator of veterans affairs pursuant to the 
  6.4   servicemen's readjustment act of 1944, as amended, or the 
  6.5   administrator of the farmers home administration pursuant to the 
  6.6   consolidated farm and rural development act, Public Law Number 
  6.7   87-128, as amended, and to obtain the insurance or guarantees; 
  6.8      (2) To make loans secured by mortgages on real property and 
  6.9   loans secured by a share or shares of stock or a membership 
  6.10  certificate or certificates issued to a stockholder or member by 
  6.11  a cooperative apartment corporation which the secretary of 
  6.12  housing and urban development, the administrator of veterans 
  6.13  affairs, or the administrator of the farmers home administration 
  6.14  has insured or guaranteed or made a commitment to insure or 
  6.15  guarantee, and to obtain the insurance or guarantees; 
  6.16     (3) To make, purchase, or participate in such loans and 
  6.17  advances of credit as would be eligible for purchase, in whole 
  6.18  or in part, by the federal national mortgage association or the 
  6.19  federal home loan mortgage corporation, but without regard to 
  6.20  any limitation placed upon the maximum principal amount of an 
  6.21  eligible loan; 
  6.22     (4) To make, purchase or participate in such loans and 
  6.23  advances of credit secured by mortgages on real property which 
  6.24  are authorized or allowed by the federal home loan bank board 
  6.25  office of thrift supervision or the office of the comptroller of 
  6.26  the currency, or any successor to these federal agencies.  
  6.27     Sec. 11.  Minnesota Statutes 1994, section 47.20, 
  6.28  subdivision 9, is amended to read: 
  6.29     Subd. 9.  (1) For purposes of this subdivision the term 
  6.30  "mortgagee" shall mean all state banks and trust companies, 
  6.31  national banking associations, state and federally chartered 
  6.32  savings and loan associations, mortgage banks, mutual savings 
  6.33  banks, insurance companies, credit unions or assignees of the 
  6.34  above.  Each mortgagee requiring funds of a mortgagor to be paid 
  6.35  into an escrow, agency or similar account for the payment of 
  6.36  taxes or insurance premiums with respect to a mortgaged 
  7.1   one-to-four family, owner occupied residence located in this 
  7.2   state, unless the account is required by federal law or 
  7.3   regulation or maintained in connection with a conventional loan 
  7.4   in an original principal amount in excess of 80 percent of the 
  7.5   lender's appraised value of the residential unit at the time the 
  7.6   loan is made or maintained in connection with loans insured or 
  7.7   guaranteed by the secretary of housing and urban development, by 
  7.8   the administrator of veterans affairs, or by the administrator 
  7.9   of the farmers home administration, shall calculate interest on 
  7.10  such funds at a rate of not less than five percent per annum.  
  7.11  Such interest shall be computed on the average monthly balance 
  7.12  in such account on the first of each month for the immediately 
  7.13  preceding 12 months of the calendar year or such other fiscal 
  7.14  year as may be uniformly adopted by the mortgagee for such 
  7.15  purposes and shall be annually credited to the remaining 
  7.16  principal balance on the mortgage, or at the election of the 
  7.17  mortgagee, paid to the mortgagor or credited to the mortgagor's 
  7.18  account.  If the interest exceeds the remaining balance, the 
  7.19  excess shall be paid to the mortgagor or vendee.  The 
  7.20  requirement to pay interest shall apply to such accounts created 
  7.21  prior to June 1, 1976, as well as to accounts created after June 
  7.22  1, 1976. 
  7.23     (2) A mortgagee offering the following option (c) to a 
  7.24  mortgagor but not requiring maintenance of escrow accounts as 
  7.25  described in clause (1), whether or not the accounts were 
  7.26  required by the mortgagee or were optional with the mortgagor, 
  7.27  shall offer to each of such mortgagors the following options: 
  7.28     (a) the mortgagor may personally manage the payment of 
  7.29  insurance and taxes; 
  7.30     (b) the mortgagor may open with the mortgagee a passbook 
  7.31  savings account carrying the current rate of interest being paid 
  7.32  on such accounts by the mortgagee in which the mortgagor can 
  7.33  deposit the funds previously paid into the escrow account; or 
  7.34     (c) the mortgagor may elect to maintain a noninterest 
  7.35  bearing escrow account as described in clause (1) to be serviced 
  7.36  by the mortgagee at no charge to the mortgagor. 
  8.1      A mortgagee that is not a depository institution offering 
  8.2   passbook savings accounts shall instead of offering option (b) 
  8.3   above notify its mortgagors (1) that they may open such accounts 
  8.4   at a depository institution and (2) of the current maximum legal 
  8.5   interest rate on such accounts. 
  8.6      A mortgagee offering option (c) above to a mortgagor but 
  8.7   not requiring the maintenance of escrow accounts shall notify 
  8.8   its mortgagor of the options under (a), (b) and (c).  The notice 
  8.9   shall state the option and state that an escrow account is not 
  8.10  required by the mortgagee, that the mortgagor is legally 
  8.11  responsible for the payment of taxes and insurance, and that the 
  8.12  notice is being given pursuant to this subdivision. 
  8.13     Notice shall be given within 30 days after the effective 
  8.14  date of the provisions of Laws 1977, chapter 350 amending the 
  8.15  subdivision, as to mortgagees offering option (c) above to 
  8.16  mortgagors but not requiring escrow accounts as of the effective 
  8.17  date, or within 30 days after a mortgagee's decision to 
  8.18  discontinue requiring escrow accounts if the mortgagee continues 
  8.19  to offer option (c) above to mortgagors.  If no reply is 
  8.20  received within 30 days, option (c) shall be selected for the 
  8.21  mortgagor but the mortgagor may, at any time, select another 
  8.22  option. 
  8.23     A mortgagee making a new mortgage and offering option (c) 
  8.24  above to a prospective mortgagor shall, at the time of loan 
  8.25  application, notify the prospective mortgagor of options (a), 
  8.26  (b) and (c) above which must be extended to the prospective 
  8.27  mortgagor.  The mortgagor shall select one of the options at the 
  8.28  time the loan is made. 
  8.29     Any notice required by this clause shall be on forms 
  8.30  approved by the commissioner of commerce and shall provide that 
  8.31  at any time a mortgagor may select a different option.  The form 
  8.32  shall contain a blank where the current passbook rate of 
  8.33  interest shall be entered by the mortgagee.  Any option selected 
  8.34  by the mortgagor shall be binding on the mortgagee. 
  8.35     This clause does not apply to escrow accounts which are 
  8.36  excepted from the interest paying requirements of clause (1). 
  9.1      (3) A mortgagee shall be prohibited from charging a direct 
  9.2   fee for the administration of the escrow account. 
  9.3      Sec. 12.  Minnesota Statutes 1994, section 47.201, 
  9.4   subdivision 1, is amended to read: 
  9.5      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  9.6   section, the terms defined in this subdivision shall have the 
  9.7   meanings given them: 
  9.8      (1) "Financial institution" means a state bank or trust 
  9.9   company, a national banking association, a state or federally 
  9.10  chartered savings and loan association, a mortgage bank or 
  9.11  mutual savings bank. 
  9.12     (2) "Graduated payment home loan" means a conventional or 
  9.13  cooperative apartment loan made pursuant to section 47.20 and 
  9.14  subject to the provisions therein, whereunder initial periodic 
  9.15  repayments are lower than those under the standard conventional 
  9.16  or cooperative apartment loan having equal periodic repayments, 
  9.17  and gradually rise to a predetermined point after which they 
  9.18  remain constant. 
  9.19     Sec. 13.  Minnesota Statutes 1994, section 47.205, 
  9.20  subdivision 1, is amended to read: 
  9.21     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  9.22  section, the terms defined in this subdivision have the meanings 
  9.23  given them. 
  9.24     (a) "Lender" means all state banks and trust companies, 
  9.25  national banking associations, state and federally chartered 
  9.26  savings and loan associations, mortgage banks, mutual savings 
  9.27  banks, insurance companies, credit unions making a loan, or any 
  9.28  person making a conventional loan as defined under section 
  9.29  47.20, subdivision 2, clause (3) or cooperative apartment loan 
  9.30  as defined under section 47.20, subdivision 2, clause (4).  A 
  9.31  "selling lender" is a lender who sells, assigns, or transfers 
  9.32  the servicing of a loan, to a "purchasing lender or a servicing 
  9.33  agent." 
  9.34     (b) "Loan" means all loans and advances of credit 
  9.35  authorized under section 47.20, subdivision 1, clauses (1) to 
  9.36  (4) and conventional loans as defined under section 47.20, 
 10.1   subdivision 2, clause (3) or cooperative apartment loan as 
 10.2   defined under section 47.20, subdivision 2, clause (4). 
 10.3      (c) "Escrow account" means escrow, agency, or similar 
 10.4   account for the payment of taxes or insurance premiums with 
 10.5   respect to a mortgaged one-to-four family, owner occupied 
 10.6   residence located in this state. 
 10.7      (d) "Person" means an individual, corporation, business 
 10.8   trust, partnership or association, or any other legal entity. 
 10.9      Sec. 14.  Minnesota Statutes 1994, section 47.209, 
 10.10  subdivision 1, is amended to read: 
 10.11     Subdivision 1.  [APPLICABILITY.] This section applies to 
 10.12  any agreement entered into after December 31, 1992, for the 
 10.13  financing or refinancing of a purchase of a manufactured home.  
 10.14  As used in this section and section 277.17, "lender" includes a 
 10.15  state bank and trust company, national banking association, 
 10.16  state or federally chartered savings and loan association, 
 10.17  mortgage bank, mutual savings bank, insurance company, credit 
 10.18  union, or a dealer as defined in section 327B.01, subdivision 7, 
 10.19  that enters into an agreement for financing or refinancing a 
 10.20  purchase of a manufactured home.  
 10.21     Sec. 15.  Minnesota Statutes 1994, section 47.27, 
 10.22  subdivision 2, is amended to read: 
 10.23     Subd. 2.  "Savings bank" shall have the meaning set forth 
 10.24  in sections 47.01 and 47.02 and shall also mean a mutual savings 
 10.25  bank.  
 10.26     Sec. 16.  Minnesota Statutes 1994, section 47.28, is 
 10.27  amended to read: 
 10.28     47.28 [SAVINGS BANKS MAY CONVERT INTO SAVINGS, BUILDING AND 
 10.29  LOAN ASSOCIATIONS.] 
 10.30     Subdivision 1.  Any savings bank organized and existing 
 10.31  under and by virtue of the law of this state may amend its 
 10.32  articles of incorporation so as to convert itself into a 
 10.33  savings, building and loan association, by complying with the 
 10.34  following requirements and procedure: 
 10.35     The savings bank by a two-thirds vote of the entire board 
 10.36  of trustees directors, at any regular or special meeting of said 
 11.1   board duly called for that purpose, shall (a) pass a resolution 
 11.2   declaring their intention to convert the savings bank into a 
 11.3   savings, building and loan association, and (b) cause an 
 11.4   application in writing to be executed, by such persons as the 
 11.5   trustees directors may direct, in the form prescribed by the 
 11.6   department of commerce, requesting a certificate of 
 11.7   authorization (charter) as a savings, building and loan 
 11.8   association to transact business at the place and in the name 
 11.9   stated in the application.  The amendments proposed to the 
 11.10  articles of incorporation and bylaws shall be included as part 
 11.11  of the application.  
 11.12     The application shall be submitted to, considered and acted 
 11.13  upon by the department of commerce in the same manner and by the 
 11.14  same standards as applications are submitted, considered and 
 11.15  acted upon under section 51.08.  
 11.16     Subd. 2.  If the certificate of authorization (charter) be 
 11.17  issued, the articles of incorporation may then be amended so as 
 11.18  to convert the savings bank into a savings, building and loan 
 11.19  association by following the procedure prescribed for amending 
 11.20  articles of incorporation of savings banks; provided, that 
 11.21  before any such conversion shall take place the secretary of the 
 11.22  savings bank shall cause 30 days written notice of such intended 
 11.23  conversion (which notice, before mailing, shall be submitted to 
 11.24  and approved by the commissioner of commerce) to be mailed 
 11.25  prepaid to each depositor, at the depositor's last known address 
 11.26  according to the records of the bank, and after such notice each 
 11.27  depositor may, prior to the time the conversion becomes final 
 11.28  and complete, on demand and without prior notice, withdraw the 
 11.29  full amount of deposit or such part thereof as the depositor may 
 11.30  request, and upon such withdrawal the depositor shall receive 
 11.31  interest to the date of withdrawal at the same rate last paid or 
 11.32  credited by the bank, notwithstanding the provisions of any law, 
 11.33  bylaw, or rule to the contrary.  
 11.34     Subd. 3.  At any time after the expiration of the 30 day 
 11.35  period specified in subdivision 2, (which fact shall be 
 11.36  evidenced by the secretary of the savings bank filing an 
 12.1   affidavit to that effect with the commissioner of commerce and 
 12.2   the secretary of state,) Upon receipt of the fees required for 
 12.3   filing and recording amended articles of incorporation of 
 12.4   savings banks, the secretary of state shall record the amended 
 12.5   articles of incorporation and certify that fact thereon, 
 12.6   whereupon the conversion of such savings bank into a savings, 
 12.7   building and loan association shall become final and complete 
 12.8   and thereafter said corporation shall have the powers and be 
 12.9   subject to the duties and obligations prescribed by the laws of 
 12.10  this state applicable to savings, building and loan associations.
 12.11     Subd. 4.  When the conversion of any savings bank into a 
 12.12  savings, building and loan association becomes final and 
 12.13  complete, the surplus fund of the bank shall become the 
 12.14  contingent or reserve fund of the association and every person 
 12.15  who was a depositor of the savings bank at the time of the 
 12.16  conversion shall cease to be a depositor and shall thereafter be 
 12.17  a shareholder of the savings, building and loan association and 
 12.18  be credited with payments on that person's share account equal 
 12.19  to the full amount on deposit with the savings bank at the time 
 12.20  of conversion, plus interest to the date of conversion at the 
 12.21  same rate last paid or credited by the bank, notwithstanding the 
 12.22  provisions of any law, bylaw, or rule to the contrary. 
 12.23     Subd. 5.  The resulting association shall as soon as 
 12.24  practicable and within such time not extending beyond three 
 12.25  years from the date the conversion becomes final and complete 
 12.26  and by such methods as the department of commerce shall direct, 
 12.27  cause its organization, its securities and investments, the 
 12.28  character of its business, and the methods of transacting the 
 12.29  same to conform to the laws applicable to savings, building and 
 12.30  loan associations.  
 12.31     Sec. 17.  Minnesota Statutes 1994, section 47.29, 
 12.32  subdivision 1, is amended to read: 
 12.33     Subdivision 1.  Any savings bank organized and existing 
 12.34  under and by virtue of the laws of this state, is hereby 
 12.35  authorized and empowered, by a two-thirds vote of the entire 
 12.36  board of trustees directors, at any regular or special meeting 
 13.1   of said board duly called for that purpose to convert itself 
 13.2   into a federal association whenever said conversion is 
 13.3   authorized by any act of the Congress of the United States:  
 13.4   Provided, that before any such conversion shall become final and 
 13.5   complete, (a) the secretary of the savings bank shall cause 30 
 13.6   days' written notice of such intended conversion (which notice, 
 13.7   before mailing, shall be submitted to and approved by the 
 13.8   commissioner of commerce) to be mailed prepaid to each 
 13.9   depositor, at their last known address, according to the records 
 13.10  of the bank, and after such notice each depositor may, prior to 
 13.11  the time the conversion becomes final and complete, on demand 
 13.12  and without prior notice, withdraw the full amount of the 
 13.13  deposit or such part thereof as the depositor may request, and 
 13.14  upon such withdrawal the depositor shall receive interest to the 
 13.15  date of withdrawal at the same rate last paid or credited by the 
 13.16  bank, notwithstanding the provisions of any law, bylaws, or rule 
 13.17  to the contrary, and (b) that such conversion be approved in 
 13.18  writing by the commissioner of commerce.  
 13.19     Sec. 18.  Minnesota Statutes 1994, section 47.29, 
 13.20  subdivision 2, is amended to read: 
 13.21     Subd. 2.  At any time after the expiration of the 30 day 
 13.22  period specified in subdivision 1, clause (a), (which fact shall 
 13.23  be evidenced by the secretary of the savings bank filing an 
 13.24  affidavit to that effect with the commissioner of commerce and 
 13.25  the secretary of state of this state), Upon filing a copy of the 
 13.26  federal charter, certified by the issuing federal agency with 
 13.27  the secretary of state of this state, the secretary of state 
 13.28  shall record said charter and certify that fact thereon, 
 13.29  whereupon the conversion shall be final and complete and the 
 13.30  savings bank shall at that time cease to be a savings bank 
 13.31  supervised by this state, and shall thereafter be a federal 
 13.32  association.  
 13.33     Sec. 19.  Minnesota Statutes 1994, section 47.30, 
 13.34  subdivision 1, is amended to read: 
 13.35     Subdivision 1.  Any capital stock savings, building and 
 13.36  loan association organized and existing under and by virtue of 
 14.1   the laws of this state may amend its articles of incorporation 
 14.2   so as to convert itself into a savings bank, by complying with 
 14.3   the following requirements and procedure: 
 14.4      A meeting of the shareholders shall be held upon not less 
 14.5   than 15 days written notice to each shareholder, served either 
 14.6   personally or by mail prepaid, directed to the shareholder's 
 14.7   last known post office address according to the records of the 
 14.8   association, stating the time, place and purpose of such meeting.
 14.9      At such meeting, the shareholders may by two-thirds vote 
 14.10  (according to the book value of said shares) of those present in 
 14.11  person or by proxy pass a resolution declaring their intention 
 14.12  to convert such association into a savings bank and setting 
 14.13  forth the names of the proposed first board of trustees 
 14.14  directors.  A copy of the minutes of such meeting verified by 
 14.15  the affidavit of the chair and the secretary of the meeting, 
 14.16  shall be filed in the office of the department of commerce and 
 14.17  with the secretary of state within ten days after the meeting.  
 14.18  Such copy, when so filed, shall be evidence of the holding of 
 14.19  such meeting and of the action taken.  
 14.20     Sec. 20.  Minnesota Statutes 1994, section 47.30, 
 14.21  subdivision 2, is amended to read: 
 14.22     Subd. 2.  An application for a certificate authorizing a 
 14.23  savings bank to transact business, in the form required by 
 14.24  sections 46.041 and 46.046, shall be submitted to, considered 
 14.25  and acted upon by the department of commerce in the same manner 
 14.26  and by the same standards as applications are submitted, 
 14.27  considered and acted upon under sections 46.041, 46.044, 46.046, 
 14.28  and 50.01 and 50.02.  The fees required by section 46.041 shall 
 14.29  be paid and the amendments proposed to the articles of 
 14.30  incorporation and bylaws shall be included as part of the 
 14.31  application.  
 14.32     Sec. 21.  Minnesota Statutes 1994, section 47.30, 
 14.33  subdivision 3, is amended to read: 
 14.34     Subd. 3.  If the department of commerce grants the 
 14.35  application, the certificate of authorization (charter) shall be 
 14.36  issued as provided by section 46.041, and the articles of 
 15.1   incorporation may then be amended so as to convert the savings, 
 15.2   building and loan association into a savings bank by following 
 15.3   the procedure prescribed for amending articles of incorporation 
 15.4   of savings, building and loan associations:  Provided, that the 
 15.5   proposed amended articles shall contain the names of, and be 
 15.6   signed by, the proposed first board of trustees directors.  
 15.7      Sec. 22.  Minnesota Statutes 1994, section 47.30, 
 15.8   subdivision 5, is amended to read: 
 15.9      Subd. 5.  At any time after the expiration of the 30 day 
 15.10  period specified in subdivision 4, (which fact shall be 
 15.11  evidenced by the secretary of the association filing an 
 15.12  affidavit to that effect with the commissioner of commerce and 
 15.13  the secretary of state), Upon receipt of the fees required for 
 15.14  filing and recording amended articles of incorporation of 
 15.15  savings, building and loan associations, the secretary of state 
 15.16  shall record the amended articles of incorporation and certify 
 15.17  that fact thereon, whereupon the conversion of such savings, 
 15.18  building and loan association into a savings bank shall become 
 15.19  final and complete and thereafter the signers of said amended 
 15.20  articles and their successors shall be a corporation, and have 
 15.21  the powers and be subject to the duties and obligations 
 15.22  prescribed by the laws of this state applicable to savings banks.
 15.23     Sec. 23.  Minnesota Statutes 1994, section 47.32, is 
 15.24  amended to read: 
 15.25     47.32 [CONVERTING INSTITUTION DEEMED CONTINUANCE; TRANSFER 
 15.26  OF PROPERTY AND RIGHTS.] 
 15.27     Upon the conversion of any savings bank into a savings, 
 15.28  building and loan association or into a federal association, and 
 15.29  of a savings, building and loan association or federal 
 15.30  association into a savings bank, the corporate existence of the 
 15.31  converting savings bank or association shall not terminate, and 
 15.32  the resulting association or savings bank shall be a continuance 
 15.33  of the converting savings bank or association; and all the 
 15.34  property of the converting savings bank or association 
 15.35  (including its rights) shall by operation of law vest in the 
 15.36  resulting association or savings bank as of the time when the 
 16.1   conversion becomes final and complete, and all of the 
 16.2   obligations of the converting savings bank or association become 
 16.3   those of the resulting association or savings bank.  Actions and 
 16.4   other judicial proceedings to which the converting savings bank 
 16.5   or association is a party may be prosecuted and defended as if 
 16.6   the conversion had not been made the detached facilities of the 
 16.7   savings bank shall become branches of the savings association or 
 16.8   federal association.  Upon conversion of any savings association 
 16.9   or federal association into a savings bank, the branches of the 
 16.10  savings association or federal association shall become detached 
 16.11  facilities of the savings bank, notwithstanding the limitations 
 16.12  on the number of facilities, distance limitations, geographic 
 16.13  limitation, notice requirements, and consent requirements 
 16.14  contained in sections 47.51 to 47.57. 
 16.15     Sec. 24.  [47.325] [APPEAL AND JUDICIAL REVIEW.] 
 16.16     A savings bank aggrieved by any action or inaction of the 
 16.17  commissioner under sections 47.27 to 47.32 may appeal under 
 16.18  sections 14.63 to 14.69.  The scope of judicial review in the 
 16.19  proceedings is as provided in those sections. 
 16.20     Sec. 25.  Minnesota Statutes 1994, section 47.62, 
 16.21  subdivision 4, is amended to read: 
 16.22     Subd. 4.  When more than one electronic financial terminal 
 16.23  is established and maintained at a single place of business by 
 16.24  the same person, or if a person wishes to make an application 
 16.25  that encompasses more than one place of business or location, a 
 16.26  single application and fee shall be sufficient.  For each 
 16.27  application, a $100 fee shall be paid to the commissioner, and 
 16.28  for each application for a change in pricing structure, a $10 
 16.29  fee shall be paid to the commissioner.  If the $100 fee or the 
 16.30  $10 fee is less than the costs incurred by the commissioner in 
 16.31  approving or disapproving the application, the fee shall be 
 16.32  equal to those costs. 
 16.33     Sec. 26.  Minnesota Statutes 1994, section 47.64, 
 16.34  subdivision 1, is amended to read: 
 16.35     Subdivision 1.  (a) Any person establishing and maintaining 
 16.36  an electronic financial terminal located separate and apart from 
 17.1   a financial institution's principal office, branch, or detached 
 17.2   facility for use by one type of financial institution shall, 
 17.3   upon written request, make its services available to any 
 17.4   requesting financial institution of similar type on a fair, 
 17.5   equitable, and nondiscriminatory basis approved by the 
 17.6   commissioner.  A financial institution requesting use of an 
 17.7   electronic financial terminal shall be permitted its use only if 
 17.8   the financial institution conforms to reasonable technical 
 17.9   operation standards which have been established by the 
 17.10  electronic financial terminal provider as approved by the 
 17.11  commissioner.  For purposes of this subdivision, the types of 
 17.12  financial institutions are:  (1) commercial banks and mutual 
 17.13  savings banks; (2) credit unions, industrial loan and thrift 
 17.14  companies, and regulated lenders under chapter 56; and (3) 
 17.15  savings and loan associations.  The services of an electronic 
 17.16  financial terminal may be made available to any type of 
 17.17  financial institution.  After March 1, 1979, or earlier if 
 17.18  determined by the commissioner to be technically feasible, an 
 17.19  electronic financial terminal which is used by or made available 
 17.20  to one type of financial institution shall be made available, 
 17.21  upon request, to other types of financial institutions on a 
 17.22  fair, equitable and nondiscriminatory basis as approved by the 
 17.23  commissioner.  The charges required to be paid to any person 
 17.24  establishing and maintaining an electronic financial terminal 
 17.25  shall be related to an equitable proportion of the direct costs 
 17.26  of establishing, operating, and maintaining the terminal plus a 
 17.27  reasonable return on those costs to the owner of the terminal.  
 17.28  The charges may provide for amortization of development costs 
 17.29  and capital expenditures over a reasonable period of time. 
 17.30     (b) Any person establishing and maintaining an electronic 
 17.31  financial terminal located on and as a part of a financial 
 17.32  institution's principal office, branch, or detached facility, or 
 17.33  lending office where deposits are not taken may, at the 
 17.34  financial institution's option, (1) maintain the electronic 
 17.35  financial terminal for the exclusive use of the financial 
 17.36  institution's customers; or (2) maintain the electronic 
 18.1   financial terminal for the use of the financial institution's 
 18.2   customers and make some or all of the electronic financial 
 18.3   terminal's services available to any other requesting financial 
 18.4   institution on a fair, equitable, and nondiscriminatory 
 18.5   basis approved by the commissioner. 
 18.6      Sec. 27.  Minnesota Statutes 1994, section 47.65, 
 18.7   subdivision 1, is amended to read: 
 18.8      Subdivision 1.  Any person may establish a transmission 
 18.9   facility in this state upon approval by the commissioner 
 18.10  pursuant to the provisions of this section, except that a 
 18.11  financial institution may establish a transmission facility in 
 18.12  this state after giving the commissioner written notice of its 
 18.13  intent to do so, provided that the commissioner does not issue 
 18.14  an order disallowing such establishment within 15 days after 
 18.15  receiving a completed notice.  Any such notice must be made 
 18.16  using a form prescribed by the commissioner.  A transmission 
 18.17  facility which is used by, or made available to, any financial 
 18.18  institution must be made available to all other financial 
 18.19  institutions upon request of such financial institution and 
 18.20  agreement by the financial institution to pay fees on a fair, 
 18.21  equitable, and nondiscriminatory basis approved by the 
 18.22  commissioner.  A person requesting use of a transmission 
 18.23  facility shall be permitted its use only if the person conforms 
 18.24  to reasonable technical operating standards which have been 
 18.25  established by the transmission facility provider as approved by 
 18.26  the commissioner.  The charges required to be paid to any person 
 18.27  establishing a transmission facility shall be related to an 
 18.28  equitable proportion of the direct costs of establishing, 
 18.29  operating and maintaining such facility plus a reasonable return 
 18.30  on those costs to the owner of the facility.  The charges may 
 18.31  provide for amortization of development costs and capital 
 18.32  expenditures over a reasonable period of time. 
 18.33     Sec. 28.  Minnesota Statutes 1994, section 47.65, 
 18.34  subdivision 2, is amended to read: 
 18.35     Subd. 2.  Before installation and operation, a transmission 
 18.36  facility application by a person who is required to submit an 
 19.1   application under subdivision 1 shall be submitted to the 
 19.2   commissioner on a form provided by the commissioner which states:
 19.3      (a) The location where the transmission facility will be 
 19.4   operated; 
 19.5      (b) The ownership of the transmission facility; 
 19.6      (c) If applicable, the bonding or insurance company which 
 19.7   has provided the bond for the transmission facility; and 
 19.8      (d) Such other information as the commissioner requires. 
 19.9      If the commissioner finds that (a) the facility will be 
 19.10  properly and safely managed, (b) the applicant is financially 
 19.11  sound, (c) there is a reasonable probability of success for the 
 19.12  facility, (d) the proposed charges for making the services of 
 19.13  the facility available to financial institutions are fair, 
 19.14  equitable and nondiscriminatory, and (e) all information has 
 19.15  been furnished by the applicant, the commissioner shall approve 
 19.16  the application within 90 days.  If the commissioner has not 
 19.17  denied the application within 90 days of the submission of the 
 19.18  application, the authorization shall be deemed granted.  For 
 19.19  each application, a $500 fee shall be paid to the commissioner.  
 19.20  For each application for change in pricing structure, a $50 fee 
 19.21  shall be paid to the commissioner.  If the $500 fee or the $50 
 19.22  fee is less than the costs incurred by the commissioner in 
 19.23  approving or disapproving the application, the application fee 
 19.24  shall be equal to those costs. 
 19.25     Sec. 29.  Minnesota Statutes 1994, section 48.01, 
 19.26  subdivision 2, is amended to read: 
 19.27     Subd. 2.  [BANKING INSTITUTION.] The term "banking 
 19.28  institution" means any bank, trust company, bank and trust 
 19.29  company, or mutual savings bank which is now or may hereafter be 
 19.30  organized under the laws of this state.  For purposes of 
 19.31  sections 48.38, 48.84, and 501B.10, subdivision 6, and to the 
 19.32  extent permitted by federal law, "banking institution" includes 
 19.33  any national banking association or affiliate exercising trust 
 19.34  powers in this state. 
 19.35     Sec. 30.  Minnesota Statutes 1994, section 48.15, is 
 19.36  amended by adding a subdivision to read: 
 20.1      Subd. 2a.  [AUTHORIZED ACTIVITIES.] The commissioner may 
 20.2   authorize a bank to undertake any activities, exercise any 
 20.3   powers, or make any investments that are authorized activities, 
 20.4   powers, or investments as of the date of final enactment of this 
 20.5   subdivision for any state savings bank doing business in this 
 20.6   state or become authorized activities, powers, or investments 
 20.7   for state savings banks after the date of final enactment of 
 20.8   this subdivision. 
 20.9      Sec. 31.  Minnesota Statutes 1994, section 49.01, is 
 20.10  amended by adding a subdivision to read: 
 20.11     Subd. 7.  [STATE BANK.] "State bank" for the purposes of 
 20.12  sections 49.02 to 49.41, shall mean any bank, savings bank, 
 20.13  trust company, or bank and trust company which is now or may 
 20.14  hereafter be organized under the laws of this state. 
 20.15     Sec. 32.  Minnesota Statutes 1994, section 49.42, is 
 20.16  amended to read: 
 20.17     49.42 [STATE BANK.] 
 20.18     As used in sections 49.42 to 49.46 "state bank" means any 
 20.19  bank (other than a mutual savings bank), savings bank, trust 
 20.20  company, or bank and trust company which is now or may hereafter 
 20.21  be organized under the laws of this state.  
 20.22     Sec. 33.  [50.001] [APPLICATION FOR CERTIFICATE OF 
 20.23  AUTHORITY; PROCEDURE.] 
 20.24     The procedures for the application and issuance of a 
 20.25  certificate of authority to a savings bank organized pursuant to 
 20.26  section 300.025 shall be those applicable to a state bank in 
 20.27  sections 46.041 to 46.045. 
 20.28     Sec. 34.  Minnesota Statutes 1994, section 50.01, is 
 20.29  amended to read: 
 20.30     50.01 [EXPEDIENCY ASCERTAINED.] 
 20.31     To enable the commissioner of commerce to determine the 
 20.32  expediency of the organization of a savings bank, as in this 
 20.33  chapter prescribed, the commissioner shall investigate and 
 20.34  ascertain: 
 20.35     (1) Whether greater convenience of access to a savings bank 
 20.36  will be afforded to any considerable number of depositors by 
 21.1   opening the proposed bank; 
 21.2      (2) Whether the population in the vicinity of the location 
 21.3   of the bank affords reasonable promise of adequate support 
 21.4   therefor; and 
 21.5      (3) Whether the responsibility, character, and general 
 21.6   fitness of the persons named as trustees directors in the 
 21.7   certificate are such as to command the confidence of the 
 21.8   community in the proposed bank.  
 21.9      Sec. 35.  Minnesota Statutes 1994, section 50.04, is 
 21.10  amended to read: 
 21.11     50.04 [BONDS OF TRUSTEES OR DIRECTORS.] 
 21.12     Every trustee director, before entering upon any duties, 
 21.13  shall give bond to the state in a penal sum of not less than 
 21.14  $5,000, with sureties approved by a judge of the district 
 21.15  court commissioner of commerce, conditioned for the faithful 
 21.16  discharge of those duties, and file the same for record with the 
 21.17  county recorder of the county, who, after record, shall transmit 
 21.18  it to the commissioner of commerce.  An action may be maintained 
 21.19  on this bond by any person aggrieved by breach of any of its 
 21.20  conditions, upon leave granted by any such judge of the district 
 21.21  court, for such damages as the plaintiff may be entitled to, not 
 21.22  exceeding its amount; and like successive actions may be 
 21.23  maintained until such amount is exhausted. 
 21.24     Sec. 36.  Minnesota Statutes 1994, section 50.05, is 
 21.25  amended to read: 
 21.26     50.05 [BOND OF TREASURER BONDS OF OFFICERS AND EMPLOYEES.] 
 21.27     Before entering upon any duties, the treasurer shall give 
 21.28  bond to the bank in such sum, not less than $10,000, as the 
 21.29  board of trustees shall prescribe, for the faithful discharge of 
 21.30  those duties, and at any time thereafter may be required by the 
 21.31  board to furnish additional security.  The board may also 
 21.32  require, at any time, from any other officer, employee, or 
 21.33  agent, such security as it deems necessary.  A savings bank 
 21.34  shall be protected against loss by reason of the unlawful act of 
 21.35  its officers or employees by a surety bond in an amount approved 
 21.36  by the board of directors and issued by a solvent corporate 
 22.1   surety in good standing authorized to do business in this state, 
 22.2   or by a fidelity insurance policy written by a solvent insurance 
 22.3   corporation in good standing authorized to do business in this 
 22.4   state.  The commissioner of commerce or the board of directors 
 22.5   of the savings bank may require an increase of the amount of the 
 22.6   bond whenever either deems it necessary.  This section shall not 
 22.7   require the bonding or insuring of officers or directors of a 
 22.8   savings bank not having active management or control of the 
 22.9   savings bank or of employees of a savings bank not holding 
 22.10  positions of trust.  Any bond given or contract of insurance 
 22.11  secured shall be in favor of the savings bank. 
 22.12     Sec. 37.  Minnesota Statutes 1994, section 50.06, is 
 22.13  amended to read: 
 22.14     50.06 [TRUSTEES DIRECTORS; FIRST BOARD.] 
 22.15     The business of every such stock savings bank shall be 
 22.16  managed by a board of not less than seven trustees directors.  
 22.17  The persons named in the certificate of authorization shall 
 22.18  constitute the first board.  Each vacancy shall be filled by the 
 22.19  board as soon as practicable, at a regular meeting thereof, 
 22.20  except when a resolution reducing the number of trustees 
 22.21  directors named in its charter to a number not less than seven 
 22.22  shall have been incorporated into its bylaws, and a copy thereof 
 22.23  filed with the commissioner of commerce, in which case vacancies 
 22.24  shall not be filled until the number has been reduced to that 
 22.25  specified in this resolution. The number may be increased to any 
 22.26  number specified in a like resolution, consented to, in writing, 
 22.27  by the commissioner of commerce.  
 22.28     Sec. 38.  [50.085] [POWERS.] 
 22.29     Subdivision 1.  [GENERALLY.] Every savings bank 
 22.30  incorporated pursuant to or operating under this chapter shall 
 22.31  be a body corporate; shall have all the powers enumerated, 
 22.32  authorized, and permitted by this chapter and other applicable 
 22.33  law; shall have other rights, privileges, and powers as may be 
 22.34  incidental to or reasonably necessary or appropriate for the 
 22.35  accomplishment of the objects and purposes of the savings bank; 
 22.36  and shall have those powers possessed by corporations organized 
 23.1   under chapter 300.  
 23.2      Subd. 2.  [BORROWING.] A savings bank may borrow money and 
 23.3   issue its obligations for the borrowed money, including but not 
 23.4   limited to obligations, bonds, notes, or other debt securities, 
 23.5   except as otherwise provided by this chapter or by rules of the 
 23.6   commissioner of commerce.  An obligation, bond, note, or other 
 23.7   debt security may include a written provision subordinating the 
 23.8   debt to claims of other creditors or of depositors.  Borrowings 
 23.9   may be secured by property of the savings association. 
 23.10     Subd. 3.  [FACILITATING ORGANIZATIONS.] A savings bank may 
 23.11  become a member of, purchase stock or securities in, deposit 
 23.12  money with, deal with, make reasonable payments or contributions 
 23.13  to, or comply with any other conditions of membership or credit 
 23.14  from any corporation or agency of the United States or of this 
 23.15  state, or of any other organization to the extent the 
 23.16  corporation, agency, or organization assists in furthering or 
 23.17  facilitating the saving bank's purposes, powers, or community 
 23.18  responsibilities. 
 23.19     Subd. 4.  [LOANS, CONTRACTS, AND LEASES.] A savings bank 
 23.20  may make, sell, purchase, invest in, and participate or 
 23.21  otherwise deal in loans and installment sale contracts and other 
 23.22  forms of indebtedness, and take any manner of security for the 
 23.23  loans and contracts.  A savings bank may also acquire and lease 
 23.24  or participate in the acquisition and leasing of personal 
 23.25  property. 
 23.26     Subd. 5.  [SAVINGS, LOANS, INVESTMENT.] A savings bank may 
 23.27  acquire deposits in the form of demand accounts, checking 
 23.28  accounts, negotiable order of withdrawal accounts, savings 
 23.29  accounts, time deposits, money market deposit accounts, treasury 
 23.30  tax and loan accounts, and other types of deposits, and pay 
 23.31  interest or dividends on those accounts, except that interest or 
 23.32  dividends must not be paid on demand deposit accounts.  A 
 23.33  savings bank may also accept memberships in the case of mutual 
 23.34  savings banks and reject applications for these memberships and 
 23.35  cancel memberships.  No capital stock savings bank shall accept 
 23.36  deposits in a sum exceeding 30 times the amount of its capital 
 24.1   stock and its actual surplus. 
 24.2      Subd. 6.  [INSURANCE OF ACCOUNTS.] A savings bank may 
 24.3   obtain and maintain insurance of its deposit accounts by the 
 24.4   federal deposit insurance corporation or any other federal 
 24.5   agency established for the purpose of insuring deposit accounts 
 24.6   in savings banks. 
 24.7      Subd. 7.  [SAFE DEPOSIT BOXES.] A savings bank may maintain 
 24.8   and let safes, boxes, or other receptacles for the safekeeping 
 24.9   of personal property upon agreed upon terms and conditions.  
 24.10  This subdivision does not supersede any inconsistent provision 
 24.11  of statute. 
 24.12     Subd. 8.  [DRAFTS.] A savings bank may issue drafts and 
 24.13  similar instruments drawn on the savings bank to aid in 
 24.14  effecting withdrawals and for other purposes of the savings 
 24.15  bank; accept for payment at a future date drafts drawn upon it 
 24.16  by its customers; and issue, advise, or confirm letters of 
 24.17  credit authorizing holders to draw drafts upon it or its 
 24.18  correspondents. 
 24.19     Subd. 9.  [FISCAL AGENT.] A savings bank may act as fiscal 
 24.20  agent of the United States, and, when so designated by the 
 24.21  Secretary of Treasury, perform, under regulations the secretary 
 24.22  prescribes, all reasonable duties as fiscal agent of the United 
 24.23  States as the secretary may require; and act as agent for any 
 24.24  instrumentality of the United States and as agent of this state 
 24.25  and any instrumentality of it. 
 24.26     Subd. 10.  [SERVICING.] A savings bank may service loans 
 24.27  and investments for others. 
 24.28     Subd. 11.  [INSURANCE AGENCY AND INSURANCE UNDERWRITING.] A 
 24.29  savings bank may engage in an insurance agency business, 
 24.30  directly or through a subsidiary.  
 24.31     Subd. 12.  [LIMITED TRUSTEESHIP.] A savings bank may act as 
 24.32  trustee or custodian of a self-employed retirement plan under 
 24.33  the Federal Self-Employed Individual Tax Retirement Act of 1962, 
 24.34  as amended, and of an individual retirement account under the 
 24.35  Federal Employee Retirement Income Security Act of 1974, as 
 24.36  amended, to the same extent permitted for state banks under 
 25.1   section 48.15.  All funds held in a fiduciary capacity by the 
 25.2   savings bank under the authority of this subdivision may be 
 25.3   commingled and consolidated for appropriate purposes of 
 25.4   investment if records reflecting each separate beneficial 
 25.5   interest are maintained by the fiduciary unless the 
 25.6   responsibility is lawfully assumed by another appropriate party. 
 25.7      Subd. 13.  [ESCROW.] A savings bank may engage in an escrow 
 25.8   business. 
 25.9      Subd. 14.  [TRUST POWERS.] Upon application to and approval 
 25.10  by the commissioner of commerce, a savings bank may act as 
 25.11  trustee, executor, administrator, personal representative, 
 25.12  conservator, custodian, guardian, or in any other fiduciary 
 25.13  capacity in which state banks, trust companies, or other 
 25.14  corporations are permitted to act, and receive reasonable 
 25.15  compensation for it.  A savings bank that has complied with 
 25.16  sections 48.36 to 48.43 and 48.475, and holds a certificate as 
 25.17  provided in section 48.37, may exercise the powers and 
 25.18  privileges set forth in sections 48.38, 48.475, 48.84, 48.841, 
 25.19  48.846, and 48.86.  A savings bank that has qualified and 
 25.20  obtained a certificate, as provided in sections 48.36 to 48.43, 
 25.21  may use in its corporate name or title, in addition to the words 
 25.22  "savings bank" or other words permitted by law, the words 
 25.23  "trust" or "trust company," and may display and make use of 
 25.24  signs, symbols, tokens, letterheads, cards, circulars, and 
 25.25  advertising stating or indicating that it is authorized to 
 25.26  transact the business authorized by those sections, and a 
 25.27  savings bank using the words "trust" or "trust company" is not 
 25.28  required to use the word "state" in its corporate name.  A 
 25.29  savings bank may not invest, pursuant to section 50.1465, in a 
 25.30  corporation that engages in activities described in this 
 25.31  subdivision, without first obtaining the approval of the 
 25.32  commissioner of commerce. 
 25.33     Subd. 15.  [SECURING DEPOSITS.] In addition to the 
 25.34  authority conferred in subdivision 2, a savings bank may pledge, 
 25.35  hypothecate, assign or transfer, or create a lien upon or charge 
 25.36  against its assets to secure:  (1) public funds, including money 
 26.1   or deposits of the United States or any instrumentality of it 
 26.2   and of this state or any instrumentality of it; (2) money or 
 26.3   deposits of a trustee in bankruptcy; (3) money borrowed in good 
 26.4   faith from other banks, trust companies, financial institutions, 
 26.5   or any financial agency created by act of Congress; (4) the 
 26.6   acquisition of real estate to be carried as an asset as provided 
 26.7   in section 47.10; (5) a liability that arises from a transfer of 
 26.8   a direct obligation of, or obligations that are fully guaranteed 
 26.9   as to principal and interest by, the United States government or 
 26.10  an agency of it that the savings bank is obligated to 
 26.11  repurchase; (6) money and deposits held in escrow; (7) money and 
 26.12  deposits if acting as a corporate fiduciary; and (8) treasury 
 26.13  tax and loan accounts as provided in section 50.171. 
 26.14     Subd. 16.  [DATA PROCESSING SERVICES.] A savings bank may 
 26.15  provide data processing services to others and act as a 
 26.16  custodian of records for others on a for-profit basis; and 
 26.17  utilize data processing services and place records of the 
 26.18  savings bank for storage and safekeeping with another person for 
 26.19  a fee. 
 26.20     Subd. 17.  [ELECTRONIC FINANCIAL TERMINALS.] A savings bank 
 26.21  may directly or indirectly acquire, place and operate, or 
 26.22  participate in the acquisition placement, and operation of 
 26.23  electronic financial terminals and transmission facilities, in 
 26.24  accordance with the requirements of sections 47.61 to 47.74. 
 26.25     Subd. 18.  [ADDITIONAL POWERS AUTHORIZED FOR STATE 
 26.26  BANKS.] A savings bank may exercise the powers that are 
 26.27  specifically enumerated by law for banks authorized to do 
 26.28  business under chapter 48. 
 26.29     Subd. 19.  [PARITY PROVISION.] (a) In addition to other 
 26.30  investments authorized by law and the powers conferred by this 
 26.31  chapter, and subject to the regulation of the commissioner of 
 26.32  commerce, a savings bank may, directly or through a subsidiary, 
 26.33  undertake any activities, exercise any powers, or make any 
 26.34  investments that any state bank or national bank located or 
 26.35  doing business in this state may undertake, exercise, or make as 
 26.36  of the date of enactment of this subdivision. 
 27.1      (b) The commissioner may authorize a savings bank to 
 27.2   undertake any activities, exercise any powers, or make any 
 27.3   investments that become authorized activities, powers, or 
 27.4   investments after the date of final enactment of this 
 27.5   subdivision for any state bank or national bank located or doing 
 27.6   business in this state. 
 27.7      (c) Subject to a rule of the commissioner, and subject to 
 27.8   the investment limits in section 50.1465, a subsidiary of a 
 27.9   savings bank may undertake any activities, exercise any powers, 
 27.10  or make any investments not authorized for any state bank or 
 27.11  national bank but authorized as of the date of final enactment 
 27.12  of this subdivision for any state bank or national bank 
 27.13  subsidiary located and doing business in this state. 
 27.14     (d) The commissioner may authorize a subsidiary of a 
 27.15  savings bank to undertake any activities, exercise any powers, 
 27.16  or make any investments that become authorized activities, 
 27.17  powers, or investments after the date of final enactment of this 
 27.18  subdivision for any state bank or national bank subsidiary 
 27.19  located and doing business in this state. 
 27.20     (e) The commissioner at any time may limit any activity, 
 27.21  power, or investment for any savings bank or savings bank 
 27.22  subsidiary under this subdivision or section 50.1465, 
 27.23  subdivision 1, clauses (2) and (3), for supervisory, legal, or 
 27.24  safety and soundness reasons.  A savings bank aggrieved by an 
 27.25  action of the commissioner under this subdivision may appeal the 
 27.26  action and the proceedings shall be conducted pursuant to 
 27.27  sections 14.63 to 14.69. 
 27.28     Sec. 39.  Minnesota Statutes 1994, section 50.11, is 
 27.29  amended to read: 
 27.30     50.11 [SECURITIES HELD FOR SAFEKEEPING; SAFE DEPOSIT BOXES; 
 27.31  LIMITATION OF LIABILITY.] 
 27.32     A mutual savings bank may receive for safekeeping for its 
 27.33  depositors obligations of the United States or its possessions 
 27.34  or of a state or territory of the United States, or of any 
 27.35  political subdivision of any such state or territory, and it may 
 27.36  provide for, and hire to, its depositors safe deposit boxes in 
 28.1   which to keep securities and valuable papers, but the liability 
 28.2   of a savings bank to any person or association of persons on 
 28.3   account of hiring such safe deposit box or boxes shall in no 
 28.4   event exceed $20,000.  
 28.5      Sec. 40.  Minnesota Statutes 1994, section 50.13, is 
 28.6   amended to read: 
 28.7      50.13 [REAL ESTATE.] 
 28.8      Any such A savings bank may purchase, hold, or convey land 
 28.9   sold upon foreclosure of mortgages owned by it, or upon 
 28.10  judgments or decrees in its favor, or in settlement of debts, or 
 28.11  received in exchange as part of the consideration of real estate 
 28.12  sold by it.  Real estate so received in exchange shall not be 
 28.13  carried on the books of the bank at a price exceeding the cost 
 28.14  of that exchanged, less the cash payment, and all real estate so 
 28.15  acquired shall be sold within ten years after its acquirement, 
 28.16  unless the time is extended by the commissioner of commerce on 
 28.17  application of the board of trustees directors. 
 28.18     Sec. 41.  Minnesota Statutes 1994, section 50.14, 
 28.19  subdivision 1, is amended to read: 
 28.20     Subdivision 1.  Except as it relates to the investment of 
 28.21  trust funds by corporate trustees or by individual trustees, the 
 28.22  term "authorized securities" whenever used in the statutes and 
 28.23  laws of this state shall be understood as referring to the 
 28.24  following described securities in which the trustees directors 
 28.25  of any savings bank shall invest the money deposited therein and 
 28.26  which at the time of the purchase thereof are included in one or 
 28.27  more of the following classes. 
 28.28     Sec. 42.  Minnesota Statutes 1994, section 50.14, 
 28.29  subdivision 5, is amended to read: 
 28.30     Subd. 5.  (1) Class four shall be: 
 28.31     (a) Notes or bonds secured by mortgages or trust deeds on 
 28.32  unencumbered real estate, whether in fee or in a leasehold of a 
 28.33  duration not less than ten years beyond the maturity of the 
 28.34  loan, in any state of the United States, worth at least twice 
 28.35  the amount loaned thereon; 
 28.36     (b) Notes or bonds secured by mortgages or trust deeds on 
 29.1   unencumbered real estate in clause (1)(a) where the notes or 
 29.2   bonds do not exceed 80 percent of the appraised value of the 
 29.3   security for the same, provided that the notes or bonds are 
 29.4   payable in installments aggregating not less than five percent 
 29.5   of the original principal a year in addition to the interest; 
 29.6   or, are payable on a regular amortization basis in equal 
 29.7   installments, including principal and interest, these 
 29.8   installments to be payable monthly in amounts that the debt will 
 29.9   be fully paid in not to exceed 30 years if the security is 
 29.10  nonagricultural real estate, and these installments to be 
 29.11  payable annually or semiannually in amounts that the debt will 
 29.12  be fully paid in not to exceed 25 years if the security is 
 29.13  agricultural real estate.  A construction loan is deemed 
 29.14  amortized as required by this clause if the first installment 
 29.15  thereon is payable not later than 18 months after the date of 
 29.16  the first advance in the case of residential construction or not 
 29.17  later than 36 months after the date of the first advance in the 
 29.18  case of nonresidential construction; and 
 29.19     (c) Notes or bonds secured by mortgages or trust deeds on 
 29.20  unencumbered real estate in clause (1)(a) which are in an 
 29.21  original principal amount of $100,000 or more and which do not 
 29.22  exceed 95 percent of the appraised value of the security for the 
 29.23  same which may be payable in the manner as the trustees 
 29.24  directors of the savings bank prescribe, provided that 
 29.25  construction loans made by a savings bank pursuant to this 
 29.26  clause (1)(c) do not exceed in the aggregate five percent of the 
 29.27  assets of the savings bank. 
 29.28     (2) Class four investments shall be made only on report of 
 29.29  a committee directed to investigate the same and report its 
 29.30  value, according to the judgment of its members, and its report 
 29.31  shall be preserved among the bank's records. 
 29.32     (3) Notwithstanding anything to the contrary in clause 
 29.33  (1)(b), a mutual savings bank organized under the laws of this 
 29.34  state may invest in notes or bonds secured by mortgages or trust 
 29.35  deed where the notes or bonds do not exceed 95 percent of the 
 29.36  appraised value of the security for the same.  Except as 
 30.1   modified herein, the other provisions of clause (1)(b) apply. 
 30.2      (4) For purposes of this subdivision, real estate is deemed 
 30.3   unencumbered if the only existing mortgage or lien against the 
 30.4   real estate is a first mortgage lien in favor of the savings 
 30.5   bank making a second mortgage loan or if the total unpaid 
 30.6   aggregate of all outstanding liens against the same real estate 
 30.7   does not exceed 80 percent of its appraised value. 
 30.8      (5) Renegotiable rate notes or bonds secured by mortgages 
 30.9   or trust deeds where the notes or bonds do not exceed 95 percent 
 30.10  of the appraised value of the security for the same. 
 30.11     For the purposes of this clause, a renegotiable rate 
 30.12  mortgage loan is a loan issued for a term of three years to five 
 30.13  years, secured by a mortgage maturing in not to exceed 30 years, 
 30.14  and automatically renewable at equal intervals after the 
 30.15  original loan term which may be up to six months shorter or 
 30.16  longer than subsequent terms.  The loan must be repayable in 
 30.17  equal monthly installments of principal and interest during the 
 30.18  loan term, in an amount at least sufficient to amortize a loan 
 30.19  with the same principal and at the same interest rate over the 
 30.20  remaining life of the mortgage. 
 30.21     In the mortgage documents, the savings bank must grant to 
 30.22  the borrower an option to renew the loan for a new term, but not 
 30.23  beyond the maturity date of the mortgage, at a new interest rate 
 30.24  which shall be the savings bank's current market rate of 
 30.25  interest on similar loans determined 60 days before the due date 
 30.26  of the loan:  provided, that the maximum interest rate increase 
 30.27  shall be equal to one-half of one percent per year multiplied by 
 30.28  the number of years in the loan term with a maximum net increase 
 30.29  of five percent over the life of the mortgage.  Interest rate 
 30.30  increases are optional with the savings bank; net decreases from 
 30.31  the previous loan term are mandatory. 
 30.32     The borrower may not be charged costs connected with the 
 30.33  renewal of the loan. 
 30.34     Sixty days before the due date of the loan, the savings 
 30.35  bank shall send a written notification to the borrower 
 30.36  containing the following information:  (i) The date on which the 
 31.1   entire balance of borrower's loan is due and payable; (ii) a 
 31.2   statement that the loan will be renewed automatically by the 
 31.3   savings bank at the rate specified in the notice unless the 
 31.4   borrower pays the loan by the due date; (iii) the amount of the 
 31.5   monthly payment, calculated according to the new rate determined 
 31.6   at the time of notice; (iv) a statement that the borrower may 
 31.7   prepay the loan without penalty at any time after the original 
 31.8   loan becomes due and payable; and (v) the name and phone number 
 31.9   of a savings bank employee who will answer the borrowers' 
 31.10  questions concerning the information in the notice. 
 31.11     An applicant for a renegotiable rate mortgage loan must be 
 31.12  given, at the time an application is requested, written 
 31.13  disclosure materials prepared in reasonably simple terms that 
 31.14  contain at least the following information:  (i) An explanation 
 31.15  of how a renegotiable rate mortgage differs from a standard 
 31.16  fixed rate mortgage; (ii) an example of a renegotiable rate 
 31.17  mortgage indicating the maximum possible interest rate increase 
 31.18  and monthly payment calculated on that rate at the time of the 
 31.19  first renewal; and (iii) an explanation of how the savings bank 
 31.20  determines what the rate will be at the end of each loan term. 
 31.21     (6) An investment in notes or bonds secured by mortgages or 
 31.22  trust deeds on real estate in fee or in a leasehold may exceed 
 31.23  the 80 percent requirement in paragraph (1), clause (b), and the 
 31.24  95 percent requirement in paragraph (2), if the amount of the 
 31.25  loan in excess of those limits is insured or guaranteed by a 
 31.26  private mortgage insurer that the Federal Home Loan Mortgage 
 31.27  Corporation or the Federal National Mortgage Association have 
 31.28  determined to be a qualified private insurer. 
 31.29     Sec. 43.  Minnesota Statutes 1994, section 50.14, 
 31.30  subdivision 7, is amended to read: 
 31.31     Subd. 7.  Class six shall be the "eligible obligations" of 
 31.32  "qualifying railroad corporations," both as hereinafter defined. 
 31.33     (A) A "qualifying railroad corporation" shall be one which 
 31.34  at the time of investment 
 31.35     (1) Shall have been incorporated under the laws of the 
 31.36  United States or of any state thereof or of the District of 
 32.1   Columbia, and 
 32.2      (2) Shall own or operate within the United States not less 
 32.3   than 500 miles of standard gauge railroad lines exclusive of 
 32.4   sidings, or shall have had, for its five preceding fiscal years, 
 32.5   average gross railway operating revenues of at least $10,000,000 
 32.6   annually, or shall own or operate railroad terminal property 
 32.7   located in a city within the United States having at least 
 32.8   200,000 population, and 
 32.9      (3) Shall not have been in default in the payment of any 
 32.10  part of the principal or interest owing by it upon any part of 
 32.11  its funded indebtedness, at any times during its current fiscal 
 32.12  year and its five consecutive fiscal years immediately prior 
 32.13  thereto, except that if the corporation shall have been 
 32.14  reorganized in receivership or bankruptcy within such period 
 32.15  such corporation shall not have been in such default since the 
 32.16  effective date of reorganization, and 
 32.17     (4) Shall not have fixed interest obligations in excess of 
 32.18  60 percent of the total sum of (a) its fixed interest 
 32.19  obligations, (b) obligations, if any, bearing interest on a 
 32.20  contingent basis, (c) preferred stock, if any, at par or stated 
 32.21  value, (d) common stock at par or stated value and (e) earned 
 32.22  surplus, and 
 32.23     (5) Shall have had net earnings (a) in its five fiscal 
 32.24  years immediately preceding time of purchase, of an average 
 32.25  annual amount not less than 1-1/2 times the fixed charges of the 
 32.26  year immediately preceding time of purchase, and (b) in four of 
 32.27  its five fiscal years immediately preceding time of purchase and 
 32.28  in its fiscal year immediately preceding time of purchase, not 
 32.29  less than the fixed charges of those respective years, except 
 32.30  that if the corporation shall have been reorganized in 
 32.31  receivership or bankruptcy within such period, its net earnings 
 32.32  for each year shall have been not less than the fixed charges of 
 32.33  the reorganized company.  As used herein "net earnings" shall be 
 32.34  defined as gross operating and nonoperating income of a railroad 
 32.35  corporation or its predecessor corporation, minus traffic and 
 32.36  transportation expenses, maintenance, depreciation, rent of 
 33.1   equipment and joint facilities, and other operating expenses, 
 33.2   and taxes excluding income and profits taxes.  As used herein 
 33.3   "fixed charges" shall be defined as interest on debt on which 
 33.4   there is an unqualified obligation to pay interests, leased line 
 33.5   rentals and amortization of debt discount and expense, except 
 33.6   that if a corporation has been reorganized in receivership or 
 33.7   bankruptcy within five years prior to time of purchase "fixed 
 33.8   charges" shall be the fixed charges of the reorganized company. 
 33.9      (B) "Eligible obligations" shall be bonds, notes or other 
 33.10  obligations which 
 33.11     (1) Shall have been issued by a qualifying railroad 
 33.12  corporation, or shall have been assumed or guaranteed as to 
 33.13  principal and interest by a qualifying railroad corporation, and 
 33.14     (2) Shall bear interest at a fixed rate, and 
 33.15     (3) Shall have a definite maturity date, and 
 33.16     (4) Shall be secured by either (a) a lien upon railroad 
 33.17  lines which shall be a first lien upon at least two-thirds of 
 33.18  the total mileage covered by such lien and upon at least 100 
 33.19  miles of main lines or (b) a first mortgage or lien on railroad 
 33.20  terminal property and assumed or guaranteed as to principal and 
 33.21  interest by two or more qualifying railroad corporations. 
 33.22     (C) No such savings bank shall invest in securities of 
 33.23  Class Six to an amount exceeding in the aggregate 15 percent of 
 33.24  its deposits; nor in securities of Class Six secured by lien 
 33.25  upon railroad lines, issued, guaranteed, or assumed by any one 
 33.26  railroad corporation to an amount exceeding two percent of its 
 33.27  deposits; nor in securities of Class Six secured by lien upon 
 33.28  any one railroad terminal property to an amount exceeding one 
 33.29  percent of its deposits. 
 33.30     The requirements set forth herein governing investments in 
 33.31  securities under this subdivision shall affect only those 
 33.32  securities acquired after the effective date of Laws 1945, 
 33.33  chapter 140. 
 33.34     Sec. 44.  Minnesota Statutes 1994, section 50.14, 
 33.35  subdivision 8, is amended to read: 
 33.36     Subd. 8.  Class seven shall be farm loan bonds issued by 
 34.1   any federal land bank, or by a joint stock land bank in the 
 34.2   Federal Reserve district in which Minnesota is situated, in 
 34.3   accordance with the provisions of an act of Congress of the 
 34.4   United States of July 17, 1916, known and designated as "The 
 34.5   Federal Farm Loan Act," and acts amendatory thereto; stocks, 
 34.6   bonds, and obligations of the Federal Home Loan Banks 
 34.7   established by act of Congress known as the Federal Home Loan 
 34.8   Bank Act approved July 22, 1932, and acts amendatory thereto; 
 34.9   and bonds issued by the federal land banks, federal intermediate 
 34.10  credit banks, and the banks for cooperatives in accordance with 
 34.11  the provisions of an act of Congress of the United States known 
 34.12  as the Farm Credit Act of 1971, and acts amendatory thereto. 
 34.13     Sec. 45.  Minnesota Statutes 1994, section 50.145, is 
 34.14  amended to read: 
 34.15     50.145 [AUTHORIZED INVESTMENTS.] 
 34.16     Any mutual savings bank subject to the supervision of the 
 34.17  commissioner of commerce of the state of Minnesota shall in 
 34.18  addition to other investments authorized by law have the power 
 34.19  to purchase and hold as investments such bonds and securities as 
 34.20  are legal investments for state banks and trust companies in 
 34.21  Minnesota, but subject however to any limitation in such power 
 34.22  that may be imposed by the commissioner of commerce, and the 
 34.23  total amount of the investments made by any bank pursuant to 
 34.24  this section and held at any one time shall not exceed 20 
 34.25  percent of the deposit liability of such bank, and not to exceed 
 34.26  three-fourths of one percent of the deposit liability of such 
 34.27  bank may be invested pursuant hereto in the securities or 
 34.28  obligations of any one obligor.  
 34.29     Sec. 46.  Minnesota Statutes 1994, section 50.146, is 
 34.30  amended to read: 
 34.31     50.146 [AUTHORIZED INVESTMENTS; CORPORATIONS.] 
 34.32     Subdivision 1.  In addition to other investments authorized 
 34.33  by law, a mutual savings bank may invest in the following: 
 34.34     (a) The preferred stocks of any corporation organized under 
 34.35  the laws of the United States or of any state, except banks, 
 34.36  bank holding companies and trust companies, provided the net 
 35.1   earnings of such corporation available for its fixed charges for 
 35.2   five fiscal years next preceding the date of investment shall 
 35.3   have averaged per year not less than 1-1/2 times the sum of its 
 35.4   annual fixed interest charges, if any, its annual maximum 
 35.5   contingent interest, if any, and its annual preferred dividend 
 35.6   requirements; and during either of the last two years of such 
 35.7   period, such net earnings shall have been not less than 1-1/2 
 35.8   times the sum of its fixed interest charges, if any, contingent 
 35.9   interest, if any, and preferred dividend requirements for such 
 35.10  year.  
 35.11     (b) The common stocks of any corporation organized under 
 35.12  the laws of the United States or of any state, except banks, 
 35.13  bank holding companies and trust companies, provided such stocks 
 35.14  are registered on a national securities exchange, and such 
 35.15  corporation shall have earned and paid cash dividends on its 
 35.16  common stocks in each year for a period of ten fiscal years next 
 35.17  preceding the date of investment.  
 35.18     (c) The stocks and bonds, notes, debentures or any other 
 35.19  obligation of any corporation organized under the laws of the 
 35.20  United States or of any state, except the stock of banks, bank 
 35.21  holding companies and trust companies located in the Ninth 
 35.22  Federal Reserve District, provided such investment shall be made 
 35.23  with such prudence, discretion, and intelligence as will protect 
 35.24  the safety of the principal of such investment as well as the 
 35.25  income to be derived therefrom.  
 35.26     Subd. 2.  No investment shall be made by a mutual savings 
 35.27  bank pursuant to subdivision 1 in any corporation if the total 
 35.28  amounts so invested by it exceeds an amount equal to 15 percent 
 35.29  of its assets, or if the total investment in any one corporation 
 35.30  exceeds (1) in amount, one-half of one percent of the assets of 
 35.31  the savings bank, or (2) in number of shares, one percent of the 
 35.32  total issued and outstanding shares of stock of such 
 35.33  corporation, or if the total investment pursuant to the 
 35.34  provisions of paragraph (c) of subdivision 1 exceeds an amount 
 35.35  equal to three percent of the assets of the savings bank, nor 
 35.36  shall any investment be made in any corporation with assets of 
 36.1   less than ten million dollars.  
 36.2      Subd. 3.  Investments made pursuant to subdivision 1 shall 
 36.3   be limited to mutual savings banks organized under the laws of 
 36.4   this state.  
 36.5      Sec. 47.  Minnesota Statutes 1994, section 50.1465, is 
 36.6   amended to read: 
 36.7      50.1465 [AUTHORIZED INVESTMENTS; SERVICE CORPORATIONS.] 
 36.8      Subdivision 1.  [GENERALLY.] In addition to other 
 36.9   investments authorized by law, a mutual savings bank may invest 
 36.10  in the following:  
 36.11     The capital stock, obligations, or other securities of any 
 36.12  corporation organized under the laws of this state if all or a 
 36.13  majority of the capital stock of the corporation is owned by the 
 36.14  mutual savings bank, and if substantially all of the activity of 
 36.15  the corporation consists of originating, making, purchasing, 
 36.16  selling and servicing loans, and participation in loans, secured 
 36.17  by real estate including brokerage and warehousing of the real 
 36.18  estate loans:  
 36.19     (1) activities in which the savings bank could engage 
 36.20  directly; 
 36.21     (2) activities in which a state bank or national bank, or a 
 36.22  subsidiary of a state bank or national bank, is authorized to 
 36.23  engage as of the date of final enactment of this section; and 
 36.24     (3) activities in which any state bank or national bank 
 36.25  becomes authorized to engage after the date of final enactment 
 36.26  of this section, which are authorized by the commissioner.  
 36.27     Subd. 2.  [RESTRICTION.] No mutual savings bank may make 
 36.28  any investment under subdivision 1 in a subsidiary that engages 
 36.29  primarily in activities in which the savings bank could not 
 36.30  engage directly if its aggregate outstanding investment under 
 36.31  this section in all subsidiaries that engage in activities in 
 36.32  which the savings bank could not engage directly exceeds three 
 36.33  25 percent of the assets capital stock and surplus of the mutual 
 36.34  savings bank.  
 36.35     Sec. 48.  Minnesota Statutes 1994, section 50.148, is 
 36.36  amended to read: 
 37.1      50.148 [AUTHORIZED INVESTMENTS; MANUFACTURED HOME LOANS.] 
 37.2      In addition to other investments authorized by law, a 
 37.3   savings bank organized and operated pursuant to this chapter, 
 37.4   may make loans upon the security of manufactured homes, and any 
 37.5   equipment installed or to be installed therein, in an amount not 
 37.6   exceeding $25,000 $30,000 repayable in installments, and may 
 37.7   make a charge for such loan computed at a rate not exceeding 12 
 37.8   percent per annum upon the unpaid principal balance of the 
 37.9   amount financed, and the installment payments shall not exceed 
 37.10  12 15 years and 32 days from the date of the loan, 
 37.11  notwithstanding that such loan is required to be repaid in 
 37.12  installments or that the loan is secured by mortgage, pledge, or 
 37.13  other collateral.  The provisions of sections 48.154 to 
 37.14  48.157 Section 50.1485, subdivision 2, shall apply applies to 
 37.15  all manufactured home loans made pursuant to the authority 
 37.16  granted by this section.  The authority granted by this section 
 37.17  shall not extend to loans which finance the acquisition of 
 37.18  inventory by a manufactured home dealer.  A savings bank may 
 37.19  purchase or invest in notes, bonds and retail installment sales 
 37.20  contracts secured by or constituting first liens upon 
 37.21  manufactured homes. 
 37.22     Sec. 49.  [50.1485] [LENDING AUTHORITY.] 
 37.23     Subdivision 1.  [GENERALLY.] In addition to other 
 37.24  investments authorized by law, a savings bank may make, 
 37.25  purchase, or invest in: 
 37.26     (a) loans secured by the pledge of policies of life 
 37.27  insurance, the assignment of which is properly acknowledged by 
 37.28  the insurer; 
 37.29     (b) consumer loans, which may be unsecured or secured by 
 37.30  personal or real property.  Consumer loans include, but are not 
 37.31  limited to, closed-end installment loans, single payment loans, 
 37.32  nonamortizing loans, open-end revolving line of credit loans, 
 37.33  credit card loans and extensions of credit, and overdraft 
 37.34  protection loans.  For the purpose of this paragraph, "consumer 
 37.35  loan" means a loan made by the savings bank in which:  (1) the 
 37.36  debtor is a person other than an organization; (2) the debt is 
 38.1   incurred primarily for personal, family, or household purpose; 
 38.2   and (3) the debt is payable in installments or a finance charge 
 38.3   is made; 
 38.4      (c) secured and unsecured loans to organizations and 
 38.5   natural persons for business or commercial purposes.  For the 
 38.6   purpose of this paragraph, "organizations" means a corporation, 
 38.7   government or governmental subdivision, or agency, trust, 
 38.8   estate, partnership, limited liability partnership, limited 
 38.9   liability company, joint venture, cooperative, or association.  
 38.10  "Business or commercial purpose" means a purpose other than 
 38.11  personal, family, household, or agricultural purpose; 
 38.12     (d) secured and unsecured loans for agricultural purposes.  
 38.13  For the purpose of this paragraph, "agricultural purpose" means 
 38.14  a purpose relating to the production, harvest, exhibition, 
 38.15  marketing, transportation, processing, or manufacture of 
 38.16  agricultural products.  "Agricultural products" includes 
 38.17  agricultural, horticultural, viticultural, and dairy products, 
 38.18  livestock, wildlife, poultry, bees, and forest products, and 
 38.19  products raised or produced on farms, including processed or 
 38.20  manufactured products; 
 38.21     (e) credit sale contracts, which means a sale of goods, 
 38.22  services, or an interest in land in which credit is granted by a 
 38.23  seller who regularly engages as a seller in credit transactions 
 38.24  of the same kind, and the debt is payable in installments or a 
 38.25  finance charge is made; 
 38.26     (f) loans on the security of deposit accounts; 
 38.27     (g) real estate loans, subject to the conditions applicable 
 38.28  to savings associations under sections 51A.38 and 51A.385.  
 38.29  "Real estate loans" include a loan or other obligation secured 
 38.30  by a first lien on real estate in fee or in a leasehold 
 38.31  extending or renewable automatically for a period of at least 
 38.32  ten years beyond the date scheduled for the final principal 
 38.33  payment of the loan or obligation, or a transaction out of which 
 38.34  a first lien or claim is created against the real estate, 
 38.35  including the purchase of the real estate in fee by a savings 
 38.36  bank and the concurrent or immediate sale of it on installment 
 39.1   contract; 
 39.2      (h) secured or unsecured loans for the purpose of repair, 
 39.3   improvement, rehabilitation, or furnishing of real estate; 
 39.4      (i) loans for the purpose of financing or refinancing an 
 39.5   ownership interest in certificates of stock, certificates of 
 39.6   beneficial interest, or other evidence of an ownership interest 
 39.7   in, or a proprietary lease from a corporation, limited liability 
 39.8   company, trust, limited liability partnership, or partnership 
 39.9   formed for the purpose of the cooperative ownership of real 
 39.10  estate, secured by the assignment or transfer of certificates or 
 39.11  other evidence of ownership of the borrower; 
 39.12     (j) loans guaranteed or insured, in whole or in part, by 
 39.13  the United States or any of its instrumentalities; 
 39.14     (k) issuance of letters of credit or other similar 
 39.15  arrangements; and 
 39.16     (l) any other type of loan authorized by rule of the 
 39.17  commissioner. 
 39.18     Subd. 2.  [LOANS AND EXTENSIONS OF CREDIT.] (a) A savings 
 39.19  bank may extend credit and make loans under section 47.59 on the 
 39.20  same terms and subject to the same conditions as apply to other 
 39.21  lenders under that chapter.  A person may enter into a credit 
 39.22  sale or service contract for sale to a savings bank, and a 
 39.23  savings bank may purchase and enforce the contract, under the 
 39.24  terms and conditions set forth in section 47.59, subdivisions 1 
 39.25  and 4 to 14. 
 39.26     (b) A savings bank may make or purchase extensions of 
 39.27  credit authorized by sections 47.20, subdivision 1, 3, or 4a; 
 39.28  47.204; 47.21; 47.60; 48.153 to 48.155; 48.185; 48.195; 59A.15; 
 39.29  168.66 to 168.77; 334.01; 334.011; 334.012, and any other 
 39.30  applicable law.  The extensions of credit or purchases of 
 39.31  extensions of credit may, but need not, be made under those 
 39.32  sections in lieu of the authority set forth in subdivision 2, 
 39.33  and if so, are subject to those sections, and not subdivision 
 39.34  2.  A savings bank may also charge an organization any rate of 
 39.35  interest and any charges agreed to by the organization and may 
 39.36  calculate and collect finance and other charges in any manner 
 40.1   agreed to by that organization.  Except for extensions of credit 
 40.2   the savings bank elects to make under section 334.01, 
 40.3   subdivision 2, 334.011, or 334.012, the provisions of chapter 
 40.4   334 do not apply to extensions of credit made pursuant to this 
 40.5   section or the sections mentioned in this subdivision. 
 40.6      Subd. 3.  [LIMIT ON TOTAL LIABILITIES.] The total 
 40.7   liabilities to a savings bank, as principal, guarantor, or 
 40.8   endorser of an individual, including the liabilities of a 
 40.9   corporation which the individual owns or controls a majority 
 40.10  interest, a partnership, limited liability partnership, limited 
 40.11  liability company, or unincorporated association, and in case of 
 40.12  a corporation of all subsidiaries of it in which the corporation 
 40.13  owns or controls a majority interest, shall never exceed the 
 40.14  limit provided for state banks under section 48.24. 
 40.15     Subd. 4.  [REAL ESTATE LOANS.] In the case of any 
 40.16  investment made by a savings bank in a loan secured by a 
 40.17  mortgage on real property, including a real estate loan, in the 
 40.18  event the ownership of the real estate security or any part of 
 40.19  it becomes vested in a person other than the party or parties 
 40.20  originally executing the security instruments, and provided 
 40.21  there is not an agreement in writing to the contrary, a savings 
 40.22  bank may, without notice to the other party or parties, deal 
 40.23  with the successor or successors in interest with reference to 
 40.24  the mortgage and the debt secured in the same manner as with the 
 40.25  party or parties, and may forbear to sue or may extend time for 
 40.26  payment of or otherwise modify the terms of the debt secured, 
 40.27  without discharging or in any way affecting the original 
 40.28  liability of the party or parties or upon the debt secured. 
 40.29     Subd. 5.  [LEASES OF PERSONAL PROPERTY.] A savings bank may 
 40.30  acquire and lease or participate in the acquisition and leasing 
 40.31  of personal property to customers, and may incur additional 
 40.32  obligations incidental to becoming an owner and lessor of the 
 40.33  property to the same extent, and subject to the same conditions, 
 40.34  as state banks under section 48.152. 
 40.35     Sec. 50.  Minnesota Statutes 1994, section 50.155, is 
 40.36  amended to read: 
 41.1      50.155 [PURCHASE OF CERTAIN MORTGAGE LOANS.] 
 41.2      Savings banks and mutual savings banks that are subject to 
 41.3   the supervision of the commissioner of commerce are authorized 
 41.4   to make or purchase loans secured by real estate mortgage the 
 41.5   payment of which is guaranteed in whole or in part by the United 
 41.6   States or any instrumentality thereof under the Servicemen's 
 41.7   Readjustment Act of 1944 and amendments thereof provided that 
 41.8   the unguaranteed portion of such loan does not exceed 70 percent 
 41.9   of the appraised value of the security.  
 41.10     Sec. 51.  Minnesota Statutes 1994, section 50.17, is 
 41.11  amended to read: 
 41.12     50.17 [DEPOSITS, DIVIDENDS, INTEREST, BONUS, BENEFITS.] 
 41.13     Subdivision 1.  [DEPOSIT ACCOUNTS.] Every deposit and all 
 41.14  dividends credited thereto shall be repaid, after demand, in 
 41.15  such manner, at such times, and after such previous notice as 
 41.16  the board of trustees shall prescribe, but the savings bank 
 41.17  shall not be required to pay a greater dividend than four 
 41.18  percent per annum.  Depositors shall receive, as nearly as may 
 41.19  be, all the profits after deducting necessary expenses, and 
 41.20  setting aside annually such sum as the board deems expedient, 
 41.21  for a surplus fund for the security of its depositors, and to 
 41.22  meet contingencies, until this fund shall amount to 15 percent 
 41.23  of its deposits.  No interest shall be allowed on any money for 
 41.24  a longer time than the same is actually on deposit; except that 
 41.25  deposits made not later than the tenth business day of the month 
 41.26  commencing any semiannual or quarterly interest period, or the 
 41.27  tenth business day of any other month, or withdrawn within the 
 41.28  last three business days of the month ending a quarterly or 
 41.29  semiannual interest period, may be treated as on deposit for the 
 41.30  entire period or month in which it was so deposited or 
 41.31  withdrawn.  No dividend shall be declared, credited, or paid 
 41.32  unless authorized by yea and nay vote of the board duly entered 
 41.33  upon its minutes, and when any dividend in excess of that earned 
 41.34  and on hand shall be declared or credited, the trustees voting 
 41.35  therefor shall be jointly and severally liable to the bank for 
 41.36  the excess.  The board of every such bank whose surplus amounts 
 42.1   to 15 percent of its deposits shall, at least once in three 
 42.2   years, divide proportionately the excess among its depositors as 
 42.3   an extra dividend, and for that purpose may classify them 
 42.4   according to character, amount and duration of dealings, and so 
 42.5   regulate the dividend that each of the same class shall receive 
 42.6   the same ratable proportion.  A deposit account with a savings 
 42.7   bank is subject to a lien for the payment of charges that may 
 42.8   accrue on the account under this chapter.  A deposit account is 
 42.9   subject to a debt offset for the debts of the deposit account 
 42.10  holder to the savings bank.  Deposit accounts may not be 
 42.11  assessed for any debts or losses of the savings bank. 
 42.12     Subd. 2.  [DIVIDENDS INTEREST.] Every such savings bank may 
 42.13  also enter into agreements with depositors designed to promote 
 42.14  systematic thrift by providing for regular deposits over agreed 
 42.15  periods of time and in connection with any such plan to provide 
 42.16  thrift incentive may classify depositors generally according to 
 42.17  character, amount, regularity or duration of deposits or type of 
 42.18  agreement, and may agree to pay and provide for different rates 
 42.19  of interest, bonuses and benefits based on any such 
 42.20  classification.  All depositors of the same class shall be 
 42.21  entitled to receive interest, bonuses and benefits of 
 42.22  substantially the same value.  When it shall appear to the 
 42.23  commissioner from an examination, or otherwise, that the 
 42.24  classification of depositors as to character, amount, regularity 
 42.25  or duration of deposits or type of agreement and the different 
 42.26  rates of interest, bonuses and benefits based on any such 
 42.27  classification are not in the best interests of the bank and its 
 42.28  depositors, the commissioner may by written order direct that 
 42.29  changes be made and thereafter such changes shall be 
 42.30  incorporated in any agreements entered into by the bank.  The 
 42.31  savings bank shall determine the rate and amount of interest, if 
 42.32  any, to be paid on or credited to deposit accounts.  The savings 
 42.33  bank may establish reasonable classifications of accounts based 
 42.34  on the types of accounts, the length of time accounts are 
 42.35  continued in effect, the size of initial deposits into accounts, 
 42.36  the minimum balances of accounts required for payment of 
 43.1   interest, the frequency and extent of the activity on accounts, 
 43.2   or location of the account, or on other classifications the 
 43.3   savings bank considers appropriate. 
 43.4      Subd. 3.  [DEPOSIT ACCOUNTS.] Deposit accounts must be 
 43.5   represented only by the account of each deposit account holder 
 43.6   on the books of the savings bank, and the accounts or any 
 43.7   interest is transferable only on the books of the savings bank 
 43.8   and upon proper written application by the transferee.  The 
 43.9   savings bank may treat the holder of record of a deposit account 
 43.10  as the owner of it for all purposes without being affected by 
 43.11  any notice to the contrary unless the savings bank has 
 43.12  acknowledged in writing notice of a pledge of the deposit 
 43.13  account.  A savings bank may also offer negotiable time deposits.
 43.14     Subd. 4.  [DEPOSIT ACCOUNTS FOR MINORS.] A savings bank may 
 43.15  issue deposit accounts to or in the name of a minor, which shall 
 43.16  be held for the exclusive right and benefit of the minor, free 
 43.17  from the control or lien of all other persons, except creditors, 
 43.18  and, together with interest or dividends, shall be paid to the 
 43.19  minor.  The minor's receipt, draft, negotiable order of 
 43.20  withdrawal, or acquittance in any form, is sufficient release 
 43.21  and discharge of the savings bank for withdrawal, until a 
 43.22  guardian appointed in this state for the minor has delivered a 
 43.23  certificate of appointment to the savings bank. 
 43.24     Subd. 5.  [SCHOOL OR INSTITUTION THRIFT SAVINGS PLAN.] A 
 43.25  savings bank may contract with the proper authorities of any 
 43.26  public or nonpublic elementary or secondary school or 
 43.27  institution of higher learning, or any public or charitable 
 43.28  institution caring for minors, for the participation and 
 43.29  implementation by the savings bank in any school or institution 
 43.30  thrift or savings plan, and it may accept savings accounts at 
 43.31  the school or institution, either by its own collector or by any 
 43.32  representative of the school or institution which becomes the 
 43.33  agent of the association for this purpose. 
 43.34     Subd. 6.  [P.O.D. DEPOSITS.] When a deposit is made in the 
 43.35  names of two or more persons jointly, or by a person payable on 
 43.36  death (P.O.D.) to another, or by a person in trust for another, 
 44.1   the rights of the parties and the savings bank are determined by 
 44.2   chapter 528. 
 44.3      Subd. 7.  [DEPOSIT ACCOUNTS IN JOINT TENANCY.] The pledge 
 44.4   or hypothecation to a savings bank of all or part of a deposit 
 44.5   account in joint tenancy signed by a tenant or tenants whether 
 44.6   minor or adult, upon whose signature or signatures withdrawals 
 44.7   may be made from the account must, unless the terms of the 
 44.8   deposit account provide specifically to the contrary, be a valid 
 44.9   pledge and transfer to the savings bank of that part of the 
 44.10  account pledged or hypothecated, and must not operate to sever 
 44.11  or terminate the joint and survivorship ownership of all or any 
 44.12  part of the account. 
 44.13     Subd. 8.  [FIDUCIARY DEPOSITS.] A savings bank may accept 
 44.14  deposits in the name of any administrator, executor, custodian, 
 44.15  conservator, guardian, trustee, or other fiduciary for a named 
 44.16  beneficiary or beneficiaries.  The fiduciary may open and make 
 44.17  additions to, and withdraw the account in whole or in part.  The 
 44.18  withdrawal value of the account and interest or other rights 
 44.19  relating to it may be paid or delivered, in whole or in part, to 
 44.20  the fiduciary without regard to any notice to the contrary as 
 44.21  long as the fiduciary is living.  The payment or delivery to the 
 44.22  fiduciary or a receipt or acquittance signed by the fiduciary to 
 44.23  whom the payment or any delivery of rights is made is a valid 
 44.24  and sufficient release and discharge of a savings bank for the 
 44.25  payment or delivery so made.  Whenever a person holding an 
 44.26  account in a fiduciary capacity dies and no written notice of 
 44.27  the revocation or termination of the fiduciary relationship has 
 44.28  been given to a savings bank and the savings bank has no written 
 44.29  notice of any other disposition of the beneficial estate, the 
 44.30  withdrawal value of the account, and interest or dividends, or 
 44.31  other rights relating to it may, at the option of a savings 
 44.32  bank, be paid or delivered, in whole or in part, to the 
 44.33  beneficiary or beneficiaries.  The payment or delivery to the 
 44.34  beneficiary, beneficiaries, or designated person, or a receipt 
 44.35  or acquittance signed by the beneficiary, beneficiaries, or 
 44.36  designated person, for the payment or delivery is a valid and 
 45.1   sufficient release and discharge of a savings bank for the 
 45.2   payment or delivery.  This section does not apply to P.O.D. 
 45.3   accounts under chapter 528. 
 45.4      Subd. 9.  [PAYMENTS TO GUARDIAN.] When a deposit account is 
 45.5   held in a savings bank by a person who becomes incompetent and 
 45.6   an adjudication of incompetency has been made by a court of 
 45.7   competent jurisdiction, the savings bank may pay or deliver the 
 45.8   withdrawal value of the deposit account and any earnings that 
 45.9   may have accrued on it to the guardian for the person upon proof 
 45.10  of appointment and qualification.  If the savings bank has 
 45.11  received no written notice and is not on actual notice that the 
 45.12  deposit account holder has been adjudicated incompetent, it may 
 45.13  pay or deliver the funds to the holder in accordance with the 
 45.14  provisions of the deposit account contract, and the receipt or 
 45.15  acquittance of the holder is a valid and sufficient release and 
 45.16  discharge of the savings bank for the payment or delivery so 
 45.17  made. 
 45.18     Subd. 10.  [INVESTMENT BY CERTAIN 
 45.19  ENTITIES.] Administrators, executors, custodians, conservators, 
 45.20  guardians, trustees, and other fiduciaries of every kind and 
 45.21  nature, insurance companies, business and manufacturing 
 45.22  companies, banks, trust companies, credit unions, and other 
 45.23  types of similar financial organizations, charitable, 
 45.24  educational, eleemosynary, and public corporations authorized by 
 45.25  law, funds, and organizations, are specifically authorized and 
 45.26  empowered to invest funds held by them, without any order of any 
 45.27  court, in deposit accounts of a savings bank, and the 
 45.28  investments are considered legal investments for the funds. 
 45.29     Subd. 11.  [SERVICE CHARGES.] A savings bank may contract 
 45.30  with depositors for service charges in connection with the 
 45.31  opening and maintaining of deposit accounts and for providing 
 45.32  services ancillary to the opening and maintaining of deposit 
 45.33  accounts.  The service charges are a matter of contract between 
 45.34  the savings bank and the depositor, and the contract will be 
 45.35  fully enforceable in accordance with its stated terms. 
 45.36     Sec. 52.  Minnesota Statutes 1994, section 50.175, 
 46.1   subdivision 1, is amended to read: 
 46.2      Subdivision 1.  [AUTHORIZATION.] Any savings bank organized 
 46.3   and operating pursuant to this chapter, may establish negotiable 
 46.4   order of withdrawal accounts on which it may or may not pay 
 46.5   interest or dividends.  Withdrawals from the accounts are 
 46.6   subject to the right of the savings bank to require the 
 46.7   depositor or account holder to give notice of an intended 
 46.8   withdrawal not less than 30 14 days before the withdrawal is 
 46.9   made, even though in practice the notice is not regularly 
 46.10  required and the depositor or account holder is allowed to make 
 46.11  withdrawals by negotiable or transferable instruments for the 
 46.12  purpose of making payments to third persons or otherwise. 
 46.13     Sec. 53.  Minnesota Statutes 1994, section 50.19, is 
 46.14  amended to read: 
 46.15     50.19 [ANNUAL REPORT; ASSETS REPORTS TO THE COMMISSIONER.] 
 46.16     On or before February first, each year, the trustees of any 
 46.17  savings bank shall cause to be made a thorough examination of 
 46.18  all its books, vouchers, and other papers and of its assets, 
 46.19  liabilities, and affairs generally by an experienced and 
 46.20  competent accountant, and make a written report upon the form 
 46.21  prescribed by the commissioner of commerce, showing accurately 
 46.22  its condition at the close of the preceding calendar year and 
 46.23  specifying, as to that year, the amounts and particulars 
 46.24  following: 
 46.25     (1) The amount loaned upon notes secured by mortgages, with 
 46.26  the names of the states or localities in which the mortgaged 
 46.27  premises are located and the amounts paid on the principal of 
 46.28  mortgage notes, and the amount of mortgages, if any, which have 
 46.29  been foreclosed; 
 46.30     (2) The cost, par value, and estimated market value of all 
 46.31  bond investments, stated separately, and the amount of principal 
 46.32  on bonds received by payment, redemption, sale, or otherwise; 
 46.33     (3) The amount of all loans upon pledge of securities, with 
 46.34  a statement of the nature and amount of these securities and the 
 46.35  amount paid upon the principal of the loans; 
 46.36     (4) The amount of the notes and of the bonds upon which 
 47.1   interest was in default at the close of the preceding calendar 
 47.2   year; 
 47.3      (5) The amount invested in real estate, giving the 
 47.4   description and the cost of each tract; 
 47.5      (6) The amount of cash on hand and on deposit in banks or 
 47.6   trust companies, giving the name of each, and the amount of each 
 47.7   depositor; and 
 47.8      (7) Such other information as the commissioner of commerce 
 47.9   may require.  Each savings bank shall submit the reports 
 47.10  required of state banks pursuant to section 48.48 and such other 
 47.11  information as the commissioner of commerce may require. 
 47.12     Sec. 54.  Minnesota Statutes 1994, section 50.21, is 
 47.13  amended to read: 
 47.14     50.21 [VERIFICATION OF REPORT.] 
 47.15     The report shall be verified by the oath of the two 
 47.16  principal officers of the institution and the statement of 
 47.17  assets shall be verified by the oath of at least two of the 
 47.18  trustees directors and of the person who made the examination; 
 47.19  and any willful false swearing in regard to these reports shall 
 47.20  be deemed perjury and be punishable accordingly.  
 47.21     Sec. 55.  [50.212] [SAVINGS BANK REGULATION.] 
 47.22     Subdivision 1.  [COMMERCE DEPARTMENT TO CONTROL.] The 
 47.23  commissioner of commerce shall have charge of the execution of 
 47.24  all laws relating to the savings banks chartered under the laws 
 47.25  of Minnesota and relating to the business of those savings banks.
 47.26     Subd. 2.  [COMMISSIONER SUPERVISION.] (a) The commissioner 
 47.27  shall supervise the books, records, and affairs of all savings 
 47.28  banks doing business with the state as provided in section 46.04.
 47.29     (b) The commissioner may pass further rules deemed 
 47.30  necessary to enable savings banks to properly carry on the 
 47.31  activities authorized under sections 50.001 to 50.28, which are 
 47.32  not inconsistent with the provisions of sections 50.001 to 50.28.
 47.33     Subd. 3.  [OFFICIAL COMMUNICATIONS REFERRED TO 
 47.34  DIRECTORS.] Each official communication from the commissioner to 
 47.35  a savings bank relating to any examination conducted by the 
 47.36  commissioner or containing suggestions and recommendations as to 
 48.1   the conduct of business of the savings bank, shall be submitted 
 48.2   by the officer receiving it to the board of directors at the 
 48.3   next meeting of the board and noted in the meeting minutes. 
 48.4      Sec. 56.  Minnesota Statutes 1994, section 50.22, is 
 48.5   amended to read: 
 48.6      50.22 [PROCEEDINGS UPON VIOLATION.] 
 48.7      When it shall appear, from an examination made by the 
 48.8   commissioner of commerce or otherwise, that any such corporation 
 48.9   has violated the law, or is conducting its business in an unsafe 
 48.10  or unauthorized manner, the commissioner shall, by written 
 48.11  order, direct such methods to be discontinued and that its 
 48.12  business be conducted in conformity with law.  If any such 
 48.13  corporation refuses or neglects to comply with this order, or to 
 48.14  make any report required by law or by the commissioner of 
 48.15  commerce, or if it shall appear to the commissioner of commerce 
 48.16  that it is unsafe or inexpedient for any such corporation to 
 48.17  continue to transact business, the commissioner shall report the 
 48.18  facts to the attorney general, who shall take such action 
 48.19  thereon as the case requires.  This action may be for the 
 48.20  removal of one or more of the trustees directors of the 
 48.21  corporation, the transfer of its corporate powers to other 
 48.22  persons, its merger and consolidation with another like 
 48.23  corporation willing to accept the trust, or such other 
 48.24  appropriate action as the facts may require; and the court may 
 48.25  grant any such relief in the interests of justice and, to 
 48.26  protect the rights of the parties, may, from time to time, 
 48.27  revoke or modify its orders made in the matter.  
 48.28     Sec. 57.  Minnesota Statutes 1994, section 50.23, is 
 48.29  amended to read: 
 48.30     50.23 [CHANGE OF NAME.] 
 48.31     When a resolution shall be adopted by the trustees 
 48.32  directors of the bank expressing their purpose to change its 
 48.33  name, they shall cause notice of this purpose, containing the 
 48.34  present and proposed names, to be published in the manner 
 48.35  provided for publication of notice of intention to organize.  On 
 48.36  completion of this publication, the trustees directors shall 
 49.1   make application to the commissioner of commerce to change the 
 49.2   name of the bank, as specified in the resolution and 
 49.3   publication, accompanied by proof of the adoption of the 
 49.4   resolution and publication of notice.  If this change be 
 49.5   approved by the commissioner of commerce, the commissioner shall 
 49.6   authorize and direct the same by a signed order under seal, and 
 49.7   designate a day, not more than 30 days from its date, when the 
 49.8   change shall take effect.  The commissioner shall execute the 
 49.9   order in triplicate, one to be filed with the county recorder of 
 49.10  the county where the bank is situated, one delivered to the 
 49.11  bank, and the other filed in the commissioner's office.  From 
 49.12  the date named in this order, the bank shall be known and 
 49.13  designated by its new name, and under this name shall have the 
 49.14  same rights and powers and be subject to the same liabilities as 
 49.15  before the change. 
 49.16     Sec. 58.  Minnesota Statutes 1994, section 50.245, is 
 49.17  amended to read: 
 49.18     50.245 [DETACHED FACILITIES; MUTUAL SAVINGS BANKS; 
 49.19  AUTHORIZATION BRANCHES; ACQUISITIONS.] 
 49.20     Subdivision 1.  [AUTHORITY FOR BRANCH OFFICES.] A mutual 
 49.21  savings bank may establish five detached facilities pursuant to 
 49.22  sections 47.51 to 47.57 in the territories of Hennepin and Anoka 
 49.23  counties.  The savings bank shall not change the location of a 
 49.24  detached facility without prior written approval of the 
 49.25  commissioner of commerce.  A saving bank may establish a loan 
 49.26  production office, without restriction as to geographical 
 49.27  location, upon written notice to the commissioner of commerce.  
 49.28     Subd. 2.  [AUTHORITY FOR BRANCH OFFICES IN RECIPROCATING 
 49.29  STATE OTHER STATES.] The authorization contained in subdivision 
 49.30  1 is in addition to the authority granted mutual savings banks 
 49.31  in section 47.52.  A savings bank chartered in this state, 
 49.32  whether or not the subsidiary of a savings bank holding company, 
 49.33  may, by acquisition, merger, purchase, and assumption of some or 
 49.34  all assets and liabilities, consolidation, or de novo formation, 
 49.35  establish or operate detached facilities in another state on the 
 49.36  same terms and conditions and subject to the same limitations 
 50.1   and restrictions as are applicable to the establishment of 
 50.2   branches by national banks located in Minnesota, except that 
 50.3   approval of the comptroller of currency shall not be required 
 50.4   for such detached facilities. 
 50.5      Subd. 3.  [RECIPROCATING STATE ACQUISITIONS.] This section 
 50.6   shall not apply to any bank with a stock form of ownership.  A 
 50.7   savings bank chartered in this state and a savings bank holding 
 50.8   company with its principal offices in this state may acquire 
 50.9   control of a financial institution chartered in a reciprocating 
 50.10  state or, subject to applicable federal law, any other state or 
 50.11  a financial institution holding company with principal offices 
 50.12  in a reciprocating state or, subject to applicable federal law, 
 50.13  any other state.  A savings bank chartered in a reciprocating 
 50.14  state or, subject to applicable federal law, any other state and 
 50.15  a savings bank holding company with principal offices in a 
 50.16  reciprocating state or, subject to applicable federal law, any 
 50.17  other state may acquire control of a savings bank chartered in 
 50.18  this state or a savings bank holding company with principal 
 50.19  offices in this state.  
 50.20     Subd. 4.  [RULEMAKING.] The commissioner shall adopt rules 
 50.21  to provide that procedural requirements equivalent to those 
 50.22  contained in sections 48.90 to 48.991 apply to reciprocal 
 50.23  interstate branching and acquisitions by savings banks and 
 50.24  savings bank holding companies. 
 50.25     Subd. 5.  [DEFINITIONS.] For the purpose of this section, 
 50.26  the terms defined in this subdivision have the meanings given 
 50.27  them. 
 50.28     (a) "Financial institution" means a bank, savings bank, 
 50.29  savings and loan association, trust company, or credit union, 
 50.30  whether chartered under the laws of this state, another state or 
 50.31  territory, or the laws of the United States. 
 50.32     (b) "Loan production office" means a place of business at 
 50.33  which a savings bank provides lending if the loans are approved 
 50.34  at the main office or detached facility of the savings bank, but 
 50.35  at which a savings bank may not accept deposits except through a 
 50.36  remote service unit. 
 51.1      (c) "Reciprocating state" means a state that authorizes the 
 51.2   acquisition of control of financial institutions chartered in 
 51.3   that state and financial institution holding companies with 
 51.4   principal offices in that state by a savings bank chartered in 
 51.5   this state or savings bank holding company with principal 
 51.6   offices in this state under conditions substantially similar to 
 51.7   those imposed by the laws of Minnesota, as determined by the 
 51.8   commissioner of commerce. 
 51.9      (d) "Remote service unit" means an electronic financial 
 51.10  terminal as defined in section 47.61. 
 51.11     Subd. 6.  [COMMISSIONER'S AUTHORITY.] The authority of the 
 51.12  commissioner of commerce to approve a transaction under this 
 51.13  section is in addition to that provided for in section 49.48. 
 51.14     Sec. 59.  Minnesota Statutes 1994, section 50.25, is 
 51.15  amended to read: 
 51.16     50.25 [BANKS ORGANIZED UNDER THE LAWS OF MINNESOTA; CAPITAL 
 51.17  STOCK; AMENDMENT OF ARTICLES.] 
 51.18     A corporation which was incorporated and organized under 
 51.19  the laws of Minnesota for the purpose of doing a savings bank 
 51.20  business, may have capital stock of $100 per share, par value; 
 51.21  provided, the minimum required capital shall not be less than 
 51.22  $500,000, and may amend its articles or certificate of 
 51.23  incorporation so as to provide for this capital stock conversion 
 51.24  by adopting a resolution specifying the proposed amendment at a 
 51.25  regular meeting or a special meeting called for that expressly 
 51.26  stated purpose.  The conversion must be approved by at least a 
 51.27  two-thirds affirmative vote of its entire board of directors, 
 51.28  trustees, or other managers.  The resolution approving the 
 51.29  conversion shall be embraced in a certificate duly executed by 
 51.30  its president and secretary, or other presiding and recording 
 51.31  officers, under its corporate seal, and approved, filed, 
 51.32  recorded, and published in the manner now prescribed for the 
 51.33  execution, approval, filing, recording, and publishing of a like 
 51.34  original certificate. 
 51.35     The resolution specifying the proposed amendment of 
 51.36  articles or certificate of incorporation shall set forth a plan 
 52.1   of conversion from a mutual savings bank to a capital stock 
 52.2   savings bank.  The plan of conversion shall provide that all 
 52.3   capital stock shall have voting powers, including the power to 
 52.4   elect the board of directors, trustees, or other managers who 
 52.5   shall have the power to sell, convey, mortgage, or otherwise 
 52.6   dispose of any part of the corporation's real or personal 
 52.7   property.  The plan and issuance of capital stock shall be 
 52.8   subject to the commissioner of commerce's approval provided the 
 52.9   plan is fair and equitable to all parties concerned and is in 
 52.10  the public interest.  The capital funds of a proposed savings 
 52.11  bank shall be in such greater amount which the commissioner 
 52.12  considers necessary, having in mind the deposit potential for 
 52.13  such a proposed bank and current industry standards of capital 
 52.14  adequacy. 
 52.15     Sec. 60.  [50.28] [DECLARATORY JUDGMENTS.] 
 52.16     At any time after a controversy has arisen between the 
 52.17  commissioner of commerce and a savings bank with respect to a 
 52.18  question of law or rule or with respect to a question involving 
 52.19  immeasurable or irreparable damage to the savings bank, and 
 52.20  before an administrative or judicial hearing, the savings bank 
 52.21  or the commissioner may apply to a court of competent 
 52.22  jurisdiction in the county in which the home office of the 
 52.23  savings bank is located for a declaratory judgment as to the 
 52.24  question. 
 52.25     Sec. 61.  Minnesota Statutes 1994, section 51A.02, 
 52.26  subdivision 6, is amended to read: 
 52.27     Subd. 6.  [ANNUAL PERCENTAGE RATE.] "Annual percentage 
 52.28  rate" has the meaning given the term in the Code of Federal 
 52.29  Regulations, title 12, part 226, but using the definition of 
 52.30  "finance charge" used in this section. 
 52.31     Sec. 62.  Minnesota Statutes 1994, section 51A.02, 
 52.32  subdivision 26, is amended to read: 
 52.33     Subd. 26.  [FINANCE CHARGE.] "Finance charge" has the 
 52.34  meaning given the term in the Code of Federal Regulations, title 
 52.35  12, part 226, except that the following will not in any event be 
 52.36  considered a finance charge: 
 53.1      (1) a charge as a result of default or delinquency under 
 53.2   section 51A.385 if made for actual unanticipated late payment, 
 53.3   delinquency, default, or other similar occurrence, unless the 
 53.4   parties agree that these charges are finance charges; 
 53.5      (2) any additional charge under section 51A.385, 
 53.6   subdivision 5; or 
 53.7      (3) a discount, if an association purchases a contract 
 53.8   evidencing a contract credit sale at less than the face amount 
 53.9   of the obligation or purchases or satisfies obligations of a 
 53.10  cardholder pursuant to a credit card and the purchase or 
 53.11  satisfaction is made at less than the face amount of the 
 53.12  obligation. 
 53.13     Sec. 63.  Minnesota Statutes 1994, section 51A.02, 
 53.14  subdivision 40, is amended to read: 
 53.15     Subd. 40.  [OFFICIAL FEES.] "Official fees" means: 
 53.16     (1) fees and charges which actually are or will be paid to 
 53.17  public officials for determining the existence of or for 
 53.18  perfecting, releasing, terminating, or satisfying a security 
 53.19  interest or mortgage related to a loan or credit sale, and any 
 53.20  separate fees or charges that actually are or will be paid to 
 53.21  public officials for recording a notice described in section 
 53.22  580.032, subdivision 1; and 
 53.23     (2) premiums payable for insurance in lieu of perfecting a 
 53.24  security interest or mortgage otherwise required by an 
 53.25  association in connection with a loan or credit sale, if the 
 53.26  premium does not exceed the fees and charges described in clause 
 53.27  (1) which would otherwise be payable. 
 53.28     Sec. 64.  Minnesota Statutes 1994, section 51A.21, is 
 53.29  amended by adding a subdivision to read: 
 53.30     Subd. 28.  [SERVICE CHARGES.] To contract with depositors 
 53.31  for service charges in connection with the opening and 
 53.32  maintaining of deposit accounts and for providing services 
 53.33  ancillary to the opening and maintaining of deposit accounts.  
 53.34  Service charges are a matter of contract between the association 
 53.35  and the depositor, and any such contract is fully enforceable 
 53.36  according to its stated terms. 
 54.1      Sec. 65.  Minnesota Statutes 1994, section 61A.09, 
 54.2   subdivision 3, is amended to read: 
 54.3      Subd. 3.  Group life insurance policies may be issued to 
 54.4   cover groups of not less than ten debtors of a creditor written 
 54.5   under a master policy issued to a creditor to insure its debtors 
 54.6   in connection with real estate mortgage loans, in an amount not 
 54.7   to exceed the actual amount of their indebtedness plus an amount 
 54.8   equal to two monthly payments or scheduled amount of their 
 54.9   indebtedness, plus an amount equal to two monthly payments, 
 54.10  whichever is greater.  If the mortgage loan provides for a 
 54.11  variable rate of finance charge or interest, the initial rate or 
 54.12  the scheduled rates based on the initial index must be used in 
 54.13  determining the scheduled amount of indebtedness.  Each 
 54.14  application for group mortgage insurance offered prior to or at 
 54.15  the time of loan closing shall contain a clear and conspicuous 
 54.16  notice that the insurance is optional and is not a condition for 
 54.17  obtaining the loan.  Each person insured under a group insurance 
 54.18  policy issued under this subdivision shall be furnished a 
 54.19  certificate of insurance which conforms to the requirements of 
 54.20  section 62B.06, subdivision 2, and which includes a conversion 
 54.21  privilege permitting an insured debtor to convert, without 
 54.22  evidence of insurability, to an individual policy of decreasing 
 54.23  term insurance within 30 days of the date the insured debtor's 
 54.24  group coverage is terminated for any reason other than the 
 54.25  nonpayment of premiums.  The initial amount of coverage under 
 54.26  the individual policy shall be an amount equal to the amount of 
 54.27  coverage terminated under the group policy and shall decrease 
 54.28  over a term that corresponds with the scheduled term of the 
 54.29  insured debtor's mortgage loan.  The premium for the individual 
 54.30  policy shall be the same premium the insured debtor was paying 
 54.31  under the group policy.  
 54.32     Sec. 66.  Minnesota Statutes 1994, section 62B.04, 
 54.33  subdivision 1, is amended to read: 
 54.34     Subdivision 1.  [CREDIT LIFE INSURANCE.] (1) The initial 
 54.35  amount of credit life insurance shall not exceed the amount of 
 54.36  principal repayable under the contract of indebtedness. 
 55.1   Thereafter, if the indebtedness is repayable in substantially 
 55.2   equal installments according to a predetermined schedule, the 
 55.3   amount of insurance shall not exceed the scheduled or actual 
 55.4   amount of indebtedness, whichever is greater.  If the contract 
 55.5   of indebtedness provides for a variable rate of finance charge 
 55.6   or interest, the initial rate or the scheduled rates based on 
 55.7   the initial index must be used in determining the scheduled 
 55.8   amount of indebtedness and subsequent changes to the rate must 
 55.9   be disregarded in determining whether the contract is repayable 
 55.10  in substantially equal installments according to a predetermined 
 55.11  schedule. 
 55.12     (2) Notwithstanding clause (1), the amount of credit life 
 55.13  insurance written in connection with credit transactions 
 55.14  repayable over a specified term exceeding 63 months shall not 
 55.15  exceed the greater of:  (i) the actual amount of unpaid 
 55.16  indebtedness as it exists from time to time; or (ii) where an 
 55.17  indebtedness is repayable in substantially equal installments 
 55.18  according to a predetermined schedule, the scheduled amount of 
 55.19  unpaid indebtedness, less any unearned interest or finance 
 55.20  charges, plus an amount equal to two monthly payments.  If the 
 55.21  credit transaction provides for a variable rate of finance 
 55.22  charge or interest, the initial rate or the scheduled rates 
 55.23  based on the initial index must be used in determining the 
 55.24  scheduled amount of unpaid indebtedness and subsequent changes 
 55.25  in the rate must be disregarded in determining whether the 
 55.26  contract is repayable in substantially equal installments 
 55.27  according to a predetermined schedule. 
 55.28     (3) Notwithstanding clauses (1) and (2), insurance on 
 55.29  educational, agricultural, and horticultural credit transaction 
 55.30  commitments may be written on a nondecreasing or level term plan 
 55.31  for the amount of the loan commitment. 
 55.32     Sec. 67.  Minnesota Statutes 1994, section 62B.04, 
 55.33  subdivision 2, is amended to read: 
 55.34     Subd. 2.  [CREDIT ACCIDENT AND HEALTH INSURANCE.] The total 
 55.35  amount of periodic indemnity payable by credit accident and 
 55.36  health insurance in the event of disability, as defined in the 
 56.1   policy, shall not exceed the aggregate of the periodic scheduled 
 56.2   unpaid installments of the indebtedness; and the amount of each 
 56.3   periodic indemnity payment shall not exceed the original 
 56.4   indebtedness divided by the number of periodic installments.  If 
 56.5   the credit transaction provides for a variable rate of finance 
 56.6   charge or interest, the initial rate or the scheduled rates 
 56.7   based on the initial index must be used in determining the 
 56.8   aggregate of the periodic scheduled unpaid installments of the 
 56.9   indebtedness. 
 56.10     Sec. 68.  Minnesota Statutes 1994, section 300.20, is 
 56.11  amended to read: 
 56.12     300.20 [BOARD OF DIRECTORS.] 
 56.13     Subdivision 1.  [ELECTION.] The business of savings banks 
 56.14  must be managed by a board of at least seven trustees, 
 56.15  directors, all residents of this state, each of whom, before 
 56.16  being authorized to act, must file a written acceptance of 
 56.17  the trust position.  The business of other corporations must be 
 56.18  managed by a board of at least three directors, unless a greater 
 56.19  number is otherwise required by law, elected by ballot by the 
 56.20  stockholders or members.  A board of directors of a financial 
 56.21  institution referred to in section 47.12 which has less than 
 56.22  five members may be increased to not more than five members by 
 56.23  order of the commissioner of commerce. 
 56.24     Subd. 2.  [VACANCIES.] If the certificate of incorporation 
 56.25  or the bylaws so provides, a vacancy in the board of directors 
 56.26  may be filled by the remaining directors.  Not more than 
 56.27  one-third of the members of the board may be so filled in any 
 56.28  one year except any number may be appointed to provide for at 
 56.29  least three directors until any subsequent meeting of the 
 56.30  stockholders.  
 56.31     Subd. 3.  [QUORUM TO DO BUSINESS.] A majority of the 
 56.32  directors or trustees constitutes a quorum for the transaction 
 56.33  of business.  
 56.34     Subd. 4.  [ACTION WITHOUT MEETING.] Any action which might 
 56.35  be taken at a meeting of the board of directors, trustees, or 
 56.36  managers may be taken without a meeting if done in writing 
 57.1   signed by all of the directors, trustees, or managers.  
 57.2      Sec. 69.  [REPEALER.] 
 57.3      Minnesota Statutes 1994, sections 47.095; 47.30, 
 57.4   subdivisions 4 and 6; 47.67; 48.67; 50.01; 50.02; 50.07; 50.08; 
 57.5   50.09; 50.10; 50.12; 50.15; 50.16; 50.21; and 50.22, are 
 57.6   repealed.