SF 2956

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

  1.1                          A bill for an act 
  1.2             relating to financial institutions; authorizing 
  1.3             reverse stock splits; providing for a notice in retail 
  1.4             installment contracts; amending Minnesota Statutes 
  1.5             1996, section 168.71; proposing coding for new law in 
  1.6             Minnesota Statutes, chapter 48. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [48.056] [REVERSE STOCK SPLIT.] 
  1.9      Subdivision 1.  [POWER TO EFFECT.] A banking institution 
  1.10  may effect a reverse stock split by reducing its outstanding 
  1.11  shares of stock if the commissioner finds that the transaction:  
  1.12     (1) has a legitimate business purpose including, but not 
  1.13  limited to, reducing corporate expenses, simplifying corporate 
  1.14  procedures, or becoming a qualified Subchapter S subsidiary; and 
  1.15     (2) complies with safe and sound banking practices.  
  1.16     The stock reduction is effective upon approval by the 
  1.17  commissioner and filing with the commissioner of commerce and 
  1.18  the secretary of state of the articles of amendment to the 
  1.19  certificate of incorporation and shareholders of the banking 
  1.20  institution. 
  1.21     Subd. 2.  [FRACTIONAL SHARES.] A banking institution may 
  1.22  issue fractions of a share as a result of a reverse stock split 
  1.23  by reducing its outstanding shares of stock according to this 
  1.24  subdivision.  If a banking institution inserts into its 
  1.25  certificate of incorporation a provision prohibiting the issue 
  1.26  of fractions of a share, it shall pay in cash the value of 
  2.1   fractions of a share as of the time when persons entitled to 
  2.2   receive the fractions are determined. 
  2.3      Subd. 3.  [PAR VALUE.] Notwithstanding section 300.30, a 
  2.4   banking institution proceeding under this subdivision may divide 
  2.5   its capital into shares greater than $100 each. 
  2.6      Subd. 4.  [RIGHTS OF DISSENTING STOCKHOLDERS.] A 
  2.7   stockholder of the banking institution not voting in favor of 
  2.8   the amendment of the certificate of incorporation of the banking 
  2.9   institution to effect a reverse stock split that will impact 
  2.10  upon the stockholder's voting rights in the banking institution 
  2.11  may, at the meeting of the stockholders held on the amendment, 
  2.12  or within 20 days after the meeting, object to the stock 
  2.13  reduction and demand payment for that person's stock.  If the 
  2.14  stock reduction takes effect at any time after this demand, the 
  2.15  stockholder may, at any time within 60 days after the demand, 
  2.16  apply to the district court in the county of the banking 
  2.17  institution's principal place of business for the appointment of 
  2.18  three persons to appraise the value of that person's stock.  The 
  2.19  court shall appoint the appraisers and designate the time and 
  2.20  place of their first meeting, give directions with regard to 
  2.21  their proceedings the court considers proper, and direct the 
  2.22  time and manner in which payment must be made of the value of 
  2.23  that person's stock to the stockholder.  The appraisers shall 
  2.24  meet at the time and place designated, after being duly sworn to 
  2.25  discharge their duties honestly and faithfully, make and certify 
  2.26  a written estimate of the value of the stock at the time of the 
  2.27  appraisal, and deliver one copy to the banking institution and 
  2.28  another to the stockholder.  The stockholder and the banking 
  2.29  institution shall each pay one-half of the charges and expenses 
  2.30  of the appraisers. 
  2.31     Sec. 2.  Minnesota Statutes 1996, section 168.71, is 
  2.32  amended to read: 
  2.33     168.71 [RETAIL INSTALLMENT CONTRACTS.] 
  2.34     (a)(1) Every retail installment contract shall be in 
  2.35  writing, shall contain all the agreements of the parties, shall 
  2.36  be signed by the retail buyer and seller, and a copy signed by 
  3.1   the retail buyer shall be furnished to such retail buyer at the 
  3.2   time the retail buyer executes the contract.  The copy signed by 
  3.3   both the retail buyer and retail seller shall be provided to the 
  3.4   retail buyer within seven days after delivery of the vehicle.  
  3.5   With respect to any contract executed prior to August 1, 1996, 
  3.6   which has not been paid in full by the retail buyer, the retail 
  3.7   seller shall provide such retail buyer a copy signed by both the 
  3.8   retail buyer and retail seller within 120 days after August 1, 
  3.9   1996. 
  3.10     (2) No provisions for confession of judgment or power of 
  3.11  attorney therefor contained in any retail installment contract 
  3.12  or contained in a separate agreement relating thereto, shall be 
  3.13  valid or enforceable.  
  3.14     (3) The holder of a precomputed retail installment contract 
  3.15  may, if the contract so provides, collect a delinquency and 
  3.16  collection charge on each installment in arrears for a period 
  3.17  not less than ten days in an amount not in excess of five 
  3.18  percent of each installment or $5, whichever is greater.  In 
  3.19  addition to such delinquency and collection charge, the retail 
  3.20  installment contract, whether interest-bearing or precomputed, 
  3.21  may provide for the payment of attorneys' fees not exceeding 15 
  3.22  percent of the amount due and payable under such contract where 
  3.23  such contract is referred to an attorney not a salaried employee 
  3.24  of the holder of the contract for collection plus the court 
  3.25  costs.  
  3.26     (4) Unless written notice has been given to the retail 
  3.27  buyer of actual or intended assignment of a retail installment 
  3.28  contract, payment thereunder or tender thereof made by the 
  3.29  retail buyer to the last known holder of such contract shall be 
  3.30  binding upon all subsequent holders or assignees.  
  3.31     (5) Upon written request from the retail buyer, the holder 
  3.32  of the retail installment contract shall give or forward to the 
  3.33  retail buyer a written statement of the dates and amounts of 
  3.34  payments and the total amount unpaid under such contract.  A 
  3.35  retail buyer shall be given a written receipt for any payment 
  3.36  when made in cash.  
  4.1      (b) The retail installment contract shall contain the 
  4.2   following items: 
  4.3      (1) The cash sale price of the motor vehicle which is the 
  4.4   subject matter of the retail installment contract; 
  4.5      (2) The total amount of the retail buyer's down payment, 
  4.6   whether made in money or goods, or partly in money or partly in 
  4.7   goods; 
  4.8      (3) The difference between items one and two; 
  4.9      (4) The charge, if any, included in the transaction for any 
  4.10  insurance and other benefits not included in clause (1), 
  4.11  specifying the types of coverage and taxes, fees, and charges 
  4.12  that actually are or will be paid to public officials or 
  4.13  government agencies, including those for perfecting, releasing, 
  4.14  or satisfying a security interest if such taxes, fees, or 
  4.15  charges are not included in clause (1); 
  4.16     (5) Principal balance, which is the sum of items three and 
  4.17  four; 
  4.18     (6) The amount of the finance charge; 
  4.19     (7) The total of payments payable by the retail buyer to 
  4.20  the retail seller and the number of installment payments 
  4.21  required and the amount of each installment expressed in dollars 
  4.22  or percentages, and date of each payment necessary finally to 
  4.23  pay the total of payments which is the sum of item five and item 
  4.24  six.  
  4.25     Provided, however, that said items one to seven inclusive 
  4.26  need not be stated in the terms, sequence or order set forth 
  4.27  above.  Provided further, that clauses (6) and (7) may be 
  4.28  disclosed on the assumption that all scheduled payments under 
  4.29  the contract will be made when due. 
  4.30     In lieu of the above clauses, the retail seller may give 
  4.31  the retail buyer disclosures which satisfy the requirements of 
  4.32  the Federal Truth-In-Lending Act in effect as of the time of the 
  4.33  contract, notwithstanding whether or not that act applies to the 
  4.34  transaction. 
  4.35     (c) Every retail seller or sales finance company, if a 
  4.36  charge for insurance on the motor vehicle is included in a 
  5.1   retail installment contract shall within 30 days after execution 
  5.2   of the retail installment contract send or cause to be sent to 
  5.3   the retail buyer a policy or policies or certificate of 
  5.4   insurance, which insurance shall be written by a company 
  5.5   authorized to do business in this state, clearly setting forth 
  5.6   the amount of the premium, the kind or kinds of insurance and 
  5.7   the scope of the coverage and all the terms, exceptions, 
  5.8   limitations, restrictions and conditions of the contract or 
  5.9   contracts of the insurance.  The buyer of a motor vehicle under 
  5.10  a retail installment contract shall have the privilege of 
  5.11  purchasing such insurance from an agent or broker of the buyer's 
  5.12  own selection and selecting an insurance company mutually 
  5.13  acceptable to the seller and the buyer; provided, however, that 
  5.14  the inclusion of the cost of the insurance premium in the retail 
  5.15  installment contract when the buyer selects the agent, broker or 
  5.16  company, shall be optional with the seller. 
  5.17     (d) Any sales finance company hereunder may purchase or 
  5.18  acquire from any retail seller any retail installment contract 
  5.19  on such terms and conditions as may be mutually agreed upon 
  5.20  between them.  
  5.21     (e) An acknowledgment by the retail buyer of the delivery 
  5.22  of any such copy or notice as required in subsection (a) 
  5.23  contained in the body of the statement or contract shall be 
  5.24  conclusive proof of delivery in any action or proceeding by or 
  5.25  against any assignee of a retail installment contract.  
  5.26     (f) A retail installment contract must include a notice 
  5.27  that reads substantially as follows: 
  5.28                   COMPLAINT ALLEGING VIOLATION
  5.29     A retail buyer having reason to believe that Minnesota law 
  5.30  relating to the buyer's retail installment contract has been 
  5.31  violated may file with the commissioner of commerce, state of 
  5.32  Minnesota, a written complaint setting forth the details of the 
  5.33  alleged violation. 
  5.34     Sec. 3.  [EFFECTIVE DATES.] 
  5.35     Section 1 is effective the day following final enactment.  
  5.36  Section 2 is effective January 1, 1999.