Minnesota Session Laws - 1984, Regular Session

  

                         Laws of Minnesota 1984 

                        CHAPTER 576-H.F.No. 1655 
           An act relating to financial institutions; providing 
          an expedited procedure for certain bank applications; 
          providing a uniform examination cycle for all 
          supervised institutions; extending the temporary 
          removal of mortgage usury limits; providing a time 
          period within which notices of the filing of 
          applications for detached facilities must be 
          published; providing prior notice to the commissioner 
          of a change in the ownership of a state bank; bringing 
          state law into conformity with federal law regarding 
          limitations on loans to bank directors, officers, or 
          employees; providing prior notification to the 
          commissioner of the termination or cancellation of a 
          fidelity bond to a bank; authorizing the commissioner, 
          after notification, to order the bank to take action; 
          clarifying the exclusion of bankers' acceptances from 
          the restrictions upon total liabilities to a bank; 
          extending the time period imposed on a bank for the 
          filing of proof of publication of its quarterly report;
          modifying the definition of "demand deposits" in light 
          of federal deregulation of interest rates; removing 
          the photo identification requirement from the 
          provisions regulating the opening of checking 
          accounts; clarifying service charges on dishonored 
          checks; making various technical changes; amending 
          Minnesota Statutes 1982, sections 45.071, by adding a 
          subdivision; 46.04, subdivision 1; 47.204, subdivision 
          1; 48.03, subdivision 4; 48.08; 48.13; 48.14; 48.24, 
          subdivision 6; 48.48, subdivisions 1 and 2; 48.51; 
          51A.50; 52.06, subdivision 1; 53.03, subdivision 4; 
          53.09, subdivision 1; and 56.12; Minnesota Statutes 
          1983 Supplement, sections 45.04; 47.54, subdivision 1; 
          48.512, subdivision 2; 52.203; 53.01; 53.03, 
          subdivisions 1 and 5; 53.04, subdivision 3a; 168.67; 
          and 332.50, subdivision 2; repealing Minnesota 
          Statutes 1982, sections 47.75, subdivision 2; and 
          51A.44, subdivision 3.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1983 Supplement, section 
45.04, is amended to read:  
    45.04 [BANK APPLICATIONS.] 
    Subdivision 1.  [FILING; FEE; HEARING.] The incorporators 
of a bank proposed to be organized under the laws of this state 
shall execute and acknowledge a written application in the form 
prescribed by the commissioner of commerce.  The application 
must be signed by two or more of the incorporators and request a 
certificate authorizing the proposed bank to transact business 
at the place and in the name stated in the application.  The 
applicant shall file the application with the department with a 
$1,000 filing fee and a $500 investigation fee.  The fees must 
be turned over by the commissioner to the state treasurer and 
credited to the general fund.  Thereupon the commissioner shall 
fix a time, within 60 days after applicant shall within 30 days 
of the receipt of the form prescribed by the commissioner, 
publish a notice of the filing of the application, for a hearing 
to decide whether or not the application will be granted.  A 
notice of the hearing must be published in the form prescribed 
by the commissioner in a newspaper published in the municipality 
in which the proposed bank is to be located, and if there is no 
such newspaper, then at the county seat of the county in which 
the bank is proposed to be located.  The notice must shall be 
published once, at the expense of the applicants, not less than 
30 days prior to the date of the hearing.  At in the hearing 
form prescribed by the commissioner shall consider the 
application and hear the applicants and witnesses that appear in 
favor of or against the granting of the application of the 
proposed and, in addition to the publication, the applicant 
shall mail a copy of the notice by certified mail to every bank 
located within three miles of the proposed location of the bank. 
If an application is contested, 50 percent of an additional fee 
equal to the actual costs incurred by the department of commerce 
in approving or disapproving the application, payable to the 
state treasurer and credited by the treasurer to the general 
fund, must be paid by the applicant and 50 percent equally by 
the intervening parties. 
    Subd. 2.  [UNCONTESTED APPLICATION APPROVAL ORDER.] If no 
objection is received by the commissioner within 21 days after 
the publication and mailing of the notices, the commissioner may 
issue an order approving the application without a hearing if it 
is found that the applicant meets the conditions in section 
45.07.  Otherwise the commissioner must deny the application.  
    Subd. 3.  [OBJECTIONS; HEARING.] If the application is 
contested, the commissioner shall fix a time, within 60 days 
after the filing of the objection for a hearing, and the record 
of the hearing shall be considered by the commissioner in 
deciding whether or not the application shall be granted.  A 
notice of the hearing must be published in the form prescribed 
by the commissioner in some newspaper published in the 
municipality in which the proposed bank is to be located, and if 
there is no such newspaper, then at the county seat of the 
county in which the bank is proposed to be located.  The notice 
shall be published once, at the expense of the applicants, not 
less than 30 days prior to the date of the hearing.  At the 
hearing the commissioner shall consider the application and hear 
the applicants and such witnesses as may appear in favor of or 
against the granting of the application of the proposed bank. 
The hearing shall be conducted by the commissioner in accordance 
with the provisions of sections 14.01 to 14.70.  
    Subd. 4.  [APPROVAL, DISAPPROVAL, AFTER HEARING.] If, upon 
the hearing, it appears to the commissioner that the application 
should be granted, he shall, not later than 90 days after the 
hearing, and after the applicants have otherwise complied with 
the provisions of law applicable to the organization of a bank, 
including the provisions herein contained, make and file in his 
office a written order directing the issuance of a certificate 
of authorization as provided by law.  If the certificate of 
authorization is not activated within a period of 12 months from 
date of issuance, the commissioner may upon written notice to 
the applicants request a new hearing.  If the commissioner 
decides that the application should not be granted, he shall 
deny the application and make a written order to that effect, 
file it in his office, and forthwith give notice thereof by 
certified mail to one of the incorporators named in the 
application for the proposed bank, addressed to the incorporator 
at the address stated in the application.  Thereupon the 
commissioner shall refuse to issue the certificate of 
authorization to the proposed bank. 
    Sec. 2.  Minnesota Statutes 1982, section 45.071, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [CERTAIN TRUST COMPANIES; SECURED DEPOSIT 
EXCEPTIONS; VIOLATIONS.] The requirements of this section may be 
met by trust companies not exercising banking powers, with the 
exception of deposit activities as defined in this subdivision, 
provided the following conditions are met:  
    (a) the number of nonfiduciary deposit accounts does not 
exceed 35, and;  
    (b) the total amount held in nonfiduciary deposit accounts 
does not exceed five percent of the aggregate of the trust 
company's capital stock, surplus, and undivided profits, and;  
    (c) the nonfiduciary funds deposited with the trust company 
referred to in (a) and (b) shall be secured against loss by the 
assignment, transfer to, and deposit with the commissioner of 
commerce or his designee, of direct obligations of the United 
States government in an amount, based upon the securities market 
value, of not less than 110 percent of such deposited funds, 
with the right of the trust company to collect the income and to 
substitute other like securities of equal value, and;  
    (d) each account holder must be disclosed to in writing 
that the account is not insured by the federal or state 
governments or their agencies, and;  
    (e) the determination of the limitations in (a) and (b) 
shall be made by the trust company from the records of the trust 
company and based upon statement of financial condition at the 
close of each business day, and security deposit defined in (c) 
adjusted if needed within one business day thereafter, and;  
    (f) any violation of the requirements in (a) through (e) of 
this subdivision shall be grounds for action by the commissioner 
under sections 46.24 to 46.33.  
    Sec. 3.  Minnesota Statutes 1982, section 46.04, 
subdivision 1, is amended to read:  
    Subdivision 1.  The commissioner of banks commerce, 
referred to in Minnesota Statutes, Chapters 46 to 59, as the 
commissioner, is vested with all the powers, authority, and 
privileges which, prior to the enactment of Laws 1909, Chapter 
201, were conferred by law upon the public examiner, and he or 
she shall take over all duties in relation to state banks, 
savings banks, trust companies, savings associations, and other 
financial institutions within the state which, prior to the 
enactment of chapter 201, were imposed upon the public examiner. 
The commissioner of banks commerce shall exercise a constant 
supervision, either personally or through the examiners herein 
provided for, over the books and affairs of all state banks, 
savings banks, trust companies, savings associations, credit 
unions, industrial loan and thrift companies, and other 
financial institutions doing business within this state; and 
shall, through examiners, examine each financial institution at 
least once annually every 18 calendar months.  In satisfying 
this examination requirement, the commissioner may accept 
reports of examination prepared by a federal agency having 
comparable supervisory powers and examination procedures.  With 
the exception of industrial loan and thrift companies which do 
not have deposit liabilities and small loan companies licensed 
regulated lenders, it shall be the principal purpose of these 
examinations to inspect and verify the assets and liabilities of 
each and so far investigate the character and value of the 
assets of each institution as to determine with reasonable 
certainty that the values are correctly carried on its books.  
Assets and liabilities shall be verified in accordance with 
methods of procedure which the commissioner may determine to be 
adequate to carry out the intentions of this section.  It shall 
be the further purpose of these examinations to assess the 
adequacy of capital protection and the capacity of the 
institution to meet usual and reasonably anticipated deposit 
withdrawals and other cash commitments without resorting to 
excessive borrowing or sale of assets at a significant loss, and 
to investigate each institution's compliance with applicable 
laws and regulations.  Based on the examination findings, the 
commissioner shall make a determination as to whether the 
institution is being operated in a safe and sound manner.  None 
of the above provisions limits the commissioner in making 
additional examinations as deemed necessary or advisable.  The 
commissioner shall investigate the methods of operation and 
conduct of these institutions and their systems of accounting, 
to ascertain whether these methods and systems are in accordance 
with law and sound banking principles.  The commissioner may 
make requirements as to records as deemed necessary to 
facilitate the carrying out of his or her duties and to properly 
protect the public interest.  The commissioner may examine, or 
cause to be examined by these examiners, on oath, any officer, 
director, trustee, owner, agent, clerk, customer, or depositor 
of any financial institution touching the affairs and business 
thereof, and may issue, or cause to be issued by the examiners, 
subpoenas, and administer, or cause to be administered by the 
examiners, oaths.  In case of any refusal to obey any subpoena 
issued under the commissioner's direction, the refusal may at 
once be reported to the district court of the district in which 
the bank or other financial institution is located, and this 
court shall enforce obedience to these subpoenas in the manner 
provided by law for enforcing obedience to subpoenas of the 
court.  In all matters relating to his official duties, the 
commissioner of banks commerce has the power possessed by courts 
of law to issue subpoenas and cause them to be served and 
enforced, and all officers, directors, trustees, and employees 
of state banks, savings banks, trust companies, savings 
associations, and other financial institutions within the state, 
and all persons having dealings with or knowledge of the affairs 
or methods of these institutions, shall afford reasonable 
facilities for these examinations, make returns and reports to 
the commissioner of banks commerce as the commissioner may 
require; attend and answer, under oath, the commissioner's 
lawful inquiries; produce and exhibit any books, accounts, 
documents, and property as the commissioner may desire to 
inspect, and in all things aid the commissioner in the 
performance of his or her duties.  
    Sec. 4.  Minnesota Statutes 1982, section 47.204, 
subdivision 1, is amended to read: 
    Subdivision 1.  [NO USURY LIMITS.] Notwithstanding any law 
to the contrary, no limitation on the rate or amount of 
interest, discount points, finance charges or other charges 
shall apply to a loan, mortgage, credit sale or advance which 
would have been exempt from the laws of this state pursuant to 
Pub. L. 96-221, Title V, Part A, Section 501, as amended as of 
June 2, 1981, but for section 47.203 and which is made in this 
state after June 2, 1981 and before August 1, 1984 1987.  
    Sec. 5.  Minnesota Statutes 1983 Supplement, section 53.04, 
subdivision 3a, is amended to read: 
    Subd. 3a.  (a) The right to make loans, secured or 
unsecured, at the rates and on the terms and other conditions 
permitted licensees under chapter 56.  Loans made under the 
authority of chapter 56 must be in amounts in compliance with 
section 53.05, clause (3), or 56.131, subdivision 1, paragraph 
(a), whichever is less.  The right to extend credit or lend 
money and to collect and receive charges therefor as provided by 
chapter 334, or in lieu thereof to charge, collect, and receive 
interest at the rate of 21.75 percent per annum.  The provisions 
of sections 47.20 and 47.21 do not apply to loans made under 
this section, except as specifically provided in this 
subdivision.  Nothing in this subdivision is deemed to 
supersede, repeal, or amend any provision of section 53.05.  A 
licensee making a loan under this chapter secured by a lien on 
real estate shall comply with the requirements of section 47.20, 
subdivision 8.  
    (b) Loans made under this section at a rate of interest not 
in excess of that provided for in paragraph (a) may be secured 
by real or personal property, or both.  If the proceeds of a 
loan made after August 1, 1984 1987 are used in whole or in part 
to satisfy the balance owed on a contract for deed, the rate of 
interest charged on the loan must not exceed the rate provided 
in section 47.20, subdivision 4a.  If the proceeds of a loan 
secured by a first lien on the borrower's primary residence are 
used to finance the purchase of the borrower's primary 
residence, the loan must comply with the provisions of section 
47.20.  
    (c) A loan made under this section that is secured by real 
estate and that is in a principal amount of $7,500 or more and a 
maturity of 60 months or more may contain a provision permitting 
discount points, if the loan does not provide a loan yield in 
excess of the maximum rate of interest permitted by this 
subdivision.  Loan yield means the annual rate of return 
obtained by a licensee computed as the annual percentage rate is 
computed under Federal Regulation Z.  If the loan is prepaid in 
full, the licensee must make a refund to the borrower to the 
extent that the loan yield will exceed the maximum rate of 
interest provided by this subdivision when the prepayment is 
taken into account.  
     Sec. 6.  Minnesota Statutes 1982, section 56.12, is amended 
to read: 
     56.12 [ADVERTISING; TAKING OF SECURITY; PLACE OF BUSINESS.] 
     No licensee shall advertise, print, display, publish, 
distribute, or broadcast, or cause or permit to be advertised, 
printed, displayed, published, distributed, or broadcast, in any 
manner any statement or representation with regard to the rates, 
terms, or conditions for the lending of money, credit, goods, or 
things in action which is false, misleading, or deceptive.  The 
commissioner may order any licensee to desist from any conduct 
which he shall find to be a violation of the foregoing 
provisions. 
     The commissioner may require that rates of charge, if 
stated by a licensee, be stated fully and clearly in such manner 
as he may deem necessary to prevent misunderstanding thereof by 
prospective borrowers.  A statement of rates of charge that 
meets the requirements of the federal Truth-in-Lending Act and 
regulations thereunder shall be deemed full compliance with this 
section. 
     A licensee may take a lien upon real estate as security for 
any loan exceeding $2,700 in principal amount made under this 
chapter.  The provisions of sections 47.20 and 47.21 do not 
apply to loans made under this chapter, except as provided in 
this section.  No loan secured by a first lien on a borrower's 
primary residence shall be made pursuant to this section if the 
proceeds of the loan are used to finance the purchase of the 
borrower's primary residence, unless:  
    (1) the proceeds of the loan are used to finance the 
purchase of a manufactured home; or 
    (2) the proceeds of the loan are used in whole or in part 
to satisfy the balance owed on a contract for deed.  The rate of 
interest charged on such a loan made after August 1, 1984 1987, 
shall not exceed the rate provided in section 47.20, subdivision 
4a.  
    If the proceeds of the loan are used to finance the 
purchase of the borrower's primary residence, the licensee shall 
consent to the subsequent transfer of the real estate if the 
existing borrower continues after transfer to be obligated for 
repayment of the entire remaining indebtedness.  The licensee 
shall release the existing borrower from all obligations under 
the loan instruments, if the transferee (1) meets the standards 
of credit worthiness normally used by persons in the business of 
making loans, including but not limited to the ability of the 
transferee to make the loan payments and satisfactorily maintain 
the property used as collateral, and (2) executes an agreement 
in writing with the licensee whereby the transferee assumes the 
obligations of the existing borrower under the loan 
instruments.  Any such agreement shall not affect the priority, 
validity or enforceability of any loan instrument.  A licensee 
may charge a fee not in excess of one-tenth of one percent of 
the remaining unpaid principal balance in the event the loan is 
assumed by the transferee and the existing borrower continues 
after the transfer to be obligated for repayment of the entire 
assumed indebtedness.  A licensee may charge a fee not in excess 
of one percent of the remaining unpaid principal balance in the 
event the remaining indebtedness is assumed by the transferee 
and the existing borrower is released from all obligations under 
the loan instruments, but in no event shall the fee exceed $150. 
     A licensee making a loan under this chapter secured by a 
lien on real estate shall comply with the requirements of 
section 47.20, subdivision 8.  
     No licensee shall conduct the business of making loans 
under this chapter within any office, room, or place of business 
in which any other business is solicited or engaged in, or in 
association or conjunction therewith, if the commissioner finds 
that the character of the other business is such that it would 
facilitate evasions of this chapter or of the rules and 
regulations lawfully made hereunder.  The commissioner may 
promulgate rules dealing with such other businesses. 
     No licensee shall transact the business or make any loan 
provided for by this chapter under any other name or at any 
other place of business than that named in the license.  No 
licensee shall take any confession of judgment or any power of 
attorney.  No licensee shall take any note or promise to pay 
that does not accurately disclose the principal amount of the 
loan, the time for which it is made, and the agreed rate or 
amount of charge, nor any instrument in which blanks are left to 
be filled in after execution.  Nothing herein is deemed to 
prohibit the making of loans by mail. 
    Sec. 7.  Minnesota Statutes 1983 Supplement, section 47.54, 
subdivision 1, is amended to read:  
    Subdivision 1.  [APPLICATION.] Any bank desiring to 
establish a detached facility shall execute and acknowledge a 
written application in the form prescribed by the commissioner 
and shall file the application in the commissioner's office with 
a fee of $500.  If an application is contested, 50 percent of an 
additional fee equal to the actual costs incurred by the 
commissioner in approving or disapproving the application, 
payable to the state treasurer and credited by the treasurer to 
the general fund, shall be paid by the applicant and 50 percent 
equally by the intervening parties.  Thereupon The applicant 
shall within 30 days of the receipt of the form prescribed by 
the commissioner publish a notice of the filing of the 
application in a newspaper published in the municipality in 
which the proposed detached facility is to be located, and if 
there is no such newspaper, then at the county seat of the 
county in which the facility is proposed to be located.  The 
notice must be in the form prescribed by the commissioner and, 
In addition to the publication, the applicant must mail a copy 
of the notice by certified mail to every bank located within 
three miles of the proposed location of the detached facility, 
measured in the manner provided in section 47.52. 
    Sec. 8.  Minnesota Statutes 1982, section 48.03, 
subdivision 4, is amended to read:  
    Subd. 4.  Whenever a change occurs in the outstanding 
voting stock of any state bank which will result in control or 
in a change in the control of the bank, the president or cashier 
of such bank shall promptly report such facts to file notice of 
the proposed acquisition of control with the commissioner of 
banks upon obtaining knowledge commerce at least 30 days prior 
to the actual effective date of such the change.  As used in 
this section, the term "control" means the power to directly or 
indirectly direct or cause the direction of the management or 
policies of the bank.  A change in ownership of capital stock 
which would result in direct or indirect ownership by a 
stockholder or an affiliated group of stockholders of less than 
25 percent of the outstanding capital stock shall not be 
considered a change of control.  If there is any doubt as to 
whether a change in the outstanding voting stock is sufficient 
to result in control thereof or to effect a change in the 
control thereof, such doubt shall be resolved in favor of 
reporting the facts to the commissioner.  This requirement to 
file prior notice does not imply the need for prior approval by 
the commissioner of commerce.  
    Sec. 9.  Minnesota Statutes 1982, section 48.08, is amended 
to read: 
    48.08 [DIRECTORS AND OFFICERS, RESTRICTED USE OF BANK 
FUNDS; DEALINGS WITH BANK.] 
    No director, officer or employee shall, directly or 
indirectly, in any manner, use the funds of the bank, or any 
part thereof, except in its regular business transactions, and 
every loan made to any of its directors, officers, employees, or 
agents shall be upon the same security required of others and in 
strict conformity to its rules and regulations.  Every such 
loan, or line of credit for a stated amount and not to run for 
more than one year, shall be authorized in advance by the board 
and acted upon in the absence of the applicant, except that a 
loan to a director, officer, or employee for an amount which 
will not increase such a liability to exceed the greater of 
(a) $25,000 or (b) five percent of the bank's capital and 
unimpaired surplus or $500,000, whichever is less, may be made 
without previous approval but shall be acted upon by the board 
at the next succeeding regular meeting.  No cashier or other 
officer or employee of a bank shall sell to the bank, directly 
or indirectly, any mortgage, bond, note, stock, or other 
security without the written approval of the board of directors, 
filed in the office of the bank or embodied in a resolution 
adopted by the board.  A copy of this written approval or 
resolution shall immediately be sent to the commissioner of 
banks commerce. 
    Sec. 10.  Minnesota Statutes 1982, section 48.13, is 
amended to read:  
    48.13 [CONDITIONS OF BONDS.] 
    If a bond is given, it shall be in favor of the bank and 
shall have one corporate surety, which shall be a solvent 
insurance corporation in good standing authorized to do business 
in Minnesota, or at least five individual sureties, not one of 
whom shall be an officer, director, or stockholder of the bank, 
and each of whom shall justify in a sum equal to the penalty of 
the bond and, in addition thereto, each individual surety shall 
furnish to the bank, in connection with the bond, a verified 
financial statement showing his solvency and responsibility, 
which statement shall be renewed and revised annually by each 
surety.  If a contract of insurance is secured, it shall be in 
favor of the bank and shall be executed by some insurance 
company possessing the qualifications heretofore specified.  No 
cancellation or termination at the request of the underwriter of 
a bond or contract of insurance required by section 48.12 shall 
be effective unless the underwriter gives in advance at least 60 
days written notice by registered mail to the commissioner of 
commerce.  
    Sec. 11.  Minnesota Statutes 1982, section 48.14, is 
amended to read:  
    48.14 [EXAMINATIONS, REPORTS TO SHOW NAMES OF BONDED 
OFFICERS AND EMPLOYEES.] 
    When an examination is made of a bank by the commissioner, 
or his examiner, the report of the examination made to the 
commissioner shall state the names of all the officers and 
employees of the bank so bonded or insured, and the penalty of 
the bonds or the amount of the insurance covering them.  When 
blanket coverage is provided, the names of all the officers and 
employees need not be stated.  When the commissioner, after an 
investigation, or upon receipt of a notice of cancellation or 
other termination required by section 48.13, finds as a fact 
that any bank is not adequately protected against loss by reason 
of the unlawful act of any officer or employee thereof, whether 
through the omission to secure any bond or contract of 
insurance, or through the insufficiency of the sureties or the 
insurer on the bond or policy given, or otherwise, he may 
require, by written order, that such bonds or contracts of 
insurance in favor of the bank be obtained as in his opinion 
would adequately protect the bank against loss by reason of the 
unlawful act of any of its officers or employees, and shall 
thereupon notify the bank, by certified mail, of his order; and, 
if the same is not complied with within 30 days after the date 
of the mailing of the order, the bank may be closed by him and, 
if closed, shall not be permitted to resume business until the 
order has been fully complied with.  All such bonds or contracts 
of insurance shall remain in the custody of the bank protected 
thereby and shall be available for examination and inspection by 
the commissioner. 
    Sec. 12.  Minnesota Statutes 1983 Supplement, section 
48.512, subdivision 2, is amended to read:  
    Subd. 2.  [REQUIRED INFORMATION.] Before opening or 
authorizing signatory power over a transaction account, a 
financial intermediary shall require one applicant to provide 
the following information on an application document signed by 
the applicant:  
    (a) full name;  
    (b) birth date;  
    (c) address of residence;  
    (d) address of current employment, if employed;  
    (e) telephone numbers of residence and place of employment, 
if any;  
    (f) social security number;  
    (g) driver's license or identification card number issued 
pursuant to section 171.07.  If the applicant does not have a 
driver's license or identification card, the applicant may 
provide an identification document number issued for 
identification purposes by any state, federal, or foreign 
government if the document includes the applicant's photograph, 
full name, birth date, and signature.  A valid Wisconsin 
driver's license without a photograph may be accepted in 
satisfaction of the requirement of this paragraph until January 
1, 1985;  
    (h) whether the applicant has had a transaction account at 
the same or another financial intermediary within 12 months 
immediately preceding the application, and if so, the name of 
the financial intermediary;  
    (i) whether the applicant has had a transaction account 
closed by a financial intermediary without the applicant's 
consent within 12 months immediately preceding the application, 
and if so, the reason the account was closed; and 
    (j) whether the applicant has been convicted of a criminal 
offense because of the use of a check or other similar item 
within 24 months immediately preceding the application.  
    A financial intermediary may require an applicant to 
disclose additional information.  
    An applicant who makes a false material statement that he 
does not believe to be true in an application document with 
respect to information required to be provided by this 
subdivision is guilty of perjury.  The financial intermediary 
shall notify the applicant of the provisions of this paragraph.  
    Sec. 13.  Minnesota Statutes 1982, section 48.24, 
subdivision 6, is amended to read:  
    Subd. 6.  The discount of the following classes of paper 
shall not be regarded as creating liability within the meaning 
of this section: 
    (1) Bonds, orders, warrants, or other evidences of 
indebtedness of the United States, of federal land banks, of 
this state or of any county, city, town, or school district in 
this state, or of the bonds, representing general obligation of 
any other state in the United States, or bonds and obligations 
of the federal home loan banks established by act of congress 
known as the federal home loan bank act, approved July 23, 1932, 
and acts amendatory thereto, or debentures and other obligations 
of the federal intermediate credit banks established by act of 
congress known as the federal intermediate credit banks act, 
approved March 4, 1923, and acts amendatory thereto, in 
obligations issued by the banks for cooperatives or any of them, 
and in bonds and obligations of the home owners' loan 
corporation established by act of congress, known as the home 
owners' loan act of 1933, and acts amendatory thereto, in 
exchange for mortgages on homes, or contracts for deed, or real 
estate held by it.  
    (2) Bills of exchange drawn in good faith against actually 
existing values, including bills which are secured by shipping 
documents conveying or securing title to goods shipped, and 
which are not to be surrendered until such bills are paid in 
cash or solvent credits.  This includes bankers' acceptances or 
participations in bankers' acceptances of the kind and 
maturities made eligible by law for rediscount with, or purchase 
by, federal reserve banks, providing the same are accepted or 
endorsed by a bank or trust company incorporated under the laws 
of this state; or by any bank or trust company in the United 
States which is a member of the federal reserve system.  
    (3) Paper based upon the collateral security of warehouse 
receipts covering agricultural or manufactured products stored 
in elevators or warehouses under the following conditions: 
    First, when the actual market value of the property covered 
by such receipts at all times exceeds by at least ten percent 
the amount loaned thereon, and 
    Second, when the full amount of every such loan is at all 
times covered by fire insurance in duly authorized companies, 
within the limit of their ability to cover such amounts, and the 
excess, if any, in companies having sufficient paid-up capital 
to authorize their admission, and payable, in case of loss, to 
the bank or holder of the warehouse receipt.  
    (4) Total loans to an obligor secured by either 
certificates of deposit, or savings certificates or both, of any 
such bank to the extent of the total of such certificates 
pledged as security.  
    (5) Debentures issued under the authority of the federal 
national mortgage association.  
    (6) Obligations representing loans from one business day to 
the next to any state bank or national banking association of 
excess reserve balances from time to time maintained under the 
provisions of Minnesota Statutes, Section 48.22, or of section 
19 of the Federal Reserve Act, as amended, 12 U.S.C. sections 
461 et seq.  
    Sec. 14.  Minnesota Statutes 1982, section 48.48, 
subdivision 1, is amended to read:  
    Subdivision 1.  [SUBMISSION AND PUBLICATION.] At least four 
times in each year, and at any other time when so requested by 
the commissioner, every bank or trust company shall, within 30 
days of the date of notice, make and transmit to the 
commissioner, in a form he prescribes, a report, verified by its 
president or vice-president and by its cashier or treasurer, and 
attested by at least two of its directors, stating in detail, 
under appropriate heads, as required by the commissioner, its 
assets and liabilities at the close of business on the day 
specified in the request.  The commissioner may accept a report 
made to a federal authority having supervision of banks or trust 
companies in fulfilling this requirement.  This statement shall 
be published once at the expense of the bank or trust company in 
a newspaper serving the municipality or town in which the bank 
or trust company is located.  The newspaper shall be published 
in the county in which the bank or trust company is located or 
in an adjoining county.  Proof of publication shall be filed 
with the commissioner immediately after publication of the 
report, but no later than 60 days following the date of the 
notice.  For the purposes of this subdivision a newspaper serves 
a municipality or town if it meets the qualifications of section 
331.02, subdivision 1, clause (4). 
    Sec. 15.  Minnesota Statutes 1982, section 48.48, 
subdivision 2, is amended to read:  
    Subd. 2.  [PENALTIES FOR LATE SUBMISSION.] For failure to 
send these reports to the commissioner in the time specified, a 
bank or trust company shall forfeit to the state the sum of $25 
for each day of delay and shall pay the accumulated sum to the 
commissioner upon a formal demand for payment by the 
commissioner.  If it appears that a report was mailed by a bank 
or trust company on or before the end of the 30 day period, or 
proof of publication mailed on or before the end of the 60-day 
period, the commissioner shall waive any forfeit.  In the event 
it does not appear that a report was timely mailed, the 
commissioner may nevertheless waive forfeit upon a showing by 
the bank or trust company to the satisfaction of the 
commissioner that failure to send the reports was the result of 
causes beyond the control of the bank or trust company. 
    Sec. 16.  Minnesota Statutes 1982, section 48.51, is 
amended to read:  
    48.51 [DEMAND DEPOSITS DEFINED.] 
    For the purpose of sections 48.50 and 48.51, all deposits 
are payable on demand except: 
    (1) Those deposits which are evidenced by a negotiable or 
non-negotiable instrument which provides on its face that the 
amount of the deposit is payable: 
    (a) on a certain date, specified in the instrument, not 
less than 14 days after the date of the deposit; or (b) at the 
expiration of a specified period not less than 14 days after the 
date of the instrument; or (c) upon written notice to be given 
not less than 14 days before the date of repayment. 
    (2) Those deposits which may not be withdrawn within 14 
days of the making thereof. 
    (3) Those deposits which may not be withdrawn within 14 
days of the giving of notice of an intended withdrawal. 
    (4) Those deposits in which the above 14-day minimums are 
in conflict with instruments authorized by the depository 
institutions deregulation committee's regulations authorized by 
title II, Depository Institutions Deregulation and Monetary 
Control Act of 1980, Public Law Number 96-221.  
    Sec. 17.  Minnesota Statutes 1982, section 52.06, 
subdivision 1, is amended to read:  
    Subdivision 1.  Credit unions shall be under the 
supervision of the commissioner of banks commerce.  Each credit 
union shall annually, on or before January 25, file a report 
with the commissioner of banks commerce on forms supplied by him 
for that purpose giving such relevant information as he may 
require concerning the operations during the preceding calendar 
year.  Additional reports may be required.  Credit unions shall 
be examined, at least annually once every 18 calendar months, by 
the commissioner of banks commerce, except that if a credit 
union requests, the commissioner may accept the audit of a 
certified public accountant in place of this examination.  Such 
certified public accountant must be approved by the 
commissioner.  The qualitative type of audit examination to be 
performed by the certified public accountant shall be defined by 
banking division regulation and approved by the commission 
commissioner.  Further, in lieu of this examination the 
commissioner may accept any examination made by the National 
Credit Union Administration, provided a copy of the examination 
is furnished to the commissioner.  A report of the examination 
by the commissioner of banks commerce shall be forwarded to the 
president, or the chairman of the board if the position is so 
designated pursuant to section 52.09, subdivision 4, of the 
examined credit union within 60 days after completion of the 
examination.  Within 60 days of the receipt of such report, a 
general meeting of the directors and committees shall be called 
to consider matters contained in the report.  For failure to 
file reports when due, unless excused for cause, the credit 
union shall pay to the state treasurer $5 for each day of its 
delinquency. 
    Sec. 18.  Minnesota Statutes 1983 Supplement, section 
52.203, is amended to read:  
     52.203 [MERGER.] 
     Any credit union chartered by this state may merge with and 
be absorbed by any other state or federal credit union, and any 
credit union chartered by this or any other state or any federal 
credit union may be merged into a successor credit union 
chartered by this state, upon approval of all regulatory 
agencies concerned, and upon compliance with this section as 
regards the credit union chartered by this state.  At the time 
of filing with the commissioner of any proposed merger or 
consolidation plan, the credit unions proposing to merge or 
consolidate shall submit a fee of $100 payable to the 
commissioner of banks commerce.  The fee shall be paid in equal 
parts by the credit unions' party to the proposal.  
     A credit union may be absorbed after two-thirds of its 
members present and entitled to vote have voted in favor of the 
merger at a special meeting called by a majority of the board of 
directors for that purpose, upon 14-days mailed written notice 
to each member at his last known address clearly stating the 
purpose of the special meeting, or at any regular meeting after 
like notice of the purpose has been given. Thereafter, the board 
of directors may execute an agreement of merger with the 
successor credit union, subject to approval of the agreement by 
the commissioner of banks commerce.  The commissioner shall 
approve or disapprove of the agreement within 60 days of the 
date the agreement is submitted to him.  The approved agreement 
must be filed with the county recorder in the county where the 
credit union is located secretary of state. 
    If the successor credit union which absorbs one or more 
credit unions is chartered by this state it may execute an 
agreement of merger upon approval of the agreement by the 
commissioner of banks commerce and by the board of directors of 
the credit union.  The commissioner of banks commerce shall 
approve the merger agreement if it is in the best interest of 
the credit unions involved.  In any event, the commissioner of 
banks commerce shall approve or disapprove of the merger 
agreement within 60 days of the date the agreement is submitted 
to him.  Members of, and persons eligible for membership in, the 
credit union being absorbed have all rights of membership in the 
successor credit union. 
    The charter and license and all other rights and property 
of the credit union being absorbed is deemed to be transferred 
to and invested in the successor credit union upon execution and 
approval of the merger agreement without further action.  Any 
pending action or other judicial proceeding to which the credit 
union being absorbed is a party at the date of merger does not 
abate by reason of the merger.  If the credit union being 
absorbed is chartered by this state, its corporate existence 
ceases upon the execution and approval of the merger agreement 
without further action. 
    Sec. 19.  Minnesota Statutes 1983 Supplement, section 
53.01, is amended to read:  
    53.01 [ORGANIZATION.] 
    It is lawful for three or more persons, who desire to form 
a corporation for the purpose of carrying on primarily the 
business of loaning money to persons within the conditions set 
forth in this chapter, to organize, under this chapter, an 
industrial loan and thrift company, by filing with the secretary 
of state a certificate articles of incorporation, and upon 
paying the fees prescribed by sections 301.07 and 301.071 or 
chapter 302A and upon compliance with the procedure provided for 
the organization and government of ordinary corporations under 
the laws of this state, and upon compliance with the additional 
requirements of this chapter prior to receiving authorization to 
do business. 
    Sec. 20.  Minnesota Statutes 1983 Supplement, section 
53.03, subdivision 1, is amended to read:  
    Subdivision 1.  [APPLICATION, FEE, NOTICE.] Any corporation 
hereafter organized as an industrial loan and thrift company, 
shall, after compliance with the requirements set forth in 
sections 53.01 and 53.02, file a written application with the 
department of commerce for a certificate of authorization.  The 
application, in triplicate duplicate, must be in the form 
prescribed by the department of commerce.  The application must 
be made in the name of the corporation, executed and 
acknowledged by two of its officers designated by the board of 
directors of the corporation for that purpose, requesting a 
certificate authorizing the corporation to transact business as 
an industrial loan and thrift company, at the place and in the 
name stated in the application.  At the time of filing the 
application the applicant shall pay a $1,000 filing fee and a 
$500 investigation fee.  The fees must be turned over by the 
commissioner to the state treasurer and credited to the general 
fund.  The applicant shall also submit a copy of the bylaws of 
the corporation, its articles of incorporation and all 
amendments thereto at that time.  If the application is 
contested, 50 percent of an additional fee equal to the actual 
costs incurred by the department of commerce in approving or 
disapproving the application, payable to the state treasurer and 
credited to the general fund shall be paid by the applicant and 
50 percent equally by the intervening parties.  A notice of the 
filing of the application must be published once within 30 days 
of the receipt of the form prescribed by the department of 
commerce, at the expense of the applicant, in a newspaper 
published in the municipality in which the proposed industrial 
loan and thrift company is to be located, or, if there be none, 
in a newspaper published at the county seat of the county in 
which the company is proposed to be located.  If the department 
of commerce receives a written objection to the application from 
any person within 20 days of the notice having been fully 
published a contested case hearing must be conducted on the 
application.  The department of commerce may without cause order 
a contested case hearing on the application.  Notice of a 
hearing in connection with this section must be published once 
in the form prescribed by the department of commerce, at the 
expense of the applicant, in the same manner as a notice of 
application. 
    Sec. 21.  Minnesota Statutes 1982, section 53.03, 
subdivision 4, is amended to read:  
    Subd. 4.  [FILING CERTIFICATE.] The certificate of 
authorization granted shall be filed in the places specified for 
filing the certificate articles of incorporation in section 
53.01.  The corporation shall thereupon become an industrial 
loan and thrift company. 
    Sec. 22.  Minnesota Statutes 1983 Supplement, section 
53.03, subdivision 5, is amended to read:  
    Subd. 5.  [PLACE OF BUSINESS.] Not more than one place of 
business may be maintained under any certificate of 
authorization issued subsequent to the enactment of Laws 1943, 
chapter 67, pursuant to the provisions of this chapter, but the 
department of commerce may issue more than one certificate of 
authorization to the same corporation upon compliance with all 
the provisions of this chapter governing an original issuance of 
a certificate of authorization.  The filing fee for a branch 
application shall be $500 and the investigation fee $250.  If a 
corporation has been issued more than one certificate of 
authorization, the corporation shall allocate a portion of 
contributed capital to each office for which a certificate has 
been issued, in order to comply with the capital requirements of 
section 53.02 and section 53.05, clause (2), which sections are 
applicable to each office and the capital allocated thereto in 
the same manner as if each certificate had been issued to a 
separate corporation.  Each additional certificate of 
authorization issued pursuant to the provisions of this 
subdivision must be filed with the secretary of state and the 
county recorder of the county in which the corporation is 
authorized to do business thereunder.  A corporation may change 
one or more of its locations upon the written approval of the 
commissioner of banks commerce.  A fee of $100 must accompany 
each application to the commissioner for approval to change the 
location of an established office.  
    Sec. 23.  Minnesota Statutes 1982, section 53.09, 
subdivision 1, is amended to read:  
    Subdivision 1.  [FREQUENCY AND EXPENSE.] The commissioner 
shall make examinations, at least once each year every 18 
calendar months, of each authorized place of business of every 
industrial loan and thrift company organized or operating under 
this chapter, at which time he shall satisfy himself that the 
corporation is in a solvent condition and is complying with the 
requirements of this chapter and operating according to sound 
business principles.  In order to enforce his actions in this 
connection, the commissioner is hereby vested with the same 
authority as in his examination and regulation of state banks.  
The corporation so examined shall pay to the commissioner such 
fees as may be required under section 46.131.  The commissioner 
may maintain an action for the recovery of such costs in any 
court of competent jurisdiction.  
    Sec. 24.  Minnesota Statutes 1983 Supplement, section 
168.67, is amended to read:  
    168.67 [SALES FINANCE COMPANIES; LICENSES, FEES, REFUNDS.] 
    (a) No person shall engage in the business of a sales 
finance company in this state without a license therefor as 
provided in sections 168.66 to 168.77 provided, however, that no 
bank, trust company, savings bank, savings and loan association, 
or credit union, whether state or federally chartered, 
industrial loan and thrift company, or small loan company 
licensee under the Minnesota Regulated Loan Act authorized to do 
business in this state shall be required to obtain a license 
under sections 168.66 to 168.77. 
    (b) The application for a license shall be in writing, 
under oath and in the form prescribed by the administrator.  The 
application shall contain the name of the applicant; date of 
incorporation, if incorporated; the address where the business 
is or is to be conducted and similar information as to any 
branch office of the applicant; the name and resident address of 
the owner or partners, or, if a corporation or association, of 
the directors, trustees and principal officers, and other 
pertinent information the administrator requires. 
    (c) The licensee fee for the fiscal year beginning July 1 
and ending June 30 of the following year, or any part thereof 
shall be the sum of $150 for the principal place of business of 
the licensee, and the sum of $75 for each branch of the 
licensee, maintained in this state.  Any licensee who proves to 
the satisfaction of the administrator, by affidavit or other 
proof satisfactory to the administrator, that during the 12 
calendar months of the immediately preceding fiscal year, for 
which his license has been paid that he has not held retail 
installment contracts exceeding $15,000 in amount, shall be 
entitled to a refund of that portion of each license fee paid in 
excess of $25.  The administrator shall certify to the 
commissioner of finance that the licensee is entitled to a 
refund, and payment thereof shall be made by the state 
treasurer.  The amount necessary to pay for the refundment of 
the license fee is appropriated out of the general fund.  All 
license fees received by the administrator under sections 168.66 
to 168.77 shall be deposited with the state treasurer. 
    (d) Each license shall specify the location of the office 
or branch and must be conspicuously displayed there.  In case 
the location be changed, the administrator shall endorse the 
change of location on the license. 
    (e) Upon the filing of such application, and the payment of 
the fee, the administrator shall issue a license to the 
applicant to engage in the business of a sales finance company 
under and in accordance with the provisions of sections 168.66 
to 168.77 for a period which shall expire the last day of June 
next following the date of its issuance.  The license shall not 
be transferable or assignable.  No licensee shall transact any 
business provided for by sections 168.66 to 168.77 under any 
other name.  
    Sec. 25.  Minnesota Statutes 1982, section 51A.50, is 
amended to read: 
    51A.50 [FEDERAL SAVINGS ASSOCIATIONS AND SAVINGS BANKS.] 
    Federal savings associations, federal savings banks, or 
federal savings and loan associations, incorporated pursuant to 
the laws of the United States, as now or hereafter amended, are 
not foreign corporations or foreign associations.  Unless 
federal laws or regulations provide otherwise, federal 
associations, federal savings banks, and the members or 
stockholders thereof shall possess all of the rights, powers, 
privileges, benefits, immunities, and exemptions that are now 
provided or that hereafter may be provided by the laws of this 
state for savings associations organized under the laws of this 
state and for the members or stockholders thereof.  This 
provision is additional and supplemental to any provision which, 
by specific reference, is applicable to federal associations and 
the members or stockholders thereof.  Federal savings banks 
shall possess all of the rights, powers, privileges, benefits, 
immunities, liabilities, and exemptions that are now provided or 
that hereafter may be provided by the laws of this state for 
federal savings and loan associations.  
    Sec. 26.  Minnesota Statutes 1983 Supplement, section 
332.50, subdivision 2, is amended to read: 
    Subd. 2.  [ACTS CONSTITUTING.] Whoever issues any check 
that is dishonored and is not paid within 30 days after mailing 
a notice of dishonor and a copy of sections 332.50 and 609.535 
in compliance with subdivision 3, is liable to the holder for 
the amount of the check plus a civil penalty of up to $100, 
interest at the rate payable on judgments pursuant to section 
549.09 on the face amount of the check from the date of 
dishonor, and reasonable attorney fees if the amount of the 
check is over $1,250, and.  
    A service charge not exceeding $15 may be imposed 
immediately on any dishonored check, regardless of mailing a 
notice of dishonor, if written notice of the service charge was 
conspicuously displayed on the premises when the check was 
issued.  
    This subdivision prevails over any provision of law 
limiting, prohibiting, or otherwise regulating service charges 
authorized by this subdivision. 
     Sec. 27.  [REPEALER.] 
     Minnesota Statutes 1982, sections 47.75, subdivision 2; and 
51A.44, subdivision 3, are repealed.  
     Sec. 28.  [EFFECTIVE DATE.] 
     Sections 1 to 27 are effective the day following final 
enactment. 
    Approved April 26, 1984