Minnesota Session Laws - 1985, Regular Session

  

                         Laws of Minnesota 1985 

                         CHAPTER 57-H.F.No. 183 
           An act relating to commerce; modifying the finance 
          charge on certain open end credit sales; providing for 
          notice of increased interest rates; amending Minnesota 
          Statutes 1984, section 334.16, subdivision 1. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 334.16, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LIMITATION OF RATES.] The imposition, 
charge or collection of a finance charge upon an account balance 
by a seller of goods, services or both shall be lawful, provided 
that: 
    (a) The sale is a consumer credit sale pursuant to an open 
end credit plan, agreement or arrangement between the buyer and 
seller under which (1) the seller may permit the buyer to make 
purchases from time to time from the seller or other sellers, 
(2) the buyer has the privilege of paying the balance in full or 
in installments, and (3) a finance charge may be computed by the 
seller from time to time on an outstanding unpaid balance; and 
    (b) The terms of the plan, agreement or arrangement provide 
for a periodic rate of finance charge which does not exceed 
1-1/2 percent per month computed on an amount no greater than 
the average daily balance of the account during each monthly 
billing cycle; provided a minimum finance charge not in excess 
of 50 cents per month may be imposed, charged or collected. 
    (c) No finance charge in excess of 1-1/3 percent per month 
shall be imposed on an open end and consumer credit account by 
any seller whose Minnesota annual gross sales exceeds 25 million 
dollars issuer whose credit card is issued primarily for the 
purpose of purchasing motor fuels and related products and whose 
gross annual national sales exceed $10 billion.  Retailers must 
give adequate notice to open end consumer credit customers 
before any higher interest rate is applied.  Accompanying credit 
statements must not suggest that the Minnesota legislature 
required retailers to raise interest rates.  The accompanying 
material must make clear that the increase affects only the 
maximum allowable interest rate. 
    Sec. 2.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment, 
but does not apply to account balances outstanding on that 
date.  The finance charges on these account balances may not 
exceed the rates permitted under Minnesota Statutes 1984, 
section 334.16. 
    Approved May 1, 1985