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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 349-H.F.No. 291 
           An act relating to financial institutions; regulating 
          incorporations and operations of banks; requiring 
          prior written approval by the commissioner for certain 
          lease arrangements; requiring certain securities to be 
          deposited with the state treasurer; requiring approval 
          of certain insider agreements; providing penalties 
          against certain lenders; regulating transfer and 
          closing of deposit accounts; regulating real estate 
          holdings by a bank; providing for exclusions to 
          certain usury limits; regulating acquisitions by bank 
          holding companies; revising the definition of feeder 
          livestock loans for bank lending limit purposes; 
          authorizing the commissioner to borrow money to 
          satisfy obligations of certain closed institutions; 
          authorizing indirect investments in eligible 
          securities for state banks; regulating bank or trust 
          company investments; regulating claims against 
          liquidated institutions; providing for the 
          organization of credit unions; regulating interest and 
          dividends paid on deposits; regulating industrial loan 
          and thrifts; regulating interstate branch banking; 
          providing for the submission of certain reports; 
          modifying the maximum allowable interest rate on 
          certain loans used to satisfy the balances owed on 
          contracts for deed; regulating consumer credit 
          transaction contracts; requiring the periodic 
          examination of debt prorate companies; modifying the 
          examination requirement for safe deposit companies and 
          insurance premium finance companies; regulating motor 
          vehicle installment sales; regulating bank 
          applications; regulating electronic financial 
          terminals and unauthorized use of financial 
          transaction cards; amending Minnesota Statutes 1986, 
          sections 46.041; 46.042; 46.07, subdivision 2; 46.131, 
          subdivision 9; 47.10, subdivision 3, and by adding a 
          subdivision; 47.204, subdivision 1; 47.205, 
          subdivisions 2 and 4; 47.69, subdivision 3; 48.055, 
          subdivision 5; 48.15, subdivision 2; 48.21; 48.24, 
          subdivision 7; 48.51; 48.61, subdivisions 3 and 5; 
          48.92, subdivision 10; 48.97, subdivision 2; 48.98, 
          subdivision 1; 48.99, subdivision 1; 49.04, 
          subdivision 1; 49.05, by adding a subdivision; 49.24, 
          subdivision 5; 51A.58; 52.01; 52.02, subdivision 3; 
          52.09, subdivision 2; 52.18; 53.04, subdivisions 3a 
          and 5; 53.05; 53.09, subdivision 2; 55.095; 55.15; 
          56.12; 59A.06, subdivision 3; 168.66, subdivisions 3, 
          4, 5, 9, 10, and 11; 168.705; 168.71; 168.72, 
          subdivisions 1 and 4; 168.73; 168.74; 325G.04, by 
          adding a subdivision; 325G.36; 332.29, subdivision 1;  
          proposing coding for new law in Minnesota Statutes, 
          chapters 46 and 47; repealing Minnesota Statutes 1986, 
          sections 48.60 and 55.13. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1 

                      SUPERVISORY CLARIFICATION ACT 
    Section 1.  Minnesota Statutes 1986, section 46.042, is 
amended to read:  
    46.042 [NOTICE AND HEARING, WHEN NOT GIVEN.] 
    The commissioner of commerce may dispense with the notice 
and hearing provided for by section 46.041 if application is 
made for the incorporation of a new bank to take over the assets 
of one or more existing banks or if the application contemplates 
the reorganization of a national bank into a state bank in the 
same locality, or where the application is made for the 
incorporation of a new bank in the same locality coincidental 
with the closing of an existing bank by the commissioner or 
federal authorities.  This section does not increase the number 
of banks in the community affected. 
    Sec. 2.  Minnesota Statutes 1986, section 46.07, 
subdivision 2, is amended to read:  
    46.07 [RECORDS.] 
    Subd. 2.  [CONFIDENTIAL RECORDS.] The commissioner shall 
divulge facts and information obtained in the course of 
examining financial institutions under the commissioner's 
supervision only when and to the extent required or permitted by 
law to report upon or take special action regarding the affairs 
of an institution, or ordered by a court of law to testify or 
produce evidence in a civil or criminal proceeding, except that 
the commissioner may furnish information as to matters of mutual 
interest to an official or examiner of the federal reserve 
system, the federal deposit insurance corporation, the federal 
savings and loan insurance corporation, the national credit 
union administration, comptroller of the currency, a legally 
constituted state credit union share insurance corporation 
approved under section 52.24, the issuer of a commitment for 
insurance or guarantee of the certificates of an industrial loan 
and thrift company approved under section 53.10, or state and 
federal law enforcement agencies.  The commissioner shall not be 
required to disclose the name of a debtor of a financial 
institution under the commissioner's supervision, or anything 
relative to the private accounts, ownership, or transactions of 
an institution, or any fact obtained in the course of an 
examination thereof, except as herein provided.  For purposes of 
this subdivision, a subpoena is not an order of a court of law.  
These records are classified confidential or protected nonpublic 
for purposes of the Minnesota government data practices act and 
their destruction, as prescribed in section 46.21, is exempt 
from the provisions of chapter 138 and Laws 1971, chapter 529, 
so far as their deposit with the state archives.  
    Sec. 3.  Minnesota Statutes 1986, section 46.131, 
subdivision 9, is amended to read:  
    Subd. 9.  These assessments or fees shall be paid by the 
institution examined within 20 days after a statement of the 
amount has been submitted to the institution examined by the 
commissioner of commerce and, if not so paid, shall bear 
interest at the discount rate charged member banks for borrowing 
from the Federal Reserve Bank of interest provided for by 
section 549.09.  The penalty shall be payable to the 
commissioner on request. 
    Sec. 4.  [46.34] [CERTAIN SECURITIES DEPOSITED WITH THE 
STATE TREASURER.] 
    All securities required or permitted by law to be assigned 
to and deposited with the commissioner of commerce for any 
purpose must, after the effective date of this section, be 
assigned to and deposited with the state treasurer, who shall 
give a receipt therefor.  This receipt must be filed with the 
commissioner, in lieu of the securities, and in this case 
neither the commissioner nor the commissioner's bonding agents 
are responsible for the safekeeping of these securities.  The 
state treasurer shall perform all the duties with regard to the 
safekeeping of these securities which the commissioner is now 
required to perform.  The state treasurer is subject to the same 
obligations and under the same liability, with reference to the 
safekeeping of these securities, as the commissioner.  The state 
treasurer shall accept, release, surrender, and permit 
substitutions of securities assigned to and deposited with the 
state treasurer under the provisions of Laws 1923, chapter 155, 
upon order of the commissioner.  
    Sec. 5.  Minnesota Statutes 1986, section 47.10, 
subdivision 3, is amended to read:  
    Subd. 3.  [LEASEHOLD PLACE OF BUSINESS; APPROVAL OF CERTAIN 
LEASE AGREEMENTS.] No bank, trust company, savings bank, or 
building and loan association may acquire property and 
improvements of any nature for its place of business by lease 
agreement if the lessor has an existing direct or indirect 
interest in the management or ownership of the bank, trust 
company, savings bank, or building and loan association unless 
approved without prior written approval by the commissioner.  
This includes subsequent amendments and associated personal 
property leases leasehold improvements.  
    Sec. 6.  Minnesota Statutes 1986, section 47.10, is amended 
by adding a subdivision to read: 
    Subd. 4.  [APPROVAL OF CERTAIN INSIDER AGREEMENTS.] No 
bank, trust company, savings bank, or savings association may 
purchase or sell real property, personal property, improvements 
or equipment of a value of $25,000 or more if the purchaser or 
seller other than the bank, trust company, savings bank, or 
savings association has an existing direct or indirect interest 
in the institution without prior written approval by the 
commissioner. 
    Sec. 7.  Minnesota Statutes 1986, 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 
Public Law Number 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, 1987. 
    Sec. 8.  Minnesota Statutes 1986, section 47.205, 
subdivision 2, is amended to read:  
    Subd. 2.  [ASSIGNMENT OR SALE OF MORTGAGE LOANS.] If the 
servicing of mortgage loans financing one-to-four family owner 
occupied residences located in this state is sold or assigned to 
another person: 
    (1) the selling lender shall notify the mortgagor of the 
sale no less more than ten days after the actual date of 
transfer.  The notification must include the name, address, and 
telephone number of the person who will assume responsibility 
for servicing and accept payments for the mortgage loan and the 
notification must also include a detailed written financial 
breakdown, including but not limited to, interest rate, monthly 
payment amount, and current escrow balance; 
    (2) the purchasing lender shall issue corrected coupon or 
payment books, if used, and shall provide notification to the 
mortgagor within 20 days after the first payment to the 
purchasing lender is due, of the name, address, and telephone 
number of the person from whom the mortgagor can receive 
information regarding the servicing of the loan, and shall 
inform the mortgagor of any changes made regarding the mortgage 
escrow accounts or servicing requirements including, but not 
limited to, interest rate, monthly payment amount, and current 
escrow balance; and 
    (3) the purchasing lender shall respond within 15 business 
days to a written request for information from a mortgagor.  A 
written response must include the telephone number of the 
company representative who can assist the mortgagor. 
    Sec. 9.  Minnesota Statutes 1986, section 47.205, 
subdivision 4, is amended to read:  
    Subd. 4.  [PENALTIES.] If a lender fails to comply with the 
requirements of subdivisions 2 and 3, the lender is liable to 
the mortgagor for $500 per occurrence, in addition to actual 
damages caused by the violation.  In addition, the lender is 
liable to the mortgager for $500 per occurrence if the violation 
of subdivision 2 or 3 was due to the lender's failure to 
exercise reasonable care.  
    Sec. 10.  Minnesota Statutes 1986, section 47.69, 
subdivision 3, is amended to read:  
    Subd. 3.  Every financial institution using an electronic 
financial terminal shall maintain reasonable procedures to 
minimize losses from unauthorized withdrawals from its 
customers' accounts by use of an electronic financial terminal.  
After a customer makes a bona fide deposit or payment at an 
electronic financial terminal and has received a receipt, any 
loss due to theft or other reason shall not be borne by the 
customer; provided, loss due to the nonpayment or dishonor of a 
check, or other order for payment, deposited at an electronic 
financial terminal shall be governed by the applicable 
provisions of chapter 336.  A financial institution shall be 
liable for all unauthorized withdrawals unless the unauthorized 
withdrawal was (a) (1) due to the negligent conduct or the 
intentional misconduct of the operator of an electronic 
financial terminal or that operator's agent in which case the 
operator of an electronic financial terminal or the agent shall 
be liable, or (b) (2) due to the loss or theft of the customer 
machine readable card in which case the customer shall be 
liable, subject to a maximum liability of $50, for those 
unauthorized withdrawals made prior to the time the financial 
institution is notified of the loss or theft.  The limitation on 
liability contained in clause (2) is effective only if the 
issuer is notified of unauthorized charges contained in a bill 
within 60 days of receipt of the bill by the person in whose 
name the card is issued.  For purposes of this subdivision, 
"unauthorized withdrawal" means a withdrawal by a person other 
than the customer who does not have actual, implied, or apparent 
authority for such withdrawal, and from which withdrawal the 
customer or a member of the customer's family or household 
receives no benefit. 
    Sec. 11.  [47.77] [TRANSFER OF ACCOUNTS PROHIBITED; NOTICE 
ON CLOSING.] 
    (a) No financial institution shall initiate a transfer of a 
deposit account to another deposit account bearing different 
identification information without sending at least 30 days 
prior notice to at least one of the deposit account holders at 
the last known address on file with the financial institution.  
If the new account is subject to different terms, the financial 
institution must obtain the written consent of at least one of 
the deposit account holders before the new terms become 
effective. 
    (b) No financial institution shall initiate a closure of a 
deposit account without first sending at least one of the 
deposit account holders a notice of intent to close the deposit 
account.  The notice must be sent to the deposit account 
holder's last known address on file with the financial 
institution at least 30 days before the financial institution 
closes the deposit account; except that, if the financial 
institution has reasonable suspicion to believe that account is 
being used in connection with a check-related fraud or other 
crime or that funds will not be available to pay items drawn on 
the account, the notice may be sent the same day as the account 
is closed. 
    (c) As used in this section, the following terms have the 
meanings given them.  "Deposit account" means a contract of 
deposit of funds between a depositor and a financial 
institution, and includes a checking account, savings account, 
certificate of deposit share account, and other like 
arrangement.  "Financial institution" means any organization 
authorized to do business under state or federal laws relating 
to financial institutions, including, without limitation, banks 
and trust companies, savings banks, savings and loan 
associations, industrial loan and thrift companies, and credit 
unions. 
    Sec. 12.  Minnesota Statutes 1986, section 48.055, 
subdivision 5, is amended to read:  
    Subd. 5.  Any preferred stock issued by a state bank shall 
be part of its capital stock structure, and the terms "capital 
stock" or "capital" in any laws of this state pertaining to 
state banks shall be deemed to also include and apply to 
preferred stock, except that only stock issued with or having 
succeeded to voting rights shall qualify a director under the 
provisions of section 48.06.  
    Sec. 13.  Minnesota Statutes 1986, section 48.15, 
subdivision 2, is amended to read:  
    Subd. 2.  The department of commerce may, by majority vote 
of its members, which shall include the affirmative vote of the 
commissioner of commerce, may authorize banks organized under 
the laws of this state to engage in any banking activity in 
which banks subject to the jurisdiction of the federal 
government may hereafter be authorized to engage by federal 
legislation, ruling, or regulation.  The commission may not 
authorize state banks as defined by section 48.01, to engage in 
any banking activity prohibited by the laws of this state. 
    Sec. 14.  Minnesota Statutes 1986, section 48.21, is 
amended to read:  
    48.21 [REAL ESTATE; RESTRICTIONS ON HOLDING.] 
    Subdivision 1.  A bank may purchase, carry as an asset, and 
convey real estate only: 
    (1) As provided for in section 47.10;  
    (2) If acquired through foreclosure of a mortgage given to 
it in good faith as security for loans made by or money due to 
it;  
    (3) If conveyed to it in satisfaction of debts previously 
contracted in good faith in the course of its dealings;  
    (4) If acquired by sale on execution or judgment of a court 
in its favor; or 
    (5) If reasonably necessary to mitigate or avoid loss on a 
loan or investment theretofore made.  
    Real estate acquired under clauses (2) to (5) shall be 
carried as an asset only in accordance with rules the 
commissioner prescribes. 
    Subd. 2.  Real estate owned by a bank as a result of 
actions authorized in clauses (2) to (5) of subdivision 1 and 
subsequently sold to any buyer on a contract for deed may not be 
considered creating a liability to a bank for purposes of 
section 48.24.  
    Subd. 3.  Notwithstanding any rules of the commissioner to 
the contrary, if real estate owned by a bank pursuant to clauses 
(2) to (5) of subdivision 1 is not sold or otherwise disposed of 
within the maximum period established by rule by the 
commissioner, the bank may write off any remaining balance at a 
rate not less than one-fifth of that balance each subsequent 
calendar year. 
    Sec. 15.  Minnesota Statutes 1986, section 48.24, 
subdivision 7, is amended to read:  
    Subd. 7.  Obligations of any person, co-partnership, 
association or corporation in the form of notes or drafts 
secured by shipping documents or instruments transferring or 
securing title covering feeder livestock which is free from all 
other encumbrances, when the market value of the livestock 
securing the obligation at the time of the making of the loan is 
not less than 115 percentum of the face amount of the notes 
covered by such documents, shall be subject under this 
subdivision to a limitation of 20 percent of capital and surplus 
in addition to 20 percent of capital and surplus as included in 
provisions of subdivision 1.  Feeder livestock loans as referred 
to in this subdivision is defined to include only obligations 
secured by liens or giving title to cattle, sheep, goats, or 
hogs or poultry being fattened for market, but excluding dairy 
cattle, milk goats, poultry used for production of eggs, or 
barnyard or work animals. 
    Sec. 16.  Minnesota Statutes 1986, section 48.51, is 
amended to read:  
    48.51 [DEMAND DEPOSITS DEFINED.] 
    For the purpose of this section and section 48.50, all 
deposits are payable on demand except: 
    (1) Those deposits which are evidenced by a negotiable or 
nonnegotiable 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 federal law or 
regulations.  
    Sec. 17.  Minnesota Statutes 1986, section 48.61, 
subdivision 3, is amended to read:  
    Subd. 3.  The bank or trust company may invest not to 
exceed ten percent of its capital and surplus in shares of stock 
in any banks or bank holding companies wherein the ownership of 
stock in the banks or bank holding companies is restricted 
to bank holding companies or banks authorized to do business in 
the state of Minnesota. 
    Sec. 18.  Minnesota Statutes 1986, section 48.61, 
subdivision 5, is amended to read:  
    Subd. 5.  In the absence of an express provision to the 
contrary, whenever any statute, rule, charter, trust indenture, 
authorizing resolution, or other instrument governing the 
investment of funds of a banking institution, as defined in 
section 48.01, subdivision 2, directs, requires, authorizes, or 
permits direct investment in certain obligations of the United 
States or obligations, the payment of the principal of and 
interest on which is unconditionally guaranteed by the United 
States, investment in these obligations may be made either 
directly or in the form of securities of, or other interests in, 
an investment company (1) registered under the Federal 
Investment Company Act of 1940, whose shares are registered 
under the Federal Securities Act of 1933, and (2) whose 
investments are limited to these obligations and repurchase 
agreements fully collateralized by these obligations, if the 
repurchase agreements are entered into only with those primary 
reporting dealers that report to the Federal Reserve Bank of New 
York and with the 100 largest United States commercial banks.  
    Investment company shares authorized pursuant to this 
subdivision shall Shares of investment companies whose 
portfolios contain investments which are subject to limits under 
other state law or rule as direct investments may only be held 
in an amount not in exceed excess of 20 percent of the banks' 
capital stock and paid in surplus in each such investment 
company.  These obligations shall be carried at the lower of 
cost or market on the banks' books and adjusted to market on a 
quarterly basis. 
    Sec. 19.  Minnesota Statutes 1986, section 48.92, 
subdivision 10, is amended to read:  
    Subd. 10.  [EQUITY CAPITAL.] "Equity capital" means the sum 
of common stock, preferred stock, and paid in surplus, reserves 
for loss loans and undivided profits. 
    Sec. 20.  Minnesota Statutes 1986, section 48.97, 
subdivision 2, is amended to read:  
    Subd. 2.  [INVESTMENT; REPORTING REQUIREMENTS.] Each 
financial institution located in this state owned by an 
interstate bank holding company shall fully and accurately 
disclose in an annual report to the commissioner of commerce for 
each calendar year the dollar value and volume of loans by zip 
code or census tract beginning with the year ending December 31, 
1987, approved in the previous year in nonreal estate commercial 
and farm lending categories established by the commissioner.  
Lending categories must be delineated in sufficient detail to 
evaluate the lender's loan performance.  Loan categories may 
include:  demand or accrual notes, installment loans, equipment 
loans, inventory or accounts receivable loans, small business 
administration loans, and FmHA guaranteed loans.  Housing loans 
must be disclosed statewide in the same manner and form as 
required by the Federal Home Mortgage Disclosure Act.  The 
annual report must also disclose by zip code or census tract the 
dollar value and volume of deposits received during the previous 
year.  The annual report must also disclose information by the 
categories required in section 48.991 demonstrating that 
developmental loans of a sufficient quantity are being made.  
The report must be accompanied by a copy of the most recent 
disclosures required under the Federal Community Reinvestment 
Act and the most recent Quarterly Statement of Income and 
Conditions. 
    Sec. 21.  Minnesota Statutes 1986, section 48.98, 
subdivision 1, is amended to read:  
    Subdivision 1.  [PUBLIC INFORMATION.] Notwithstanding the 
Minnesota government data practices act, chapter 13, and 
consistent with federal law, the commissioner shall make 
available to the public at reasonable cost copies of all 
applications, including supporting documents and any other 
information required to be submitted to the commissioner. 
    Sec. 22.  Minnesota Statutes 1986, section 48.99, 
subdivision 1, is amended to read:  
    Subdivision 1.  [APPLICATION CRITERIA FOR APPROVAL.] 
Pursuant to the present requirement of the United States Code, 
title 12, section 1842(d) and notwithstanding any other 
provision of state law, a reciprocating state bank holding 
company, or any subsidiary of the a bank holding company, may 
acquire a bank located in this state where the commissioner has 
determined that a merger, consolidation, or purchase of assets 
and assumption of liabilities is necessary and in the public 
interest to prevent the probable failure of a bank or is made 
for the incorporation of a new bank in the same locality 
coincidental with the closing of an existing bank by the 
commissioner or federal authorities and does not increase the 
number of banks in the community affected.  The acquisition is 
subject to the prior written approval of the commissioner of an 
application submitted under this section and after the following 
considerations:  
    (1) the financial and managerial resources of the applicant;
    (2) the future prospects of the applicant and the state 
bank or its subsidiary whose assets, interest in, or shares it 
will acquire;  
    (3) the financial history of the applicant;  
    (4) whether the acquisition or holding may result in undue 
concentration of resources or substantial lessening of 
competition in this state;  
    (5) the convenience and needs of the public of this state; 
and 
    (6) whether the acquisition or holding will strengthen the 
financial condition of the state bank.  
    Sec. 23.  Minnesota Statutes 1986, section 49.04, 
subdivision 1, is amended to read:  
    Subdivision 1.  [COMMISSIONER TAKING POSSESSION; GROUNDS 
FOR; RIGHTS OF THIRD PARTIES.] When it shall appear to the 
commissioner that any financial institution has violated its 
charter, or any law of the state, or is conducting its business 
in an unsafe or unauthorized manner, or that its capital is 
impaired, or if it or any of its controlling officers shall 
refuse to submit its books, papers, and concerns to the 
inspection of the commissioner, or any duly authorized 
assistant, or if any of its officers shall refuse to be examined 
upon oath touching its concerns, or if it shall suspend payment 
of its obligations, or furnish reason for the commissioner 
concluding that it is in an unsound or unsafe condition to 
transact the business for which it was organized, or that it is 
unsafe and inexpedient for it to continue business, or if it 
shall neglect or refuse to observe a proper order of the 
commissioner, the commissioner may forthwith take possession of 
its property and business including forfeiture of its 
certificate of authorization and retain this possession until it 
shall resume business or its affairs be finally liquidated, as 
herein provided.  On taking possession of the property and 
business of any such financial institution, the commissioner 
shall forthwith give notice of that fact to any and all 
financial institutions or other corporations, associations, 
partnerships, and individuals holding, or in possession of, any 
of its assets.  No financial institution or other corporation, 
association, partnership, or individual knowing of such taking 
possession by the commissioner, or notified, as aforesaid, shall 
have a lien or charge for any payment, advance, or clearance 
thereafter made, or liability thereafter incurred against any of 
the assets of the financial institution of whose property and 
business the commissioner shall have taken possession, as 
aforesaid.  The financial institution may, with the consent of 
the commissioner, resume business upon such conditions as may be 
approved by the commissioner.  Upon taking possession of the 
property and business of the financial institution, the 
commissioner is authorized to collect moneys due to it and to do 
such other acts as are necessary to conserve its assets and 
business, and shall proceed to liquidate the affairs thereof, if 
in the commissioner's opinion it cannot safely resume business, 
as hereinafter provided.  
    Sec. 24.  Minnesota Statutes 1986, section 49.05, is 
amended by adding a subdivision to read: 
    Subd. 7.  [COMMISSIONER MAY BORROW MONEY.] With respect to 
a banking institution which is or may be closed on account of 
inability to meet the demands of its depositors or by action of 
the commissioner or of a court or by action of its directors, 
or, in the event of its insolvency or suspension, the 
commissioner may borrow from the Federal Deposit Insurance 
Corporation and furnish any part or all of the assets of the 
institution to the corporation as security for a loan from 
same.  The order of a court of record of competent jurisdiction 
shall be first obtained approving this loan.  The commissioner 
or receiver or liquidator appointed by the commissioner upon the 
order of a court of record of competent jurisdiction may sell to 
the corporation any part or all of the assets of the institution.
    The provisions of this subdivision shall not be construed 
to limit the power of any banking institution, or the 
commissioner, to pledge or sell assets in accordance with any 
other law of this state. 
    Sec. 25.  Minnesota Statutes 1986, section 49.24, 
subdivision 5, is amended to read:  
    Subd. 5.  [REJECTION OF CLAIMS; ACTIONS; LIMITATIONS.] If 
the commissioner doubts the justice or validity of any claim, 
the commissioner may reject the same in whole or in part and 
serve notice of such rejection upon the claimant, either by mail 
or personally.  An affidavit of the service of such notice made 
according to law shall be filed with the commissioner.  An 
action upon a claim so rejected must be brought within 60 days 
after such service and the filing of proof thereof.  The venue 
of such action shall be in the county in which such financial 
institution had its principal place of business prior to 
liquidation, and such action shall be brought jointly against 
the financial institution and the commissioner or receiver or 
liquidator appointed by the commissioner as statutory liquidator 
thereof.  Any person having a claim against such financial 
institution which is not presented and filed within the time 
fixed in the notice to creditors may thereafter present the same 
and the commissioner shall allow or reject the same in whole or 
in part and give notice of any rejection, as hereinbefore 
provided.  Suit on any such claim not filed within the time 
fixed by the notice which is rejected must be brought within 30 
days after the service and filing of proof of such rejection.  
Any claim not filed within the time fixed in the notice to 
creditors but later received and filed as by this section 
provided and duly allowed, shall participate and share in such 
dividends only as shall be paid from the proceeds of those 
assets remaining undistributed at the time of filing of such 
claim, and any claim not filed prior to the declaration of a 
final dividend shall be barred.  No action shall be commenced 
against any such financial institution after possession of the 
business and property thereof has been taken by the commissioner 
on any claim until such claim has been filed with and rejected, 
in whole or in part, by the commissioner.  As to any action 
pending at the time the commissioner takes possession of the 
business and property of such financial institution which has 
been stayed by order of the court, a claim may be filed for the 
subject matter of said action.  If the claim be allowed, the 
action shall terminate and be dismissed without costs and 
disbursements, but, if rejected in whole or in part, the stay 
order shall be vacated, and the action may continue.  No 
interest shall be allowed or paid on any deposit or other claim 
from and after the closing of the financial institution and the 
taking over of the same by the commissioner for purposes of 
liquidation.  
    Sec. 26.  Minnesota Statutes 1986, section 51A.58, is 
amended to read:  
    51A.58 [INTERSTATE BRANCHING.] 
    An association, whether or not the subsidiary of a savings 
and loan holding company, may, by acquisition, merger, purchase 
and assumption of some or all of the assets and liabilities, or 
consolidation, establish or operate branch offices in any 
reciprocating state, and a savings and loan association 
chartered in the any reciprocating state may establish or 
operate branch offices in this state by acquisition, merger, 
purchase, and assumption of some or all of the assets or 
liabilities or consolidation.  A savings and loan holding 
company with its headquarters in this state may acquire by 
direct or indirect ownership or control the voting shares of a 
savings and loan holding company, savings and loan association, 
or savings bank located in any reciprocating state, and a 
savings and loan holding company with its headquarters in a 
reciprocating state, may acquire by direct or indirect ownership 
or control the voting shares of a savings and loan holding 
company, a savings and loan association, or savings bank located 
in this state, and may acquire and merge with a savings and loan 
holding company with its headquarters in this state.  For the 
purposes of this section, "reciprocating state" is:  (1) a state 
that authorizes the establishment of branch offices in that 
state by an association located in this state, and the 
acquisition of savings and loan associations and savings banks 
located in that state by a savings and loan holding company with 
its headquarters in this state, under conditions no more 
restrictive than those imposed by the laws of Minnesota as 
determined by the commissioner of commerce; and (2) limited to 
the states specifically enumerated as reciprocating states in 
section 48.92, subdivision 7. 
    The commissioner of commerce shall adopt rules to provide 
that procedural requirements equivalent to those contained in 
sections 48.90 to 48.991 apply to reciprocal interstate 
branching and acquisitions by savings and loan associations. 
    Sec. 27.  Minnesota Statutes 1986, section 52.01, is 
amended to read:  
    52.01 [ORGANIZATION.] 
    Any seven residents of the state may apply to the 
commissioner of commerce for permission to organize a credit 
union. 
    A credit union is a cooperative society, incorporated for 
the two-fold purpose of promoting thrift among its members and 
creating a source of credit for them at legitimate rates of 
interest for provident purposes. 
    A credit union is organized in the following manner: 
    (1) The applicants execute, in duplicate, a certificate of 
organization by the terms of which they agree to be bound, which 
shall state: 
    (a) the name and location of the proposed credit union; 
    (b) the names and addresses of the subscribers to the 
certificate and the number of shares subscribed by each; 
    (2) The applicants submit the following in the form 
prescribed by the commissioner of commerce:  
    (a) a statement of the common bond of the proposed credit 
union;  
    (b) the number of potential members;  
    (c) the geographic dispersion of the potential members;  
    (d) evidence of interest, including willingness of 
potential members to assume responsibility for leadership and 
service;  
    (e) a two-year forecast of probable levels of assets, 
shares and deposits, and income and expense;  
    (f) the availability of other credit union services to the 
potential members;  
    (g) other information the commissioner requires;  
    (3) They next prepare and adopt bylaws for the general 
governance of the credit union consistent with the provisions of 
this chapter, and execute them in duplicate; 
    (4) The certificate and the bylaws, both executed in 
duplicate, are forwarded to the commissioner of commerce with a 
$100 application fee; 
    (5) The commissioner of commerce shall, within 60 days of 
the receipt of the certificate, the information required by 
paragraph (2), and the bylaws, and a commitment for insurance of 
accounts as required by section 52.24, subdivision 2, determine 
whether they comply with the provisions of this chapter, and 
whether or not the organization of the credit union in question 
would benefit its members, be economically feasible, and be 
consistent with the purposes of this chapter; 
    (6) Thereupon the commissioner of commerce shall notify the 
applicants of the decision.  If it is favorable, the 
commissioner shall upon receipt of a commitment for insurance of 
accounts as required by section 52.24, subdivision 2, issue a 
certificate of approval, attached to the duplicate certificate 
of organization, and return them with the duplicate bylaws to 
the applicants.  If it is unfavorable, the applicants may, 
within 60 days after the decision, appeal for a review in a 
court of competent jurisdiction; 
    (7) The applicants shall thereupon file the duplicate of 
the certificate of organization, with the certificate of 
approval attached thereto, with the secretary of state, who 
shall make a record of the certificate and return it, with a 
certificate of record attached thereto, to the commissioner of 
commerce for permanent records; and 
    (8) Thereupon the applicants shall be a credit union 
incorporated in accordance with the provisions of this chapter. 
    In order to simplify the organization of credit unions, the 
commissioner of commerce shall prepare approved forms of 
certificate of organization and bylaws, consistent with this 
chapter, which may be used by credit union incorporators for 
their guidance, and on written application of seven residents of 
the state, shall supply them without charge with a blank 
certificate of organization and a copy of the form of suggested 
bylaws. 
    Sec. 28.  Minnesota Statutes 1986, section 52.02, 
subdivision 3, is amended to read:  
    Subd. 3.  [APPROVAL.] Amendments to the certificate of 
organization or bylaws must be approved by the commissioner of 
commerce before they become operative.  The commissioner shall 
not unreasonably withhold approval if the amendments do not 
violate any provision of this chapter or other state law.  In 
any event, the commissioner shall approve or disapprove the 
proposed amendment within 60 days of the date the proposed 
amendment is submitted to the commissioner by the credit union.  
In case of disapproval the credit union shall have the right to 
appeal to a court of competent jurisdiction within the time 
limits stated in section 52.01, clause (5) (6).  In case any 
amendment to the certificate of organization is adopted, the 
resolution, containing a full text of the amendment and verified 
by its president or treasurer and approved by the commissioner 
of commerce, shall be recorded in the office of the secretary of 
state. 
    Sec. 29.  Minnesota Statutes 1986, section 52.09, 
subdivision 2, is amended to read:  
    Subd. 2.  [PARTICULAR DUTIES.] The directors shall manage 
the affairs of the credit union and shall: 
    (1) act on applications for membership.  This power may be 
delegated to a membership chair who serves at the pleasure of 
the board of directors and is subject to its rules.  An 
application must contain a certification signed by the 
membership chair or a member of the board showing the basis of 
membership; 
    (2) determine interest rates on loans and on deposits.  The 
interest period on deposits may be on a daily, monthly, 
quarterly, semiannual or annual basis, and may be paid on all 
deposits whether or not the deposits have been withdrawn during 
the interest period.  Interest may be computed on a daily 
basis.  At the discretion of the board of directors, interest 
need not be paid on deposit accounts of less than $10; 
    (3) fix the amount of the surety bond required of all 
officers and employees handling money; 
    (4) declare dividends and transmit to the members 
recommended amendments to the bylaws; 
    (5) fill vacancies in the board and in the credit committee 
until successors are chosen and qualify at the next annual 
meeting; 
    (6) limit the number of shares and deposits which may be 
owned by a member, not to exceed ten percent of the outstanding 
shares and deposits, or $2,000, whichever is larger, and the 
maximum individual loan which can be made with and without 
security, including liability indirectly as a comaker, 
guarantor, or endorser to ten percent of outstanding shares and 
deposits.  The ten percent share and deposit limitation is not 
applicable to the Minnesota corporate credit union, or to credit 
unions insured by the National Credit Union Administration; 
    (7) have charge of investments including loans to members, 
unless a credit committee is established pursuant to section 
52.08 or paragraph (13) of this subdivision; 
    (8) fix the salaries of the treasurer and other employees, 
which must be on a fixed monthly or annual basis, in dollars 
(not percentage); 
    (9) designate the depository institution in which the funds 
of the credit union will be deposited; 
    (10) authorize the officers of the credit union to borrow 
money from any source, as provided in section 52.15; 
    (11) with the permission of the commissioner of commerce, 
suspend any member of the credit committee or supervisory 
committee if it deems this action necessary to the proper 
conduct of the credit union, and call the members together to 
act on the suspension within a reasonable time after the 
suspension.  The members at the meeting may, by majority vote of 
those present, sustain the suspension and remove the committee 
members permanently or may reinstate the committee members;  
    (12) provide financial assistance to the supervisory 
committee in carrying out its audit responsibilities;  
    (13) if the bylaws so provide and no credit committee has 
been elected pursuant to section 52.08, appoint a credit manager 
or a credit committee of not less than three members; and 
    (14) to establish different classes of shares.  
    Sec. 30.  Minnesota Statutes 1986, section 52.18, is 
amended to read:  
    52.18 [DIVIDENDS.] 
    The directors of a credit union may, on a daily, monthly, 
quarterly, semiannual, or annual basis as its board of directors 
may determine, declare and pay a dividend from net earnings or 
accumulated net undivided profits remaining after statutory 
reserve has been set aside, which dividend may be paid on all 
shares whether or not they have been withdrawn during the 
dividend period.  Dividends may be computed on a daily basis.  
The board of directors may classify its share accounts according 
to character, amount and duration and declare dividends which 
may be at variable rates with due regard to the conditions that 
pertain to each class of shares, or pay no dividend at all.  A 
dividend shall be uniform within a classification.  At the 
discretion of the board of directors dividends may not be 
declared or paid on share accounts of less than $10.  Shares 
which become fully paid up during a dividend period shall be 
entitled to a proportional part of the dividend calculated from 
the first day of the month following the payment in full.  For 
the purpose of this section, shares which become fully paid up 
by the fifteenth day of any month may be treated as being paid 
up from the first day of the month. 
    Sec. 31.  Minnesota Statutes 1986, 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 section 56.125 must be in amounts in compliance 
with section 53.05, clause (7).  All other loans made under the 
authority of chapter 56 must be in amounts in compliance with 
section 53.05, clause (7), 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, including the 
right to contract for, charge, and collect all other charges 
including discount points, fees, late payment charges, and 
insurance premiums on the loans to the same extent permitted on 
loans made under the authority of chapter 56, regardless of the 
amount of the loan.  The provisions of sections 47.20 and 47.21 
do not apply to loans made under this subdivision, 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 subdivision 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, 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 subdivision 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.  
    (d) An agency or instrumentality of the United States 
government or a corporation otherwise created by an act of the 
United States Congress or a lender approved or certified by the 
secretary of housing and urban development, or approved or 
certified by the administrator of veterans affairs, or approved 
or certified by the administrator of the farmers home 
administration, or approved or certified by the federal home 
loan mortgage corporation, or approved or certified by the 
federal national mortgage association, that engages in the 
business of purchasing or taking assignments of mortgage loans 
and undertakes direct collection of payments from or enforcement 
of rights against borrowers arising from mortgage loans, is not 
required to obtain a certificate of authorization under this 
chapter in order to purchase or take assignments of mortgage 
loans from persons holding a certificate of authorization under 
this chapter. 
    Sec. 32.  Minnesota Statutes 1986, section 53.04, 
subdivision 5, is amended to read:  
    Subd. 5.  The right, with the consent of the department of 
commerce, to (1) sell and issue for investment certificates of 
indebtedness, under any descriptive name, which may bear 
interest, if any, as their terms provide, and which may require 
the payment to the company of amounts, from time to time as 
their terms provide, and permit the withdrawal of amounts paid 
on them, in whole or in part, from time to time, and the credit 
of amounts thereon upon conditions set forth therein; and (2) 
receive savings accounts or savings deposits.  No certificate of 
indebtedness shall have a surrender value which is less than the 
total amount paid to the company therefor. 
     Sec. 33.  Minnesota Statutes 1986, section 53.05, is 
amended to read:  
    53.05 [POWERS, LIMITATION.] 
    No industrial loan and thrift company may do any of the 
following: 
    (1) carry demand banking accounts; use the word "savings" 
unless the institution's investment certificates, savings 
accounts, and savings deposits are insured by the federal 
deposit insurance corporation and then only if the word is not 
followed by the words "and loan" in its corporate name; use the 
word "bank" or "banking" in its corporate name; operate as a 
savings bank; 
    (2) have outstanding at any one time certificates of 
indebtedness, savings accounts, and savings deposits, exclusive 
of those held by the company, as security for loans made by it 
of more than seven times the sum of the contributed capital and 
appropriated reserves of the company until July 1, 1985, or the 
date an industrial loan and thrift company obtains a commitment 
for insurance or guarantee of accounts acceptable to the 
commissioner as required by section 53.10, whichever is earlier, 
and thereafter 15 times the sum of contributed capital and 
appropriated reserves of the company; 
    (3) accept trusts, except as provided in section 47.75, 
subdivision 1, or act as guardian, administrator, or judicial 
trustee in any form;  
    (4) deposit any of its funds in any banking corporation, 
unless that corporation has been designated by vote of a 
majority of directors or of the executive committee present at a 
meeting duly called, at which a quorum was in attendance;  
    (5) change any allocation of capital made pursuant to 
section 53.03 or reduce or withdraw in any way any portion of 
the contributed capital and appropriated reserves without prior 
written approval of the commissioner of commerce;  
    (6) take any instrument in which blanks are left to be 
filled in after execution;  
    (7) lend money in excess of ten 15 percent of its 
contributed capital and appropriated reserves to a person 
primarily liable.  "Contributed capital and appropriated 
reserves" means the total of the company's contributed capital 
and appropriated reserves at all its authorized locations.  
    If a loan has been made to a person primarily liable and 
payments have been made on a certificate of indebtedness 
securing it, the amount of the payments may be added to the 
limitation contained in this clause for the purpose of 
determining whether additional loans may be made to that person; 
or 
    (8) issue cashier's checks pursuant to section 48.151, 
unless and at all times the aggregate liability to all creditors 
on these instruments is protected by a special fund in cash or 
due from banks to be used solely for payment of the cashier's 
checks. 
    Sec. 34.  Minnesota Statutes 1986, section 53.09, 
subdivision 2, is amended to read:  
    Subd. 2.  [REPORT TO COMMISSIONER.] (1) Each industrial 
loan and thrift company shall annually on or before the first 
day of February file a report with the commissioner stating in 
detail, under appropriate heads, its assets and liabilities at 
the close of business on the last day of the preceding calendar 
year.  This report shall be made under oath in the form 
prescribed by the commissioner and published once, at the 
expense of the industrial loan and thrift company, in a 
newspaper of the county of its location, and proof thereof filed 
immediately with the commissioner of commerce. 
    (2) Each industrial loan and thrift company which holds 
authority to accept accounts pursuant to section 53.04, 
subdivision 5, shall in place of the requirement in clause (1) 
submit the reports and make the publication required of state 
banks pursuant to section 48.48.  
    (2) (3) Within 30 days following a change in controlling 
ownership of the capital stock of an industrial loan and thrift 
company, it shall file a written report with the commissioner 
stating in detail the nature of such change in ownership.  
    Sec. 35.  Minnesota Statutes 1986, section 55.15, is 
amended to read: 
    55.15 [APPLICATION.] 
    This chapter shall not be held or construed as limiting, 
restricting, or in any way affecting the operation or management 
of safe deposit boxes or vaults, or a safe deposit business, by 
any savings bank, bank, or trust company.  If any bank, savings 
bank, or trust company elects to transact the business of a safe 
deposit company under the provisions of this chapter, it shall 
so notify the commissioner of commerce and thereafter the 
provisions of sections 55.02 and 55.10 to 55.13 55.12 shall 
apply to such safe deposit business and said bank, savings bank, 
or trust company shall have the benefit thereof.  The provisions 
of sections 55.03 to 55.09 and the provisions of section 55.095 
shall not apply to a bank, savings bank, or trust company 
carrying on the business of a safe deposit company. 
    Sec. 36.  Minnesota Statutes 1986, 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 the commissioner 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 the commissioner may deem necessary to prevent 
misunderstanding thereof by prospective borrowers.  In lieu of 
the disclosure requirements of this section and section 56.14, a 
licensee may give the disclosures required by the federal 
Truth-in-Lending Act. 
    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, 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 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. 37.  Minnesota Statutes 1986, section 325G.04, is 
amended by adding a subdivision to read:  
    Subd. 3.  For purposes of subdivisions 1 and 2, 
"unauthorized use" means a use by a person other than the 
customer who does not have actual, implied, or apparent 
authority for the use. 
    Sec. 38.  Minnesota Statutes 1986, section 325G.36, is 
amended to read:  
    325G.36 [WAIVERS VOID.] 
    Subdivision 1.  Any provision of a consumer contract which 
waives or attempts to waive any provision of sections 325G.29 to 
325G.36 is void.  
    Subd. 2.  Any provision of a consumer credit transaction 
contract which waives or attempts to waive any provision of 
section 325G.22 is void.  
    Sec. 39.  Minnesota Statutes 1986, section 332.29, 
subdivision 1, is amended to read:  
    Subdivision 1.  The commissioner may from time to time 
shall examine the books and records of every licensee hereunder 
and of any person engaged in the business of debt prorating 
service as defined in section 332.13 at least once every 18 
calendar months.  The commissioner once during any calendar 
year, may require the submission of an audit prepared by a 
certified public accountant of the books and records of each 
licensee hereunder.  If the licensee has, within one year 
previous to the commissioner's demand, had an audit prepared for 
some other purpose, this audit may be submitted to satisfy the 
requirement of this section.  The commissioner may investigate 
any complaint concerning violations of sections 332.12 to 332.29 
and may require the attendance and sworn testimony of witnesses 
and the production of documents.  
    Sec. 40.  [REPEALER.] 
    Minnesota Statutes 1986, sections 48.60 and 55.13, are 
repealed. 
    Sec. 41.  [EFFECTIVE DATE.] 
    Sections 1, 2, 4, 12, 13, 14, 15, 16, 18, 19, 20, 21, 22, 
23, 25, 26, 27, and 28 are effective the day following final 
enactment.  Sections 3 and 39 are effective July 1, 1987. 

                               ARTICLE 2  

                       REGULATORY REDUCTION ACT  
    Section 1.  Minnesota Statutes 1986, section 55.095, is 
amended to read:  
    55.095 [DUTIES OF COMMISSIONER OF COMMERCE.] 
    Every safe deposit company is at all times under the 
supervision and subject to the control of the commissioner of 
commerce.  The commissioner's examiners shall visit at least 
once each year each commissioner may at any time examine a 
licensed safe deposit company licensed by the commissioner to 
ascertain whether the safe deposit company is complying with the 
provisions of this chapter and whether its methods and systems 
are in accordance with law and designed to protect the property 
of persons doing business with it.  For each examination the 
commissioner shall charge the actual expenses of examination.  
If the commissioner of commerce determines that the safe deposit 
company is violating the provisions of this chapter, any law of 
the state, or has engaged or the commissioner has reason to 
believe that a licensee is about to engage in an unlawful, 
unsafe, or unsound practice in the conduct of its business, the 
commissioner may proceed pursuant to sections 46.24 to 46.33 or 
serve notice on the safe deposit company of intention to revoke 
the license, stating in general the grounds therefor and giving 
reasonable opportunity to be heard.  If for a period of 15 days 
after the notice, the violation continues, the commissioner of 
commerce may revoke the license and take possession of the 
business and property of the safe deposit company and maintain 
possession until the time the commissioner permits it to 
continue business, or its affairs are finally liquidated.  The 
liquidation must proceed pursuant to sections 49.04 to 49.32. 
    Sec. 2.  Minnesota Statutes 1986, section 59A.06, 
subdivision 3, is amended to read:  
    Subd. 3.  The commissioner shall may at any time make an 
examination of the affairs, business, office and records of each 
licensee at least once each year.  Each licensee shall pay to 
the commissioner the actual costs of examination as well as 
amounts required under section 46.131, and the commissioner may 
maintain an action for the recovery of such costs in any court 
of competent jurisdiction. 
    Sec. 3.  Minnesota Statutes 1986, section 168.66, 
subdivision 3, is amended to read:  
    Subd. 3.  "Retail installment sale" means any sale 
evidenced by a retail installment contract wherein retail buyer 
agrees to buy and retail seller agrees to sell a motor vehicle 
at a time sale price payable in one or more installments with 
the payment of a finance charge. 
    Sec. 4.  Minnesota Statutes 1986, section 168.66, 
subdivision 4, is amended to read:  
    Subd. 4.  "Retail installment contract" means any 
agreement, entered into in this state, evidencing a retail 
installment sale of a motor vehicle, other than for the purpose 
of resale, when purchased primarily for personal, family or 
household use, pursuant to which title to, or a lien upon the 
motor vehicle is retained by the retail seller as security for 
the retail buyer's obligation.  This term includes a mortgage, 
conditional sale contract, or any contract for the bailment or 
leasing of a motor vehicle by which the bailee or lessee 
contracts to pay as compensation for its use a sum substantially 
equivalent to the time retail installment sale price of the 
motor vehicle and by which it is agreed that the bailee or 
lessee is bound to become, or has the option of becoming, the 
owner of such motor vehicle for no additional consideration or 
for nominal additional consideration.  "Retail installment 
contract" does not include any agreement, entered into in this 
state, evidencing an installment sale of a motor vehicle 
purchased primarily for use in business.  For purposes of this 
subdivision, "business"  means a commercial or industrial 
enterprise which is carried on for the purpose of active or 
passive investment or profit. 
    Sec. 5.  Minnesota Statutes 1986, section 168.66, 
subdivision 5, is amended to read:  
    Subd. 5.  "Motor vehicle" means any device propelled or 
drawn by any power other than muscular power, in, upon, or by 
which any person or property is, or may be transported or drawn 
upon a highway, excepting building and road construction 
equipment not subject to motor vehicle registration fees, 
snowmobiles, three-wheel off-road vehicles, boat, snowmobile, 
and other utility trailers, farm tractors, and agricultural 
machinery not designed primarily for highway transportation, but 
which may incidentally transport persons or property on a public 
highway, or any other device which may not be lawfully operated 
upon a highway at the time of sale.  
    Sec. 6.  Minnesota Statutes 1986, section 168.66, 
subdivision 9, is amended to read:  
    Subd. 9.  "Cash sale price" means the price at which the 
seller would in good faith sell to the buyer, and the buyer 
would in good faith buy from the seller, the motor vehicle which 
is the subject matter of the retail installment contract, if 
such sale were a sale for cash, instead of a retail installment 
sale.  The cash sale price may include any taxes, charges for 
delivery, servicing, repairing or improving the motor vehicle, 
including accessories and their installation, and any other 
charges agreed upon between the parties.  The cash price may not 
include a documentary fee or document administration fee in 
excess of $25 for services actually rendered to, for, or on 
behalf of, the retail buyer in preparing, handling, and 
processing documents relating to the motor vehicle and the 
closing of the retail sale. 
    Sec. 7.  Minnesota Statutes 1986, section 168.66, 
subdivision 10, is amended to read:  
    Subd. 10.  "Time sale price"  "Total of payments" means the 
amount which the buyer contracts to pay under a retail 
installment contract, excluding any down payment. 
    Sec. 8.  Minnesota Statutes 1986, section 168.66, 
subdivision 11, is amended to read:  
    Subd. 11.  "Time price differential" means the amount by 
which the seller's total time sale price exceeds the aggregate 
of the cash sale price, "Finance charge" means any charge 
payable directly or indirectly by the buyer and imposed directly 
or indirectly by the seller as a condition of the extension of 
credit under a retail installment contract, and includes a time 
price differential.  The term does not include the cost of any 
insurance and other benefits included in the retail installment 
contract and any other permissible cost or expense incidental to 
the retail installment sale or any charge of a type payable in a 
comparable cash transaction, or any taxes, fees, or charges that 
actually are or will be paid to public officials or government 
agencies for determining the existence of or for perfecting, 
releasing, or satisfying a security interest.  The term also 
does not include premiums for insurance against loss of or 
damage to property, or against liability arising out of the 
ownership or use of property if the insurance coverage may be 
obtained from a person of the buyer's choice. 
    Sec. 9.  Minnesota Statutes 1986, section 168.705, is 
amended to read:  
    168.705 [EXAMINATIONS, SPECIAL INVESTIGATIONS, COSTS.] 
    For the purpose of discovering violations of sections 
168.66 to 168.77 or securing information lawfully required by 
the administrator hereunder, the administrator may, at any time, 
either personally or by a person or persons duly designated by 
the administrator, investigate the conditional sales contracts 
and business related to the conditional sales contracts and 
examine the books, accounts, records, and files used therein, of 
every licensee and of every person who shall be engaged in the 
business of a sales finance company, whether the person shall 
act as principal or agent, or under or without the authority of 
sections 168.66 to 168.77.  For that purpose, the administrator 
and the administrator's duly designated representative shall 
have free access to the offices and places of business, books, 
accounts, papers, records, files, safes, and vaults of all these 
persons.  The administrator and all persons duly designated by 
the administrator shall have authority to require the attendance 
of and to examine, under oath, all persons whomsoever whose 
testimony the administrator may require relative to the 
conditional sales contract or the business or to the subject 
matter of any examination, investigation, or hearing. 
    The administrator shall may make an examination of the 
affairs, business, office, and records of each licensee at least 
once every two calendar years.  Each licensee shall pay to the 
administrator an amount as may be required under section 46.131, 
and the administrator licensees as often as considered 
necessary.  The administrator may assess a fee covering the 
necessary costs of an examination or special investigation under 
this section, section 168.69, or reports filed under section 
168.706.  The fee is payable to the administrator on the 
administrator's request for payment.  The administrator may 
maintain an action for the recovery of the costs in any court of 
competent jurisdiction. 
    Sec. 10.  Minnesota Statutes 1986, section 168.71, is 
amended to read:  
    168.71 [RETAIL INSTALLMENT CONTRACTS.] 
    (a) (1) Every retail installment contract shall be in 
writing, shall contain all the agreements of the parties, shall 
be signed by the retail buyer and seller, and a copy thereof 
shall be furnished to such retail buyer at the time of the 
execution of the contract.  
    (2) No provisions for confession of judgment or power of 
attorney therefor contained in any retail installment contract 
or contained in a separate agreement relating thereto, shall be 
valid or enforceable.  
    (3) The holder of a precomputed retail installment contract 
may, if the contract so provides, collect a delinquency and 
collection charge on each installment in arrears for a period 
not less than ten days in an amount not in excess of five 
percent of each installment or $5, whichever is the less.  In 
addition to such delinquency and collection charge, the retail 
installment contract, whether interest-bearing or precomputed, 
may provide for the payment of attorneys' fees not exceeding 15 
percent of the amount due and payable under such contract where 
such contractis referred to an attorney not a salaried employee 
of the holder of the contract for collection plus the court 
costs.  
    (4) Unless written notice has been given to the retail 
buyer of actual or intended assignment of a retail installment 
contract, payment thereunder or tender thereof made by the 
retail buyer to the last known holder of such contract shall be 
binding upon all subsequent holders or assignees.  
    (5) Upon written request from the retail buyer, the holder 
of the retail installment contract shall give or forward to the 
retail buyer a written statement of the dates and amounts of 
payments and the total amount unpaid under such contract.  A 
retail buyer shall be given a written receipt for any payment 
when made in cash.  
    (b) The retail installment contract shall contain the 
following items: 
    (1) The cash sale price of the motor vehicle which is the 
subject matter of the retail installment contract; 
    (2) The total amount of the retail buyer's down payment, 
whether made in money or goods, or partly in money or partly in 
goods; 
    (3) The difference between items one and two; 
    (4) The charge, if any, included in the transaction for any 
insurance and other benefits not included in clause (1), 
specifying the types of coverage and benefits taxes, fees, and 
charges that actually are or will be paid to public officials or 
government agencies, including those for perfecting, releasing, 
or satisfying a security interest if such taxes, fees, or 
charges are not included in clause (1); 
    (5) Principal balance, which is the sum of item three and 
item four; 
     (6) The amount of the time price differential finance 
charge; 
    (7) The time balance total of payments payable by the 
retail buyer to the retail seller and the number of installment 
payments required and the amount of each installment expressed 
in dollars or percentages, and date of each payment necessary 
finally to pay the time balance total of payments which is the 
sum of item five and item six.  
    Provided, however, that said items one to seven inclusive 
need not be stated in the terms, sequence or order set forth 
above and that additional items may be included which serve to 
explain the calculations involved in determining the stated time 
balance to be paid by the retail buyer.  Provided further, that 
clauses (6) and (7) may be disclosed on the assumption that all 
scheduled payments under the contract will be made when due. 
    In lieu of the above clauses, the retail seller may give 
the retail buyer disclosures which satisfy the requirements of 
the Federal Truth-In-Lending Act in effect as of the time of the 
contract, notwithstanding whether or not that act applies to the 
transaction. 
    (c) Every retail seller or sales finance company, if a 
charge for insurance on the motor vehicle is included in a 
retail installment contract shall within 30 days after execution 
of the retail installment contract send or cause to be sent to 
the retail buyer a policy or policies or certificate of 
insurance, which insurance shall be written by a company 
authorized to do business in this state, clearly setting forth 
the amount of the premium, the kind or kinds of insurance and 
the scope of the coverage and all the terms, exceptions, 
limitations, restrictions and conditions of the contract or 
contracts of the insurance.  The buyer of a motor vehicle under 
a retail installment contract shall have the privilege of 
purchasing such insurance from an agent or broker of the buyer's 
own selection and selecting an insurance company mutually 
acceptable to the seller and the buyer; provided, however, that 
the inclusion of the cost of the insurance premium in the retail 
installment contract when the buyer selects the agent, broker or 
company, shall be optional with the seller.  
    (d) Any sales finance company hereunder may purchase or 
acquire from any retail seller any retail installment contract 
on such terms and conditions as may be mutually agreed upon 
between them.  
    (e) An acknowledgment by the retail buyer of the delivery 
of any such copy or notice as required in subsection (a) of this 
section contained in the body of the statement or contract shall 
be conclusive proof of delivery in any action or proceeding by 
or against any assignee of a retail installment contract.  
    Sec. 11.  Minnesota Statutes 1986, section 168.72, 
subdivision 1, is amended to read:  
    Subdivision 1.  (a) The time price differential finance 
charge authorized by sections 168.66 to 168.77 in a retail 
installment sale may not exceed the following simple interest 
annual percentage rates: 
    Class 1.  Any motor vehicle designated by the manufacturer 
by a year model of the same or not more than one year prior to 
the year in which the sale is made - $10 per $100 18 percent per 
year. 
    Class 2.  Any motor vehicle designated by the manufacturer 
by a year model of two or three years prior to the year in which 
the sale is made - $11 per $100 19.75 percent per year. 
    Class 3.  Any motor vehicle not in Class 1 or Class 2 - $13 
per $100 23.25 percent per year plus a flat charge of $3 for 
each retail installment sale. 
    (b) The time price differential finance charge must be 
computed on the principal balance outstanding from time to time 
as originally determined under section 168.71, clause (b) and 
must be computed at the rate indicated on contracts payable in 
successive monthly installment payments substantially equal in 
amount extending for a period of one year.  For purposes of this 
subdivision and section 168.73, contracts payable in successive 
monthly installment payments include those where the first 
installment is scheduled for not less than 15 days nor more than 
one month and 15 days from the date of the contract.  On 
contracts providing for installment payments extending for a 
period less than or greater than one year, the time price 
differential must be computed proportionately. 
    (c) When a retail installment contract provides for unequal 
or irregular installment payments, the time price differential 
is at the effective rate provided in clause (a) hereof, having 
due regard for the irregular schedule of payment Retail 
installment contracts may be interest-bearing or precomputed, 
and fixed-rate or variable rate.  For precomputed retail 
installment contracts, the finance charge may be calculated in 
advance on the assumption that all scheduled payments will be 
made when due and the effect of prepayment in full is governed 
by section 168.73.  To compute time for the purpose of 
calculating interest under this section and section 168.73, a 
day may be considered 1/30 of a month when calculation is made 
for a fraction of a calendar month.  A year is 12 calendar 
months.  A calendar month is that period from a given date in 
one month to the same numbered date in the following month, and 
if there is no same-numbered date, to the last day of the 
following month.  When a period of time includes a whole month 
and a fraction of a month, the fraction of a month is considered 
to follow the whole month.  In the alternative, for 
interest-bearing retail installment contracts, a retail seller 
may charge finance charges not to exceed 1/365th of the simple 
interest annual percentage rate permitted in this section for 
each actual day elapsed from the date of the retail installment 
contract through and including the date of payment in full. 
    (d) (c) The time price differential finance charge is 
inclusive of all charges incident to investigating and making 
the contract, and for the extension of the credit provided for 
in the contract and no fee, commission, expense or other charge 
whatsoever may be taken, received, reserved or contracted for 
except taxes, fees, and charges that actually are or will be 
paid to public officials or government agencies for determining 
the existence of or for perfecting, releasing, or satisfying a 
security interest, and except as provided in sections 168.66 to 
168.77. 
    Sec. 12.  Minnesota Statutes 1986, section 168.72, 
subdivision 4, is amended to read:  
    Subd. 4.  A sale of a manufactured home made after July 31, 
1983, is governed by the provisions of subdivision 1 for 
purposes of determining the lawful time price differential 
finance charge rate, except that the maximum time differential 
finance charge for a class I manufactured home may not exceed $8 
per $100 14.5 percent per year.  A retail installment sale of a 
manufactured home that imposes a time price differential rate 
that is greater than the rate permitted by this subdivision is 
lawful and enforceable in accordance with its terms until the 
indebtedness is fully satisfied if the rate was lawful when the 
sale was made. 
    Sec. 13.  Minnesota Statutes 1986, section 168.73, is 
amended to read:  
    168.73 [PREPAYMENT IN FULL, REFUND CREDITS, ALLOWANCE.] 
    Notwithstanding the provisions of any retail installment 
contract to the contrary, any retail buyer may pay in full at 
any time before maturity the debt of any retail installment 
contract and without penalty.  In so paying such debt a 
precomputed retail installment contract in full, the retail 
buyer shall receive a refund credit thereon for such 
anticipation of payments.  For contracts with substantially 
equal scheduled monthly payments remaining after the date of 
prepayment in full, the refund must be calculated for all fully 
unexpired monthly payment periods following the date of payment 
in full.  For all other contracts, the refund must be calculated 
as of the date in the month following prepayment which 
corresponds to the original contract date.  The amount of such 
refund shall represent at least as great a proportion of the 
time price differential after first deducting from such time 
price differential be calculated according to the actuarial 
method, less an acquisition cost of $15, as the sum of the 
periodic time balances after the month in which date prepayment 
is made, bears to the sum of all the periodic time balances 
under the schedule of payments in the original contract which 
may be deducted from the refund so calculated.  
    Where the amount of the credit for anticipation of payment 
is less than $1, no refund need be made.  
    The actuarial method means the method of allocating 
payments on a contract between the principal amount and finance 
charge at the contract rate charged under section 168.72, 
whereby a payment is applied first to the accumulated finance 
charge and then to the unpaid principal balance based on the 
original terms of the contract and based on the assumption that 
all payments are made on the due date as originally scheduled or 
deferred. 
    Sec. 14.  Minnesota Statutes 1986, section 168.74, is 
amended to read:  
    168.74 [EXTENSION OF SCHEDULES, PAYMENTS.] 
    The holder of a precomputed retail installment contract, 
may, upon written agreement with the retail buyer, extend 
the schedules scheduled due date, or defer the schedules 
scheduled payment of all or part of any installment payment or 
payments, or renew the balance of such contract.  In any such 
case the holder may restate the amount of the installments and 
the time schedule therefor, and collect as a refinance charge 
for such extension, deferment or renewal, a flat service fee not 
to exceed $5 and a total additional charge not exceeding an 
amount equal to one percent per month the simple interest annual 
percentage rate under the original retail installment contract 
calculated on the respective descending balances computed from 
the date of such extension, deferment or renewal. 
    Sec. 15.  [EFFECTIVE DATE.] 
    Sections 1, 2, 5, and 9 of this article are effective July 
1, 1987.  Sections 6, 7, 8, 10, 11, 12, and 14 are effective 
January 1, 1988.  Section 13 is effective January 1, 1988, and 
applies to contracts entered into on or after that date. 

                               ARTICLE 3 

                        APPLICATION PARITY ACT  
    Section 1.  Minnesota Statutes 1986, section 46.041, is 
amended to read:  
    46.041 [BANK APPLICATIONS.] 
    Subdivision 1.  [FILING; FEE; HEARING PUBLIC INSPECTION.] 
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 
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 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 in the 
form prescribed by the commissioner 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 The application file must be public, with the exception 
of financial data on individuals which is private under the 
Minnesota government data practices act. 
    Subd. 2.  [UNCONTESTED NOTICE OF FILING APPLICATION 
APPROVAL ORDER; PUBLICATION.] 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 46.044.  Otherwise the 
commissioner must deny the application Upon notice of acceptance 
of an application as complete in all respects for filing, 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 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 be in the 
form prescribed by the commissioner 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.  
    Subd. 3.  [OBJECTIONS; COMMENTS, REQUESTS FOR 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 Within 21 days after the notice of application has been 
published, any person may submit to the commissioner either or 
both written comments on an application and a written request 
for a hearing on the application.  The request must state the 
nature of the issues or facts to be presented and the reasons 
why written submissions would be insufficient to make an 
adequate presentation to the commissioner.  Comments challenging 
the legality of an application should be submitted separately in 
writing.  
    Written requests for hearing must be evaluated by the 
commissioner who may grant or deny the request.  A hearing must 
generally be granted only if it is determined that written 
submissions would be inadequate or that a hearing would 
otherwise be beneficial to the decision-making process.  A 
hearing may be limited to issues considered material by the 
commissioner.  
    If a request for a hearing has been denied, the 
commissioner shall notify the applicant and all interested 
persons stating the reasons for denial.  Interested parties may 
submit to the commissioner with simultaneous copies to the 
applicant additional written comments on the application within 
14 days after the date of the notice of denial.  The applicant 
shall be provided an additional seven days after the 14-day 
deadline has expired within which to respond to any comments 
submitted within the 14-day period.  A copy of any response 
submitted by the applicant shall also be mailed simultaneously 
by the applicant to the interested parties.  The commissioner 
may waive the additional seven-day comment period if so 
requested by the applicant. 
    Subd. 4.  [HEARING.] In any case in which the commissioner 
grants a request for a hearing, the commissioner shall fix a 
time for a hearing conducted pursuant to chapter 14 to decide 
whether or not the application will be granted.  A notice of the 
hearing must be published by the applicant 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 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 witnesses that appear in favor of or against 
the granting of the application of the proposed 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. 5.  [APPROVAL, DISAPPROVAL, AFTER HEARING.] If, upon 
the hearing or upon other information submitted, it appears to 
the commissioner that the application should be granted, the 
commissioner 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 the 
commissioner's 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, 
the commissioner shall deny the application and make a written 
order to that effect, file it in the commissioner's 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.  [EFFECTIVE DATE.] 
    This article is effective the day following final 
enactment, and applies to pending applications at that time if 
any notice of the filing of the application has not been fully 
published. 
    Approved June 1, 1987