Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 616-S.F.No. 203 
           An act relating to financial institutions; permitting 
          interstate banking with additional reciprocating 
          states; regulating reciprocal interstate banking; 
          requiring the commissioner to recommend reporting 
          requirements; amending Minnesota Statutes 1986, 
          section 48.92, subdivision 7; 48.93, subdivision 4; 
          48.95, subdivision 1; and 48.991. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 48.92, 
subdivision 7, is amended to read:  
    Subd. 7.  [RECIPROCATING STATE.] "Reciprocating state" is: 
(1) a state that authorizes the acquisition, directly or 
indirectly, or control of, banks in that state by a bank or bank 
holding company located in this state under conditions 
substantially similar to those imposed by the laws of Minnesota 
as determined by the commissioner; and (2) limited to the states 
of Iowa, North Dakota, South Dakota, and Wisconsin, Colorado, 
Idaho, Illinois, Kansas, Missouri, Montana, Nebraska, 
Washington, and Wyoming. 
    Sec. 2.  Minnesota Statutes 1986, section 48.93, 
subdivision 4, is amended to read: 
    Subd. 4.  [DISAPPROVAL.] The commissioner shall disapprove 
any proposed acquisition if:  
    (1) the financial condition of any acquiring person is such 
as might jeopardize the financial stability of the bank or 
prejudice the interests of the depositors of the bank;  
    (2) the competence, experience, integrity of any acquiring 
person or of any of the proposed management personnel indicates 
that it would not be in the interest of the depositors of the 
bank, or in the interest of the public to permit the person to 
control the bank;  
    (3) the acquisition will result in undue concentration of 
resources or substantial lessening of competition in this state; 
    (4) the application fails to adequately demonstrate that 
the acquisition proposal would bring net new funds into 
Minnesota; or 
    (5) the application is incomplete or any acquiring party 
neglects, fails, or refuses to furnish all the information 
required by the commissioner; 
    (6) a subsidiary of the acquiring bank holding company has 
failed to meet the requirements set forth in the federal 
Community Reinvestment Act; or 
    (7) the acquisition will result in over 30 percent of 
Minnesota's total deposits in financial institutions as defined 
in section 13A.01, subdivision 2, being held by banks located in 
this state owned by reciprocating state bank holding companies.  
This limitation does not apply to consideration for approval 
pursuant to section 48.99, special acquisitions. 
    Sec. 3.  Minnesota Statutes 1986, section 48.95, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DIVESTITURE; CEASE AND DESIST.] In the 
event a reciprocating state bank holding company makes an 
acquisition other than in full compliance with the requirements 
and procedures of Laws 1986, chapter 339, the commissioner may:  
    (1) by order immediately require the reciprocating state 
bank holding company to divest itself of its direct or indirect 
ownership or control of any bank located in this state; or 
    (2) by order require the reciprocating state bank holding 
company to cease and desist the violations by a date certain. 
The order would be subject to the procedures applicable to cease 
and desist proceedings pursuant to sections 46.23 to 46.33 and 
any applicable rules; or 
    (3) in the event control of a bank located in this state is 
acquired by a bank holding company that is not a reciprocating 
state bank holding company as a result of change of control of a 
reciprocating state bank holding company, the acquiring bank 
holding company shall divest itself of control of the bank 
located in this state within two years of the date of its 
acquisition of control of the bank. 
    Sec. 4.  Minnesota Statutes 1986, section 48.991, is 
amended to read: 
    48.991 [DEVELOPMENTAL LOANS.] 
    A financial institution bank located in this state owned by 
an interstate bank holding company shall provide a level of 
developmental loans as defined by the commissioner by rule.  In 
establishing the developmental loan levels for banks, the 
commissioner may consider the developmental loan performance of 
financially stable banks of comparable or smaller size that have 
above average levels of activity in developmental loans in 
reciprocating states as defined in section 48.92, subdivision 
7.  A "developmental loan" includes, but is not limited to, (1) 
loans for low and moderate income housing, loans to community 
development corporations, loans to woman and minority owned 
businesses, student education loans, and alternative energy or 
energy conservation loans, and (2) loans within distressed areas 
and on any Indian reservation for any commercial nonreal estate 
purpose, home loans, home improvement loans, and operating loans 
to family farmers.  The commissioner of commerce shall annually 
designate distressed areas.  A distressed area may be made for a 
geographic region smaller than a county within the counties of 
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.  
The determination of a distressed area should be made on the 
area's unemployment rate, economic conditions, and credit needs. 
    Sec. 5.  [RECOMMENDATIONS OF THE COMMISSIONER OF COMMERCE.] 
    The commissioner of commerce shall recommend to the 
financial institutions and insurance committee of the house of 
representatives and the commerce committee of the senate by 
January 1, 1989, reporting requirements for financial 
institutions as defined in Minnesota Statutes, section 13A.01, 
subdivision 2, that address a financial institution's commitment 
and performance in investing in their community.  The 
recommendations must address the following: 
    (1) the amount of developmental loans that financial 
institutions have made within their service areas.  
Developmental loans include, but are not limited to, loans for 
low and moderate income housing, operating loans to family 
farmers, loans made in distressed areas of the state, commercial 
loans to minority-owned and woman-owned businesses, loans for 
alternative energy and energy conservation, student loans, loans 
made for businesses and housing-related loans within Indian 
reservations, and loans to community-based economic development 
organizations; 
    (2) the degree of "redlining" by financial institutions 
within their service areas; 
    (3) the effect of reporting requirements on various sizes 
and types of financial institutions; and 
    (4) the adequacy of existing federal and state reporting 
requirements of financial institutions. 
    Approved April 24, 1988