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Minnesota Legislature

Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1988 

                        CHAPTER 666-S.F.No. 1956 
           An act relating to financial institutions; savings and 
          loan associations; defining terms; adding clarifying 
          language; regulating incorporations; regulating mutual 
          to stock conversions; providing for corporate 
          governance of capital stock associations; regulating 
          the powers of saving associations; regulating deposit 
          accounts; regulating investments; regulating terms and 
          conditions of loans, contracts, and extensions of 
          credit; amending Minnesota Statutes 1986, sections 
          51A.02; 51A.03, by adding a subdivision; 51A.041, 
          subdivisions 1 and 4, and by adding a subdivision; 
          51A.05, subdivision 1, and by adding a subdivision; 
          51A.06, subdivision 3; 51A.065, subdivisions 1, 3, 4, 
          8, and by adding a subdivision; 51A.07; 51A.10; 
          51A.11, subdivision 1; 51A.12; 51A.13; 51A.15, 
          subdivision 2; 51A.17; 51A.19, subdivisions 1, 8, and 
          10; 51A.21, subdivisions 1, 5, 7, 9, 14, 15, 17, 21, 
          and by adding subdivisions; 51A.251; 51A.261; 51A.262; 
          51A.28; 51A.31, subdivision 1; 51A.32; 51A.35; 51A.361;
          51A.37, subdivisions 1, 2, 3, 4, and by adding 
          subdivisions; 51A.38, subdivisions 1, 2, 3, 4, 5, 7, 
          and 8; 51A.40; 51A.44, subdivision 1; 51A.48; 51A.50; 
          51A.51, subdivision 1; 51A.53; 51A.56; and 118.005, 
          subdivision 1; Minnesota Statutes 1987 Supplement, 
          section 51A.23, subdivision 1; proposing coding for 
          new law in Minnesota Statutes, chapters 48 and 51A; 
          repealing Minnesota Statutes 1986, sections 51A.03, 
          subdivision 2a; 51A.05, subdivisions 3, 4, and 5; 
          51A.091; 51A.11, subdivision 3; 51A.18; 51A.19, 
          subdivisions 2 and 3; 51A.21, subdivisions 6 and 19; 
          51A.23, subdivisions 2, 3, 4, and 5; 51A.37, 
          subdivisions 7 and 9; 51A.38, subdivision 6; and 
          51A.39. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [48.194] [INSTALLMENT SALES CONTRACTS; LOANS.] 
    A person may enter into a credit sale or service contract 
for sale to a state or national bank doing business in this 
state, and a bank may purchase and enforce the contract under 
the terms and conditions set forth in section 66, subdivision 
2.  A state bank or national bank may extend credit pursuant to 
the terms and conditions set forth in section 66. 
    Sec. 2.  Minnesota Statutes 1986, section 51A.02, is 
amended to read: 
    51A.02 [DEFINITIONS.] 
    Subdivision 1.  [SCOPE.] When used in sections 51A.01 to 
51A.57, the words and phrases defined in this section have the 
meanings given them, except to the extent that any such word or 
phrase specifically is qualified by its context.  
    Subd. 2.  [AFFILIATE.] "Affiliate" means a person or 
organization controlled by, controlling, or under common control 
with another person or organization. 
    Subd. 3.  [AGREEMENT.] "Agreement" means the bargain of the 
parties in fact as found in their contract language or by 
implication from other circumstances including course of 
dealings, usage of trade, or course of performance. 
    Subd. 4.  [AGRICULTURAL PURPOSE.] "Agricultural purpose" 
means a purpose relating to the production, harvest, exhibition, 
marketing, transportation, processing, or manufacture of 
agricultural products.  "Agricultural products" includes 
agricultural, horticultural, viticultural, and dairy products, 
livestock, wildlife, poultry, bees, forest products, fish and 
shellfish, and their products, including processed and 
manufactured products, and products raised or produced on farms, 
including processed or manufactured products. 
    Subd. 5.  [AMOUNT FINANCED.] "Amount financed" has the 
meaning given the term in the Code of Federal Regulations, title 
12, part 226. 
    Subd. 6.  [ANNUAL PERCENTAGE RATE.] "Annual percentage rate"
has the meaning given the term in the Code of Federal 
Regulations, title 12, part 226. 
    Subd. 2 7.  [ASSOCIATION.] "Association" means a mutual or 
capital stock savings association or savings and loan 
association subject to chartered under the provisions of 
sections 51A.01 to 51A.57. 
    Subd. 8.  [BRANCH OFFICE.] "Branch office" means an office 
other than the home office at which deposit accounts are opened 
and loans are made. 
    Subd. 9.  [BUSINESS PURPOSE.] "Business purpose" means a 
purpose other than personal, family, household, or agricultural 
purpose. 
    Subd. 2a 10.  [CAPITAL STOCK.] "Capital stock" means the 
aggregate of shares of nonwithdrawable capital issued by a 
capital stock association, but does not include nonwithdrawable 
capital represented by capital certificates.  
    Subd. 11.  [CARD ISSUER.] "Card issuer" means a person who 
provides credit by issuing a credit card. 
    Subd. 12.  [CARDHOLDER.] "Cardholder" means a person to 
whom a credit card is issued or who has agreed with the card 
issuer to pay obligations arising from the issuance to or use of 
the card by another person.  
    Subd. 3 13.  [COMMISSIONER.] "Commissioner" means the 
commissioner of commerce of the state of Minnesota.  
    Subd. 4.  [DIRECT REDUCTION LOAN.] "Direct reduction loan" 
means a loan or other obligation repayable in consecutive 
monthly installments, equal or unequal, beginning not later than 
90 days after the date of the advance, sufficient to retire the 
debt, interest, and principal within 40 years, the initial 
contract of which shall not provide for any subsequent monthly 
installment of interest and principal of an amount larger than 
any previous monthly installment, except that provisions may be 
contained in the contract which specify that one or more 
consecutive monthly installments may be lapsed to the extent 
that monthly installments have been made ahead of schedule or, 
in the event of an emergency to the borrower affecting the 
borrower's ability to pay, to the extent of no more than six 
monthly installments but that nevertheless the full amount of 
principal and interest shall be paid within the scheduled term 
of the loan; provided, that in the case of construction loans 
the first installment under the contract shall be payable not 
later than 18 months after the date of the first advance.  The 
loan or obligation is an amortized loan. 
    Subd. 4a.  [DIRECT REDUCTION LOAN.] Pursuant to rules the 
commissioner finds necessary and proper "direct reduction loan" 
also means renegotiable rate notes or bonds secured by mortgages 
or trust deeds where the notes or bonds do not exceed 95 percent 
of the appraised value of the security for the same. 
    For the purposes of this subdivision, a renegotiable rate 
mortgage loan is a loan issued for a term of three years to five 
years, secured by a mortgage maturing in not to exceed 30 years, 
and automatically renewable at equal intervals after the 
original loan term which may be up to six months shorter or 
longer than subsequent terms.  The loan must be repayable in 
equal monthly installments of principal and interest during the 
loan term, in an amount at least sufficient to amortize a loan 
with the same principal and at the same interest rate over the 
remaining life of the mortgage.  
    In the mortgage documents, the association must grant to 
the borrower an option to renew the loan for a new term, but not 
beyond the maturity date of the mortgage, at a new interest rate 
which shall be the association's current market rate of interest 
on similar loans determined 60 days before the due date of the 
loan:  provided, that the maximum interest rate increase shall 
be equal to one-half of one percent per year multiplied by the 
number of years in the loan term with a maximum net increase of 
five percent over the life of the mortgage.  Interest rate 
increases are optional with the association; net decreases from 
the previous loan term are mandatory.  
    The borrower may not be charged costs connected with the 
renewal of the loan.  
    Sixty days before the due date of the loan, the association 
shall send a written notification to the borrower containing the 
following information:  (i) The date on which the entire balance 
of borrower's loan is due and payable; (ii) a statement that the 
loan will be renewed automatically by the association at the 
rate specified in the notice unless the borrower pays the loan 
by the due date; (iii) the amount of the monthly payment, 
calculated according to the new rate determined at the time of 
notice; (iv) a statement that the borrower may prepay the loan 
without penalty at any time after the original loan becomes due 
and payable; and (v) the name and phone number of an association 
employee who will answer the borrowers' questions concerning the 
information in the notice.  
    An applicant for a renegotiable rate mortgage loan must be 
given, at the time an application is requested, written 
disclosure materials prepared in reasonably simple terms that 
contain at least the following information:  (i) An explanation 
of how a renegotiable rate mortgage differs from a standard 
fixed rate mortgage; (ii) an example of a renegotiable rate 
mortgage indicating the maximum possible interest rate increase 
and monthly payment calculated on that rate at the time of the 
first renewal; and (iii) an explanation of how the association 
determines what the rate will be at the end of each loan term. 
    Subd. 14.  [CONDITIONAL SALE CONTRACT.] "Conditional sale 
contract" means a contract evidencing a credit sale. 
    Subd. 15.  [CONSPICUOUS.] "Conspicuous" means, in reference 
to a term or clause, that it is written so that a reasonable 
person against whom it is to operate ought to have noticed it. 
    Subd. 16.  [CONSUMER.] "Consumer" means the debtor to whom 
credit is granted in a consumer loan. 
    Subd. 17.  [CONSUMER LOAN.] "Consumer loan" means a loan 
made by an association in which:  
    (1) the debtor is a person other than an organization; 
    (2) the debt is incurred primarily for a personal, family, 
household, or agricultural purpose; and 
    (3) the debt is payable in installments or a finance charge 
is made. 
    Subd. 18.  [CREDIT.] "Credit" means the right granted by an 
association to a borrower to defer payment of debt, to incur 
debt and defer its payment, or to purchase property or services 
and defer payment. 
    Subd. 19.  [CREDIT CARD.] "Credit card" means a card or 
device issued under an arrangement pursuant to which a card 
issuer gives to a cardholder the privilege of obtaining credit 
from the card issuer or other person in purchasing or leasing 
property or services, obtaining loans, or otherwise.  A 
transaction is "pursuant to a credit card" only if credit is 
obtained according to the terms of the arrangement by 
transmitting information contained on the card or device orally, 
in writing, by mechanical or electronic methods, or in any other 
manner.  A transaction is not "pursuant to a credit card" if the 
card or device is used solely in that transaction to: 
    (1) identify the cardholder or evidence the cardholder's 
creditworthiness and credit is not obtained according to the 
terms of the arrangement; 
    (2) obtain a guarantee of payment from the cardholder's 
deposit account, whether or not the payment results in a credit 
extension to the cardholder by the card issuer; or 
    (3) effect an immediate transfer of funds from the 
cardholder's deposit account by electronic or other means, 
whether or not the transfer results in a credit extension to the 
cardholder by the card issuer.  
    Subd. 20.  [CREDIT SALE.] "Credit sale" means a sale of 
goods, services, or an interest in land in which: 
    (1) credit is granted by a seller who regularly engages as 
a seller in credit transactions of the same kind; and 
    (2) the debt is payable in installments or a finance charge 
is made. 
    Subd. 21.  [DEMAND DEPOSIT ACCOUNT.] "Demand deposit 
account" has the meaning given the term in the Code of Federal 
Regulations, title 12, part 204. 
     Subd. 22.  [DEPOSIT ACCOUNT.] "Deposit account" means funds 
deposited with an association in the form of a savings account, 
time deposit account, NOW account, demand deposit account, or 
treasury and tax loan account. 
    Subd. 5 23.  [DWELLING UNIT.] "Dwelling unit" means a 
single, unified combination of rooms designed for residential 
use by one family in a multiple dwelling unit structure, and 
which is not "home property."  
    Subd. 6 24.  [EARNINGS.] "Earnings" means that part of the 
sources available for payment of earnings of an association 
which is declared payable on savings accounts from time to time 
by the board of directors, and is the cost of savings money to 
the association.  Earnings also may be referred to as "interest" 
or "dividends."  
    Subd. 25.  [FEDERAL ASSOCIATION.] "Federal association" 
means an association or savings bank with its home office in 
this state and chartered under the federal Home Owners' Loan Act 
of 1933, United States Code, title 12, sections 1461 to 1470. 
    Subd. 26.  [FINANCE CHARGE.] "Finance charge" has the 
meaning given the term in the Code of Federal Regulations, title 
12, part 226, except that the following will not in any event be 
considered a finance charge: 
    (1) a charge as a result of default or delinquency under 
section 66 if made for actual unanticipated late payment, 
delinquency, default, or other similar occurrence, unless the 
parties agree that these charges are finance charges; 
    (2) any additional charge under section 66, subdivision 5; 
or 
    (3) a discount, if an association purchases a contract 
evidencing a contract sale at less than the face amount of the 
obligation or purchases or satisfies obligations of a cardholder 
pursuant to a credit card and the purchase or satisfaction is 
made at less than the face amount of the obligation. 
    Subd. 7 27.  [FINANCIAL INSTITUTION.] "Financial 
institution" means a thrift institution savings association, 
commercial bank, trust company, credit union, or industrial loan 
and thrift company or investment company.  
    Subd. 28.  [HOME OFFICE.] "Home office" means the office of 
the association designated by it as its principal office. 
    Subd. 8 29.  [HOME PROPERTY.] "Home property" means real 
estate on which there is located, or will be located pursuant to 
a real estate loan, either a structure designed for residential 
use by one family or a single condominium unit, or unit in a 
residential cooperative, including all elements pertinent 
thereto, designed for residential use by one family in a 
multiple dwelling unit structure or complex, and includes 
fixtures, furnishings and equipment. 
    Subd. 9 30.  [IMPAIRED CONDITION.] "Impaired condition" 
means a condition in which, based upon accepted examination 
practices, the assets of an association do not have an aggregate 
value equal to the aggregate amount of liabilities of the 
association to its creditors, including its members and all 
other persons.  
    Subd. 10 31.  [IMPROVED REAL ESTATE.] "Improved real estate"
means real estate on which there is a structure or an enclosure, 
or which is reclaimed, prepared as building lots or sites, or 
otherwise occupied, made better, more useful, or of greater 
value by care so as to provide an enjoyment thereof.  
    Subd. 11 32.  [INSURED ASSOCIATION.] "Insured association" 
means an association the saving deposit accounts of which are 
insured wholly or in part in accordance with the provisions of 
sections 51A.01 to 51A.57.  
    Subd. 33.  [LENDER CREDIT CARD.] "Lender credit card" means 
a credit card issued by an association or federal association. 
    Subd. 12 34.  [LIQUID ASSETS.] "Liquid assets" means cash 
on hand; cash on deposit in federal home loan banks, state banks 
performing similar reserve functions, commercial banks, or 
insured savings and loan associations or federal associations, 
which is withdrawable upon not more than 30 days' notice and 
which is not pledged as security for indebtedness, except that 
any deposits in a bank under the control or in the possession of 
any supervisory authority shall not be considered as liquid 
assets; and obligations of the United States, or such government 
guaranteed obligations as are approved by the Federal Savings 
and Loan Insurance Corporation.  
    Subd. 35.  [LOAN.] "Loan": 
    (a) Except as provided in paragraph (b), "loan" includes: 
    (1) the creation of debt by the association's or federal 
association's payment of or agreement to pay money to the 
borrower or to a third person for the account of the borrower; 
    (2) the creation of debt pursuant to a lender credit card 
in any manner, including a cash advance or the card issuer's 
honoring a draft or similar order for the payment of money drawn 
or accepted by the borrower, paying or agreeing to pay the 
borrower's obligation, or purchasing or otherwise acquiring the 
borrower's obligation from the obligee or the borrower's 
assignee; 
    (3) the creation of debt by a cash advance to a borrower 
pursuant to an overdraft line of credit arrangement; 
    (4) the creation of debt by a credit to an account with the 
lender upon which the borrower is entitled to draw immediately; 
    (5) the forbearance of debt arising from a loan; and 
    (6) the creation of debt pursuant to open-end credit. 
    (b) "Loan" does not include the forbearance of debt arising 
from a sale or lease. 
    Subd. 13 36.  [MEMBER.] "Member" means a person holding a 
savings deposit account of an a mutual association, and a person 
borrowing from or assuming or obligated upon a loan or interest 
therein held by an a mutual association, or purchasing property 
securing a loan or interest held by an a mutual association, and 
any other person obligated to an a mutual association.  A joint 
and survivorship relationship, whether of savers or borrowers, 
constitutes a single membership. 
    Subd. 37.  [MONEY MARKET DEPOSIT ACCOUNT.] "Money market 
deposit account" has the meaning given the term in the Code of 
Federal Regulations, title 12, part 561. 
    Subd. 14 38.  [NET INCOME.] "Net income" means gross 
revenues for an accounting period less all expenses paid or 
incurred, taxes, and losses sustained as shall not have been 
charged to reserves pursuant to the provisions of sections 
51A.01 to 51A.57.  
    Subd. 39.  [NOW ACCOUNT.] "NOW account" has the meaning 
given the term in the Code of Federal Regulations, title 12, 
part 561. 
    Subd. 40.  [OFFICIAL FEES.] "Official fees" means: 
    (1) fees and charges which actually are or will be paid to 
public officials for determining the existence of or for 
perfecting, releasing, terminating, or satisfying a security 
interest or mortgage related to a loan;  
    (2) premiums payable for insurance in lieu of perfecting a 
security interest or mortgage otherwise required by an 
association in connection with a loan, if the premium does not 
exceed the fees and charges described in clause (1) which would 
otherwise be payable. 
    Subd. 15 41.  [ONE BORROWER.] "One borrower" means (1) any 
person or entity which is, or which upon the making of a loan 
will become, obligor on a real estate loan, (2) nominees of such 
obligor, (3) all persons, trusts, partnerships, syndicates, and 
corporations of which such obligor is a nominee or a 
beneficiary, partner, member, or record or beneficial 
stockholder owning ten percent or more of the capital stock, and 
(4) if such obligor is a trust, partnership, syndicate, or 
corporation, all trusts, partnerships, syndicates, and 
corporations of which any beneficiary, partner, member, or 
record or beneficial stockholder owning ten percent or more of 
the capital stock, is also a beneficiary, partner, member, or 
record or beneficial stockholder owning ten percent or more of 
the capital stock of such obligor.  
    Subd. 42.  [OPEN-END CREDIT.] "Open-end credit" means an 
arrangement pursuant to which: 
    (1) an association may permit a borrower, from time to 
time, to obtain loans, including but not limited to an overdraft 
checking line of credit arrangement, a secured or unsecured line 
of credit agreement, or a credit card line of credit; 
    (2) the amounts financed and the finance and other 
appropriate charges are debited to an account; and 
    (3) the finance charge, if made, is computed on the account 
periodically.  
    Subd. 43.  [ORGANIZATION.] "Organization" means a 
corporation, government or governmental subdivision or agency, 
trust, estate, partnership, joint venture, cooperative, or 
association. 
    Subd. 44.  [PAYABLE IN INSTALLMENTS.] "Payable in 
installments" means that payment is required or permitted by 
agreement to be made in more than four periodic payments.  If 
any periodic payment under an agreement requiring or permitting 
two or more periodic payments is more than twice the amount of 
any other periodic payment, a loan is "payable in installments." 
    Subd. 45.  [PERSON.] "Person" means a natural person or an 
organization. 
    Subd. 16.  [PRIMARILY RESIDENTIAL PROPERTY.] "Primarily 
residential property" means real estate on which there is 
located or will be located pursuant to a real estate loan, any 
of the following:  a structure or structures designed or used 
primarily for residential rather than nonresidential purposes 
and consisting of more than one dwelling unit; a structure or 
structures designed or used primarily for residential rather 
than nonresidential purposes for students, residents, and 
persons under care, employees or members of the staff of an 
educational, health, or welfare institution or facility; and a 
structure or structures which are used in part for residential 
purposes for not more than one family and in part for business 
purposes, provided that the residential use of such structure or 
structures must be substantial and permanent, and the area used 
for business purposes shall not exceed twice the area of the 
residence.  
    Subd. 17 46.  [PRIMARY LENDING AREA.] "Primary lending area"
means the state of Minnesota.  
    Subd. 18 47.  [REAL ESTATE LOAN.] "Real estate loan" means 
any loan or other obligation secured by a first lien on real 
estate held in fee or in a leasehold extending or renewable 
automatically for a period of at least ten years beyond the date 
scheduled for the final principal payment of such loan or 
obligation, or any transaction out of which a first lien or 
claim is created against such real estate, including inter alia 
the purchase of such real estate in fee by an association and 
the concurrent or immediate sale thereof on installment contract.
    Subd. 19 48.  [SAVINGS ACCOUNT.] "Savings account" means 
that part of the savings liability of the association which is 
credited to the account of the holder thereof.  A savings 
account also may be referred to as a deposit any deposit account 
other than a time deposit account, a NOW account, a demand 
deposit account, or a treasury tax and loan account.  Savings 
accounts include but are not limited to money market deposit 
accounts. 
    Subd. 20 49.  [SAVINGS LIABILITY.] "Savings liability" 
means the aggregate amount of savings accounts of members, 
including earnings credited to such accounts, less redemptions 
and withdrawals.  
    Subd. 21 50.  [SERVICE ORGANIZATION.] "Service organization"
means an affiliate organization substantially all the activities 
of which consist of originating, purchasing, selling, and 
servicing loans upon real estate and participating interests 
therein, or clerical, bookkeeping, accounting, statistical, or 
similar functions performed primarily for savings and loan 
associations, as clearly permitted under appropriate federal 
laws or regulations, and such other activities as the 
commissioner may approve.  
    Subd. 22 51.  [SOURCES AVAILABLE FOR PAYMENT OF EARNINGS.] 
"Sources available for payment of earnings" means net income for 
an accounting period less amounts transferred to reserves as 
provided in or permitted by sections 51A.01 to 51A.57, plus any 
balance of undivided profits whether same are designated as such 
or by other language from preceding accounting periods.  
    Subd. 22a 52.  [STOCKHOLDER.] "Stockholder" means the 
holder of one or more shares of any class of capital stock of a 
capital stock association organized and operating pursuant to 
the provisions of Laws 1981, chapter 276.  
    Subd. 22b 53.  [SURPLUS.] "Surplus" means the aggregate 
amount of the undistributed net income for an association held 
as undivided profits or unallocated reserves for general 
corporate purposes, and any paid-in surplus held by an 
association.  
    Subd. 23 54.  [THRIFT INSTITUTION.] "Thrift institution" 
means an association, a mutual savings bank, a cooperative bank, 
a homestead association, a savings and loan association, a 
building and loan association, a federal savings association, a 
federal savings and loan association, and a supervised thrift 
and residential financing institution of a substantially similar 
nature.  
    Subd. 55.  [TIME DEPOSIT.] "Time deposit" has the meaning 
given the term in the Code of Federal Regulations, title 12, 
part 204. 
    Subd. 24.  [UNAMORTIZED REAL ESTATE LOAN.] "Unamortized 
real estate loan" means a real estate loan repayable within five 
years from date, with or without amortization of principal, but 
with interest payable at least semiannually.  
    Subd. 25 56.  [WITHDRAWAL VALUE.] "Withdrawal value" means 
the amount credited to a savings deposit account of a member, 
less lawful deduction therefrom, as shown by the records of the 
association.  
    Sec. 3.  Minnesota Statutes 1986, section 51A.03, is 
amended by adding a subdivision to read: 
    Subd. 2b.  [REGULATION OF CAPITAL STOCK ASSOCIATIONS.] The 
incorporation, formation, and corporate governance of capital 
stock associations are governed by chapter 300, except to the 
extent the provisions of this chapter conflict with the 
provisions of chapter 300, in which case the provisions of this 
chapter govern. 
    Sec. 4.  Minnesota Statutes 1986, section 51A.041, 
subdivision 1, is amended to read: 
    Subdivision 1.  [SELECTION OF CHAIR OF INCORPORATORS; 
SURETY BOND REQUIRED; CAPITAL REQUIRED.] The incorporators of a 
capital stock association shall appoint one of their number as 
chair of the incorporators and the chair shall procure from a 
surety company or other surety acceptable to the commissioner, a 
surety bond in an amount at least equal to the amount of capital 
stock contributions, plus the additional amounts described in 
subdivision 2.  The bond shall name the commissioner as obligee 
and shall be delivered to the commissioner.  It shall assure the 
safekeeping of the funds described; their delivery to the 
association after the issuance of the certificate of 
incorporation and after the bonding of the officers; and, in the 
event of the failure to complete organization, the return of the 
amounts collected to the respective subscribers or their 
assigns, less reasonable expenses which shall be deducted from 
the paid-in surplus.  Before a certificate of incorporation is 
issued, the capital of the association shall be paid in by 
subscribers to the chair in cash or authorized securities and 
shall be the sum of the par or initially stated value of all 
shares of voting capital stock.  Each share of capital stock 
shall entitle the holder thereof to one vote.  The minimum 
required capital shall be not less than $500,000, provided the 
commissioner may require a larger amount to be paid in.  No 
portion of the capital stock shall be withdrawn by any person or 
in any way, either in dividends or otherwise, except as provided 
by law.  No dividend on capital stock shall be made except as 
provided in section 51A.21, subdivision 21.  No commissions, 
fees, or other remuneration shall be paid for the sale of shares 
of capital stock, and no incentive stock shall be issued.  
     Sec. 5.  Minnesota Statutes 1986, section 51A.041, is 
amended by adding a subdivision to read: 
     Subd. 1a.  [QUALIFICATIONS REQUIRED OF DIRECTORS OF STOCK 
ASSOCIATIONS.] Except with the written consent of the 
commissioner, no person shall be eligible for election or shall 
serve as director or officer of an association who has been 
adjudicated a bankrupt or convicted of a criminal offense 
involving dishonesty or a breach of trust.  A director shall 
automatically cease to be a director when adjudicated a bankrupt 
or convicted of a criminal offense as herein provided. 
    Sec. 6.  Minnesota Statutes 1986, section 51A.041, 
subdivision 4, is amended to read:  
    Subd. 4.  [ISSUANCE OF CAPITAL STOCK.] As of the date 
corporate existence begins, the association shall issue capital 
stock as necessary to satisfy the minimum capital requirements 
of this section and additional capital stock as may be approved 
for issuance by its board of directors up to the amount 
authorized in its certificate of incorporation, and thereafter 
shall issue no other shares except as authorized in Laws 1981, 
chapter 276.  Any capital stock of an association, when issued, 
shall constitute permanent capital and shall not be retired or 
withdrawn except as hereinafter provided until all liabilities 
of the association have been satisfied in full, including the 
withdrawal value of all savings deposit accounts, and until 
outstanding capital certificates have been retired.  An 
association may issue shares of common stock and preferred 
stock, with or without par value, and the common and preferred 
stock may be divided into classes and the classes into series.  
Capital stock of an association shall be issued pursuant to the 
following requirements:  
    (a) Except for stock issued pursuant to the incorporation 
of the association, an employee stock option plan, or other 
forms of stock-based compensation or a plan of merger, 
consolidation, conversion from a mutual to a capital stock 
association, or other type of reorganization which has been 
approved by the commissioner, the consideration for the issuance 
of capital stock shall be paid in cash.  The par value or stated 
value of the stock shall be maintained as the permanent capital 
of the association, and any additional amount paid in shall be 
credited to paid-in surplus.  
    (b) The aggregate par value or stated value of all 
outstanding shares of capital stock shall be the permanent 
capital of the association, and except as otherwise specifically 
provided by Laws 1981, chapter 276 the capital stock shall not 
be retired until final liquidation of the association.  No 
association shall reduce the par or stated value of its 
outstanding capital stock without first obtaining the written 
approval of the commissioner, and the approval shall be withheld 
if the reduction will cause the par or stated value of 
outstanding capital stock to be less than the minimum required 
by Laws 1981, chapter 276 or will result in less than adequate 
net worth as the commissioner may determine.  No association 
shall retire any part of its capital stock unless the retirement 
is approved by the commissioner.  With the written approval of 
the commissioner, an association may purchase its capital stock 
from the personal representative of a deceased stockholder; and 
with the written approval, an association may contract with a 
living stockholder for this purpose upon the stockholder's 
death.  Any purchase shall be for the price, and upon the terms 
and conditions, agreed upon by the association and the 
stockholder or personal representative; provided, however, that 
the purchase shall not reduce the net worth accounts of the 
association, or any of them, to an amount less than required by 
applicable law or by any approved insurer of the association's 
savings accounts.  An association agreeing with a stockholder to 
purchase that stockholder's capital stock upon the stockholder's 
death may purchase insurance upon the life of the stockholder to 
fund or partially fund the purchase.  Any stock purchased from a 
decedent's personal representative may be resold by the 
association at the price, and upon the terms and conditions, as 
the board of directors of the association shall approve, or may 
be retired; provided, however, that prior to the resale, notice 
shall be filed with the commissioner disclosing the price, 
terms, and conditions of the proposed resale.  
    Sec. 7.  Minnesota Statutes 1986, section 51A.05, 
subdivision 1, is amended to read:  
    Subdivision 1.  [CORPORATE NAME.] The name of every 
association shall include either the words "savings 
association," word "saving" or "savings and loan 
association."  These words shall be preceded by an appropriate 
descriptive word or words approved by the commissioner.  An 
ordinal number may not be used as a single descriptive word 
preceding the words "savings association," or "savings and loan 
association," unless such words are followed by the words "of 
.......................," the blank being filled by the name of 
the community, town, city, or county in which the association 
has its principal office.  An ordinal number may be used 
together with another descriptive word, preceding the words 
"savings association" or "savings and loan association," 
provided the other descriptive word has not been used in the 
corporate name of any other association in the state, in which 
case the suffix mentioned above is not required to be used.  An 
ordinal number may be used, together with another descriptive 
word, preceding the words "savings association" or "savings and 
loan association," even when such other descriptive word has 
been used in the corporate name of an association in the state, 
provided the suffix "of .........................," as provided 
above, is also used.  The suffix provided above may be used in 
any corporate name.  The use of the words, "national," 
"federal," "United States," "insured," "guaranteed," or any form 
thereof, separately or in any combination thereof with other 
words or syllables, is prohibited as part of the corporate name 
of an association.  No certificate of incorporation of a 
proposed association having the same name as a corporation 
authorized to do business under the laws of this state or a name 
so nearly resembling it as to be likely to deceive shall be 
issued by the commissioner, except to an association formed by 
the reincorporation, reorganization, or consolidation of the 
association with other associations, or upon the sale of the 
property or franchise of an association. The use of the words 
"national," "federal," or "United States," or any form of these 
words, separately or in any combination with other words or 
syllables, is prohibited as part of the corporate name of an 
association.  Any association in existence at the time of the 
adoption of sections 51A.01 to 51A.57 may continue to operate 
under its existing name.  
    Sec. 8.  Minnesota Statutes 1986, section 51A.05, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [OFFICES.] The association shall obtain approval 
from the commissioner pursuant to rules prior to opening a 
branch office.  The association shall not change the location of 
any branch office without prior written approval of the 
commissioner.  The association may, however, operate other 
business facilities not constituting branch offices as defined 
in section 51A.02, subdivision 8, including automated teller 
machines and loan production offices upon providing notice under 
this subdivision. 
    Sec. 9.  Minnesota Statutes 1986, section 51A.06, 
subdivision 3, is amended to read:  
    Subd. 3.  [LIMITATION.] No conversion of an association or 
a federal association, direct or indirect, shall be permitted 
except as specifically authorized by sections 51A.01 to 51A.57 
or other provision of the Minnesota Statutes.  
    Sec. 10.  Minnesota Statutes 1986, section 51A.065, 
subdivision 1, is amended to read:  
    Subdivision 1.  [TYPES OF CONVERSIONS.] Any state mutual or 
capital stock association, state capital stock association, 
federal mutual savings and loan association or federal capital 
stock savings and loan or mutual or capital stock federal 
association, if substantial business benefit to the applicant 
will result, and if otherwise permitted by federal law and 
regulations, may apply to convert to one of the following other 
forms of organization:  state mutual association, state capital 
stock association, federal mutual savings and loan mutual 
federal association, or federal capital stock savings and 
loan federal association in accordance with the provisions of 
subdivisions 2 to 4 and one of the three plans of conversion set 
forth in subdivisions 5 to 7.  This section shall have no 
application to conversions where neither the converting nor the 
converted applicant is an association as defined in Laws 1981, 
chapter 276. 
    Sec. 11.  Minnesota Statutes 1986, section 51A.065, 
subdivision 3, is amended to read:  
    Subd. 3.  [SUPERVISORY APPROVAL OF PLAN.] Upon approval of 
the plan of conversion by the board of directors, the plan and 
the resolution approving it shall be submitted to the 
commissioner or other appropriate supervisory authority.  
The authority commissioner may approve or disapprove the plan of 
conversion in its discretion, but shall not approve the plan 
unless a finding is made, after appropriate examination, that:  
substantial business benefit to the applicant will result; the 
plan of conversion is fair and equitable; the interests of the 
applicant, its members or stockholders, its savings account 
holders and the public are adequately protected; and the 
converting applicant has complied with the requirements of this 
section.  If the authority commissioner approves the plan of 
conversion, the approval, which shall be in writing and sent to 
the home office of the converting applicant, may prescribe terms 
and conditions to be fulfilled either before or after the 
conversion to cause the applicant to conform with the 
requirements of Laws 1981, chapter 276.  If the authority 
commissioner disapproves the plan of conversion, the objections 
shall be stated in writing and sent to the home office of the 
converting applicant, and the applicant afforded an opportunity 
to amend and resubmit the plan within a reasonable time as 
prescribed by the authority.  In the event that the 
authority commissioner disapproves the plan after resubmission, 
written notice of the final disapproval shall be sent by 
certified mail to the applicant's home office.  
    Sec. 12.  Minnesota Statutes 1986, section 51A.065, 
subdivision 4, is amended to read:  
    Subd. 4.  [SUBMISSION TO MEMBERS OR STOCKHOLDERS.] If the 
commissioner or other appropriate supervisory authority approves 
a plan of conversion in accordance with subdivision 3, the plan 
must be submitted for adoption to the members or stockholders of 
the converting applicant by vote at a meeting called to consider 
the action.  Except in the case of a conversion of a state an 
association to a federally chartered federal association of like 
corporate form, or vice versa pursuant to subdivision 7 and in 
addition to any notice of annual or special meeting required by 
Laws 1981, chapter 276 and at least three weeks prior to the 
meeting, a copy of the plan, together with an accurate summary 
plan description explaining the operation of the plan and the 
rights, duties, obligations, liabilities, conditions, and 
requirements which may be imposed upon the members or 
stockholders and the converted applicant as a result of the 
adoption of the plan, must be mailed to each member or 
stockholder eligible to vote at the meeting.  The plan of 
conversion may be approved by not less than a majority of the 
total number of votes eligible to be cast at the meeting.  If 
the plan is approved, action must be taken to obtain a charter, 
articles of incorporation, articles of association or similar 
instrument, adopt bylaws, elect directors and officers and take 
other action prescribed or appropriate for the type of 
corporation into which the converting applicant will be 
converted.  A certified report of the proceedings at the meeting 
must be filed promptly with the commissioner or other 
appropriate supervisory authority.  
    Sec. 13.  Minnesota Statutes 1986, section 51A.065, 
subdivision 8, is amended to read:  
    Subd. 8.  [CERTIFICATE OF CONVERSION.] If the commissioner 
or other appropriate supervisory authority finds that a 
conversion proceeding has been completed in accordance with the 
requirements of this section and any other applicable law and 
regulations, the authority commissioner shall issue to the 
applicant a certificate of conversion, attaching as a part of 
the certificate a copy of the charter, articles of 
incorporation, articles of association or similar instrument.  
The conversion shall not become effective until the issuance of 
the certificate as provided in this section.  
    Sec. 14.  Minnesota Statutes 1986, section 51A.065, is 
amended by adding a subdivision to read: 
     Subd. 11.  [FEDERAL ASSOCIATION.] Nothing in this section 
applies to the conversion of a federal association to another 
form of federally-chartered institution. 
    Sec. 15.  Minnesota Statutes 1986, section 51A.07, is 
amended to read:  
    51A.07 [POWER TO REORGANIZE, MERGE OR CONSOLIDATE.] 
    Pursuant to a plan adopted by the board of directors and 
approved by the commissioner as equitable to the members or 
stockholders of the association and as not impairing the 
usefulness and success of other properly conducted associations 
in the community, an association shall have power to reorganize 
or to merge or consolidate with another association or federal 
association within its primary lending area; provided, that the 
plan of the reorganization, merger, or consolidation shall be 
approved at an annual meeting or at any special meeting of the 
members or stockholders called to consider the action by a vote 
of 51 percent or more than 50 percent of the total number of 
votes of the members cast in person or by proxy.  In all cases 
the corporate continuity of the resulting corporation shall 
possess the same incidents as that of an association which has 
converted in accordance with sections 51A.01 to 51A.57.  No 
association, directly or indirectly, shall convert or 
reorganize, or merge, consolidate, assume liability to pay 
savings accounts or other liabilities of, transfer assets in 
consideration of the assumption of liabilities for any portion 
of the savings accounts, deposits made in, or other liabilities 
of the association to, or acquire the assets of or assume 
liability to pay any liabilities of, any financial institution 
or any other organization, person, or entity, except as 
specifically authorized by sections 51A.01 to 51A.57 the 
commissioner.  Any association aggrieved by any action or 
nonaction of the commissioner under this section may appeal 
therefrom and the proceedings shall be conducted pursuant to the 
provisions of the administrative procedure act relating to 
judicial review of agency decisions, sections 14.63 to 14.70, 
and the scope of judicial review in the proceedings shall be as 
provided therein. 
    Sec. 16.  Minnesota Statutes 1986, section 51A.10, is 
amended to read:  
    51A.10 [MEMBERSHIP CHARGES PROHIBITED.] 
    The mutual association shall not directly or indirectly 
charge any membership, admission, withdrawal, or any fee or sum 
of money for the privilege of becoming, remaining, or ceasing to 
be a member of the mutual association, except reasonable charges 
upon the making or modification of a loan charges authorized by 
this chapter.  Except as authorized by sections 51A.01 to 51A.57 
this chapter, the mutual association shall not charge any member 
any sum of money by way of fine or penalty for any cause, except 
that a reasonable charge may be made against borrowers for 
defaults or prepayments.  
    Sec. 17.  Minnesota Statutes 1986, section 51A.11, 
subdivision 1, is amended to read:  
    Subdivision 1.  [EXCLUSIVENESS OF ACCESS.] Every member or 
stockholder shall have the right to inspect books and records of 
an association that pertain to that person's loan or savings 
account or the determination of that person's voting rights.  
Otherwise, The right of inspection and examination of the books 
and records of an association including those pertaining to 
loans and accounts shall be limited (1) to the commissioner or 
duly authorized representatives as provided in sections 51A.01 
to 51A.57, (2) to persons duly authorized by the association to 
act for the association, and (3) to affiliates, and (4) to any 
federal or state instrumentality or agency authorized by the 
association to inspect or examine the books and records of an 
insured association.  The books and records pertaining to the 
accounts and, loans of members, and voting rights of depositors, 
borrowers, or stockholders shall otherwise be kept confidential 
by the such association, its directors, officers, and employees, 
and by the commissioner, the commissioner's examiners and 
representatives, except where the disclosure thereof shall be 
compelled by a court of competent jurisdiction or public 
authority in accordance with law, and no member depositor, 
borrower, or stockholder or any other person shall have access 
to the books and records or shall be furnished or shall possess 
a partial or complete list of the members depositors, borrowers, 
or stockholders except upon express action and authority of the 
board of directors. 
    Sec. 18.  Minnesota Statutes 1986, section 51A.12, is 
amended to read:  
    51A.12 [FINANCIAL STATEMENT; MUTUAL ASSOCIATIONS.] 
    Every mutual association shall prepare and publish annually 
within 30 days of the close of the association's fiscal year in 
a newspaper of general circulation in the county in which the 
principal office of the association is located, and shall 
deliver to each member or stockholder upon application therefor, 
a statement of its financial condition in the form prescribed or 
approved by the commissioner. 
    Sec. 19.  Minnesota Statutes 1986, section 51A.13, is 
amended to read:  
    51A.13 [DIRECTORS OF MUTUAL ASSOCIATIONS.] 
    Subdivision 1.  [ASSOCIATION MUTUAL ASSOCIATIONS UNDER 
DIRECTION OF BOARD OF DIRECTORS.] The business of the 
association shall be directed by a board of directors of not 
less than five nor more than 15 as determined by, and elected by 
ballot from among, the members by a plurality of the votes of 
the members present.  If authorized by vote of the members the 
directors may elect all directors.  At all times at least 
two-thirds of the directors shall be bona fide residents of this 
state. 
    Subd. 2.  [QUALIFICATIONS REQUIRED OF DIRECTORS OF MUTUAL 
ASSOCIATIONS.] Except with the written consent of the 
commissioner, no member shall be eligible for election or shall 
serve as a director or officer of an association who has been 
adjudicated a bankrupt or convicted of a criminal offense 
involving dishonesty or a breach of trust.  A director shall 
automatically cease to be a director on ceasing to be a member, 
on being adjudicated a bankrupt, or on being convicted of a 
criminal offense as herein provided, but no action of the board 
of directors shall be invalidated through the participation of 
the director in the action.  However, if a director becomes 
ineligible under the terms of this subdivision by reason of the 
exercise by the association of the right of redemption of 
savings accounts provided for in section 51A.34, the director 
shall remain validly in office until the expiration of the term 
of office or until the director otherwise becomes ineligible, 
resigns, or is removed, whichever may occur first. 
    Subd. 2a.  [QUALIFICATIONS REQUIRED OF DIRECTORS OF STOCK 
ASSOCIATIONS.] Except with the written consent of the 
commissioner, no person shall be eligible for election or shall 
serve as director or officer of an association who has been 
adjudicated a bankrupt or convicted of a criminal offense 
involving dishonesty or a breach of trust.  A director shall 
automatically cease to be a director when adjudicated a bankrupt 
or convicted of a criminal offense as herein provided. 
    Subd. 3.  [CLASSIFICATION OF DIRECTORS OF MUTUAL 
ASSOCIATIONS.] At the first annual meeting, the members shall by 
majority vote divide the directors into three classes of as 
nearly equal numbers as possible.  The term of office of 
directors of the first class shall expire at the annual meeting 
next after the first election; of the second class, one year 
thereafter; and of the third class, two years thereafter; and at 
each annual election thereafter directors shall be chosen for a 
full term of three years to succeed those whose terms expire. 
    Subd. 4.  [NUMBER OF DIRECTORS OF MUTUAL ASSOCIATIONS 
CHANGED ONLY BY MEMBERS.] The authorized number of directors 
determined by the members within the limits hereinabove 
specified may subsequently be increased or decreased only by 
vote of the members. 
    Subd. 5.  [HOW VACANCY ON BOARD OF DIRECTORS OF MUTUAL 
ASSOCIATIONS CAUSED BY INCREASE IN NUMBER OF DIRECTORS IS TO BE 
FILLED.] If the members fail to elect a director to fill each 
vacancy created by any increase, the directors may fill the 
vacancy by electing a director to serve until the next annual 
meeting of the members, at which time a director shall be 
elected to fill the vacancy for the unexpired term for the class 
of director in which the vacancy exists. 
    Subd. 6.  [CLASSIFICATION OF NEW DIRECTORS OF MUTUAL 
ASSOCIATIONS ELECTED TO FILL VACANCIES.] Whenever under the 
provisions hereof the number of directors is changed and 
vacancies caused by the change are filled, the directors so 
elected shall be classified in accordance with the provisions 
hereof, so that each of the three classes shall always contain 
numbers as nearly equal as possible. 
    Subd. 7.  [WHEN VACANCY ON BOARD OF DIRECTORS OF MUTUAL 
ASSOCIATIONS MAY BE FILLED BY DIRECTORS.] Any vacancy among 
directors, not so filled by the members, may be filled by a 
majority vote of the remaining directors, though less than a 
quorum, by electing a director to serve until the next annual 
meeting of the members, at which time a director shall be 
elected to fill the vacancy for the unexpired term for the class 
of director in which the vacancy exists.  In event of a vacancy 
on the board of directors from any cause, the remaining 
directors shall have full power and authority to continue 
direction of the association until the vacancy is filled. 
    Sec. 20.  [51A.131] [DIRECTORS OF CAPITAL STOCK 
ASSOCIATIONS.] 
    The duties and qualifications required of directors of 
capital stock associations are governed by chapter 300. 
    Sec. 21.  Minnesota Statutes 1986, section 51A.15, 
subdivision 2, is amended to read:  
    Subd. 2.  [DUAL STATUS.] No officer or director of an 
association shall hold office or status as a director or officer 
of another nonaffiliated financial institution the principal 
office of which is located in the association's primary lending 
area; except such directors or officers who are holding office 
at the time of the adoption of sections 51A.01 to 51A.57, and 
such directors or officers may continue to be reelected for two 
additional terms.  
    Sec. 22.  Minnesota Statutes 1986, section 51A.17, is 
amended to read:  
    51A.17 [INDEMNIFICATION OF OFFICERS, DIRECTORS AND 
EMPLOYEES.] 
    Any person shall be indemnified or reimbursed by the 
association for reasonable expenses, including but not limited 
to attorney fees, actually incurred in connection with any 
action, suit, or proceeding, instituted or threatened, judicial 
or administrative, civil or criminal, to which that person is 
made a party by reason of being or having been a director, 
officer, or employee of an association; provided, however, that 
no person shall be so indemnified or reimbursed, nor shall that 
person retain any advancement or allowance for indemnification 
which may have been made by the association in advance of final 
disposition, in relation to such action, suit, or proceeding in 
which and to the extent that the person finally shall be 
adjudicated to have been guilty of a breach of good faith, to 
have been negligent in the performance of duties, or to have 
committed an action or failed to perform a duty for which there 
is a common law or a statutory liability; and provided further, 
that a person may, with the approval of the commissioner, be so 
indemnified or reimbursed for (1) amounts paid in compromise or 
settlement of any action, suit, or proceeding, including 
reasonable expenses incurred in connection therewith, or (2) 
reasonable expenses including fines and penalties incurred in 
connection with a criminal or civil action, suit, or proceeding 
in which such person has been adjudicated guilty, negligent, or 
liable if it shall be determined by the board of directors and 
by the commissioner that such person was acting in good faith 
and in what that person believed to be the best interests of the 
association and without knowledge that the action was illegal 
and if such indemnification or reimbursement is approved at an 
annual or special meeting of the members by a majority of the 
votes eligible to be cast.  Amounts paid to the association, 
whether pursuant to judgment or settlement by any person within 
the meaning of this section shall not be indemnified or 
reimbursed in any case.  The indemnification of officers, 
directors, and employees of associations is governed by section 
300.083. 
    Sec. 23.  Minnesota Statutes 1986, section 51A.19, 
subdivision 1, is amended to read:  
    Subdivision 1.  [RECORDS TO BE KEPT AT PRINCIPAL HOME 
OFFICE.] Every association shall keep at the principal home 
office correct and complete books of account and minutes of the 
proceedings of members, directors, stockholders, and the 
executive committee.  Complete records of all business 
transacted at the principal home office shall be maintained at 
the principal home office.  Control records of all business 
transacted at other offices shall be maintained at the principal 
home office. 
    Sec. 24.  Minnesota Statutes 1986, section 51A.19, 
subdivision 8, is amended to read:  
    Subd. 8.  [APPRAISAL OF REAL ESTATE OWNED AND THAT SECURING 
DELINQUENT LOANS.] Every association shall have appraised each 
parcel of real estate at the time of acquisition thereof.  The 
report of each such appraisal shall be submitted in writing to 
the board of directors and shall be kept in the records of the 
association.  In addition to the powers under section 51A.44, 
subdivision 6, the commissioner may require the appraisal of 
real estate securing loans which are delinquent more than four 
months.  
    Sec. 25.  Minnesota Statutes 1986, section 51A.19, 
subdivision 10, is amended to read:  
    Subd. 10.  [MAINTENANCE OF MEMBERSHIP RECORDS.] Every 
mutual association shall maintain membership records, which 
shall show the name and address of the member, the status of the 
member as a savings account holder, or an obligor, or a savings 
account holder and obligor, and the date of membership thereof.  
In the case of members holding a savings account the mutual 
association shall obtain a savings account contract containing 
the signature of each holder of such account or a duly 
authorized representative, and shall preserve such contract in 
the records of the association. 
    Sec. 26.  Minnesota Statutes 1986, section 51A.21, 
subdivision 1, is amended to read:  
    Subdivision 1.  [GENERALLY.] Every association incorporated 
pursuant to or operating under the provisions of sections 51A.01 
to 51A.57 shall have all the powers enumerated, authorized, and 
permitted by sections 51A.01 to 51A.57 and such other rights, 
privileges, and powers as may be incidental to or reasonably 
necessary or appropriate for the accomplishment of the objects 
and purposes of the association, and in addition shall have 
those powers possessed by corporations organized under chapter 
300.  Among others, and except as otherwise limited by the 
provisions of sections 51A.01 to 51A.57, every association shall 
have the powers set forth in this section. 
    Sec. 27.  Minnesota Statutes 1986, section 51A.21, 
subdivision 5, is amended to read:  
    Subd. 5.  [BORROWING.] If and when an association is not a 
member of a federal home loan bank, To borrow from sources, 
individual or corporate, not more than an aggregate amount equal 
to one-fourth one-half of its savings liability total assets on 
the date of borrowing and additional sums the commissioner 
approves.  If and when an association is a member of a federal 
home loan bank, to secure advances of not more than an aggregate 
amount equal to one-half of its savings liability; within the 
amount equal to one-half of its savings liability, the 
association may borrow from sources, individual or corporate 
other than the federal home loan bank, an aggregate amount not 
in excess of 20 percent of its savings liability.  The advance 
written approval of the commissioner, who has sole discretionary 
authority to grant or withhold such approval, is required for 
sources of borrowing other than financial institutions or 
federal home loan banks.  A subsequent reduction of savings 
liability total assets shall not affect in any way outstanding 
obligations for borrowed money.  All loans and advances 
borrowing under this subdivision may be secured by property of 
the association, and may be evidenced by notes, bonds, 
debentures, commercial paper, bankers' acceptances, or other 
obligations or securities, (except capital stock and capital 
certificates) the commissioner authorizes for all associations; 
provided, that authorization by the commissioner shall not be 
required in the case of securities guaranteed pursuant to 
section 306(g) of the National Housing Act of 1934, as amended. 
    Sec. 28.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 6a.  [LOANS AND CONTRACTS.] To make, sell, purchase, 
invest in, and participate or otherwise deal in loans and 
conditional sale contracts and other forms of indebtedness and 
leases, and to take any manner of security for the loans and 
contracts. 
    Sec. 29.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 6b.  [BUSINESS PROPERTY.] To acquire or own real 
property or interests in real property the directors consider 
necessary or convenient for the conduct of the business of the 
association, which for the purposes of sections 51A.01 to 51A.57 
includes the ownership of stock of a wholly owned subsidiary 
corporation having as its exclusive activity the ownership and 
management of this property or interests.  The amount so 
invested must not exceed the sum equal to five percent of net 
assets of the association, provided that the commissioner may 
authorize a greater amount to be so invested. 
    Sec. 30.  Minnesota Statutes 1986, section 51A.21, 
subdivision 7, is amended to read:  
    Subd. 7.  [INSURANCE OF ACCOUNTS.] To obtain and maintain 
insurance of its savings accounts by the federal savings and 
loan insurance corporation or any agency of this state or other 
federal agency established for the purpose of insuring savings 
accounts in associations. 
    Sec. 31.  Minnesota Statutes 1986, section 51A.21, 
subdivision 9, is amended to read:  
    Subd. 9.  [EMPLOYEES.] To appoint and remove officers, 
agents, and employees as its business shall require and to 
provide them suitable compensation; to provide for life, health, 
and casualty insurance for officers and employees, and to adopt 
and operate reasonable bonus plans and retirement benefits for 
such officers and employees; and to provide for indemnification 
of its officers, employees, and directors as prescribed or 
permitted in sections 51A.01 to 51A.57 whether by insurance or 
otherwise. 
    Sec. 32.  Minnesota Statutes 1986, section 51A.21, 
subdivision 14, is amended to read:  
    Subd. 14.  [SERVICING.] To service loans and investments 
for others, provided that the maximum principal amount of loans 
and investments serviced for others at any one time shall not 
exceed 75 percent of the amount of the savings liability of such 
association. 
    Sec. 33.  Minnesota Statutes 1986, section 51A.21, 
subdivision 15, is amended to read:  
    Subd. 15.  [SAVINGS, LOANS, INVESTMENTS.] To acquire 
savings deposits and pay earnings thereon, and to lend and 
commit to lend, extend credit, and invest its funds as provided 
in sections 51A.01 to 51A.57. 
    Sec. 34.  Minnesota Statutes 1986, section 51A.21, 
subdivision 17, is amended to read:  
    Subd. 17.  [AGENCY.] To act as agent or holder of an escrow 
for others in any transaction incidental to the operation of its 
business. 
    Sec. 35.  Minnesota Statutes 1986, section 51A.21, 
subdivision 21, is amended to read:  
    Subd. 21.  [DIVIDENDS ON CAPITAL STOCK.] To declare and pay 
dividends on capital stock in cash or property out of the 
unreserved and unrestricted earned surplus of the association, 
or its own shares from time to time except when the association 
has failed within the preceding 12 months to make any minimum 
allocation to surplus or reserve accounts required by section 
51A.20 or to maintain any minimum required level, and except 
when the association is in an impaired condition or when the 
payment thereof would cause the association to be in an impaired 
condition.  A split-up or division of the issued shares of 
capital stock into a greater number of shares without increasing 
the state capital of the association is authorized, and shall 
not be construed to be a dividend within the meaning of this 
section.  
    Sec. 36.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 22.  [LIMITED TRUSTEESHIP.] To act and receive 
compensation as trustee of a trust created or organized in the 
United States and forming a part of a stock bonus, pension, or 
profit-sharing plan that qualifies or is qualified for specific 
tax treatment under section 401 of the Internal Revenue Code of 
1986, as amended through December 31, 1987, and to act as 
trustee or custodian of an individual retirement account within 
the meaning of section 408 of that code if the funds of the 
trust or account are invested only in savings accounts of the 
association or in obligations or securities issued by the 
association.  All funds held in a fiduciary capacity by the 
association under the authority of this subdivision may be 
commingled and consolidated for appropriate purposes of 
investment if records reflecting each separate beneficial 
interest are maintained by the fiduciary unless the 
responsibility is lawfully assumed by another appropriate party. 
    Sec. 37.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 23.  [AUTOMATED TELLER MACHINES.] To own or use 
automated teller machines and establish electronic financial 
terminals and transmission facilities as provided in sections 
47.61 to 47.74. 
    Sec. 38.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 24.  [PAYROLL SAVINGS.] To contract with an employer 
with respect to the following: 
    (1) Soliciting, collecting, and receiving savings by 
payroll deduction.  These savings are to be credited to a 
designated account of an employee who may voluntarily 
participate in a payroll deduction plan. 
    (2) Direct deposit of wages or salary paid by the employer 
to an employee's account in a financial depository institution.  
Deposits may be made by electronic or other medium.  Direct 
deposits may be made if the employee authorizes the deposits in 
writing and designates the association or other financial 
depository institution as the recipient of these deposits. 
    Sec. 39.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 25.  [DRAFTS.] To issue drafts and similar 
instruments drawn on the association to aid in effecting 
withdrawals and for other purposes of the association. 
    Sec. 40.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 26.  [DEPOSITS.] To raise funds in the form of (1) 
savings accounts; (2) time deposit accounts; (3) NOW accounts; 
(4) demand deposit accounts; and (5) treasury tax and loan 
accounts. 
    Sec. 41.  Minnesota Statutes 1986, section 51A.21, is 
amended by adding a subdivision to read: 
    Subd. 27.  [TRUST POWERS.] Upon application and approval by 
the commissioner, to act as trustee, executor, administrator, 
personal representative, conservator, custodian, guardian, or in 
any other fiduciary capacity in which state banks, trust 
companies, or other corporations are permitted to act, and to 
receive reasonable compensation therefore. 
    Sec. 42.  Minnesota Statutes 1987 Supplement, section 
51A.23, subdivision 1, is amended to read:  
    Subdivision 1.  [OWNERSHIP.] Savings accounts may be opened 
and held solely and absolutely by, or in trust or other 
fiduciary capacity for, any person, including an adult or minor 
individual, male or female, single or married, partnership, 
association, fiduciary, or corporation.  Trust funds received by 
a real estate broker or the broker's salespersons in trust may 
be deposited in a savings and loan association.  Savings Deposit 
accounts shall be represented only by the account of each 
savings deposit account holder on the books of the association, 
and such the accounts or any interest therein shall be 
transferable only on the books of the association and upon 
proper written application by the transferee and upon acceptance 
by the association of the transferee as a member upon terms 
approved by the board of directors.  The association may treat 
the holder of record of a savings account as the owner thereof 
of it for all purposes without being affected by any notice to 
the contrary unless the association has acknowledged in writing 
notice of a pledge of such savings the deposit account.  
Notwithstanding the foregoing, an association or federal 
association may offer negotiable time deposits.  
    An association may issue savings deposit accounts to or in 
the name of a minor, which shall be held for the exclusive right 
and benefit of the minor, free from the control or lien of all 
other persons, except creditors, and, together with dividends 
thereon, shall be paid to the minor, and receipt or acquittance 
in any form, shall be sufficient release and discharge of the 
association for withdrawal, until a guardian appointed in this 
state for the minor shall have delivered a certificate of 
appointment.  
    Sec. 43.  Minnesota Statutes 1986, section 51A.251, is 
amended to read:  
    51A.251 [MARRIED PERSONS AND MINORS.] 
    An association and any federal association may issue 
savings deposit accounts or negotiable order of withdrawal 
accounts to any married person or minor as the sole and absolute 
owner of the account, and receive payments thereon by or for the 
other, and pay withdrawals or drafts, accept pledges to the 
association, and act in any other manner with respect to the 
accounts on the order of the married person or minor.  Any 
payment or delivery of rights to a married person or to any 
minor, or a receipt of or acquisition signed by a married person 
or by a minor who holds an account, shall be a valid and 
sufficient release and discharge of the association for any 
payment so made or delivery of rights to the married person or 
minor.  In the case of a minor, the receipt, acquittance, pledge 
or other action required by the association to be taken by the 
minor shall be binding upon the minor as if the minor were of 
full age and legal capacity.  The parent or guardian of the 
minor shall not in the capacity as parent or guardian have the 
power to attach or in any manner to transfer any account issued 
to or in the name of the minor; provided, however, that in the 
event of the death of the minor the receipt or acquittance of 
either parent or of a person standing in loco parentis to the 
minor shall be a valid and sufficient discharge of the 
association for any sum or sums not exceeding in the aggregate 
$2,500 unless the minor shall have given written notice to the 
association to accept the signature of the parent or person. 
    Sec. 44.  Minnesota Statutes 1986, section 51A.261, is 
amended to read:  
    51A.261 [DEPOSITS IN NAME OF MINOR.] 
    A deposit made at an association in the name of a minor, or 
shares issued in a minor's name, shall be held for the exclusive 
right and benefit of the minor, free from the control or lien of 
all other persons except creditors, and together with the 
dividends or interest thereon shall be paid the minor, and the 
minor's receipt, check, or acquittance in any form shall be a 
sufficient release and discharge of the depository for the 
deposits or shares, or any part thereof, until a conservator or 
guardian appointed for the minor has delivered a certificate of 
appointment to the depository.  
    Sec. 45.  Minnesota Statutes 1986, section 51A.262, is 
amended to read:  
    51A.262 [MULTIPARTY ACCOUNTS.] 
    When any deposit is made in the names of two or more 
persons jointly, or by any person payable on death (P.O.D.) to 
another, or by any person in trust for another, the rights of 
the parties and the financial institution association are 
determined by chapter 528. 
    Sec. 46.  Minnesota Statutes 1986, section 51A.28, is 
amended to read:  
    51A.28 [ACCOUNTS OF ADMINISTRATORS, EXECUTORS, GUARDIANS, 
CUSTODIANS, TRUSTEES, AND OTHER FIDUCIARIES.] 
    Any association or federal association may accept savings 
deposit accounts in the name of any administrator, executor, 
custodian, conservator, guardian, trustee, or other fiduciary 
for a named beneficiary or beneficiaries.  Any such fiduciary 
shall have power to vote as a member in a mutual association as 
if the membership were held absolutely, to open and to make 
additions to, and to withdraw any such account in whole or in 
part.  The withdrawal value of any such account, and earnings 
thereon, or other rights relating thereto may be paid or 
delivered, in whole or in part, to such fiduciary without regard 
to any notice to the contrary as long as such fiduciary is 
living.  The payment or delivery to any such fiduciary or a 
receipt or acquittance signed by any such fiduciary to whom any 
such payment or any such delivery of rights is made shall be a 
valid and sufficient release and discharge of an association for 
the payment or delivery so made.  Whenever a person holding an 
account in a fiduciary capacity dies and no written notice of 
the revocation or termination of the fiduciary relationship 
shall have been given to an association and the association has 
no written notice of any other disposition of the beneficial 
estate, the withdrawal value of such account, and earnings 
thereon, or other rights relating thereto may, at the option of 
an association, be paid or delivered, in whole or in part, to 
the beneficiary or beneficiaries.  The payment or delivery to 
any such beneficiary, beneficiaries, or designated person, or a 
receipt or acquittance signed by any such beneficiary, 
beneficiaries, or designated person for any such payment or 
delivery shall be a valid and sufficient release and discharge 
of an association for the payment or delivery so made.  This 
section does not apply to a P.O.D. account under chapter 528. 
    Sec. 47.  Minnesota Statutes 1986, section 51A.31, 
subdivision 1, is amended to read:  
    Subdivision 1.  [LEGAL INVESTMENTS.] Administrators, 
executors, custodians, conservators, guardians, trustees, and 
other fiduciaries of every kind and nature, insurance companies, 
business and manufacturing companies, banks, trust companies, 
credit unions, and other types of similar financial 
organizations, charitable, educational, eleemosynary and such 
public corporations as are authorized by law, funds, and 
organizations, are specifically authorized and empowered to 
invest funds held by them, without any order of any court, in 
savings accounts of savings associations which are under state 
supervision, and in accounts of federal associations organized 
under the laws of the United States and under federal 
supervision, and such investments shall be deemed and held to be 
legal investments for such funds.  
    Sec. 48.  Minnesota Statutes 1986, section 51A.32, is 
amended to read:  
    51A.32 [EARNINGS.] 
    Subdivision 1.  [MUTUAL ASSOCIATION.] An A mutual 
association may pay earnings on its savings accounts from 
sources available for payment of earnings at such rate and at 
such times and for such time or notice periods as shall be 
determined by resolution of its board of directors.  All savings 
deposit account holders shall participate equally in earnings 
pro rata to the withdrawal value of their respective accounts, 
except that an association may classify its savings deposit 
accounts according to the character, amount, or duration 
thereof, or regularity of additions thereto, and may agree in 
advance to pay an additional or different rate of earnings not 
to exceed one percent over and above the rate of earnings paid 
on all savings deposit accounts on accounts based on such 
classification, and shall regulate such earnings in such manner 
that each savings deposit account in the same classification 
shall receive the same ratable portion of such additional 
earnings, except for accounts which shall be classified 
according to a specified contractual time or notice period. 
Earnings shall be declared on the withdrawal value of 
each savings deposit account at the beginning of the accounting 
period, plus additions thereto made during the period (less 
amounts previously withdrawn and noticed for withdrawal, which 
for earnings purposes shall be deducted from the latest previous 
additions thereto) computed at the declared rate for the time 
the funds have been invested, determined as next provided.  The 
date of investment shall be the date of actual receipt by the 
association of an account or an addition to an account, except 
that if the board of directors shall so determine, accounts in 
one or more classifications or additions thereto received by the 
association on or before a date not later than the 20th day of 
the month in which such payments were received; if the board 
shall make such determination, it also shall determine that 
payments received subsequent to such determination date shall 
either (1) receive earnings as if invested on the first day of 
the next succeeding month, or (2) receive earnings from the date 
of actual receipt by the association.  Unless the commissioner 
shall issue approval in writing, no earnings shall be declared 
or paid for an accounting period unless the allocation to the 
general reserve for the preceding accounting period required by 
section 51A.20 or approved by the commissioner thereunder has 
been made.  Notwithstanding the provisions of the second 
sentence of this section, the board of directors, by resolution, 
may determine that earnings shall not be paid on any savings 
deposit account which has a withdrawal value of a specified 
amount less than $50 or which by written agreement is intended 
to be closed within a specified period less than 15 months from 
the date on which such savings the account is opened, provided 
that an exception may be made and earnings paid on savings 
deposit accounts opened pursuant to section 51A.24.  The 
directors shall determine by resolution the method of 
calculating the amount of any earnings on savings accounts as 
herein provided, and the time or times when earnings are to be 
declared, paid, or credited.  
    Subd. 2.  [CAPITAL STOCK ASSOCIATIONS.] A capital stock 
association may pay interest, if any, on its savings accounts in 
accordance with the terms of the account contract. 
    Sec. 49.  Minnesota Statutes 1986, section 51A.35, is 
amended to read:  
    51A.35 [INVESTMENT IN SECURITIES.] 
    Savings Associations shall have power to invest in 
securities as follows: 
    (a) [INVESTMENTS NOT SUBJECT TO LIMITATION.] Without limit, 
in obligations of, or obligations which are fully guaranteed as 
to principal and interest by, the United States or this state or 
the political subdivision of this state in stock or obligations 
of any federal home loan bank or banks; in stock or obligations 
of the federal savings and loan insurance corporation; in 
demand, time, or savings deposits, shares or accounts, or other 
obligations of any financial institution the accounts of which 
are insured by a federal agency. 
    (b) [INVESTMENTS SUBJECT TO 25 PERCENT OF ASSETS 
LIMITATION.] Not in excess of 25 percent of its assets in (1) 
bonds, notes, or other evidences of indebtedness which are a 
general obligation of, or guaranteed as to principal and 
interest by, any agency or instrumentality of the United States 
not specified in subparagraph (a) or of this state, or any city, 
town, county, district, or other municipal corporation or 
political subdivision of this state, or any instrumentality or 
authority of any one or more of the foregoing; (2) capital 
stock, obligations, or other securities of service 
organizations, provided that the aggregate of such investments 
shall not thereupon exceed one three percent of its assets 
liabilities. 
    Sec. 50.  Minnesota Statutes 1986, section 51A.361, is 
amended to read:  
    51A.361 [RESERVES.] 
    An association shall maintain reserves in the form of 
liquid assets, as defined in section 51A.02, subdivision 12 34, 
at a level reasonably necessary to meet anticipated withdrawals, 
commitments, and loan demand.  The commissioner of commerce may 
prescribe the required amount of reserves for any individual 
association from time to time based upon examination findings or 
other reports relating to the association that are available to 
the commissioner.  The determination by the commissioner of a 
required amount of reserves for an association shall not be 
considered a rule as defined by section 14.02, subdivision 4.  
Reserves for an individual association as prescribed by the 
commissioner pursuant to this section shall be enforced in 
accordance with sections 46.24 and 46.30 to 46.33.  
    Sec. 51.  Minnesota Statutes 1986, section 51A.37, 
subdivision 1, is amended to read:  
    Subdivision 1.  [GENERALLY.] Every savings association 
shall have power to invest in loans and other investments as set 
forth in this section.  
    Sec. 52.  Minnesota Statutes 1986, section 51A.37, 
subdivision 2, is amended to read:  
    Subd. 2.  [SAVINGS ACCOUNT LOANS.] Loans secured by its 
savings accounts to the extent of the withdrawal value thereof.  
    Sec. 53.  Minnesota Statutes 1986, section 51A.37, 
subdivision 3, is amended to read:  
    Subd. 3.  [REAL ESTATE LOANS.] Real estate loans in any 
amount not exceeding the value of the security, subject to the 
following conditions: 
    (a) No association shall make a real estate loan to one 
borrower if the sum of (1) the amount of the loan and (2) the 
total balances of all outstanding real estate loans owed to the 
association by the borrower exceeds an amount equal to ten 
percent of the association's savings liability or an amount 
equal to the sum of the association's reserves for losses and 
undivided profits, whichever amount is less, except that any 
such loan may be made if the sum of (1) and (2) does not exceed 
$100,000. 
    (b) An association may (1) participate with one or more 
financial institutions, or other entities having a tax exemption 
under section 501(a) of the internal revenue code, in any real 
estate loan of the type in which the association is authorized 
to invest on its own account, provided that the participating 
interest of the association is not subordinated or inferior to 
any other participating interest; and (2) participate in real 
estate loans with other than financial institutions or those 
entities described, provided that the participating interest of 
the association is superior to the participating interests of 
the other participants. 
    (c) (b) The aggregate balances outstanding of real estate 
loans on real estate located outside the primary lending area of 
an association shall at no time exceed ten percent of the assets 
of the association, except that (1) loans insured or guaranteed 
in whole or in part by the United States, or a federal agency 
and (2) loans in which an association owns or has purchased no 
more than a 75 percent participation interest are not subject to 
this restriction; and 
    (d) Direct reduction real estate loans on home property and 
not in excess of 90 percent of the value of the security except 
as may be provided by the Federal Home Loan Bank Board for 
federally insured associations, and direct reduction real estate 
loans on primarily residential property not in excess of 80 
percent of the value of the security, including participating 
interests in the loans, shall average annually, based on monthly 
computations, at least 70 percent of assets, other than liquid 
assets, held by the association. 
    (e) (c) Real estate loans on home property by mortgage or 
contract for deed, as provided in clauses paragraphs (a) through 
(d) above and (b) with no limit on purchase or sale thereof; and 
may participate with other lenders in the making, purchasing, or 
selling of the loans, provided (1) the property securing same is 
within 100 miles of the servicing office of the other lender or 
lenders and (2) that the other lender or lenders participate to 
the extent of at least ten percent in the loan and further 
provided not more than 25 percent of the assets of the 
association licensed hereunder shall be in the loan. 
    (f) (d) An association may purchase, at any sheriff's, 
judicial, or other sale, public or private, any real estate upon 
which it has a mortgage, judgment, or other lien, or in which it 
has any interest.  It may acquire title to any real estate on 
which it holds any lien, in full or part satisfaction thereof, 
and may sell, convey, hold, lease, or mortgage the same.  In 
transactions involving the purchase by a vendee of improved real 
estate for home purposes, or for the construction of a home, a 
savings and loan an association organized under the laws of this 
state, or of the United States of America, may, when authorized 
by its bylaws, acquire the title thereof, and it may give to the 
vendee a contract to convey the same as upon a sale thereof.  
Provided, that no association shall hereafter invest more than 
50 percent of its assets in such contracts to convey.  Upon 
default in the conditions of the contract, the association may 
terminate the interest of the vendee or the vendee's 
representatives or assigns by serving the notice provided by 
section 559.21, upon the vendee, or the vendee's representative 
or assigns. 
    Sec. 54.  Minnesota Statutes 1986, section 51A.37, 
subdivision 4, is amended to read:  
    Subd. 4.  [INSURANCE POLICY LOANS.] Loans secured by the 
pledge of policies of life insurance, the assignment of which is 
properly acknowledged by the insurer, but not exceeding the cash 
value of such policies providing such pledge is made as 
additional collateral for real estate, home improvement, or 
manufactured home loans.  
    Sec. 55.  Minnesota Statutes 1986, section 51A.37, is 
amended by adding a subdivision to read: 
    Subd. 10.  [CONSUMER LOANS.] Consumer loans. 
    Sec. 56.  Minnesota Statutes 1986, section 51A.37, is 
amended by adding a subdivision to read: 
    Subd. 11.  [BUSINESS LOANS.] Loans to organizations and 
natural persons for business purposes. 
    Sec. 57.  Minnesota Statutes 1986, section 51A.37, is 
amended by adding a subdivision to read: 
    Subd. 12.  [AGRICULTURAL LOANS.] Loans for agricultural 
purposes. 
    Sec. 58.  Minnesota Statutes 1986, section 51A.37, is 
amended by adding a subdivision to read: 
    Subd. 13.  [LOAN TO ONE BORROWER LIMITS.] (a) No mutual 
association shall make a loan to one borrower if the sum of (1) 
the amount of the loan and (2) the total balances of all 
outstanding loans owed to the association by the borrower 
exceeds an amount equal to ten percent of the association's 
savings liability or an amount equal to the sum of the 
association's reserves for losses and undivided profits, 
whichever amount is less, except that any such loan may be made 
if the sum of clauses (1) and (2) does not exceed $500,000. 
    (b) No stock association shall make a loan to one borrower 
if the sum of (1) the amount of the loan and (2) the total 
balances of all outstanding loans owed to the association by the 
borrower exceeds an amount equal to ten percent of the 
association's savings liability or an amount equal to the sum of 
the association's reserves for losses and capital and surplus, 
whichever amount is less, except that any such loan may be made 
if the sum of clauses (1) and (2) does not exceed $500,000. 
    Sec. 59.  Minnesota Statutes 1986, section 51A.38, 
subdivision 1, is amended to read:  
    Subdivision 1.  [GENERALLY.] Real estate loans and other 
loans secured by a mortgage on real estate that are eligible for 
investment by an association under sections 51A.01 to 51A.57 may 
be written upon the plan set forth in according to this section 
and section 66, or upon any other plan approved by the 
commissioner.  
    Sec. 60.  Minnesota Statutes 1986, section 51A.38, 
subdivision 2, is amended to read:  
    Subd. 2.  [APPRAISAL.] No investment in a real estate loan, 
the proceeds of which are used for the purchase of the real 
estate, shall be made until a qualified person or persons 
approved by the board of directors shall have made a physical 
inspection and submitted a signed appraisal of the value of the 
real estate securing such loan.  
    Sec. 61.  Minnesota Statutes 1986, section 51A.38, 
subdivision 3, is amended to read:  
    Subd. 3.  [PAYMENTS.] Payments on real estate loans shall 
be applied first to other charges, then to the payment of 
interest on the unpaid balance of the loan, and the remainder on 
the reduction of principal; provided that if the loan is in 
default in any manner or is being assumed by the assignee of the 
mortgagor, payments may be applied by the association to payment 
of penalties or assumption charges as provided in the loan 
contract.  All real estate loans may be prepaid in part or in 
full, at any time and the association shall not charge for such 
privilege of anticipatory payment an amount greater than 5 
percent of the amount of such anticipatory payment.  An 
association may charge a borrower a prepayment fee on any loan 
that is not a consumer loan.  Unless otherwise agreed in 
writing, any prepayment of principal on any loan may, at the 
option of the association, be applied on the final installment 
of the note or other obligation until fully paid, and thereafter 
on the installments in the inverse order of their maturity, or, 
at the option of the association, the payments may be applied 
from time to time wholly or partially to offset payments which 
subsequently accrue under the loan contract. 
    Sec. 62.  Minnesota Statutes 1986, section 51A.38, 
subdivision 4, is amended to read:  
    Subd. 4.  [EVIDENCE OF LOAN.] Every loan shall be evidenced 
by a note or instrument of obligation for the amount of the 
loan.  The note or instrument shall specify the amount, rate of 
interest, or manner of calculating the rate of interest of a 
variable rate loan, and terms of repayment including any 
prepayment penalty or charge for late payment, mortgage 
assumption fee, and may contain all other terms of the loan 
contract.  
    Sec. 63.  Minnesota Statutes 1986, section 51A.38, 
subdivision 5, is amended to read:  
    Subd. 5.  [SECURITY INSTRUMENT FOR LOANS SECURED BY REAL 
ESTATE.] Every real estate loan secured by a mortgage on real 
property, including a real estate loan, shall be 
secured evidenced by a mortgage, deed of trust, or other 
transaction or instrument constituting a first lien or claim, or 
the full equivalent thereof, upon the real estate securing the 
loan, according to any lawful and recognized practice which is 
suited to the transaction.  Any such instrument or 
transaction constituting a first lien or claim is herein termed 
a "mortgage."  Such mortgage shall provide specifically for full 
protection to the association with respect to such loan and 
additional advances and the usual insurance risks, ground rents, 
taxes, assessments, other governmental levies, maintenance, and 
repairs.  It may provide for an assignment of rents, and if such 
assignment is made, any such assignment shall be absolute upon 
the borrower's default, becoming operative upon written demand 
made by the association.  All such mortgages shall be recorded 
in accordance with the law of this state.  
    Sec. 64.  Minnesota Statutes 1986, section 51A.38, 
subdivision 7, is amended to read:  
    Subd. 7.  [ADVANCES FOR TAXES.] An association may pay 
taxes, assessments, ground rents, insurance premiums, and other 
similar charges for the protection of its real estate loans any 
loan secured by a mortgage on real property, including a real 
estate loan.  All such payments shall be added to the unpaid 
balance of the loan and shall be equally secured by the first 
lien on the property as provided above.  An association may 
require life insurance to be assigned as additional collateral 
upon any real estate loan.  In such event, the association shall 
obtain a first lien upon such policy and may advance premiums 
thereon, and such premium advances shall be added to the unpaid 
balance of the loan and shall be equally secured by the first a 
lien on the property as provided above.  
    Sec. 65.  Minnesota Statutes 1986, section 51A.38, 
subdivision 8, is amended to read:  
    Subd. 8.  [PROVISION FOR TAXES, INSURANCE.] An association 
may require the a borrower on any loan secured by a mortgage on 
real property, including a real estate loan, to pay monthly in 
advance, in addition to interest or interest and principal 
payments, the equivalent of 1/12 of the estimated annual taxes, 
assessments, insurance premiums, ground rents, and other charges 
upon the real estate securing a loan, or any of such charges, so 
as to enable the association to pay such charges as they become 
due from the funds so received.  The amount of such monthly 
charges may be increased or decreased so as to provide 
reasonably for the payment of the estimated annual taxes, 
assessment, insurance premiums, and other charges.  The 
association at its option may hold such funds in trust and 
commingle them with other such funds and use the same for such 
purposes, or hold such funds in open account and commingle them 
with its own funds and advance like amounts for such purposes, 
or credit such funds as received to the mortgage account and 
advance a like amount for the purposes stated.  If such funds 
are held in trust or invested in savings accounts, the 
amounts shall may be pledged to further secure the indebtedness 
and, if held in open account or credited to the loan account, 
the amounts when advanced for the purposes stated shall may be 
secured by the mortgage with the same priority as the original 
amount advanced under the mortgage.  The association shall have 
no obligation to pay interest, earnings, or other increment to 
the borrower upon such monthly payments, nor to invest the same 
for the benefit of the borrower, unless such funds have been 
placed in a savings account or accounts in the borrower's name.  
Every association shall keep a record of the status of taxes, 
assessments, insurance, ground rents, and other charges on all 
real estate securing its real estate loans and on all real and 
other property owned by it. 
    Sec. 66.  [51A.385] [TERMS AND CONDITIONS OF LOANS, 
CONTRACTS, AND EXTENSIONS OF CREDIT.] 
    Subdivision 1.  [APPLICATION.] Except as otherwise provided 
in this section, this section applies to loans made and 
contracts purchased by federal and state associations, and 
"association" as used in this section applies to federal and 
state associations. 
    Subd. 2.  [FINANCE CHARGE FOR CREDIT SALES MADE BY A THIRD 
PARTY.] (a) A person may enter into a credit sale contract for 
sale to an association and an association may purchase and 
enforce a contract evidencing the sale, if the annual percentage 
rate provided for in the contract does not exceed that permitted 
in this section, or, in the case of contracts governed by 
sections 168.66 to 168.77, the rates permitted by those sections.
     (b) Except as provided in subdivision 4, the annual 
percentage rate may not exceed the equivalent of the greater of 
either of the following: 
     (1) the total of: 
     (i) 36 percent per year on that part of the unpaid balances 
of the amount financed which is $300 or less; 
     (ii) 21 percent per year on that part of the unpaid 
balances of the amount financed which exceeds $300 but does not 
exceed $1,000; and 
     (iii) 15 percent per year on that part of the unpaid 
balances of the amount financed which exceeds $1,000; or 
     (2) 19 percent per year on the unpaid balances of the 
amount financed. 
     (c) This subdivision does not limit or restrict the manner 
of calculating or charging the finance charge whether by way of 
add-on, discount, discount points, single annual percentage 
rate, precomputed charges, variable rate, interest in advance, 
compounding or otherwise, if the annual percentage rate 
calculated under paragraph (d) does not exceed that permitted by 
this section.  The finance charge may be contracted for and 
earned at the single annual percentage rate that would earn the 
same finance charge as the graduated rates when the debt is paid 
according to the agreed terms and the finance charge is 
calculated under paragraph (d).  If the finance charge is 
calculated or collected in advance, or included in the principal 
amount of the contract, and the borrower prepays the contract in 
full, the association shall credit the borrower with a refund of 
the charge to the extent the charge would exceed the annual 
percentage rate on the contract as originally determined under 
paragraph (d) and taking into account the prepayment.  For the 
purpose of calculating the refund, the association may assume 
that the contract was paid before the date of prepayment 
according to the schedule of payments under the contract and 
that all payments were paid on their due dates.  For contracts 
repayable in substantially equal successive monthly 
installments, the association may calculate the refund as the 
portion of the finance charge allocable to all unexpired payment 
periods following the date of prepayment, based on the annual 
percentage rate on the contract as originally determined under 
paragraph (d), and for the purpose of calculating the refund may 
assume that all payments are made on the due date. 
    (d) The annual percentage rate must be calculated in 
accordance with Code of Federal Regulations, title 12, part 226, 
but using the definition of finance charge in section 51A.02, 
and computed on the basis of a 365-day year. 
    Subd. 3.  [FINANCE CHARGE FOR LOANS.] Except as provided in 
subdivision 4: 
    (a) With respect to a loan, including a loan pursuant to 
open-end credit but excluding open-end credit pursuant to a 
credit card, an association may contract for and receive a 
finance charge at an annual percentage rate not exceeding 19 
percent per year.  With respect to open-end credit pursuant to a 
credit card, an association may contract for and receive a 
finance charge at an annual percentage rate not exceeding 18 
percent per year.  With respect to a loan, the finance charge 
shall be considered not to exceed the maximum annual percentage 
rate permitted pursuant to this section if the finance charge 
contracted for and received does not exceed the equivalent of 
the maximum annual percentage rate computed on a 365-day year 
calculated in accordance with Code of Federal Regulations, title 
12, part 226, but using the definition of finance charge in 
section 51A.02. 
    (b) This subdivision does not limit or restrict the manner 
of calculating the finance charge, whether by way of add-on, 
discount, single annual percentage rate, variable rate, interest 
in advance, compounding, average daily balance method, or 
otherwise, if the annual percentage rate does not exceed that 
permitted by this section.  With respect to a loan secured by 
real estate, including a real estate loan, if a finance charge 
is calculated or collected in advance, or included in the 
principal amount of the loan, and the borrower prepays the loan 
in full, the association shall credit the borrower with a refund 
of the charge to the extent that the annual percentage rate on 
the loan would exceed the maximum rate permitted under paragraph 
(a), taking into account the prepayment.  With respect to all 
other loans, if the finance charge is calculated or collected in 
advance, or included in the principal amount of the loan, and 
the borrower prepays the loan in full, the association shall 
credit the borrower with a refund of the charge to the extent 
the charge would exceed the annual percentage rate on the loan 
as originally determined under paragraph (a) and taking into 
account the prepayment.  For the purpose of calculating the 
refund under this subdivision, the association may assume that 
the contract was paid before the date of prepayment according to 
the schedule of payments under the loan and that all payments 
were paid on their due dates.  For loans repayable in 
substantially equal successive monthly installments, the 
association may calculate the refund under this subdivision as 
the portion of the finance charge allocable to all unexpired 
payment periods following the date of prepayment, based on the 
annual percentage rate on the loan as originally determined 
under paragraph (a), and for the purpose of calculating the 
refund may assume that all payments are made on the due date.  
    Subd. 4.  [ADDITIONAL AUTHORITY.] Extensions of credit, and 
purchases of extensions of credit, authorized by sections 47.20, 
subdivision 1, 3, or 4a; 47.204; 47.21; 48.153; 48.185; sections 
168.66 to 168.77, or section 334.01, subdivision 2; and section 
334.011 may, but need not, be made pursuant to those sections in 
lieu of the authority set forth in subdivisions 1 to 3, and if 
so, are subject to the provisions of those sections, and not the 
provisions of this section, except this subdivision.  An 
association may also charge an organization any rate of interest 
and any charges agreed to by the organization, and may calculate 
and collect finance and other charges in any manner agreed to by 
that organization.  Except for extensions of credit the 
association elects to make under section 334.01, subdivision 2; 
or 334.011, the provisions of chapter 334 do not apply to 
extensions of credit made pursuant to this section or the 
sections mentioned in this subdivision. 
    Subd. 5.  [ADDITIONAL CHARGES.] (a) In addition to the 
finance charges permitted by this section, an association may 
contract for and receive the following additional charges which 
may be included in the amount financed: 
    (1) official fees and taxes; 
    (2) charges for insurance as described in paragraph (b); 
    (3) with respect to a loan secured by real estate, 
including a real estate loan, the following "closing costs," if 
they are bona fide, reasonable in amount, and not for the 
purpose of circumvention or evasion of this section: 
    (i) fees or premiums for title examination, abstract of 
title, title insurance, surveys, or similar purposes; 
    (ii) fees for preparation of a deed, mortgage, settlement 
statement, or other documents, if not paid to the association; 
    (iii) escrows for future payments of taxes, including 
assessments for improvements, insurance, and water, sewer, and 
land rents; 
    (iv) fees for notarizing deeds and other documents; and 
    (v) appraisal and credit report fees; 
    (4) a delinquency charge on any installment, including the 
minimum payment due in connection with the open-end credit, not 
paid in full on or before the tenth day after its due date in an 
amount not to exceed five percent of the amount of the 
installment; 
    (5) for any returned check or returned automatic payment 
withdrawal request, an amount not in excess of the service 
charge limitation in section 332.50; and 
    (6) charges for other benefits, including insurance, 
conferred on the borrower that are of a type that is not for 
credit. 
    (b) An additional charge may be made for insurance written 
in connection with the loan: 
    (1) with respect to insurance against loss of or damage to 
property, or against liability arising out of the ownership or 
use of property, if the association furnishes a clear, 
conspicuous, and specific statement in writing to the borrower 
setting forth the cost of the insurance if obtained from or 
through the association and stating that the borrower may choose 
the person through whom the insurance is to be obtained; 
    (2) with respect to credit insurance providing life, 
accident, health, or unemployment coverage, if the insurance 
coverage is not required by the association, and this fact is 
clearly and conspicuously disclosed in writing to the borrower, 
and the borrower gives specific, dated, and separately signed 
affirmative written indication of the borrower's desire to do so 
after written disclosure to the borrower of the cost of the 
insurance; and 
    (3) with respect to vendor's single interest insurance, but 
only (i) to the extent that the insurer has no right of 
subrogation against the borrower, and (ii) to the extent that 
the insurance does not duplicate the coverage of other insurance 
under which loss is payable to the association as its interest 
may appear, against loss of or damage to property for which a 
separate charge is made to the borrower pursuant to paragraph 
(b), clause (1), and (iii) if a clear, conspicuous, and specific 
statement in writing is furnished by the association to the 
borrower setting forth the cost of the insurance if obtained 
from or through the association and stating that the borrower 
may choose the person through whom the insurance is to be 
obtained. 
    (c) In addition to the finance charges and other additional 
charges permitted by this section, an association may contract 
for and receive the following additional charges in connection 
with open-end credit: 
    (1) annual charges, not to exceed $50 per annum, payable in 
advance, for the privilege of opening and maintaining open-end 
credit; 
    (2) charges for the use of an automated teller machine; 
    (3) charges for any monthly or other periodic payment 
period in which the borrower has exceeded or, except for the 
association's dishonor would have exceeded, the maximum approved 
credit limit, in an amount not in excess of the service charge 
permitted in section 332.50;  
     (4) charges for obtaining a cash advance in an amount not 
to exceed the service charge permitted in section 332.50; and 
    (5) charges for check and draft copies and for the 
replacement of lost or stolen credit cards. 
    Subd. 6.  [ADVANCES TO PERFORM COVENANTS OF BORROWER OR 
PURCHASER.] (a) If the agreement with respect to a loan or 
contract contains covenants by the borrower or purchaser to 
perform certain duties pertaining to insuring or preserving 
collateral and the association pursuant to the agreement pays 
for performance of the duties on behalf of the borrower or 
purchaser, the association may add to the debt or contract 
balance the amounts so advanced.  Within a reasonable time after 
advancing any sums, the association shall state to the borrower 
or purchaser in writing the amount of sums advanced, any charges 
with respect to this amount, and any revised payment schedule 
and, if the duties of the borrower or purchaser performed by the 
association pertain to insurance, a brief description of the 
insurance paid for by the association including the type and 
amount of coverages.  Further information need not be given. 
    (b) A finance charge equal to that specified in the loan 
agreement or contract may be made for sums advanced under 
paragraph (a). 
    Subd. 7.  [ATTORNEY'S FEES.] With respect to a loan or 
credit sale, the agreement may provide for payment by the 
borrower of the attorney's fees incurred in connection with 
collection or foreclosure.  
    Subd. 8.  [RIGHT TO PREPAY.] The borrower or purchaser may 
prepay in full the unpaid balance of a consumer loan or 
contract, at any time without penalty.  
    Subd. 9.  [CREDIT INSURANCE.] (a) The sale of credit 
insurance is subject to the provisions of chapter 62B and the 
rules adopted under that chapter, but the term of the insurance 
may exceed 60 months if the loan exceeds 60 months and the 
insurance will nevertheless be subject to chapter 62B and the 
rules adopted under that chapter. 
     (b) An association which provides credit insurance in 
relation to open-end credit may calculate the charge to the 
borrower in each billing cycle by applying the current premium 
rate to the balance in the manner permitted with respect to 
finance charges by the provisions on finance charge in this 
section. 
     (c) Upon prepayment in full of a consumer loan by the 
proceeds of credit insurance, the consumer or the consumer's 
estate is entitled to a refund of any portion of a separate 
charge for insurance which by reason of prepayment is retained 
by the association or returned to it by the insurer, unless the 
charge was computed from time to time on the basis of the 
balances of the consumer's loan. 
     (d) This section does not require an association to grant a 
refund to the consumer if all refunds due to the consumer under 
paragraph (c) amount to less than $1 and, except as provided in 
paragraph (c), does not require the association to account to 
the consumer for any portion of a separate charge for insurance 
because:  
     (1) the insurance is terminated by performance of the 
insurer's obligation; 
     (2) the association pays or accounts for premiums to the 
insurer in amounts and at times determined by the agreement 
between them; or 
     (3) the association receives directly or indirectly under 
any policy of insurance a gain or advantage not prohibited by 
law. 
    (e) Except as provided in paragraph (d), the association 
shall promptly make or cause to be made an appropriate refund to 
the consumer with respect to any separate charge made to the 
consumer for insurance if: 
    (1) the insurance is not provided or is provided for a 
shorter term than for which the charge to the borrower for 
insurance was computed; or 
    (2) the insurance terminates before the end of the term for 
which it was written because of prepayment in full or otherwise. 
    (f) If an association requires insurance, upon notice to 
the borrower, the borrower has the option of providing the 
required insurance through an existing policy of insurance owned 
or controlled by the borrower, or through a policy to be 
obtained and paid for by the borrower, but the association for 
reasonable cause may decline the insurance provided by the 
borrower. 
    Subd. 10.  [PROPERTY AND LIABILITY INSURANCE.] (a) Except 
as otherwise provided in this section and subject to the 
provisions on additional charges and maximum finance charges in 
this section, an association may agree to sell, as an agent, 
property and liability insurance, and may contract for and 
receive a charge for such insurance separate from and in 
addition to other charges.  An association need not make a 
separate charge for the insurance provided or required by it.  
This section does not authorize the issuance of the insurance 
prohibited under any statute or rule governing the business of 
insurance nor does it authorize an association to underwrite 
insurance. 
     (b) This section does not apply to an insurance premium 
loan.  An association may request cancellation of a policy of 
property or liability insurance only after the borrower's 
default or in accordance with a written authorization by the 
borrower.  In either case, the cancellation does not take effect 
until written notice is delivered to the borrower or mailed to 
the borrower at the borrower's address as stated by the 
borrower.  The notice must state that the policy may be canceled 
on a date not less than ten days after the notice is delivered, 
or, if the notice is mailed, not less than 13 days after it is 
mailed.  A cancellation may not take effect until those notice 
periods expire. 
    Subd. 11.  [CONSUMER PROTECTIONS.] (a) Associations shall 
comply with the requirements of the Federal Truth in Lending 
Act, United States Code, title 15, section 1601 to 1693, in 
connection with a consumer loan or credit sale for a consumer 
purpose. 
     (b) Associations shall comply with the following consumer 
protection provisions in connection with a consumer loan or 
credit sale for a consumer purpose:  sections 325G.02 to 
325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to 
325G.36, and the Code of Federal Regulations, title 12, part 535.
     (c) An assignment of a consumer's earnings by the consumer 
to an association as payment or as security for payment of a 
debt arising out of a consumer loan or consumer credit sale is 
unenforceable by the association and revocable by the consumer. 
    Subd. 12.  [LOANS OTHER THAN CONSUMER LOANS.] Loans other 
than consumer loans are not subject to the provisions and 
limitations of subdivisions 8, 9, 10, paragraph (b), and 11. 
    Subd. 13.  [EFFECT OF VIOLATIONS ON RIGHTS OF PARTIES.] (a) 
If an association has violated any provision of this section 
applying to collection of finance or other charges, the borrower 
has a cause of action to recover damages and also a right in an 
action other than a class action, to recover from the 
association violating this section a penalty in an amount 
determined by the court not less than $100 nor more than 
$1,000.  With respect to violations arising from other than 
open-end credit transactions, no action may be brought pursuant 
to this paragraph and no set-off or recoupment may be asserted 
pursuant to this paragraph, more than one year after the making 
of the debt. 
    (b) A borrower is not obligated to pay a charge in excess 
of that allowed by this section and has a right of refund of any 
excess charge paid.  A refund may not be made by reducing the 
borrower's obligation by the amount of the excess charge, unless 
the association has notified the borrower that the borrower may 
request a refund and the borrower has not so requested within 30 
days thereafter.  If the debtor has paid an amount in excess of 
the lawful obligation under the agreement, the borrower may 
recover the excess amount from the association who made the 
excess charge or from an assignee of the association's rights 
who undertakes direct collection of payments from or enforcement 
of rights against borrowers arising from the debt. 
    (c) If an association has contracted for or received a 
charge in excess of that allowed by this section, or if a 
borrower is entitled to a refund and a person liable to the 
borrower refuses to make a refund within a reasonable time after 
demand, the borrower may recover from the association or the 
person liable in an action other than a class action a penalty 
in an amount determined by the court not less than $100 nor more 
than $1,000.  With respect to excess charges arising from other 
than open-end credit transactions, no action pursuant to this 
paragraph may be brought more than one year after the making of 
the debt.  For purposes of this paragraph, a reasonable time is 
presumed to be 30 days. 
    (d) A violation of this section does not impair rights on a 
debt. 
    (e) An association is not liable for a penalty under 
paragraph (a) or (c) if it notifies the borrower of a violation 
before the association receives from the borrower written notice 
of the violation or the borrower has brought an action under 
this section, and the association corrects the violation within 
45 days after notifying the borrower.  If the violation consists 
of a prohibited agreement, giving the borrower a corrected copy 
of the writing containing the violation is sufficient 
notification and correction.  If the violation consists of an 
excess charge, correction must be made by an adjustment or 
refund. 
    (f) An association may not be held liable in an action 
brought under this section for a violation of this section if 
the association shows by a preponderance of evidence that the 
violation was not intentional and resulted from a bona fide 
error notwithstanding the maintenance of procedures reasonably 
adopted to avoid the error. 
    (g) In an action in which it is found that an association 
has violated this section, the court shall award to the borrower 
the costs of the action and to the borrower's attorneys their 
reasonable fees. 
    Sec. 67.  Minnesota Statutes 1986, section 51A.40, is 
amended to read:  
    51A.40 [DEALING WITH SUCCESSORS IN INTEREST.] 
    In the case of any investment made by an association in 
a real estate loan secured by a mortgage on real property, 
including a real estate loan, in the event the ownership of the 
real estate security or any part thereof becomes vested in a 
person other than the party or parties originally executing the 
security instruments, and provided there is not an agreement in 
writing to the contrary, an association may, without notice to 
such party or parties, deal with such successor or successors in 
interest with reference to said mortgage and the debt thereby 
secured in the same manner as with such party or parties, and 
may forbear to sue or may extend time for payment of or 
otherwise modify the terms of the debt secured thereby, without 
discharging or in any way affecting the original liability of 
such party or parties thereunder or upon the debt thereby 
secured.  
    Sec. 68.  Minnesota Statutes 1986, section 51A.44, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ANNUAL REPORT.] On or before the last day 
of January April in each year, every association shall make an 
annual written report to the commissioner, upon a form to be 
prescribed and furnished by the commissioner, of its affairs and 
operations, which shall include a complete statement of its 
financial condition, including a statement of income and expense 
since its last previous similar report, for the 12 months ending 
on the 31st day of December of the previous year.  Every such 
report shall be verified by the president and treasurer.  
    Sec. 69.  Minnesota Statutes 1986, section 51A.48, is 
amended to read:  
    51A.48 [RIGHT TO DECLARATORY JUDGMENT.] 
    At any time after any controversy has arisen between the 
commissioner and an association with respect to any question of 
law or rule or with respect to any question involving 
immeasurable or irreparable damage to the association, and prior 
to an administrative or judicial hearing, the association or the 
commissioner may apply to any court of competent jurisdiction in 
the county in which the principal home office of the association 
is located for a declaratory judgment as to such question, and 
such court shall have and shall take jurisdiction and decide the 
controversy on its merits in accordance with the weight of the 
evidence, and such court shall have full power to enforce its 
orders.  
    Sec. 70.  Minnesota Statutes 1986, section 51A.50, is 
amended to read:  
    51A.50 [FEDERAL SAVINGS ASSOCIATIONS AND SAVINGS BANKS.] 
    Federal savings associations, federal savings banks, or 
federal savings and loan associations, incorporated pursuant to 
the laws of the United States, as now or hereafter amended, are 
not foreign corporations or foreign associations.  Unless 
federal laws or regulations provide otherwise, federal 
associations, federal savings banks, and the members or 
stockholders thereof shall possess all of the rights, powers, 
privileges, benefits, immunities, and exemptions that are now 
provided or that hereafter may be provided by the laws of this 
state for savings associations organized under the laws of this 
state and for the members or stockholders thereof.  This 
provision is additional and supplemental to any provision which, 
by specific reference, is applicable to federal associations and 
the members or stockholders thereof.  Federal savings banks 
shall possess all of the rights, powers, privileges, benefits, 
immunities, liabilities, and exemptions that are now provided or 
that hereafter may be provided by the laws of this state for 
federal savings and loan associations.  The following sections 
apply to federal associations, except to the extent they are 
inconsistent with federal law or regulations:  sections 51A.01; 
51A.02; 51A.065; 51A.15, subdivision 6; 51A.21, subdivisions 6a, 
15, 16, 22, 25, 27, and 28; 51A.23, subdivision 1; 51A.24; 
51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 51A.30; 
51A.31; 51A.37, subdivisions 1, 2, 3, paragraphs (a), (c), (d), 
4, 5, 6, 7, 8, 9, 10, 11, and 12; 51A.38; 51A.385; 51A.40; 
51A.50; 51A.52; 51A.56; and 51A.57. 
    Sec. 71.  Minnesota Statutes 1986, section 51A.51, 
subdivision 1, is amended to read:  
    Subdivision 1.  [FEES TO BE PAID TO STATE TREASURER.] 
Associations An association shall pay fees by delivering to the 
commissioner a check payable to the state treasurer.  
    Sec. 72.  Minnesota Statutes 1986, section 51A.53, is 
amended to read:  
    51A.53 [POWERS OF FEDERAL SAVINGS AND LOAN ASSOCIATIONS; 
APPROVAL.] 
    Subject to the approval of the commissioner, any savings 
and loan association organized under sections 51A.01 to 51A.57 
is hereby vested with all the powers conferred upon a 
federal savings and loan association organized under the laws 
and regulations of the United States or its agencies, as 
amended, as fully and completely as if the powers were 
specifically enumerated and described herein, provided that the 
same are not specifically prohibited by state law. 
    Sec. 73.  Minnesota Statutes 1986, section 51A.56, is 
amended to read:  
    51A.56 [ACT CONTROLLING.] 
    Insofar as the provisions of sections 51A.01 to 51A.57 are 
inconsistent with the provisions of any other law 
affecting savings associations, the provisions of sections 
51A.01 to 51A.57 shall control. 
    Sec. 74.  Minnesota Statutes 1986, section 118.005, 
subdivision 1, is amended to read:  
    Subdivision 1.  The governing body of every municipality, 
as defined in section 118.01, which has the power to receive and 
disburse funds, shall designate as a depository of the funds 
such national, insured state banks or thrift institutions as 
defined in section 51A.02, subdivision 23 54, as it may deem 
proper.  The governing body may authorize the treasurer or chief 
financial officer to exercise the powers of the governing body 
in designating a depository of the funds.  
    For purposes of this chapter, a credit union is a thrift 
institution. 
    Sec. 75.  [REPEALER.] 
    Minnesota Statutes 1986, sections 51A.03, subdivision 2a; 
51A.05, subdivisions 3, 4, and 5; 51A.091; 51A.11, subdivision 
3; 51A.18; 51A.19, subdivisions 2 and 3; 51A.21, subdivisions 6 
and 19; 51A.23, subdivisions 2, 3, 4, and 5; 51A.37, 
subdivisions 7 and 9; 51A.38, subdivision 6; and 51A.39 are 
repealed. 
    Sec. 76.  [EFFECTIVE DATE.] 
    Sections 1 to 75 are effective the day following final 
enactment. 
    Approved April 26, 1988