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Minnesota Legislature

Office of the Revisor of Statutes

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

  

                         Laws of Minnesota 1989 

                        CHAPTER 129-H.F.No. 955 
           An act relating to financial institutions; providing 
          standards for determining transaction account service 
          charges; permitting state banks to establish 
          subsidiaries under certain circumstances; authorizing 
          the commissioner to adopt rules regarding activities 
          of banks and bank subsidiaries; permitting banks to 
          perform clerical services at off-premises data 
          processing and storage centers; amending Minnesota 
          Statutes 1988, sections 48.512, by adding a 
          subdivision; and 48.61, by adding a subdivision; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 48. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1988, section 48.512, is 
amended by adding a subdivision to read: 
     Subd. 7.  [TRANSACTION ACCOUNT SERVICE CHARGES.] The 
establishment of transaction account service charges and the 
amounts of the charges not otherwise limited or prescribed by 
law or rule is a business decision to be made by each financial 
intermediary according to sound business judgment and safe, 
sound financial institution operational standards.  In 
establishing transaction account service charges, the financial 
intermediary may consider, but is not limited to considering: 
     (1) costs incurred by the institution, plus a profit 
margin, in providing the service; 
     (2) the deterrence of misuse by customers of financial 
institution services; 
     (3) the establishment of the competitive position of the 
financial institution in accordance with the institution's 
marketing strategy; and 
     (4) maintenance of the safety and soundness of the 
institution. 
     Transaction account service charges must be reasonable in 
relation to these considerations and should be arrived at by 
each financial intermediary on a competitive basis and not on 
the basis of any agreement, arrangement, undertaking, or 
discussion with other financial intermediaries or their officers.
    Sec. 2.  Minnesota Statutes 1988, section 48.61, is amended 
by adding a subdivision to read: 
     Subd. 7.  [SUBSIDIARIES.] (a) A state bank or trust company 
may organize, acquire, or invest in a subsidiary located in this 
state for the purposes of engaging in one or more of the 
following activities, subject to the prior written approval of 
the commissioner: 
     (1) any activity, not including receiving deposits, lending 
money, or paying checks that a state bank is authorized to 
engage in under state law or rule or under federal law or 
regulation unless the activity is prohibited by the laws of this 
state; 
     (2) any activity that a bank clerical service corporation 
is authorized to engage in under section 48.89; and 
    (3) any other activity authorized for a national bank, a 
bank holding company, or a subsidiary of a national bank or bank 
holding company under federal law or regulation of general 
applicability, and approved by the commissioner by rule.  
     (b) A bank or trust company subsidiary may engage in an 
activity under this section only upon application together with 
a filing fee of $250 and with the prior written approval of the 
commissioner.  In approving or denying a proposed activity, the 
commissioner shall consider the financial and management 
strength of the bank or trust company, the current written 
operating plan and policies of the proposed subsidiary 
corporation, the bank or trust company's community reinvestment 
record, and whether the proposed activity should be conducted 
through a subsidiary of the bank or trust company. 
     (c) The aggregate amount of funds invested in either an 
equity or loan capacity in all of the subsidiaries of the bank 
or trust company authorized under this subdivision shall not 
exceed 25 percent of the capital stock and paid in surplus of 
the bank or trust company. 
     (d) A subsidiary organized or acquired under this 
subdivision is subject to the examination and enforcement 
authority of the commissioner under chapters 45 and 46 to the 
same extent as a state bank or trust company. 
     (e) For the purposes of this section, "subsidiary" means a 
corporation of which more than 50 percent of the voting shares 
are owned or controlled by the bank or trust company. 
     Sec. 3.  [48.892] [CLERICAL SERVICES OFFICES.] 
    A bank may perform clerical services, as defined in section 
48.89, subdivision 1, for itself at an off-premises data 
processing and storage center located within the state if the 
bank furnishes assurances satisfactory to the commissioner that 
the performances of those services will be subject to regulation 
and examination by the commissioner to the same extent as if the 
services were being performed at the bank's main office or 
detached facility.  A data processing and storage center is not 
considered a branch or detached facility, as defined in section 
47.51.  The establishment of a data processing and storage 
center may include acquiring real and personal property, which 
shall be subject to section 47.10. 
    Presented to the governor May 12, 1989 
    Signed by the governor May 15, 1989, 5:58 p.m.