Minnesota Session Laws - 1991, Regular Session

  

                         Laws of Minnesota 1991 

                        CHAPTER 256-S.F.No. 880 
           An act relating to checks; increasing bank 
          verification requirements for opening checking 
          accounts; limiting service charges for dishonored 
          checks on persons other than the issuer; regulating 
          check numbering procedures; giving the commissioner of 
          commerce enforcement powers regarding verification 
          procedure requirements; modifying procedures and 
          liability for civil restitution for holders of 
          worthless checks; authorizing service charges for use 
          of law enforcement agencies; regulating fees; 
          authorizing checks for gambling under the Indian 
          Gaming Regulatory Act; clarifying criminal penalties; 
          increasing information that banks must provide to 
          holders of worthless checks; imposing penalties; 
          amending Minnesota Statutes 1990, sections 48.512, 
          subdivisions 3, 4, 5, 7, and by adding subdivisions; 
          332.50, subdivisions 1 and 2; 349.2127, subdivision 7; 
          and 609.535, subdivisions 2a, 6, and 7; 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 1990, section 48.512, 
subdivision 3, is amended to read: 
    Subd. 3.  [CONFIRM NO INVOLUNTARY CLOSING.] Before opening 
or authorizing signatory power over a transaction account, the 
financial intermediary shall attempt to verify the information 
disclosed for subdivision 2, clause (i).  Inquiries made to 
verify this information through persons in the business of 
providing such information must include an inquiry based on the 
applicant's identification number provided under subdivision 2, 
clause (g).  The financial intermediary may not open or 
authorize signatory power over a transaction account if (i) the 
applicant had a transaction account closed by a financial 
intermediary without consent because of issuance by the 
applicant of dishonored checks within 12 months immediately 
preceding the application, or (ii) the applicant has been 
convicted of a criminal offense because of the use of a check or 
other similar item within 24 months immediately preceding the 
application.  
    If the transaction account is refused pursuant to this 
subdivision, the reasons for the refusal shall be given to the 
applicant in writing and the applicant shall be allowed to 
provide additional information. 
    Sec. 2.  Minnesota Statutes 1990, section 48.512, 
subdivision 4, is amended to read: 
    Subd. 4.  [IDENTIFICATION IS REQUIRED.] A financial 
intermediary shall not open or authorize signatory power over a 
transaction account if none of the applicants provides a 
driver's license, identification card, or identification 
document as required by subdivision 2.  If the applicant 
provides a driver's license or identification card issued under 
section 171.07, the financial intermediary must confirm the 
identification number and name on that card through the records 
of the department of public safety.  The financial intermediary 
need not confirm this information if an employee of the 
financial intermediary has known the identity of the applicant 
for at least one year prior to the time of the application, and 
the employee provides a signed statement confirming that fact.  
When a minor is the applicant and the minor does not have a 
driver's license or identification card issued pursuant to 
section 171.07, the identification requirements of subdivision 
2, clause (g), and this subdivision are satisfied if the minor's 
parent or guardian provides identification of that person's own 
that meets the identification requirement.  The financial 
intermediary may waive the identification requirement if the 
applicant has had another type of account with the financial 
intermediary for at least one year immediately preceding the 
time of application. 
    Sec. 3.  Minnesota Statutes 1990, section 48.512, 
subdivision 5, is amended to read: 
    Subd. 5.  [NO LIABILITY.] The requirements of this section 
do not impose any liability on financial intermediaries offering 
transaction accounts or, except as provided in subdivisions 3 
and 4, limit a financial intermediary's discretion as to whether 
to grant or deny an application subject to this section.  This 
subdivision does not exempt a financial intermediary from civil 
penalties imposed under section 45.027. 
    Sec. 4.  Minnesota Statutes 1990, section 48.512, 
subdivision 7, is amended to read: 
    Subd. 7.  [TRANSACTION ACCOUNT SERVICE CHARGES AND CHARGES 
RELATING TO DISHONORED CHECKS.] (a) 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. 
    (b) 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.
    (c) A financial intermediary may not impose a service 
charge in excess of $4 for a dishonored check on any person 
other than the issuer of the check. 
    Sec. 5.  Minnesota Statutes 1990, section 48.512, is 
amended by adding a subdivision to read: 
    Subd. 8.  [CHECK LABELING.] A person providing printed 
checks for a transaction account shall print the month and year 
that the original order was received or the month and year that 
appears on the facsimile of the check from which the new checks 
are produced, unless the applicant has an existing account in 
good standing or a previous account in good standing within the 
past five years that was voluntarily closed.  This subdivision 
no longer applies after the account has been open and in good 
standing for one year. 
    Sec. 6.  Minnesota Statutes 1990, section 48.512, is 
amended by adding a subdivision to read: 
    Subd. 9.  [POWERS AFFECTING CHECKING ACCOUNTS; OTHER 
FINANCIAL INFORMATION.] The commissioner of commerce may 
exercise the powers authorized under section 45.027 if the 
commissioner has reason to believe that a financial intermediary 
or drawer has failed to: 
    (1) comply with the verification requirements of 
subdivision 2, 3, or 4; or 
    (2) release information as required under section 609.535, 
subdivision 7. 
     Sec. 7.  [48.513] [FINANCIAL INTERMEDIARY FEES.] 
    A financial intermediary may charge a fee for the assembly, 
production, and copying of records requested under chapter 13A, 
not to exceed the schedule established from time to time by the 
Federal Reserve System under Regulation S, Code of Federal 
Regulations, title 12, part 219, except that a fee may not be 
imposed if the records are requested by a law enforcement agency 
or prosecuting authority.  This section does not apply to 
requests made under section 609.535.  For purposes of this 
section, "financial intermediary" has the meaning given in 
section 48.512, subdivision 1. 
    Sec. 8.  Minnesota Statutes 1990, section 332.50, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] "Check" means a check, 
draft, order of withdrawal, or similar negotiable or 
nonnegotiable instrument.  
    "Credit" means an arrangement or understanding with the 
drawee for the payment of the check. 
    "Dishonor" has the meaning given in section 336.3-507, but 
does not include dishonor due to a stop payment order requested 
by an issuer who has a good faith defense to payment on the 
check.  
    Sec. 9.  Minnesota Statutes 1990, section 332.50, 
subdivision 2, is amended to read: 
    Subd. 2.  [ACTS CONSTITUTING.] (a) Whoever issues any check 
that is dishonored and is not paid within 30 days after mailing 
a notice of dishonor that includes a citation to this section 
and section 609.535, and a description of the penalties 
contained in these sections, in compliance with subdivision 3, 
is liable to the holder for: (1) the amount of the check plus a 
civil penalty of up to $100, or up to 100 percent of the value 
of the check, whichever is greater; (2) interest at the rate 
payable on judgments pursuant to section 549.09 on the face 
amount of the check from the date of dishonor,; and (3) 
reasonable attorney fees if the aggregate amount of the check 
dishonored checks issued by the issuer to all payees within a 
six-month period is over $1,250. 
    (b) If the amount of the dishonored check plus any service 
charges that have been incurred under paragraph (d) or (e) have 
not been paid within 30 days after having mailed a notice of 
dishonor in compliance with subdivision 3 but before bringing an 
action, a payee may make a written demand for payment for the 
liability imposed by paragraph (a) by sending a copy of this 
section and a description of the liability contained in this 
section to the issuer's last known address. 
    (c) After notice has been sent but before an action under 
this section is heard by the court, the plaintiff shall settle 
the claim if the defendant gives the plaintiff the amount of the 
check plus court costs, any service charge owed under paragraph 
(d), and reasonable attorney fees if provided for under 
paragraph (a), clause (3).  
    (d) A service charge not exceeding $15 may be imposed 
immediately on any dishonored check, regardless of mailing a 
notice of dishonor, if written notice of the service charge was 
conspicuously displayed on the premises when the check was 
issued.  The service charge may not exceed $20, except that if 
the payee uses the services of a law enforcement agency to 
obtain payment of a dishonored check, a service charge of up to 
$25 may be imposed if the service charge is used to reimburse 
the law enforcement agency for its expenses.  A payee may impose 
only one service charge under this paragraph for each dishonored 
check.  
    (e) This subdivision prevails over any provision of law 
limiting, prohibiting, or otherwise regulating service charges 
authorized by this subdivision, but does not nullify charges for 
dishonored checks, which do not exceed $15 the charges in 
paragraph (d) or the actual cost of collection, but in no case 
more than $30, or terms or conditions for imposing the charges 
which have been agreed to by the parties to an express contract. 
     Sec. 10.  Minnesota Statutes 1990, section 349.2127, 
subdivision 7, is amended to read: 
    Subd. 7.  [CHECKS FOR GAMBLING PURCHASES.] An organization 
may not accept checks in payment for the purchase of any 
gambling equipment or for the chance to participate in any form 
of lawful gambling.  This subdivision does not apply to gaming 
activities conducted pursuant to the Indian Gaming Regulatory 
Act, 25 U.S.C. 2701 et seq. 
    Sec. 11.  Minnesota Statutes 1990, section 609.535, 
subdivision 2a, is amended to read: 
    Subd. 2a.  [PENALTIES.] (a) A person who is convicted of 
issuing a dishonored check under subdivision 2 may be sentenced 
as follows: 
    (1) to imprisonment for not more than one year or to 
payment of a fine of not more than $3,000, or both, if the value 
of the dishonored check, or checks aggregated under paragraph 
(b), is more than $250; or 
    (2) to imprisonment for not more than 90 days or to payment 
of a fine of not more than $700, or both, if the value of the 
dishonored check, or checks aggregated under paragraph (b), is 
not more than $250. 
    (b) In a prosecution under this subdivision, the value of 
dishonored checks issued by the defendant in violation of this 
subdivision within any six-month period may be aggregated and 
the defendant charged accordingly in applying this section.  
When two or more offenses are committed by the same person in 
two or more counties, the accused may be prosecuted in any 
county in which one of the dishonored checks was issued for all 
of the offenses aggregated under this paragraph. 
     Sec. 12.  Minnesota Statutes 1990, section 609.535, 
subdivision 6, is amended to read: 
    Subd. 6.  [RELEASE OF ACCOUNT INFORMATION TO LAW 
ENFORCEMENT AUTHORITIES.] A drawee shall release the information 
specified below to any state, county, or local law enforcement 
or prosecuting authority which certifies in writing that it is 
investigating or prosecuting a complaint against the drawer 
under this section or section 609.52, subdivision 2, clause 
(3)(a), and that 15 days have elapsed since the mailing of the 
notice of dishonor required by subdivisions 3 and 8.  This 
subdivision applies to the following information relating to the 
drawer's account:  
    (1) Documents relating to the opening of the account by the 
drawer; 
    (2) Notices regarding nonsufficient funds, overdrafts, and 
the dishonor of any check drawn on the account within a period 
of six months of the date of request; 
    (3) Periodic statements mailed to the drawer by the drawee 
for the periods immediately prior to, during, and subsequent to 
the issuance of any check which is the subject of the 
investigation or prosecution; or 
    (4) The last known home and business addresses and 
telephone numbers of the drawer.  
    The drawee shall release all of the information described 
in clauses (1) to (4) that it possesses within ten days after 
receipt of a request conforming to all of the provisions of this 
subdivision.  The drawee may not impose a reasonable fee for the 
cost for furnishing this information to law enforcement or 
prosecuting authorities, not to exceed 15 cents per page.  
    A drawee is not liable in a criminal or civil proceeding 
for releasing information in accordance with this subdivision. 
    Sec. 13.  Minnesota Statutes 1990, section 609.535, 
subdivision 7, is amended to read: 
    Subd. 7.  [RELEASE OF ACCOUNT INFORMATION TO PAYEE OR 
HOLDER.] (a) A drawee shall release the information specified in 
paragraph (b), clauses (1) and (2) to (3) to the payee or holder 
of a check that has been dishonored who makes a written request 
for this information and states in writing that the check has 
been dishonored and that 30 days have elapsed since the mailing 
of the notice described in subdivision 8 and who accompanies 
this request with a copy of the dishonored check and a copy of 
the notice of dishonor.  
    The requesting payee or holder shall notify the drawee 
immediately to cancel this request if payment is made before the 
drawee has released this information.  
    (b) This subdivision applies to the following information 
relating to the drawer's account:  
    (1) Whether at the time the check was issued or presented 
for payment the drawer had sufficient funds or credit with the 
drawee, and whether at that time the account was open, closed, 
or restricted for any reason and the date it was closed or 
restricted; and 
    (2) The last known home address and telephone number of the 
drawer.  The drawee may not release the address or telephone 
number of the place of employment of the drawer unless the 
drawer is a business entity or the place of employment is the 
home; and 
    (3) A statement as to whether the aggregated value of 
dishonored checks attributable to the drawer within six months 
before or after the date of the dishonored check exceeds $250; 
for purposes of this clause, a check is not dishonored if 
payment was not made pursuant to a stop payment order.  
    The drawee shall release all of the information described 
in clauses (1) and (2) to (3) that it possesses within ten days 
after receipt of a request conforming to all of the provisions 
of this subdivision.  The drawee may require the person 
requesting the information to pay the reasonable costs, not to 
exceed 15 cents per page, of reproducing and mailing the 
requested information.  
    (c) A drawee is not liable in a criminal or civil 
proceeding for releasing information in accordance with this 
subdivision. 
    Presented to the governor May 28, 1991 
    Signed by the governor May 31, 1991, 4:56 p.m.