language to be deleted (2) new language
Laws of Minnesota 1992 CHAPTER 427-H.F.No. 1416 An act relating to commerce; modifying the regulation of interest rate advertising; amending Minnesota Statutes 1990, section 45.025, subdivisions 1 and 2; repealing Minnesota Statutes 1990, section 45.025, subdivision 7. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: Section 1. Minnesota Statutes 1990, section 45.025, subdivision 1, is amended to read: Subdivision 1. [DEFINITIONS.] For the purposes of this section only, the following terms have the meanings given them: (a) "Advertisement" includes: (1) printed or published material, audio visual material, and descriptive literature of an issuer or agent used in direct mail, newspapers, magazines, other periodicals, radio scripts, television scripts, billboards, and other similar displays, excluding advertisements prepared for the sole purpose of obtaining employees, agents, or agencies; (2) descriptive literature and sales aids of all kinds issued by an issuer or agent for presentation to members of the public, including but not limited to circulars, leaflets, booklets, depictions, illustrations, and form letters; (3) prepared sales talks, presentations, and materials for use by issuers and agents and representations made by issuers and agents in accordance with these talks, presentations, and materials; and (4) statements, written or oral, by an agent or issuer. (b) "Agent" is a person who effects or attempts to effect or assist in the purchase or sale of an investment product. (c) "Commissioner" means the commissioner of commerce. (d) "Effective annual yield" is the annualized income expressed as a simple interest rate per annum based on the initial investment principal. (e) "Effective net annual yield" means the effective annual yield, based on a hypothetical $1,000 investment, minus any annual fee or similar regular periodic charges. (f) "Investment product" includes but is not limited to: (1) certificate of deposits, deposits, or fiduciary funds entrusted to banks, savings associations, trust companies, credit unions, savings banks, industrial loan and thrift companies, and any other financial institution whether or not licensed by or registered with the department of commerce; (2) annuities, endowment policies, or other life insurance products; (3) securities, including: a note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit sharing agreement; collateral trust certificate; preorganizational certificate or subscription; transferable shares; investment contract, including but not limited to metals, gems, and coins; voting trust certificate; certificate of deposit for a security; certificate of interest or participation in an oil, gas, or mining right, title or lease, or in payments out of production under the right, title or lease; or, in general, any interest or instrument commonly known as a security, or any certificate of interest or participation in, temporary or interim certificate for, receipt for guarantee of, or warrant or right to subscribe to or purchase, any of the securities listed in this clause. (g) "Issuer" includes but is not limited to: banks, savings associations, trust companies, credit unions, savings banks, industrial loan and thrift companies, insurance companies, investment companies, trusts, or a person who issues an investment product. (h) "Person" means an individual, corporation, a partnership, an association, a joint stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, a political subdivision of a government, or any other entity. (i) "Yield to maturity" means the discount rate which, when applied to all future principal and interest payments to be received from an investment product assuming the investment product is held to maturity, results in a present value exactly equal to the price of the investment product. Sec. 2. Minnesota Statutes 1990, section 45.025, subdivision 2, is amended to read: Subd. 2. [GENERAL RESTRICTION.] A person may not advertise the interest rate of an investment product unless: (1) the yield to maturity if the investment product is a note, bond, or debenture that bears interest at a fixed rate and has a stated maturity; or (2) the effective net annual yield if the investment product does not bear interest at a fixed rate or has an indefinite life, is disclosed in an equally prominent manner. The name and address of the issuer, or a person from whom the name and address of the issuer may be obtained, and any prepayment expense, surrender charge, or withdrawal penalty charged by the issuer must also be disclosed in a prominent manner. If the expense, charge, or penalty varies according to the length of time the product is held, the advertisement must disclose the expense, fee, or penalty imposed if surrendered or terminated within one year. Sec. 3. [REPEALER.] Minnesota Statutes 1990, section 45.025, subdivision 7, is repealed. Presented to the governor April 6, 1992 Signed by the governor April 9, 1992, 4:15 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes