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Office of the Revisor of Statutes

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

                            CHAPTER 171-H.F.No. 1573 
                  An act relating to financial institutions; regulating 
                  savings banks; modifying and clarifying statutory 
                  provisions relating to the structure and functions of 
                  savings banks; making technical changes; amending 
                  Minnesota Statutes 1994, sections 9.031, subdivision 
                  8; 46.047, subdivision 2; 47.01, subdivisions 2 and 3; 
                  47.015, subdivision 1; 47.02; 47.10, subdivision 1; 
                  47.12; 47.20, subdivisions 1 and 9; 47.201, 
                  subdivision 1; 47.205, subdivision 1; 47.209, 
                  subdivision 1; 47.27, subdivision 2; 47.28; 47.29, 
                  subdivisions 1 and 2; 47.30, subdivisions 1, 2, 3, and 
                  5; 47.32; 47.62, subdivision 4; 47.64, subdivision 1; 
                  47.65, subdivisions 1 and 2; 48.01, subdivision 2; 
                  48.15, by adding a subdivision; 49.01, by adding a 
                  subdivision; 49.42; 50.01; 50.04; 50.05; 50.06; 50.11; 
                  50.13; 50.14, subdivisions 1, 5, 7, and 8; 50.145; 
                  50.146; 50.1465; 50.148; 50.155; 50.17; 50.175, 
                  subdivision 1; 50.19; 50.21; 50.22; 50.23; 50.245; 
                  50.25; 51A.02, subdivisions 6, 26, and 40; 51A.21, by 
                  adding a subdivision; 61A.09, subdivision 3; 62B.04, 
                  subdivisions 1 and 2; and 300.20; proposing coding for 
                  new law in Minnesota Statutes, chapters 46; 47; and 
                  50; repealing Minnesota Statutes 1994, sections 
                  47.095; 47.30, subdivisions 4 and 6; 48.67; 50.02; 
                  50.07; 50.08; 50.09; 50.10; 50.12; 50.15; 50.16; 
                  50.21; and 50.22.  
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 9.031, 
        subdivision 8, is amended to read: 
           Subd. 8.  [ACTIVE AND INACTIVE DEPOSITORIES.] Depositories 
        shall be divided into two classes to be known as active and 
        inactive.  A depository may be designated as a depository of 
        both classes.  
           All state funds deposited in active depositories are 
        subject to withdrawal by the state treasurer upon demand and no 
        interest shall be charged on these deposits.  
           Surplus funds not required to meet the state's current 
        disbursements shall be deposited for a definite period in 
        inactive depositories and interest shall be paid on these 
        deposits at a rate of not less than one percent per annum nor 
        more than the maximum rate authorized to be paid by Minnesota 
        state banks other than mutual savings banks.  This rate shall be 
        fixed by the executive council in accordance with the current 
        rate upon similar deposits.  
           Sec. 2.  Minnesota Statutes 1994, section 46.047, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BANKING INSTITUTION.] The term "banking 
        institution" means a bank, trust company, bank and trust 
        company, mutual savings bank, or thrift institution, that is 
        organized under the laws of this state, or a holding company 
        which owns or otherwise controls the banking institution. 
           Sec. 3.  [46.35] [INTERPRETATIONS.] 
           The commissioner of commerce may upon request from an 
        interested party give an interpretive opinion in connection with 
        the administration of chapters 45 to 56.  No penalty provision 
        in these chapters or of any other chapter to which chapters 45 
        to 56 may refer applies to any act done or not done in 
        conformity with a written interpretive opinion of the 
        commissioner, notwithstanding that the written interpretive 
        opinion may, after the act or omission, be amended or rescinded 
        or be determined by judicial or other authority to be invalid 
        for any reason. 
           Sec. 4.  Minnesota Statutes 1994, section 47.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BANK.] A bank is a corporation under public 
        control, having a place of business where credits are opened by 
        the deposit or collection of money and currency, subject to be 
        paid or remitted upon draft, check, or order, and where money is 
        advanced, loaned on stocks, bonds, bullion, bills of exchange, 
        and promissory notes, and where the same are received for 
        discount or sale; and all persons and copartnerships, 
        respectively, so operating, are bankers.  The term does not 
        include a savings bank. 
           Sec. 5.  Minnesota Statutes 1994, section 47.01, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SAVINGS BANK.] A savings bank is an institution 
        under like control, managed by disinterested trustees solely, 
        authorized to receive and safely invest the savings of small 
        depositors a corporation authorized to do business under chapter 
        50.  
           Sec. 6.  Minnesota Statutes 1994, section 47.015, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FINANCIAL INSTITUTIONS.] As used in this 
        section the term "financial institution" shall include banks, 
        trust companies, banks and trust companies, mutual savings 
        banks, industrial loan and thrift companies having outstanding 
        certificates of indebtedness for investment, savings and loan 
        associations, national banking associations, federal reserve 
        banks and, federal savings and loan associations, and federal 
        savings banks doing business in this state, and includes any 
        branch or detached facility of any of them. 
           Sec. 7.  Minnesota Statutes 1994, section 47.02, is amended 
        to read: 
           47.02 ["BANK" AND "SAVINGS BANK."] 
           A "bank" is a corporation having a place of business in 
        this state, where credits are opened by the deposit of money or 
        currency, or the collection of the same, subject to be paid or 
        remitted on draft, check, or order; and where money is loaned or 
        advanced on stocks, bonds, bullion, bills of exchange, or 
        promissory notes, and where the same are received for discount 
        or sale.  A "savings bank" is a corporation managed by 
        disinterested trustees, solely authorized to receive and safely 
        invest the savings of small depositors authorized to do business 
        under chapter 50.  Every "bank" or "savings bank" in this state 
        shall at all times be under the supervision and subject to the 
        control of the commissioner of commerce, and when so conducted 
        the business shall be known as "banking."  
           Sec. 8.  Minnesota Statutes 1994, section 47.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY, APPROVAL, LIMITATIONS.] (a) 
        Except as otherwise specially provided, the net book value of 
        land and buildings for the transaction of the business of the 
        corporation, including parking lots and premises leased to 
        others, shall not be more than as follows:  
           (1) for a bank, trust company, savings bank, or stock 
        savings association, if investment is for acquisition and 
        improvements to establish a new bank, or is for improvements to 
        existing property or acquisition and improvements to adjacent 
        property, approval by the commissioner of commerce is not 
        required if the total investment does not exceed 50 percent of 
        its existing capital stock and paid-in surplus.  Upon written 
        prior approval of the commissioner of commerce, a bank, trust 
        company, savings bank, or stock savings association may invest 
        in the property and improvements in clause (1) or for 
        acquisition of nonadjacent property for expansion or future use, 
        if the aggregate of all such investments does not exceed 75 
        percent of its existing capital stock and paid-in surplus; 
           (2) for a savings bank, 50 percent of its net surplus; 
           (3) for a mutual building and loan savings association, 
        five percent of its net assets.  
           (b) For purposes of this subdivision, an intervening 
        highway, street, road, alley, other public thoroughfare, or 
        easement of any kind does not cause two parcels of real property 
        to be nonadjacent. 
           Sec. 9.  Minnesota Statutes 1994, section 47.12, is amended 
        to read: 
           47.12 [FINANCIAL CORPORATIONS.] 
           Corporations may be formed for any one of the following 
        purposes: 
           (1) Carrying on the business of banking, by receiving 
        deposits, buying, selling, and discounting notes, bills, and 
        other evidences of debt legal for investment, domestic or 
        foreign, dealing in gold and silver bullion and foreign coins, 
        issuing circulating notes, and loaning money upon real estate or 
        personal security or upon the creditworthiness of the borrower; 
           (2) Establishing and conducting clearing houses, for 
        effecting, in one place, the speedy and systematic daily 
        exchange and adjustment of balances between banks and bankers in 
        any municipality, town, or county, establishing and enforcing 
        uniform methods of conducting the banking business in such 
        locality, and adjusting disputes or misunderstandings between 
        members of such clearing house engaged in the banking business; 
           (3) Creating and conducting savings banks for the 
        reception, on deposit, of money offered for that purpose, the 
        investment thereof, and the declaring, crediting, and paying of 
        dividends or interest thereon, as authorized and provided by 
        law; 
           (4) Transacting business as a trust company in conformity 
        with the laws relating thereto; and 
           (5) Carrying on, in accordance with law, the business of 
        building, loan, and savings associations.  
           Sec. 10.  Minnesota Statutes 1994, section 47.20, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Pursuant to rules the commissioner of 
        commerce finds to be necessary and proper, if any, banks, 
        savings banks, mutual savings banks, building and loan 
        associations, and savings and loan associations organized under 
        the laws of this state or the United States, trust companies, 
        trust companies acting as fiduciaries, and other banking 
        institutions subject to the supervision of the commissioner of 
        commerce, and mortgagees or lenders approved or certified by the 
        secretary of housing and urban development or approved or 
        certified by the administrator of veterans affairs, or approved 
        or certified by the administrator of the farmers home 
        administration, or approved or certified by the federal home 
        loan mortgage corporation, or approved or certified by the 
        federal national mortgage association, are authorized: 
           (1) To make loans and advances of credit and purchases of 
        obligations representing loans and advances of credit which are 
        insured or guaranteed by the secretary of housing and urban 
        development pursuant to the national housing act, as amended, or 
        the administrator of veterans affairs pursuant to the 
        servicemen's readjustment act of 1944, as amended, or the 
        administrator of the farmers home administration pursuant to the 
        consolidated farm and rural development act, Public Law Number 
        87-128, as amended, and to obtain the insurance or guarantees; 
           (2) To make loans secured by mortgages on real property and 
        loans secured by a share or shares of stock or a membership 
        certificate or certificates issued to a stockholder or member by 
        a cooperative apartment corporation which the secretary of 
        housing and urban development, the administrator of veterans 
        affairs, or the administrator of the farmers home administration 
        has insured or guaranteed or made a commitment to insure or 
        guarantee, and to obtain the insurance or guarantees; 
           (3) To make, purchase, or participate in such loans and 
        advances of credit as would be eligible for purchase, in whole 
        or in part, by the federal national mortgage association or the 
        federal home loan mortgage corporation, but without regard to 
        any limitation placed upon the maximum principal amount of an 
        eligible loan; 
           (4) To make, purchase or participate in such loans and 
        advances of credit secured by mortgages on real property which 
        are authorized or allowed by the federal home loan bank board 
        office of thrift supervision or the office of the comptroller of 
        the currency, or any successor to these federal agencies.  
           Sec. 11.  Minnesota Statutes 1994, section 47.20, 
        subdivision 9, is amended to read: 
           Subd. 9.  (1) For purposes of this subdivision the term 
        "mortgagee" shall mean all state banks and trust companies, 
        national banking associations, state and federally chartered 
        savings and loan associations, mortgage banks, mutual savings 
        banks, insurance companies, credit unions or assignees of the 
        above.  Each mortgagee requiring funds of a mortgagor to be paid 
        into an escrow, agency or similar account for the payment of 
        taxes or insurance premiums with respect to a mortgaged 
        one-to-four family, owner occupied residence located in this 
        state, unless the account is required by federal law or 
        regulation or maintained in connection with a conventional loan 
        in an original principal amount in excess of 80 percent of the 
        lender's appraised value of the residential unit at the time the 
        loan is made or maintained in connection with loans insured or 
        guaranteed by the secretary of housing and urban development, by 
        the administrator of veterans affairs, or by the administrator 
        of the farmers home administration, shall calculate interest on 
        such funds at a rate of not less than five percent per annum.  
        Such interest shall be computed on the average monthly balance 
        in such account on the first of each month for the immediately 
        preceding 12 months of the calendar year or such other fiscal 
        year as may be uniformly adopted by the mortgagee for such 
        purposes and shall be annually credited to the remaining 
        principal balance on the mortgage, or at the election of the 
        mortgagee, paid to the mortgagor or credited to the mortgagor's 
        account.  If the interest exceeds the remaining balance, the 
        excess shall be paid to the mortgagor or vendee.  The 
        requirement to pay interest shall apply to such accounts created 
        prior to June 1, 1976, as well as to accounts created after June 
        1, 1976. 
           (2) A mortgagee offering the following option (c) to a 
        mortgagor but not requiring maintenance of escrow accounts as 
        described in clause (1), whether or not the accounts were 
        required by the mortgagee or were optional with the mortgagor, 
        shall offer to each of such mortgagors the following options: 
           (a) the mortgagor may personally manage the payment of 
        insurance and taxes; 
           (b) the mortgagor may open with the mortgagee a passbook 
        savings account carrying the current rate of interest being paid 
        on such accounts by the mortgagee in which the mortgagor can 
        deposit the funds previously paid into the escrow account; or 
           (c) the mortgagor may elect to maintain a noninterest 
        bearing escrow account as described in clause (1) to be serviced 
        by the mortgagee at no charge to the mortgagor. 
           A mortgagee that is not a depository institution offering 
        passbook savings accounts shall instead of offering option (b) 
        above notify its mortgagors (1) that they may open such accounts 
        at a depository institution and (2) of the current maximum legal 
        interest rate on such accounts. 
           A mortgagee offering option (c) above to a mortgagor but 
        not requiring the maintenance of escrow accounts shall notify 
        its mortgagor of the options under (a), (b) and (c).  The notice 
        shall state the option and state that an escrow account is not 
        required by the mortgagee, that the mortgagor is legally 
        responsible for the payment of taxes and insurance, and that the 
        notice is being given pursuant to this subdivision. 
           Notice shall be given within 30 days after the effective 
        date of the provisions of Laws 1977, chapter 350 amending the 
        subdivision, as to mortgagees offering option (c) above to 
        mortgagors but not requiring escrow accounts as of the effective 
        date, or within 30 days after a mortgagee's decision to 
        discontinue requiring escrow accounts if the mortgagee continues 
        to offer option (c) above to mortgagors.  If no reply is 
        received within 30 days, option (c) shall be selected for the 
        mortgagor but the mortgagor may, at any time, select another 
        option. 
           A mortgagee making a new mortgage and offering option (c) 
        above to a prospective mortgagor shall, at the time of loan 
        application, notify the prospective mortgagor of options (a), 
        (b) and (c) above which must be extended to the prospective 
        mortgagor.  The mortgagor shall select one of the options at the 
        time the loan is made. 
           Any notice required by this clause shall be on forms 
        approved by the commissioner of commerce and shall provide that 
        at any time a mortgagor may select a different option.  The form 
        shall contain a blank where the current passbook rate of 
        interest shall be entered by the mortgagee.  Any option selected 
        by the mortgagor shall be binding on the mortgagee. 
           This clause does not apply to escrow accounts which are 
        excepted from the interest paying requirements of clause (1). 
           (3) A mortgagee shall be prohibited from charging a direct 
        fee for the administration of the escrow account. 
           Sec. 12.  Minnesota Statutes 1994, section 47.201, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the terms defined in this subdivision shall have the 
        meanings given them: 
           (1) "Financial institution" means a state bank or trust 
        company, a national banking association, a state or federally 
        chartered savings and loan association, a mortgage bank, or 
        mutual savings bank. 
           (2) "Graduated payment home loan" means a conventional or 
        cooperative apartment loan made pursuant to section 47.20 and 
        subject to the provisions therein, whereunder initial periodic 
        repayments are lower than those under the standard conventional 
        or cooperative apartment loan having equal periodic repayments, 
        and gradually rise to a predetermined point after which they 
        remain constant. 
           Sec. 13.  Minnesota Statutes 1994, section 47.205, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For the purposes of this 
        section, the terms defined in this subdivision have the meanings 
        given them. 
           (a) "Lender" means all state banks and trust companies, 
        national banking associations, state and federally chartered 
        savings and loan associations, mortgage banks, mutual savings 
        banks, insurance companies, credit unions making a loan, or any 
        person making a conventional loan as defined under section 
        47.20, subdivision 2, clause (3) or cooperative apartment loan 
        as defined under section 47.20, subdivision 2, clause (4).  A 
        "selling lender" is a lender who sells, assigns, or transfers 
        the servicing of a loan, to a "purchasing lender or a servicing 
        agent." 
           (b) "Loan" means all loans and advances of credit 
        authorized under section 47.20, subdivision 1, clauses (1) to 
        (4) and conventional loans as defined under section 47.20, 
        subdivision 2, clause (3) or cooperative apartment loan as 
        defined under section 47.20, subdivision 2, clause (4). 
           (c) "Escrow account" means escrow, agency, or similar 
        account for the payment of taxes or insurance premiums with 
        respect to a mortgaged one-to-four family, owner occupied 
        residence located in this state. 
           (d) "Person" means an individual, corporation, business 
        trust, partnership or association, or any other legal entity. 
           Sec. 14.  Minnesota Statutes 1994, section 47.209, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICABILITY.] This section applies to 
        any agreement entered into after December 31, 1992, for the 
        financing or refinancing of a purchase of a manufactured home.  
        As used in this section and section 277.17, "lender" includes a 
        state bank and trust company, national banking association, 
        state or federally chartered savings and loan association, 
        mortgage bank, mutual savings bank, insurance company, credit 
        union, or a dealer as defined in section 327B.01, subdivision 7, 
        that enters into an agreement for financing or refinancing a 
        purchase of a manufactured home.  
           Sec. 15.  Minnesota Statutes 1994, section 47.27, 
        subdivision 2, is amended to read: 
           Subd. 2.  "Savings bank" shall have the meaning set forth 
        in sections 47.01 and 47.02 and shall also mean a mutual savings 
        bank.  
           Sec. 16.  Minnesota Statutes 1994, section 47.28, is 
        amended to read: 
           47.28 [SAVINGS BANKS MAY CONVERT INTO SAVINGS, BUILDING AND 
        LOAN ASSOCIATIONS.] 
           Subdivision 1.  Any savings bank organized and existing 
        under and by virtue of the law of this state may amend its 
        articles of incorporation so as to convert itself into a 
        savings, building and loan association, by complying with the 
        following requirements and procedure: 
           The savings bank by a two-thirds vote of the entire board 
        of trustees directors, at any regular or special meeting of said 
        board duly called for that purpose, shall (a) pass a resolution 
        declaring their intention to convert the savings bank into a 
        savings, building and loan association, and (b) cause an 
        application in writing to be executed, by such persons as the 
        trustees directors may direct, in the form prescribed by the 
        department of commerce, requesting a certificate of 
        authorization (charter) as a savings, building and loan 
        association to transact business at the place and in the name 
        stated in the application.  The amendments proposed to the 
        articles of incorporation and bylaws shall be included as part 
        of the application.  
           The application shall be submitted to, considered and acted 
        upon by the department of commerce in the same manner and by the 
        same standards as applications are submitted, considered and 
        acted upon under section 51.08.  
           Subd. 2.  If the certificate of authorization (charter) be 
        issued, the articles of incorporation may then be amended so as 
        to convert the savings bank into a savings, building and loan 
        association by following the procedure prescribed for amending 
        articles of incorporation of savings banks; provided, that 
        before any such conversion shall take place the secretary of the 
        savings bank shall cause 30 days written notice of such intended 
        conversion (which notice, before mailing, shall be submitted to 
        and approved by the commissioner of commerce) to be mailed 
        prepaid to each depositor, at the depositor's last known address 
        according to the records of the bank, and after such notice each 
        depositor may, prior to the time the conversion becomes final 
        and complete, on demand and without prior notice, withdraw the 
        full amount of deposit or such part thereof as the depositor may 
        request, and upon such withdrawal the depositor shall receive 
        interest to the date of withdrawal at the same rate last paid or 
        credited by the bank, notwithstanding the provisions of any law, 
        bylaw, or rule to the contrary.  
           Subd. 3.  At any time after the expiration of the 30 day 
        period specified in subdivision 2, (which fact shall be 
        evidenced by the secretary of the savings bank filing an 
        affidavit to that effect with the commissioner of commerce and 
        the secretary of state,) Upon receipt of the fees required for 
        filing and recording amended articles of incorporation of 
        savings banks, the secretary of state shall record the amended 
        articles of incorporation and certify that fact thereon, 
        whereupon the conversion of such savings bank into a savings, 
        building and loan association shall become final and complete 
        and thereafter said corporation shall have the powers and be 
        subject to the duties and obligations prescribed by the laws of 
        this state applicable to savings, building and loan associations.
           Subd. 4.  When the conversion of any savings bank into a 
        savings, building and loan association becomes final and 
        complete, the surplus fund of the bank shall become the 
        contingent or reserve fund of the association and every person 
        who was a depositor of the savings bank at the time of the 
        conversion shall cease to be a depositor and shall thereafter be 
        a shareholder of the savings, building and loan association and 
        be credited with payments on that person's share account equal 
        to the full amount on deposit with the savings bank at the time 
        of conversion, plus interest to the date of conversion at the 
        same rate last paid or credited by the bank, notwithstanding the 
        provisions of any law, bylaw, or rule to the contrary. 
           Subd. 5.  The resulting association shall as soon as 
        practicable and within such time not extending beyond three 
        years from the date the conversion becomes final and complete 
        and by such methods as the department of commerce shall direct, 
        cause its organization, its securities and investments, the 
        character of its business, and the methods of transacting the 
        same to conform to the laws applicable to savings, building and 
        loan associations.  
           Sec. 17.  Minnesota Statutes 1994, section 47.29, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any savings bank organized and existing 
        under and by virtue of the laws of this state, is hereby 
        authorized and empowered, by a two-thirds vote of the entire 
        board of trustees directors, at any regular or special meeting 
        of said board duly called for that purpose to convert itself 
        into a federal association whenever said conversion is 
        authorized by any act of the Congress of the United States:  
        Provided, that before any such conversion shall become final and 
        complete, (a) the secretary of the savings bank shall cause 30 
        days' written notice of such intended conversion (which notice, 
        before mailing, shall be submitted to and approved by the 
        commissioner of commerce) to be mailed prepaid to each 
        depositor, at their last known address, according to the records 
        of the bank, and after such notice each depositor may, prior to 
        the time the conversion becomes final and complete, on demand 
        and without prior notice, withdraw the full amount of the 
        deposit or such part thereof as the depositor may request, and 
        upon such withdrawal the depositor shall receive interest to the 
        date of withdrawal at the same rate last paid or credited by the 
        bank, notwithstanding the provisions of any law, bylaws, or rule 
        to the contrary, and (b) that such conversion be approved in 
        writing by the commissioner of commerce.  
           Sec. 18.  Minnesota Statutes 1994, section 47.29, 
        subdivision 2, is amended to read: 
           Subd. 2.  At any time after the expiration of the 30 day 
        period specified in subdivision 1, clause (a), (which fact shall 
        be evidenced by the secretary of the savings bank filing an 
        affidavit to that effect with the commissioner of commerce and 
        the secretary of state of this state), Upon filing a copy of the 
        federal charter, certified by the issuing federal agency with 
        the secretary of state of this state, the secretary of state 
        shall record said charter and certify that fact thereon, 
        whereupon the conversion shall be final and complete and the 
        savings bank shall at that time cease to be a savings bank 
        supervised by this state, and shall thereafter be a federal 
        association.  
           Sec. 19.  Minnesota Statutes 1994, section 47.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any capital stock savings, building and 
        loan association organized and existing under and by virtue of 
        the laws of this state may amend its articles of incorporation 
        so as to convert itself into a savings bank, by complying with 
        the following requirements and procedure: 
           A meeting of the shareholders shall be held upon not less 
        than 15 days written notice to each shareholder, served either 
        personally or by mail prepaid, directed to the shareholder's 
        last known post office address according to the records of the 
        association, stating the time, place and purpose of such meeting.
           At such meeting, the shareholders may by two-thirds vote 
        (according to the book value of said shares) of those present in 
        person or by proxy pass a resolution declaring their intention 
        to convert such association into a savings bank and setting 
        forth the names of the proposed first board of trustees 
        directors.  A copy of the minutes of such meeting verified by 
        the affidavit of the chair and the secretary of the meeting, 
        shall be filed in the office of the department of commerce and 
        with the secretary of state within ten days after the meeting.  
        Such copy, when so filed, shall be evidence of the holding of 
        such meeting and of the action taken.  
           Sec. 20.  Minnesota Statutes 1994, section 47.30, 
        subdivision 2, is amended to read: 
           Subd. 2.  An application for a certificate authorizing a 
        savings bank to transact business, in the form required by 
        sections 46.041 and 46.046, shall be submitted to, considered 
        and acted upon by the department of commerce in the same manner 
        and by the same standards as applications are submitted, 
        considered and acted upon under sections 46.041, 46.044, 46.046, 
        and 50.01 and 50.02.  The fees required by section 46.041 shall 
        be paid and the amendments proposed to the articles of 
        incorporation and bylaws shall be included as part of the 
        application.  
           Sec. 21.  Minnesota Statutes 1994, section 47.30, 
        subdivision 3, is amended to read: 
           Subd. 3.  If the department of commerce grants the 
        application, the certificate of authorization (charter) shall be 
        issued as provided by section 46.041, and the articles of 
        incorporation may then be amended so as to convert the savings, 
        building and loan association into a savings bank by following 
        the procedure prescribed for amending articles of incorporation 
        of savings, building and loan associations:  Provided, that the 
        proposed amended articles shall contain the names of, and be 
        signed by, the proposed first board of trustees directors.  
           Sec. 22.  Minnesota Statutes 1994, section 47.30, 
        subdivision 5, is amended to read: 
           Subd. 5.  At any time after the expiration of the 30 day 
        period specified in subdivision 4, (which fact shall be 
        evidenced by the secretary of the association filing an 
        affidavit to that effect with the commissioner of commerce and 
        the secretary of state), Upon receipt of the fees required for 
        filing and recording amended articles of incorporation of 
        savings, building and loan associations, the secretary of state 
        shall record the amended articles of incorporation and certify 
        that fact thereon, whereupon the conversion of such savings, 
        building and loan association into a savings bank shall become 
        final and complete and thereafter the signers of said amended 
        articles and their successors shall be a corporation, and have 
        the powers and be subject to the duties and obligations 
        prescribed by the laws of this state applicable to savings banks.
           Sec. 23.  Minnesota Statutes 1994, section 47.32, is 
        amended to read: 
           47.32 [CONVERTING INSTITUTION DEEMED CONTINUANCE; TRANSFER 
        OF PROPERTY AND RIGHTS.] 
           Upon the conversion of any savings bank into a savings, 
        building and loan association or into a federal association, and 
        of a savings, building and loan association or federal 
        association into a savings bank, the corporate existence of the 
        converting savings bank or association shall not terminate, and 
        the resulting association or savings bank shall be a continuance 
        of the converting savings bank or association; and all the 
        property of the converting savings bank or association 
        (including its rights) shall by operation of law vest in the 
        resulting association or savings bank as of the time when the 
        conversion becomes final and complete, and all of the 
        obligations of the converting savings bank or association become 
        those of the resulting association or savings bank.  Actions and 
        other judicial proceedings to which the converting savings bank 
        or association is a party may be prosecuted and defended as if 
        the conversion had not been made the detached facilities of the 
        savings bank shall become branches of the savings association or 
        federal association.  Upon conversion of any savings association 
        or federal association into a savings bank, the branches of the 
        savings association or federal association shall become detached 
        facilities of the savings bank, notwithstanding the limitations 
        on the number of facilities, distance limitations, geographic 
        limitation, notice requirements, and consent requirements 
        contained in sections 47.51 to 47.57. 
           Sec. 24.  [47.325] [APPEAL AND JUDICIAL REVIEW.] 
           A savings bank aggrieved by any action or inaction of the 
        commissioner under sections 47.27 to 47.32 may appeal under 
        sections 14.63 to 14.69.  The scope of judicial review in the 
        proceedings is as provided in those sections. 
           Sec. 25.  Minnesota Statutes 1994, section 47.62, 
        subdivision 4, is amended to read: 
           Subd. 4.  When more than one electronic financial terminal 
        is established and maintained at a single place of business by 
        the same person, or if a person wishes to make an application 
        that encompasses more than one place of business or location, a 
        single application and fee shall be sufficient.  For each 
        application, a $100 fee shall be paid to the commissioner, and 
        for each application for a change in pricing structure, a $10 
        fee shall be paid to the commissioner.  If the $100 fee or the 
        $10 fee is less than the costs incurred by the commissioner in 
        approving or disapproving the application, the fee shall be 
        equal to those costs. 
           Sec. 26.  Minnesota Statutes 1994, section 47.64, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) Any person establishing and maintaining 
        an electronic financial terminal located separate and apart from 
        a financial institution's principal office, branch, or detached 
        facility for use by one type of financial institution shall, 
        upon written request, make its services available to any 
        requesting financial institution of similar type on a fair, 
        equitable, and nondiscriminatory basis approved by the 
        commissioner.  A financial institution requesting use of an 
        electronic financial terminal shall be permitted its use only if 
        the financial institution conforms to reasonable technical 
        operation standards which have been established by the 
        electronic financial terminal provider as approved by the 
        commissioner.  For purposes of this subdivision, the types of 
        financial institutions are:  (1) commercial banks and mutual 
        savings banks; (2) credit unions, industrial loan and thrift 
        companies, and regulated lenders under chapter 56; and (3) 
        savings and loan associations.  The services of an electronic 
        financial terminal may be made available to any type of 
        financial institution.  After March 1, 1979, or earlier if 
        determined by the commissioner to be technically feasible, an 
        electronic financial terminal which is used by or made available 
        to one type of financial institution shall be made available, 
        upon request, to other types of financial institutions on a 
        fair, equitable and nondiscriminatory basis as approved by the 
        commissioner.  The charges required to be paid to any person 
        establishing and maintaining an electronic financial terminal 
        shall be related to an equitable proportion of the direct costs 
        of establishing, operating, and maintaining the terminal plus a 
        reasonable return on those costs to the owner of the terminal.  
        The charges may provide for amortization of development costs 
        and capital expenditures over a reasonable period of time. 
           (b) Any person establishing and maintaining an electronic 
        financial terminal located on and as a part of a financial 
        institution's principal office, branch, or detached facility, or 
        lending office where deposits are not taken may, at the 
        financial institution's option, (1) maintain the electronic 
        financial terminal for the exclusive use of the financial 
        institution's customers; or (2) maintain the electronic 
        financial terminal for the use of the financial institution's 
        customers and make some or all of the electronic financial 
        terminal's services available to any other requesting financial 
        institution on a fair, equitable, and nondiscriminatory 
        basis approved by the commissioner. 
           Sec. 27.  Minnesota Statutes 1994, section 47.65, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any person may establish a transmission 
        facility in this state upon approval by the commissioner 
        pursuant to the provisions of this section, except that a 
        financial institution may establish a transmission facility in 
        this state after giving the commissioner written notice of its 
        intent to do so, provided that the commissioner does not issue 
        an order disallowing such establishment within 15 days after 
        receiving a completed notice.  Any such notice must be made 
        using a form prescribed by the commissioner.  A transmission 
        facility which is used by, or made available to, any financial 
        institution must be made available to all other financial 
        institutions upon request of such financial institution and 
        agreement by the financial institution to pay fees on a fair, 
        equitable, and nondiscriminatory basis approved by the 
        commissioner.  A person requesting use of a transmission 
        facility shall be permitted its use only if the person conforms 
        to reasonable technical operating standards which have been 
        established by the transmission facility provider as approved by 
        the commissioner.  The charges required to be paid to any person 
        establishing a transmission facility shall be related to an 
        equitable proportion of the direct costs of establishing, 
        operating and maintaining such facility plus a reasonable return 
        on those costs to the owner of the facility.  The charges may 
        provide for amortization of development costs and capital 
        expenditures over a reasonable period of time. 
           Sec. 28.  Minnesota Statutes 1994, section 47.65, 
        subdivision 2, is amended to read: 
           Subd. 2.  Before installation and operation, a transmission 
        facility application by a person who is required to submit an 
        application under subdivision 1 shall be submitted to the 
        commissioner on a form provided by the commissioner which states:
           (a) The location where the transmission facility will be 
        operated; 
           (b) The ownership of the transmission facility; 
           (c) If applicable, the bonding or insurance company which 
        has provided the bond for the transmission facility; and 
           (d) Such other information as the commissioner requires. 
           If the commissioner finds that (a) the facility will be 
        properly and safely managed, (b) the applicant is financially 
        sound, (c) there is a reasonable probability of success for the 
        facility, (d) the proposed charges for making the services of 
        the facility available to financial institutions are fair, 
        equitable and nondiscriminatory, and (e) all information has 
        been furnished by the applicant, the commissioner shall approve 
        the application within 90 days.  If the commissioner has not 
        denied the application within 90 days of the submission of the 
        application, the authorization shall be deemed granted.  For 
        each application, a $500 fee shall be paid to the commissioner.  
        For each application for change in pricing structure, a $50 fee 
        shall be paid to the commissioner.  If the $500 fee or the $50 
        fee is less than the costs incurred by the commissioner in 
        approving or disapproving the application, the application fee 
        shall be equal to those costs. 
           Sec. 29.  Minnesota Statutes 1994, section 48.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BANKING INSTITUTION.] The term "banking 
        institution" means any bank, trust company, bank and trust 
        company, or mutual savings bank which is now or may hereafter be 
        organized under the laws of this state.  For purposes of 
        sections 48.38, 48.84, and 501B.10, subdivision 6, and to the 
        extent permitted by federal law, "banking institution" includes 
        any national banking association or affiliate exercising trust 
        powers in this state. 
           Sec. 30.  Minnesota Statutes 1994, section 48.15, is 
        amended by adding a subdivision to read: 
           Subd. 2a.  [AUTHORIZED ACTIVITIES.] The commissioner may 
        authorize a state bank to undertake any activities, exercise any 
        powers, or make any investments that are authorized activities, 
        powers, or investments as of the date of final enactment of this 
        subdivision for any state savings bank doing business in this 
        state, or that become authorized activities, powers, or 
        investments for state savings banks after the date of final 
        enactment of this subdivision.  The commissioner may not 
        authorize state banks to engage in any banking activity 
        prohibited by the laws of this state. 
           Sec. 31.  Minnesota Statutes 1994, section 49.01, is 
        amended by adding a subdivision to read: 
           Subd. 7.  [STATE BANK.] "State bank" for the purposes of 
        sections 49.02 to 49.41, shall mean any bank, savings bank, 
        trust company, or bank and trust company which is now or may 
        hereafter be organized under the laws of this state. 
           Sec. 32.  Minnesota Statutes 1994, section 49.42, is 
        amended to read: 
           49.42 [STATE BANK.] 
           As used in sections 49.42 to 49.46 "state bank" means any 
        bank (other than a mutual savings bank), savings bank, trust 
        company, or bank and trust company which is now or may hereafter 
        be organized under the laws of this state.  
           Sec. 33.  [50.001] [APPLICATION FOR CERTIFICATE OF 
        AUTHORITY; PROCEDURE.] 
           The procedures for the application and issuance of a 
        certificate of authority to a savings bank organized pursuant to 
        section 300.025 shall be those applicable to a state bank in 
        sections 46.041 to 46.045. 
           Sec. 34.  Minnesota Statutes 1994, section 50.01, is 
        amended to read: 
           50.01 [EXPEDIENCY ASCERTAINED.] 
           To enable the commissioner of commerce to determine the 
        expediency of the organization of a savings bank, as in this 
        chapter prescribed, the commissioner shall investigate and 
        ascertain: 
           (1) Whether greater convenience of access to a savings bank 
        will be afforded to any considerable number of depositors by 
        opening the proposed bank; 
           (2) Whether the population in the vicinity of the location 
        of the bank affords reasonable promise of adequate support 
        therefor; and 
           (3) Whether the responsibility, character, and general 
        fitness of the persons named as trustees directors in the 
        certificate are such as to command the confidence of the 
        community in the proposed bank.  
           Sec. 35.  Minnesota Statutes 1994, section 50.04, is 
        amended to read: 
           50.04 [BONDS OF TRUSTEES OR DIRECTORS.] 
           Every trustee director, before entering upon any duties, 
        shall give bond to the state in a penal sum of not less than 
        $5,000, with sureties approved by a judge of the district 
        court commissioner of commerce, conditioned for the faithful 
        discharge of those duties, and file the same for record with the 
        county recorder of the county, who, after record, shall transmit 
        it to the commissioner of commerce.  An action may be maintained 
        on this bond by any person aggrieved by breach of any of its 
        conditions, upon leave granted by any such judge of the district 
        court, for such damages as the plaintiff may be entitled to, not 
        exceeding its amount; and like successive actions may be 
        maintained until such amount is exhausted. 
           Sec. 36.  Minnesota Statutes 1994, section 50.05, is 
        amended to read: 
           50.05 [BOND OF TREASURER BONDS OF OFFICERS AND EMPLOYEES.] 
           Before entering upon any duties, the treasurer shall give 
        bond to the bank in such sum, not less than $10,000, as the 
        board of trustees shall prescribe, for the faithful discharge of 
        those duties, and at any time thereafter may be required by the 
        board to furnish additional security.  The board may also 
        require, at any time, from any other officer, employee, or 
        agent, such security as it deems necessary.  A savings bank 
        shall be protected against loss by reason of the unlawful act of 
        its officers or employees by a surety bond in an amount approved 
        by the board of directors and issued by a solvent corporate 
        surety in good standing authorized to do business in this state, 
        or by a fidelity insurance policy written by a solvent insurance 
        company in good standing authorized to do business in this 
        state.  The commissioner of commerce or the board of directors 
        of the savings bank may require an increase of the amount of the 
        bond whenever either deems it necessary.  This section shall not 
        require the bonding or insuring of officers or directors of a 
        savings bank not having active management or control of the 
        savings bank or of employees of a savings bank not holding 
        positions of trust.  Any bond given or contract of insurance 
        secured shall be in favor of the savings bank. 
           Sec. 37.  Minnesota Statutes 1994, section 50.06, is 
        amended to read: 
           50.06 [TRUSTEES DIRECTORS; FIRST BOARD.] 
           The business of every such stock savings bank shall be 
        managed by a board of not less than seven trustees directors.  
        The persons named in the certificate of authorization shall 
        constitute the first board.  Each vacancy shall be filled by the 
        board as soon as practicable, at a regular meeting thereof, 
        except when a resolution reducing the number of trustees 
        directors named in its charter to a number not less than seven 
        shall have been incorporated into its bylaws, and a copy thereof 
        filed with the commissioner of commerce, in which case vacancies 
        shall not be filled until the number has been reduced to that 
        specified in this resolution. The number may be increased to any 
        number specified in a like resolution, consented to, in writing, 
        by the commissioner of commerce.  
           Sec. 38.  [50.085] [POWERS.] 
           Subdivision 1.  [GENERALLY.] Every savings bank 
        incorporated pursuant to or operating under this chapter shall 
        be a body corporate; shall have all the powers enumerated, 
        authorized, and permitted by this chapter and other applicable 
        law; shall have 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 savings bank; 
        and shall have those powers possessed by corporations organized 
        under chapter 300.  
           Subd. 2.  [BORROWING.] A savings bank may borrow money and 
        issue its obligations for the borrowed money, including, but not 
        limited to, obligations, bonds, notes, or other debt securities, 
        except as otherwise provided by this chapter or by rules of the 
        commissioner of commerce.  An obligation, bond, note, or other 
        debt security may include a written provision subordinating the 
        debt to claims of other creditors or of depositors.  Borrowings 
        may be secured by property of the savings bank. 
           Subd. 3.  [FACILITATING ORGANIZATIONS.] A savings bank may 
        become a member of, purchase stock or securities in, deposit 
        money with, deal with, make reasonable payments or contributions 
        to, or comply with any other conditions of membership or credit 
        from any corporation or agency of the United States or of this 
        state, or of any other organization to the extent the 
        corporation, agency, or organization assists in furthering or 
        facilitating the saving bank's purposes, powers, or community 
        responsibilities. 
           Subd. 4.  [LOANS, CONTRACTS, AND LEASES.] A savings bank 
        may make, sell, purchase, invest in, and participate or 
        otherwise deal in loans and installment sale contracts and other 
        forms of indebtedness, and take any manner of security for the 
        loans and contracts.  A savings bank may also acquire and lease 
        or participate in the acquisition and leasing of personal 
        property. 
           Subd. 5.  [SAVINGS, LOANS, INVESTMENT.] A savings bank may 
        acquire deposits in the form of demand accounts, checking 
        accounts, negotiable order of withdrawal accounts, savings 
        accounts, time deposits, money market deposit accounts, treasury 
        tax and loan accounts, and other types of deposits, and pay 
        interest or dividends on those accounts, except that interest or 
        dividends must not be paid on demand deposit accounts.  No 
        capital stock savings bank shall accept deposits in a sum 
        exceeding 30 times the amount of its capital stock and its 
        actual surplus. 
           Subd. 6.  [INSURANCE OF ACCOUNTS.] A savings bank may 
        obtain and maintain insurance of its deposit accounts by the 
        federal deposit insurance corporation or any other federal 
        agency established for the purpose of insuring deposit accounts 
        in savings banks. 
           Subd. 7.  [SAFE DEPOSIT BOXES.] A savings bank may maintain 
        and let safes, boxes, or other receptacles for the safekeeping 
        of personal property upon agreed upon terms and conditions.  
        This subdivision does not supersede any inconsistent provision 
        of statute. 
           Subd. 8.  [DRAFTS.] A savings bank may issue drafts and 
        similar instruments drawn on the savings bank to aid in 
        effecting withdrawals and for other purposes of the savings 
        bank; accept for payment at a future date drafts drawn upon it 
        by its customers; and issue, advise, or confirm letters of 
        credit authorizing holders to draw drafts upon it or its 
        correspondents. 
           Subd. 9.  [FISCAL AGENT.] A savings bank may act as fiscal 
        agent of the United States, and, when so designated by the 
        Secretary of Treasury, perform, under regulations the secretary 
        prescribes, all reasonable duties as fiscal agent of the United 
        States as the secretary may require; and act as agent for any 
        instrumentality of the United States and as agent of this state 
        and any instrumentality of it. 
           Subd. 10.  [SERVICING.] A savings bank may service loans 
        and investments for others. 
           Subd. 11.  [INSURANCE AGENCY.] (a) A savings bank located 
        and doing business in any place where the population does not 
        exceed 5,000 inhabitants as shown by the last preceding 
        decennial census may, directly or through a subsidiary, subject 
        to any rules adopted by the commissioner, act as an agent for 
        any property-casualty, life, or other insurance company 
        authorized by the commissioner to do business in this state.  
        Except as provided in paragraph (c), a savings bank may not 
        directly or through a subsidiary act as an agent for any 
        property-casualty, life, or other insurance company in any place 
        where the population exceeds 5,000 inhabitants as shown by the 
        last preceding decennial census. 
           (b) To the extent allowed under paragraphs (a) and (c), a 
        savings bank or its subsidiary may solicit or sell insurance and 
        collect premiums on policies issued by the insurance company and 
        may receive for these services the fees and commissions agreed 
        upon between the savings bank and the insurance company. 
           (c) A savings bank may, directly or through a subsidiary, 
        act as an agent for any property-casualty, life, or other 
        insurance company in a place where the population exceeds 5,000 
        inhabitants as shown by the last preceding decennial census, if: 
           (1) the savings bank is a direct or indirect subsidiary of 
        a state or federal savings association or of a state or federal 
        savings association holding company that, prior to the date of 
        enactment of this subdivision, had a license from the 
        commissioner to solicit or sell insurance of the type in 
        question, or directly or indirectly controlled a subsidiary that 
        held such a license; or 
           (2) the savings bank is a successor to a state or federal 
        savings association as a result of merger, charter conversion, 
        or otherwise, which association, prior to the date of enactment 
        of this subdivision, held a license from the commissioner to 
        solicit or sell insurance of the type in question, or directly 
        or indirectly controlled a subsidiary that held such a license. 
           Subd. 12.  [LIMITED TRUSTEESHIP.] A savings bank may act as 
        trustee or custodian of a self-employed retirement plan under 
        the federal Self-Employed Individual Tax Retirement Act of 1962, 
        as amended, and of an individual retirement account under the 
        federal Employee Retirement Income Security Act of 1974, as 
        amended, to the same extent permitted for state banks under 
        section 48.15.  All funds held in a fiduciary capacity by the 
        savings bank 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. 
           Subd. 13.  [ESCROW.] A savings bank may engage in an escrow 
        business. 
           Subd. 14.  [TRUST POWERS.] Upon application to and approval 
        by the commissioner of commerce, a savings bank may 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 receive reasonable 
        compensation for it.  A savings bank that has complied with 
        sections 48.36 to 48.43 and 48.475, and holds a certificate as 
        provided in section 48.37, may exercise the powers and 
        privileges set forth in sections 48.38, 48.475, 48.84, 48.841, 
        48.846, and 48.86.  A savings bank that has qualified and 
        obtained a certificate, as provided in sections 48.36 to 48.43, 
        may use in its corporate name or title, in addition to the words 
        "savings bank" or other words permitted by law, the words 
        "trust" or "trust company," and may display and make use of 
        signs, symbols, tokens, letterheads, cards, circulars, and 
        advertising stating or indicating that it is authorized to 
        transact the business authorized by those sections, and a 
        savings bank using the words "trust" or "trust company" is not 
        required to use the word "state" in its corporate name.  A 
        savings bank may not invest, pursuant to section 50.1465, in a 
        corporation that engages in activities described in this 
        subdivision, without first obtaining the approval of the 
        commissioner of commerce. 
           Subd. 15.  [SECURING DEPOSITS.] In addition to the 
        authority conferred in subdivision 2, a savings bank may pledge, 
        hypothecate, assign or transfer, or create a lien upon or charge 
        against its assets to secure:  (1) public funds, including money 
        or deposits of the United States or any instrumentality of it 
        and of this state or any instrumentality of it; (2) money or 
        deposits of a trustee in bankruptcy; (3) money borrowed in good 
        faith from other banks, trust companies, financial institutions, 
        or any financial agency created by act of Congress; (4) the 
        acquisition of real estate to be carried as an asset as provided 
        in section 47.10; (5) a liability that arises from a transfer of 
        a direct obligation of, or obligations that are fully guaranteed 
        as to principal and interest by, the United States government or 
        an agency of it that the savings bank is obligated to 
        repurchase; (6) money and deposits held in escrow; (7) money and 
        deposits if acting as a corporate fiduciary; and (8) treasury 
        tax and loan accounts as provided in section 50.171. 
           Subd. 16.  [DATA PROCESSING SERVICES.] A savings bank may 
        provide data processing services to others and act as a 
        custodian of records for others on a for-profit basis and 
        utilize data processing services and place records of the 
        savings bank for storage and safekeeping with another person for 
        a fee. 
           Subd. 17.  [ELECTRONIC FINANCIAL TERMINALS.] A savings bank 
        may directly or indirectly acquire, place, and operate, or 
        participate in the acquisition, placement, and operation of, 
        electronic financial terminals and transmission facilities, in 
        accordance with the requirements of sections 47.61 to 47.74. 
           Subd. 18.  [ADDITIONAL POWERS AUTHORIZED FOR STATE 
        BANKS.] A savings bank may exercise the powers that are 
        specifically enumerated by law for banks authorized to do 
        business under chapter 48. 
           Subd. 19.  [PARITY PROVISION.] (a) In addition to other 
        investments authorized by law and the powers conferred by this 
        chapter, and subject to the regulation of the commissioner of 
        commerce, a savings bank may, directly or through a subsidiary, 
        undertake any activities, exercise any powers, or make any 
        investments that any state bank or national bank located or 
        doing business in this state may undertake, exercise, or make as 
        of the date of enactment of this subdivision. 
           (b) The commissioner may authorize a savings bank to 
        undertake any activities, exercise any powers, or make any 
        investments that become authorized activities, powers, or 
        investments after the date of final enactment of this 
        subdivision for any state bank or national bank located or doing 
        business in this state. 
           (c) Subject to rules adopted by the commissioner, and 
        subject to the investment limits in section 50.1465, a 
        subsidiary of a savings bank may undertake any activities, 
        exercise any powers, or make any investments not authorized for 
        any state bank or national bank but authorized as of the date of 
        final enactment of this subdivision for any state bank or 
        national bank subsidiary located and doing business in this 
        state. 
           (d) The commissioner may authorize a subsidiary of a 
        savings bank to undertake any activities, exercise any powers, 
        or make any investments that become authorized activities, 
        powers, or investments after the date of final enactment of this 
        subdivision for any state bank or national bank subsidiary 
        located and doing business in this state. 
           (e) The commissioner at any time may limit any activity, 
        power, or investment for any savings bank or savings bank 
        subsidiary under this subdivision or section 50.1465, 
        subdivision 1, clauses (2) and (3), for supervisory, legal, or 
        safety and soundness reasons.  A savings bank aggrieved by an 
        action of the commissioner under this subdivision may appeal the 
        action, and the proceedings shall be conducted pursuant to 
        sections 14.63 to 14.69. 
           Sec. 39.  Minnesota Statutes 1994, section 50.11, is 
        amended to read: 
           50.11 [SECURITIES HELD FOR SAFEKEEPING; SAFE DEPOSIT BOXES; 
        LIMITATION OF LIABILITY.] 
           A mutual savings bank may receive for safekeeping for its 
        depositors obligations of the United States or its possessions 
        or of a state or territory of the United States, or of any 
        political subdivision of any such state or territory, and it may 
        provide for, and hire to, its depositors safe deposit boxes in 
        which to keep securities and valuable papers, but the liability 
        of a savings bank to any person or association of persons on 
        account of hiring such safe deposit box or boxes shall in no 
        event exceed $20,000.  
           Sec. 40.  Minnesota Statutes 1994, section 50.13, is 
        amended to read: 
           50.13 [REAL ESTATE.] 
           Any such A savings bank may purchase, hold, or convey land 
        sold upon foreclosure of mortgages owned by it, or upon 
        judgments or decrees in its favor, or in settlement of debts, or 
        received in exchange as part of the consideration of real estate 
        sold by it.  Real estate so received in exchange shall not be 
        carried on the books of the bank at a price exceeding the cost 
        of that exchanged, less the cash payment, and all real estate so 
        acquired shall be sold within ten years after its acquirement, 
        unless the time is extended by the commissioner of commerce on 
        application of the board of trustees directors. 
           Sec. 41.  Minnesota Statutes 1994, section 50.14, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Except as it relates to the investment of 
        trust funds by corporate trustees or by individual trustees, the 
        term "authorized securities" whenever used in the statutes and 
        laws of this state shall be understood as referring to the 
        following described securities in which the trustees directors 
        of any savings bank shall invest the money deposited therein and 
        which at the time of the purchase thereof are included in one or 
        more of the following classes. 
           Sec. 42.  Minnesota Statutes 1994, section 50.14, 
        subdivision 5, is amended to read: 
           Subd. 5.  (1) Class four shall be: 
           (a) Notes or bonds secured by mortgages or trust deeds on 
        unencumbered real estate, whether in fee or in a leasehold of a 
        duration not less than ten years beyond the maturity of the 
        loan, in any state of the United States, worth at least twice 
        the amount loaned thereon; 
           (b) Notes or bonds secured by mortgages or trust deeds on 
        unencumbered real estate in clause (1)(a) where the notes or 
        bonds do not exceed 80 percent of the appraised value of the 
        security for the same, provided that the notes or bonds are 
        payable in installments aggregating not less than five percent 
        of the original principal a year in addition to the interest; 
        or, are payable on a regular amortization basis in equal 
        installments, including principal and interest, these 
        installments to be payable monthly in amounts that the debt will 
        be fully paid in not to exceed 30 years if the security is 
        nonagricultural real estate, and these installments to be 
        payable annually or semiannually in amounts that the debt will 
        be fully paid in not to exceed 25 years if the security is 
        agricultural real estate.  A construction loan is deemed 
        amortized as required by this clause if the first installment 
        thereon is payable not later than 18 months after the date of 
        the first advance in the case of residential construction or not 
        later than 36 months after the date of the first advance in the 
        case of nonresidential construction; and 
           (c) Notes or bonds secured by mortgages or trust deeds on 
        unencumbered real estate in clause (1)(a) which are in an 
        original principal amount of $100,000 or more and which do not 
        exceed 95 percent of the appraised value of the security for the 
        same which may be payable in the manner as the trustees 
        directors of the savings bank prescribe, provided that 
        construction loans made by a savings bank pursuant to this 
        clause (1)(c) do not exceed in the aggregate five percent of the 
        assets of the savings bank. 
           (2) Class four investments shall be made only on report of 
        a committee directed to investigate the same and report its 
        value, according to the judgment of its members, and its report 
        shall be preserved among the bank's records. 
           (3) Notwithstanding anything to the contrary in clause 
        (1)(b), a mutual savings bank organized under the laws of this 
        state may invest in notes or bonds secured by mortgages or trust 
        deed where the notes or bonds do not exceed 95 percent of the 
        appraised value of the security for the same.  Except as 
        modified herein, the other provisions of clause (1)(b) apply. 
           (4) For purposes of this subdivision, real estate is deemed 
        unencumbered if the only existing mortgage or lien against the 
        real estate is a first mortgage lien in favor of the savings 
        bank making a second mortgage loan or if the total unpaid 
        aggregate of all outstanding liens against the same real estate 
        does not exceed 80 percent of its appraised value. 
           (5) 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 clause, 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 savings bank 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 savings bank'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 savings bank; 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 savings 
        bank 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 
        savings bank 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 a savings bank 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 savings bank 
        determines what the rate will be at the end of each loan term. 
           (6) An investment in notes or bonds secured by mortgages or 
        trust deeds on real estate in fee or in a leasehold may exceed 
        the 80 percent requirement in paragraph (1), clause (b), and the 
        95 percent requirement in paragraph (2), if the amount of the 
        loan in excess of those limits is insured or guaranteed by a 
        private mortgage insurer that the Federal Home Loan Mortgage 
        Corporation or the Federal National Mortgage Association has 
        determined to be a qualified private insurer. 
           Sec. 43.  Minnesota Statutes 1994, section 50.14, 
        subdivision 7, is amended to read: 
           Subd. 7.  Class six shall be the "eligible obligations" of 
        "qualifying railroad corporations," both as hereinafter defined. 
           (A) A "qualifying railroad corporation" shall be one which 
        at the time of investment 
           (1) Shall have been incorporated under the laws of the 
        United States or of any state thereof or of the District of 
        Columbia, and 
           (2) Shall own or operate within the United States not less 
        than 500 miles of standard gauge railroad lines exclusive of 
        sidings, or shall have had, for its five preceding fiscal years, 
        average gross railway operating revenues of at least $10,000,000 
        annually, or shall own or operate railroad terminal property 
        located in a city within the United States having at least 
        200,000 population, and 
           (3) Shall not have been in default in the payment of any 
        part of the principal or interest owing by it upon any part of 
        its funded indebtedness, at any times during its current fiscal 
        year and its five consecutive fiscal years immediately prior 
        thereto, except that if the corporation shall have been 
        reorganized in receivership or bankruptcy within such period 
        such corporation shall not have been in such default since the 
        effective date of reorganization, and 
           (4) Shall not have fixed interest obligations in excess of 
        60 percent of the total sum of (a) its fixed interest 
        obligations, (b) obligations, if any, bearing interest on a 
        contingent basis, (c) preferred stock, if any, at par or stated 
        value, (d) common stock at par or stated value and (e) earned 
        surplus, and 
           (5) Shall have had net earnings (a) in its five fiscal 
        years immediately preceding time of purchase, of an average 
        annual amount not less than 1-1/2 times the fixed charges of the 
        year immediately preceding time of purchase, and (b) in four of 
        its five fiscal years immediately preceding time of purchase and 
        in its fiscal year immediately preceding time of purchase, not 
        less than the fixed charges of those respective years, except 
        that if the corporation shall have been reorganized in 
        receivership or bankruptcy within such period, its net earnings 
        for each year shall have been not less than the fixed charges of 
        the reorganized company.  As used herein "net earnings" shall be 
        defined as gross operating and nonoperating income of a railroad 
        corporation or its predecessor corporation, minus traffic and 
        transportation expenses, maintenance, depreciation, rent of 
        equipment and joint facilities, and other operating expenses, 
        and taxes excluding income and profits taxes.  As used herein 
        "fixed charges" shall be defined as interest on debt on which 
        there is an unqualified obligation to pay interests, leased line 
        rentals and amortization of debt discount and expense, except 
        that if a corporation has been reorganized in receivership or 
        bankruptcy within five years prior to time of purchase "fixed 
        charges" shall be the fixed charges of the reorganized company. 
           (B) "Eligible obligations" shall be bonds, notes or other 
        obligations which 
           (1) Shall have been issued by a qualifying railroad 
        corporation, or shall have been assumed or guaranteed as to 
        principal and interest by a qualifying railroad corporation, and 
           (2) Shall bear interest at a fixed rate, and 
           (3) Shall have a definite maturity date, and 
           (4) Shall be secured by either (a) a lien upon railroad 
        lines which shall be a first lien upon at least two-thirds of 
        the total mileage covered by such lien and upon at least 100 
        miles of main lines or (b) a first mortgage or lien on railroad 
        terminal property and assumed or guaranteed as to principal and 
        interest by two or more qualifying railroad corporations. 
           (C) No such savings bank shall invest in securities of 
        Class Six to an amount exceeding in the aggregate 15 percent of 
        its deposits; nor in securities of Class Six secured by lien 
        upon railroad lines, issued, guaranteed, or assumed by any one 
        railroad corporation to an amount exceeding two percent of its 
        deposits; nor in securities of Class Six secured by lien upon 
        any one railroad terminal property to an amount exceeding one 
        percent of its deposits. 
           The requirements set forth herein governing investments in 
        securities under this subdivision shall affect only those 
        securities acquired after the effective date of Laws 1945, 
        chapter 140. 
           Sec. 44.  Minnesota Statutes 1994, section 50.14, 
        subdivision 8, is amended to read: 
           Subd. 8.  Class seven shall be farm loan bonds issued by 
        any federal land bank, or by a joint stock land bank in the 
        Federal Reserve district in which Minnesota is situated, in 
        accordance with the provisions of an act of Congress of the 
        United States of July 17, 1916, known and designated as "The 
        Federal Farm Loan Act," and acts amendatory thereto; stocks, 
        bonds, and obligations of the Federal Home Loan Banks 
        established by act of Congress known as the Federal Home Loan 
        Bank Act approved July 22, 1932, and acts amendatory thereto; 
        and bonds issued by the federal land banks, federal intermediate 
        credit banks, and the banks for cooperatives in accordance with 
        the provisions of an act of Congress of the United States known 
        as the Farm Credit Act of 1971, and acts amendatory thereto. 
           Sec. 45.  Minnesota Statutes 1994, section 50.145, is 
        amended to read: 
           50.145 [AUTHORIZED INVESTMENTS.] 
           Any mutual savings bank subject to the supervision of the 
        commissioner of commerce of the state of Minnesota shall in 
        addition to other investments authorized by law have the power 
        to purchase and hold as investments such bonds and securities as 
        are legal investments for state banks and trust companies in 
        Minnesota, but subject however to any limitation in such power 
        that may be imposed by the commissioner of commerce, and the 
        total amount of the investments made by any bank pursuant to 
        this section and held at any one time shall not exceed 20 
        percent of the deposit liability of such bank, and not to exceed 
        three-fourths of one percent of the deposit liability of such 
        bank may be invested pursuant hereto in the securities or 
        obligations of any one obligor.  
           Sec. 46.  Minnesota Statutes 1994, section 50.146, is 
        amended to read: 
           50.146 [AUTHORIZED INVESTMENTS; CORPORATIONS.] 
           Subdivision 1.  In addition to other investments authorized 
        by law, a mutual savings bank may invest in the following: 
           (a) The preferred stocks of any corporation organized under 
        the laws of the United States or of any state, except banks, 
        bank holding companies and trust companies, provided the net 
        earnings of such corporation available for its fixed charges for 
        five fiscal years next preceding the date of investment shall 
        have averaged per year not less than 1-1/2 times the sum of its 
        annual fixed interest charges, if any, its annual maximum 
        contingent interest, if any, and its annual preferred dividend 
        requirements; and during either of the last two years of such 
        period, such net earnings shall have been not less than 1-1/2 
        times the sum of its fixed interest charges, if any, contingent 
        interest, if any, and preferred dividend requirements for such 
        year.  
           (b) The common stocks of any corporation organized under 
        the laws of the United States or of any state, except banks, 
        bank holding companies and trust companies, provided such stocks 
        are registered on a national securities exchange, and such 
        corporation shall have earned and paid cash dividends on its 
        common stocks in each year for a period of ten fiscal years next 
        preceding the date of investment.  
           (c) The stocks and bonds, notes, debentures or any other 
        obligation of any corporation organized under the laws of the 
        United States or of any state, except the stock of banks, bank 
        holding companies and trust companies located in the Ninth 
        Federal Reserve District, provided such investment shall be made 
        with such prudence, discretion, and intelligence as will protect 
        the safety of the principal of such investment as well as the 
        income to be derived therefrom.  
           Subd. 2.  No investment shall be made by a mutual savings 
        bank pursuant to subdivision 1 in any corporation if the total 
        amounts so invested by it exceeds an amount equal to 15 percent 
        of its assets, or if the total investment in any one corporation 
        exceeds (1) in amount, one-half of one percent of the assets of 
        the savings bank, or (2) in number of shares, one percent of the 
        total issued and outstanding shares of stock of such 
        corporation, or if the total investment pursuant to the 
        provisions of paragraph (c) of subdivision 1 exceeds an amount 
        equal to three percent of the assets of the savings bank, nor 
        shall any investment be made in any corporation with assets of 
        less than ten million dollars.  
           Subd. 3.  Investments made pursuant to subdivision 1 shall 
        be limited to mutual savings banks organized under the laws of 
        this state.  
           Sec. 47.  Minnesota Statutes 1994, section 50.1465, is 
        amended to read: 
           50.1465 [AUTHORIZED INVESTMENTS; SERVICE CORPORATIONS.] 
           Subdivision 1.  [GENERALLY.] In addition to other 
        investments authorized by law, a mutual savings bank may invest 
        in the following:  
           The capital stock, obligations, or other securities of any 
        corporation organized under the laws of this state if all or a 
        majority of the capital stock of the corporation is owned by the 
        mutual savings bank, and if substantially all of the activity of 
        the corporation consists of originating, making, purchasing, 
        selling and servicing loans, and participation in loans, secured 
        by real estate including brokerage and warehousing of the real 
        estate loans:  
           (1) activities in which the savings bank could engage 
        directly; 
           (2) activities in which a state bank or national bank, or a 
        subsidiary of a state bank or national bank, is authorized to 
        engage as of the date of final enactment of this section; and 
           (3) activities in which any state bank or national bank 
        becomes authorized to engage after the date of final enactment 
        of this section, which are authorized by the commissioner.  
           Subd. 2.  [RESTRICTION.] No mutual savings bank may make 
        any investment under subdivision 1 in a subsidiary that engages 
        primarily in activities in which the savings bank could not 
        engage directly if its aggregate outstanding investment under 
        this section in all subsidiaries that engage in activities in 
        which the savings bank could not engage directly exceeds three 
        25 percent of the assets capital stock and surplus of the mutual 
        savings bank.  
           Sec. 48.  Minnesota Statutes 1994, section 50.148, is 
        amended to read: 
           50.148 [AUTHORIZED INVESTMENTS; MANUFACTURED HOME LOANS.] 
           In addition to other investments authorized by law, a 
        savings bank organized and operated pursuant to this chapter, 
        may make loans upon the security of manufactured homes, and any 
        equipment installed or to be installed therein, in an amount not 
        exceeding $25,000 $30,000 repayable in installments, and may 
        make a charge for such loan computed at a rate not exceeding 12 
        percent per annum upon the unpaid principal balance of the 
        amount financed, and the installment payments shall not exceed 
        12 15 years and 32 days from the date of the loan, 
        notwithstanding that such loan is required to be repaid in 
        installments or that the loan is secured by mortgage, pledge, or 
        other collateral.  The provisions of sections 48.154 to 
        48.157 Section 50.1485, subdivision 2, shall apply applies to 
        all manufactured home loans made pursuant to the authority 
        granted by this section.  The authority granted by this section 
        shall not extend to loans which finance the acquisition of 
        inventory by a manufactured home dealer.  A savings bank may 
        purchase or invest in notes, bonds and retail installment sales 
        contracts secured by or constituting first liens upon 
        manufactured homes. 
           Sec. 49.  [50.1485] [LENDING AUTHORITY.] 
           Subdivision 1.  [GENERALLY.] In addition to other 
        investments authorized by law, a savings bank may make, 
        purchase, or invest in: 
           (a) loans secured by the pledge of policies of life 
        insurance, the assignment of which is properly acknowledged by 
        the insurer; 
           (b) consumer loans, which may be unsecured or secured by 
        personal or real property.  Consumer loans include, but are not 
        limited to, closed-end installment loans, single payment loans, 
        nonamortizing loans, open-end revolving line of credit loans, 
        credit card loans and extensions of credit, and overdraft 
        protection loans.  For the purpose of this paragraph, "consumer 
        loan" means a loan made by the savings bank in which:  (1) the 
        debtor is a person other than an organization; (2) the debt is 
        incurred primarily for personal, family, or household purpose; 
        and (3) the debt is payable in installments or a finance charge 
        is made; 
           (c) secured and unsecured loans to organizations and 
        natural persons for business or commercial purposes.  For the 
        purpose of this paragraph, "organization" means a corporation, 
        government or governmental subdivision, or agency, trust, 
        estate, partnership, limited liability partnership, limited 
        liability company, joint venture, cooperative, or association.  
        "Business or commercial purpose" means a purpose other than 
        personal, family, household, or agricultural purpose; 
           (d) secured and unsecured loans for agricultural purposes.  
        For the purpose of this paragraph, "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, and forest products, and 
        products raised or produced on farms, including processed or 
        manufactured products; 
           (e) credit sale contracts, which means a sale of goods, 
        services, or an interest in land in which credit is granted by a 
        seller who regularly engages as a seller in credit transactions 
        of the same kind, and the debt is payable in installments or a 
        finance charge is made; 
           (f) loans on the security of deposit accounts; 
           (g) real estate loans, subject to the conditions applicable 
        to savings associations under sections 51A.38 and 51A.385.  
        "Real estate loans" include a loan or other obligation secured 
        by a first lien on real estate 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 the loan or obligation, or a transaction out of which 
        a first lien or claim is created against the real estate, 
        including the purchase of the real estate in fee by a savings 
        bank and the concurrent or immediate sale of it on installment 
        contract; 
           (h) secured or unsecured loans for the purpose of repair, 
        improvement, rehabilitation, or furnishing of real estate; 
           (i) loans for the purpose of financing or refinancing an 
        ownership interest in certificates of stock, certificates of 
        beneficial interest, or other evidence of an ownership interest 
        in, or a proprietary lease from, a corporation, limited 
        liability company, trust, limited liability partnership, or 
        partnership formed for the purpose of the cooperative ownership 
        of real estate, secured by the assignment or transfer of 
        certificates or other evidence of ownership of the borrower; 
           (j) loans guaranteed or insured, in whole or in part, by 
        the United States or any of its instrumentalities; 
           (k) issuance of letters of credit or other similar 
        arrangements; and 
           (l) any other type of loan authorized by rules adopted by 
        the commissioner. 
           Subd. 2.  [LOANS AND EXTENSIONS OF CREDIT.] (a) A savings 
        bank may extend credit and make loans under section 47.59 on the 
        same terms and subject to the same conditions as apply to other 
        lenders under that chapter.  A person may enter into a credit 
        sale or service contract for sale to a savings bank, and a 
        savings bank may purchase and enforce the contract, under the 
        terms and conditions set forth in section 47.59, subdivisions 1 
        and 4 to 14. 
           (b) A savings bank may make or purchase extensions of 
        credit authorized by sections 47.20, subdivision 1, 3, or 4a; 
        47.204; 47.21; 47.60; 48.153 to 48.155; 48.185; 48.195; 59A.15; 
        168.66 to 168.77; 334.01; 334.011; 334.012, and any other 
        applicable law.  The extensions of credit or purchases of 
        extensions of credit may, but need not, be made under those 
        sections in lieu of the authority set forth in subdivision 2, 
        and if so, are subject to those sections, and not subdivision 
        2.  A savings bank 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 savings bank elects to make under section 334.01, 
        subdivision 2, 334.011, or 334.012, chapter 334 does not apply 
        to extensions of credit made pursuant to this section or the 
        sections mentioned in this subdivision. 
           Subd. 3.  [LIMIT ON TOTAL LIABILITIES.] The total 
        liabilities to a savings bank, as principal, guarantor, or 
        endorser of an individual, including the liabilities of a 
        corporation which the individual owns or controls a majority 
        interest in, a partnership, limited liability partnership, 
        limited liability company, or unincorporated association, and in 
        case of a corporation, of all subsidiaries of it in which the 
        corporation owns or controls a majority interest, shall never 
        exceed the limit provided for state banks under section 48.24. 
           Subd. 4.  [REAL ESTATE LOANS.] In the case of any 
        investment made by a savings bank in a 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 of 
        it 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, a savings 
        bank may, without notice to the other party or parties, deal 
        with the successor or successors in interest with reference to 
        the mortgage and the debt secured in the same manner as with the 
        party or parties, and may forbear to sue or may extend time for 
        payment of or otherwise modify the terms of the debt secured, 
        without discharging or in any way affecting the original 
        liability of the party or parties upon the debt secured. 
           Subd. 5.  [LEASES OF PERSONAL PROPERTY.] A savings bank may 
        acquire and lease or participate in the acquisition and leasing 
        of personal property to customers, and may incur additional 
        obligations incidental to becoming an owner and lessor of the 
        property to the same extent, and subject to the same conditions, 
        as state banks under section 48.152. 
           Sec. 50.  Minnesota Statutes 1994, section 50.155, is 
        amended to read: 
           50.155 [PURCHASE OF CERTAIN MORTGAGE LOANS.] 
           Savings banks and mutual savings banks that are subject to 
        the supervision of the commissioner of commerce are authorized 
        to make or purchase loans secured by real estate mortgage the 
        payment of which is guaranteed in whole or in part by the United 
        States or any instrumentality thereof under the Servicemen's 
        Readjustment Act of 1944 and amendments thereof provided that 
        the unguaranteed portion of such loan does not exceed 70 percent 
        of the appraised value of the security.  
           Sec. 51.  Minnesota Statutes 1994, section 50.17, is 
        amended to read: 
           50.17 [DEPOSITS, DIVIDENDS, INTEREST, BONUS, BENEFITS.] 
           Subdivision 1.  [DEPOSIT ACCOUNTS.] Every deposit and all 
        dividends credited thereto shall be repaid, after demand, in 
        such manner, at such times, and after such previous notice as 
        the board of trustees shall prescribe, but the savings bank 
        shall not be required to pay a greater dividend than four 
        percent per annum.  Depositors shall receive, as nearly as may 
        be, all the profits after deducting necessary expenses, and 
        setting aside annually such sum as the board deems expedient, 
        for a surplus fund for the security of its depositors, and to 
        meet contingencies, until this fund shall amount to 15 percent 
        of its deposits.  No interest shall be allowed on any money for 
        a longer time than the same is actually on deposit; except that 
        deposits made not later than the tenth business day of the month 
        commencing any semiannual or quarterly interest period, or the 
        tenth business day of any other month, or withdrawn within the 
        last three business days of the month ending a quarterly or 
        semiannual interest period, may be treated as on deposit for the 
        entire period or month in which it was so deposited or 
        withdrawn.  No dividend shall be declared, credited, or paid 
        unless authorized by yea and nay vote of the board duly entered 
        upon its minutes, and when any dividend in excess of that earned 
        and on hand shall be declared or credited, the trustees voting 
        therefor shall be jointly and severally liable to the bank for 
        the excess.  The board of every such bank whose surplus amounts 
        to 15 percent of its deposits shall, at least once in three 
        years, divide proportionately the excess among its depositors as 
        an extra dividend, and for that purpose may classify them 
        according to character, amount and duration of dealings, and so 
        regulate the dividend that each of the same class shall receive 
        the same ratable proportion.  A deposit account with a savings 
        bank is subject to a lien for the payment of charges that may 
        accrue on the account under this chapter.  A deposit account is 
        subject to a debt offset for the debts of the deposit account 
        holder to the savings bank.  Deposit accounts may not be 
        assessed for any debts or losses of the savings bank. 
           Subd. 2.  [DIVIDENDS INTEREST.] Every such savings bank may 
        also enter into agreements with depositors designed to promote 
        systematic thrift by providing for regular deposits over agreed 
        periods of time and in connection with any such plan to provide 
        thrift incentive may classify depositors generally according to 
        character, amount, regularity or duration of deposits or type of 
        agreement, and may agree to pay and provide for different rates 
        of interest, bonuses and benefits based on any such 
        classification.  All depositors of the same class shall be 
        entitled to receive interest, bonuses and benefits of 
        substantially the same value.  When it shall appear to the 
        commissioner from an examination, or otherwise, that the 
        classification of depositors as to character, amount, regularity 
        or duration of deposits or type of agreement and the different 
        rates of interest, bonuses and benefits based on any such 
        classification are not in the best interests of the bank and its 
        depositors, the commissioner may by written order direct that 
        changes be made and thereafter such changes shall be 
        incorporated in any agreements entered into by the bank.  The 
        savings bank shall determine the rate and amount of interest, if 
        any, to be paid on or credited to deposit accounts.  The savings 
        bank may establish reasonable classifications of accounts based 
        on the types of accounts, the length of time accounts are 
        continued in effect, the size of initial deposits into accounts, 
        the minimum balances of accounts required for payment of 
        interest, the frequency and extent of the activity on accounts, 
        or location of the account, or on other classifications the 
        savings bank considers appropriate. 
           Subd. 3.  [DEPOSIT ACCOUNTS.] Deposit accounts must be 
        represented only by the account of each deposit account holder 
        on the books of the savings bank, and the accounts or any 
        interest is transferable only on the books of the savings bank 
        and upon proper written application by the transferee.  The 
        savings bank may treat the holder of record of a deposit account 
        as the owner of it for all purposes without being affected by 
        any notice to the contrary unless the savings bank has 
        acknowledged in writing notice of a pledge of the deposit 
        account.  A savings bank may also offer negotiable time deposits.
           Subd. 4.  [DEPOSIT ACCOUNTS FOR MINORS.] A savings bank may 
        issue 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 interest or dividends, shall be paid to the 
        minor.  The minor's receipt, draft, negotiable order of 
        withdrawal, or acquittance in any form, is sufficient release 
        and discharge of the savings bank for withdrawal, until a 
        guardian appointed in this state for the minor has delivered a 
        certificate of appointment to the savings bank. 
           Subd. 5.  [SCHOOL OR INSTITUTION THRIFT SAVINGS PLAN.] A 
        savings bank may contract with the proper authorities of any 
        public or nonpublic elementary or secondary school or 
        institution of higher learning, or any public or charitable 
        institution caring for minors, for the participation and 
        implementation by the savings bank in any school or institution 
        thrift or savings plan, and it may accept savings accounts at 
        the school or institution, either by its own collector or by any 
        representative of the school or institution which becomes the 
        agent of the association for this purpose. 
           Subd. 6.  [P.O.D. DEPOSITS.] When a deposit is made in the 
        names of two or more persons jointly, or by a person payable on 
        death (P.O.D.) to another, or by a person in trust for another, 
        the rights of the parties and the savings bank are determined by 
        sections 524.6-201 to 524.6-214. 
           Subd. 7.  [DEPOSIT ACCOUNTS IN JOINT TENANCY.] The pledge 
        or hypothecation to a savings bank of all or part of a deposit 
        account in joint tenancy signed by a tenant or tenants whether 
        minor or adult, upon whose signature or signatures withdrawals 
        may be made from the account must, unless the terms of the 
        deposit account provide specifically to the contrary, be a valid 
        pledge and transfer to the savings bank of that part of the 
        account pledged or hypothecated, and must not operate to sever 
        or terminate the joint and survivorship ownership of all or any 
        part of the account. 
           Subd. 8.  [FIDUCIARY DEPOSITS.] A savings bank may accept 
        deposits in the name of any administrator, executor, custodian, 
        conservator, guardian, trustee, or other fiduciary for a named 
        beneficiary or beneficiaries.  The fiduciary may open, make 
        additions to, and withdraw the account in whole or in part.  The 
        withdrawal value of the account, and interest, or other rights 
        relating to it may be paid or delivered, in whole or in part, to 
        the fiduciary without regard to any notice to the contrary as 
        long as the fiduciary is living.  The payment or delivery to the 
        fiduciary or a receipt or acquittance signed by the fiduciary to 
        whom the payment or any delivery of rights is made is a valid 
        and sufficient release and discharge of a savings bank 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 has 
        been given to a savings bank and the savings bank has no written 
        notice of any other disposition of the beneficial estate, the 
        withdrawal value of the account, and interest or dividends, or 
        other rights relating to it may, at the option of a savings 
        bank, be paid or delivered, in whole or in part, to the 
        beneficiary or beneficiaries.  The payment or delivery to the 
        beneficiary, beneficiaries, or designated person, or a receipt 
        or acquittance signed by the beneficiary, beneficiaries, or 
        designated person, for the payment or delivery is a valid and 
        sufficient release and discharge of a savings bank for the 
        payment or delivery.  This section does not apply to P.O.D. 
        accounts under sections 524.6-201 to 524.6-214. 
           Subd. 9.  [PAYMENTS TO GUARDIAN.] When a deposit account is 
        held in a savings bank by a person who becomes incompetent and 
        an adjudication of incompetency has been made by a court of 
        competent jurisdiction, the savings bank may pay or deliver the 
        withdrawal value of the deposit account and any earnings that 
        may have accrued on it to the guardian for the person upon proof 
        of appointment and qualification.  If the savings bank has 
        received no written notice and is not on actual notice that the 
        deposit account holder has been adjudicated incompetent, it may 
        pay or deliver the funds to the holder in accordance with the 
        provisions of the deposit account contract, and the receipt or 
        acquittance of the holder is a valid and sufficient release and 
        discharge of the savings bank for the payment or delivery so 
        made. 
           Subd. 10.  [INVESTMENT BY CERTAIN ENTITIES.] 
        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 public corporations authorized by law, funds, 
        and organizations, are specifically authorized and empowered to 
        invest funds held by them, without any order of any court, in 
        deposit accounts of a savings bank, and the investments are 
        considered legal investments for the funds. 
           Subd. 11.  [SERVICE CHARGES.] A savings bank may contract 
        with depositors for service charges in connection with the 
        opening and maintaining of deposit accounts and for providing 
        services ancillary to the opening and maintaining of deposit 
        accounts.  The service charges are a matter of contract between 
        the savings bank and the depositor, and the contract will be 
        fully enforceable in accordance with its stated terms. 
           Sec. 52.  Minnesota Statutes 1994, section 50.175, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORIZATION.] Any savings bank organized 
        and operating pursuant to this chapter, may establish negotiable 
        order of withdrawal accounts on which it may or may not pay 
        interest or dividends.  Withdrawals from the accounts are 
        subject to the right of the savings bank to require the 
        depositor or account holder to give notice of an intended 
        withdrawal not less than 30 14 days before the withdrawal is 
        made, even though in practice the notice is not regularly 
        required and the depositor or account holder is allowed to make 
        withdrawals by negotiable or transferable instruments for the 
        purpose of making payments to third persons or otherwise. 
           Sec. 53.  Minnesota Statutes 1994, section 50.19, is 
        amended to read: 
           50.19 [ANNUAL REPORT; ASSETS REPORTS TO THE COMMISSIONER.] 
           On or before February first, each year, the trustees of any 
        savings bank shall cause to be made a thorough examination of 
        all its books, vouchers, and other papers and of its assets, 
        liabilities, and affairs generally by an experienced and 
        competent accountant, and make a written report upon the form 
        prescribed by the commissioner of commerce, showing accurately 
        its condition at the close of the preceding calendar year and 
        specifying, as to that year, the amounts and particulars 
        following: 
           (1) The amount loaned upon notes secured by mortgages, with 
        the names of the states or localities in which the mortgaged 
        premises are located and the amounts paid on the principal of 
        mortgage notes, and the amount of mortgages, if any, which have 
        been foreclosed; 
           (2) The cost, par value, and estimated market value of all 
        bond investments, stated separately, and the amount of principal 
        on bonds received by payment, redemption, sale, or otherwise; 
           (3) The amount of all loans upon pledge of securities, with 
        a statement of the nature and amount of these securities and the 
        amount paid upon the principal of the loans; 
           (4) The amount of the notes and of the bonds upon which 
        interest was in default at the close of the preceding calendar 
        year; 
           (5) The amount invested in real estate, giving the 
        description and the cost of each tract; 
           (6) The amount of cash on hand and on deposit in banks or 
        trust companies, giving the name of each, and the amount of each 
        depositor; and 
           (7) Such other information as the commissioner of commerce 
        may require Each savings bank shall submit the reports required 
        of state banks pursuant to section 48.48 and such other 
        information as the commissioner of commerce may require.  
           Sec. 54.  Minnesota Statutes 1994, section 50.21, is 
        amended to read: 
           50.21 [VERIFICATION OF REPORT.] 
           The report shall be verified by the oath of the two 
        principal officers of the institution and the statement of 
        assets shall be verified by the oath of at least two of the 
        trustees directors and of the person who made the examination; 
        and any willful false swearing in regard to these reports shall 
        be deemed perjury and be punishable accordingly.  
           Sec. 55.  [50.212] [SAVINGS BANK REGULATION.] 
           Subdivision 1.  [COMMERCE DEPARTMENT TO CONTROL.] The 
        commissioner of commerce shall have charge of the execution of 
        all laws relating to the savings banks chartered under the laws 
        of Minnesota and relating to the business of those savings banks.
           Subd. 2.  [COMMISSIONER SUPERVISION.] The commissioner 
        shall supervise the books, records, and affairs of all savings 
        banks doing business in the state as provided in section 46.04. 
           Subd. 3.  [OFFICIAL COMMUNICATIONS REFERRED TO 
        DIRECTORS.] Each official communication from the commissioner to 
        a savings bank relating to any examination conducted by the 
        commissioner or containing suggestions and recommendations as to 
        the conduct of business of the savings bank, shall be submitted 
        by the officer receiving it to the board of directors at the 
        next meeting of the board and noted in the meeting minutes. 
           Sec. 56.  Minnesota Statutes 1994, section 50.22, is 
        amended to read: 
           50.22 [PROCEEDINGS UPON VIOLATION.] 
           When it shall appear, from an examination made by the 
        commissioner of commerce or otherwise, that any such corporation 
        has violated the law, or is conducting its business in an unsafe 
        or unauthorized manner, the commissioner shall, by written 
        order, direct such methods to be discontinued and that its 
        business be conducted in conformity with law.  If any such 
        corporation refuses or neglects to comply with this order, or to 
        make any report required by law or by the commissioner of 
        commerce, or if it shall appear to the commissioner of commerce 
        that it is unsafe or inexpedient for any such corporation to 
        continue to transact business, the commissioner shall report the 
        facts to the attorney general, who shall take such action 
        thereon as the case requires.  This action may be for the 
        removal of one or more of the trustees directors of the 
        corporation, the transfer of its corporate powers to other 
        persons, its merger and consolidation with another like 
        corporation willing to accept the trust, or such other 
        appropriate action as the facts may require; and the court may 
        grant any such relief in the interests of justice and, to 
        protect the rights of the parties, may, from time to time, 
        revoke or modify its orders made in the matter.  
           Sec. 57.  Minnesota Statutes 1994, section 50.23, is 
        amended to read: 
           50.23 [CHANGE OF NAME.] 
           When a resolution shall be adopted by the trustees 
        directors of the bank expressing their purpose to change its 
        name, they shall cause notice of this purpose, containing the 
        present and proposed names, to be published in the manner 
        provided for publication of notice of intention to organize.  On 
        completion of this publication, the trustees directors shall 
        make application to the commissioner of commerce to change the 
        name of the bank, as specified in the resolution and 
        publication, accompanied by proof of the adoption of the 
        resolution and publication of notice.  If this change be 
        approved by the commissioner of commerce, the commissioner shall 
        authorize and direct the same by a signed order under seal, and 
        designate a day, not more than 30 days from its date, when the 
        change shall take effect.  The commissioner shall execute the 
        order in triplicate, one to be filed with the county recorder of 
        the county where the bank is situated, one delivered to the 
        bank, and the other filed in the commissioner's office.  From 
        the date named in this order, the bank shall be known and 
        designated by its new name, and under this name shall have the 
        same rights and powers and be subject to the same liabilities as 
        before the change. 
           Sec. 58.  Minnesota Statutes 1994, section 50.245, is 
        amended to read: 
           50.245 [DETACHED FACILITIES; MUTUAL SAVINGS BANKS; 
        AUTHORIZATION BRANCHES; ACQUISITIONS.] 
           Subdivision 1.  [AUTHORITY FOR BRANCH OFFICES.] A mutual 
        savings bank may establish five detached facilities pursuant to 
        sections 47.51 to 47.57 in the territories of Hennepin and Anoka 
        counties.  The savings bank shall not change the location of a 
        detached facility without prior written approval of the 
        commissioner of commerce.  A savings bank may establish a loan 
        production office, without restriction as to geographical 
        location, upon written notice to the commissioner of commerce.  
           Subd. 2.  [AUTHORITY FOR BRANCH OFFICES IN RECIPROCATING 
        STATE OTHER STATES.] The authorization contained in subdivision 
        1 is in addition to the authority granted mutual savings banks 
        in section 47.52.  A savings bank chartered in this state, 
        whether or not the subsidiary of a savings bank holding company, 
        may, by acquisition, merger, purchase, and assumption of some or 
        all assets and liabilities, consolidation, or de novo formation, 
        establish or operate detached facilities in another state on the 
        same terms and conditions and subject to the same limitations 
        and restrictions as are applicable to the establishment of 
        branches by national banks located in Minnesota, except that 
        approval of the comptroller of the currency shall not be 
        required for such detached facilities. 
           Subd. 3.  [RECIPROCATING STATE ACQUISITIONS.] This section 
        shall not apply to any bank with a stock form of ownership.  A 
        savings bank chartered in this state and a savings bank holding 
        company with its principal offices in this state may acquire 
        control of a financial institution chartered in a reciprocating 
        state or, subject to applicable federal law, any other state or 
        a financial institution holding company with principal offices 
        in a reciprocating state or, subject to applicable federal law, 
        any other state.  A savings bank chartered in a reciprocating 
        state or, subject to applicable federal law, any other state and 
        a savings bank holding company with principal offices in a 
        reciprocating state or, subject to applicable federal law, any 
        other state may acquire control of a savings bank chartered in 
        this state or a savings bank holding company with principal 
        offices in this state.  
           Subd. 4.  [PROCEDURAL REQUIREMENTS.] Procedural 
        requirements equivalent to those contained in sections 48.90 to 
        48.991 apply to reciprocal interstate branching and acquisitions 
        by savings banks and savings bank holding companies. 
           Subd. 5.  [DEFINITIONS.] For the purpose of this section, 
        the terms defined in this subdivision have the meanings given 
        them. 
           (a) "Financial institution" means a bank, savings bank, 
        savings association, trust company, or credit union, whether 
        chartered under the laws of this state, another state or 
        territory, or under the laws of the United States. 
           (b) "Loan production office" means a place of business at 
        which a savings bank provides lending if the loans are approved 
        at the main office or detached facility of the savings bank, but 
        at which a savings bank may not accept deposits except through a 
        remote service unit. 
           (c) "Reciprocating state" means a state that authorizes the 
        acquisition of control of financial institutions chartered in 
        that state and financial institution holding companies with 
        principal offices in that state by a savings bank chartered in 
        this state or savings bank holding company with principal 
        offices in this state under conditions substantially similar to 
        those imposed by the laws of Minnesota, as determined by the 
        commissioner of commerce. 
           (d) "Remote service unit" means an electronic financial 
        terminal as defined in section 47.61. 
           Subd. 6.  [COMMISSIONER'S AUTHORITY.] The authority of the 
        commissioner of commerce to approve a transaction under this 
        section is in addition to that provided for in section 49.48. 
           Sec. 59.  Minnesota Statutes 1994, section 50.25, is 
        amended to read: 
           50.25 [BANKS ORGANIZED UNDER THE LAWS OF MINNESOTA; CAPITAL 
        STOCK; AMENDMENT OF ARTICLES.] 
           A corporation which was incorporated and organized under 
        the laws of Minnesota for the purpose of doing a savings bank 
        business, may have capital stock of $100 per share, par value; 
        provided, the minimum required capital shall not be less than 
        $500,000., and may amend its articles or certificate of 
        incorporation so as to provide for this capital stock conversion 
        by adopting a resolution specifying the proposed amendment at a 
        regular meeting or a special meeting called for that expressly 
        stated purpose.  The conversion must be approved by at least a 
        two-thirds affirmative vote of its entire board of directors, 
        trustees, or other managers.  The resolution approving the 
        conversion shall be embraced in a certificate duly executed by 
        its president and secretary, or other presiding and recording 
        officers, under its corporate seal, and approved, filed, 
        recorded, and published in the manner now prescribed for the 
        execution, approval, filing, recording, and publishing of a like 
        original certificate. 
           The resolution specifying the proposed amendment of 
        articles or certificate of incorporation shall set forth a plan 
        of conversion from a mutual savings bank to a capital stock 
        savings bank.  The plan of conversion shall provide that all 
        capital stock shall have voting powers, including the power to 
        elect the board of directors, trustees, or other managers who 
        shall have the power to sell, convey, mortgage, or otherwise 
        dispose of any part of the corporation's real or personal 
        property.  The plan and issuance of capital stock shall be 
        subject to the commissioner of commerce's approval provided the 
        plan is fair and equitable to all parties concerned and is in 
        the public interest.  The capital funds of a proposed savings 
        bank shall be in such greater amount which the commissioner 
        considers necessary, having in mind the deposit potential for 
        such a proposed bank and current industry standards of capital 
        adequacy. 
           Sec. 60.  [50.28] [DECLARATORY JUDGMENTS.] 
           At any time after a controversy has arisen between the 
        commissioner of commerce and a savings bank with respect to a 
        question of law or rule or with respect to a question involving 
        immeasurable or irreparable damage to the savings bank, and 
        before an administrative or judicial hearing, the savings bank 
        or the commissioner may apply to a court of competent 
        jurisdiction in the county in which the home office of the 
        savings bank is located for a declaratory judgment as to the 
        question. 
           Sec. 61.  Minnesota Statutes 1994, section 51A.02, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ANNUAL PERCENTAGE RATE.] "Annual percentage 
        rate" has the meaning given the term in the Code of Federal 
        Regulations, title 12, part 226, but using the definition of 
        "finance charge" used in this section. 
           Sec. 62.  Minnesota Statutes 1994, section 51A.02, 
        subdivision 26, is amended to read: 
           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 51A.385 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 51A.385, 
        subdivision 5; or 
           (3) a discount, if an association purchases a contract 
        evidencing a contract credit sale or loan 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. 
           Sec. 63.  Minnesota Statutes 1994, section 51A.02, 
        subdivision 40, is amended to read: 
           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 or credit sale, and any 
        separate fees or charges that actually are or will be paid to 
        public officials for recording a notice described in section 
        580.032, subdivision 1; and 
           (2) premiums payable for insurance in lieu of perfecting a 
        security interest or mortgage otherwise required by an 
        association in connection with a loan or credit sale, if the 
        premium does not exceed the fees and charges described in clause 
        (1) which would otherwise be payable. 
           Sec. 64.  Minnesota Statutes 1994, section 51A.21, is 
        amended by adding a subdivision to read: 
           Subd. 28.  [SERVICE CHARGES.] To contract with depositors 
        for service charges in connection with the opening and 
        maintaining of deposit accounts and for providing services 
        ancillary to the opening and maintaining of deposit accounts.  
        Service charges are a matter of contract between the association 
        and the depositor, and any such contract is fully enforceable 
        according to its stated terms. 
           Sec. 65.  Minnesota Statutes 1994, section 61A.09, 
        subdivision 3, is amended to read: 
           Subd. 3.  Group life insurance policies may be issued to 
        cover groups of not less than ten debtors of a creditor written 
        under a master policy issued to a creditor to insure its debtors 
        in connection with real estate mortgage loans, in an amount not 
        to exceed the actual amount of their indebtedness plus an amount 
        equal to two monthly payments or scheduled amount of their 
        indebtedness, plus an amount equal to two monthly payments, 
        whichever is greater.  If the mortgage loan provides for a 
        variable rate of finance charge or interest, the initial rate or 
        the scheduled rates based on the initial index must be used in 
        determining the scheduled amount of indebtedness.  Each 
        application for group mortgage insurance offered prior to or at 
        the time of loan closing shall contain a clear and conspicuous 
        notice that the insurance is optional and is not a condition for 
        obtaining the loan.  Each person insured under a group insurance 
        policy issued under this subdivision shall be furnished a 
        certificate of insurance which conforms to the requirements of 
        section 62B.06, subdivision 2, and which includes a conversion 
        privilege permitting an insured debtor to convert, without 
        evidence of insurability, to an individual policy of decreasing 
        term insurance within 30 days of the date the insured debtor's 
        group coverage is terminated for any reason other than the 
        nonpayment of premiums.  The initial amount of coverage under 
        the individual policy shall be an amount equal to the amount of 
        coverage terminated under the group policy and shall decrease 
        over a term that corresponds with the scheduled term of the 
        insured debtor's mortgage loan.  The premium for the individual 
        policy shall be the same premium the insured debtor was paying 
        under the group policy.  
           Sec. 66.  Minnesota Statutes 1994, section 62B.04, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT LIFE INSURANCE.] (1) The initial 
        amount of credit life insurance shall not exceed the amount of 
        principal repayable under the contract of indebtedness. 
        Thereafter, if the indebtedness is repayable in substantially 
        equal installments according to a predetermined schedule, the 
        amount of insurance shall not exceed the scheduled or actual 
        amount of indebtedness, whichever is greater.  If the contract 
        of indebtedness provides for a variable rate of finance charge 
        or interest, the initial rate or the scheduled rates based on 
        the initial index must be used in determining the scheduled 
        amount of indebtedness and subsequent changes to the rate must 
        be disregarded in determining whether the contract is repayable 
        in substantially equal installments according to a predetermined 
        schedule. 
           (2) Notwithstanding clause (1), the amount of credit life 
        insurance written in connection with credit transactions 
        repayable over a specified term exceeding 63 months shall not 
        exceed the greater of:  (i) the actual amount of unpaid 
        indebtedness as it exists from time to time; or (ii) where an 
        indebtedness is repayable in substantially equal installments 
        according to a predetermined schedule, the scheduled amount of 
        unpaid indebtedness, less any unearned interest or finance 
        charges, plus an amount equal to two monthly payments.  If the 
        credit transaction provides for a variable rate of finance 
        charge or interest, the initial rate or the scheduled rates 
        based on the initial index must be used in determining the 
        scheduled amount of unpaid indebtedness and subsequent changes 
        in the rate must be disregarded in determining whether the 
        contract is repayable in substantially equal installments 
        according to a predetermined schedule. 
           (3) Notwithstanding clauses (1) and (2), insurance on 
        educational, agricultural, and horticultural credit transaction 
        commitments may be written on a nondecreasing or level term plan 
        for the amount of the loan commitment. 
           Sec. 67.  Minnesota Statutes 1994, section 62B.04, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CREDIT ACCIDENT AND HEALTH INSURANCE.] The total 
        amount of periodic indemnity payable by credit accident and 
        health insurance in the event of disability, as defined in the 
        policy, shall not exceed the aggregate of the periodic scheduled 
        unpaid installments of the indebtedness; and the amount of each 
        periodic indemnity payment shall not exceed the original 
        indebtedness divided by the number of periodic installments.  If 
        the credit transaction provides for a variable rate of finance 
        charge or interest, the initial rate or the scheduled rates 
        based on the initial index must be used in determining the 
        aggregate of the periodic scheduled unpaid installments of the 
        indebtedness. 
           Sec. 68.  Minnesota Statutes 1994, section 300.20, is 
        amended to read: 
           300.20 [BOARD OF DIRECTORS.] 
           Subdivision 1.  [ELECTION.] The business of savings banks 
        must be managed by a board of at least seven trustees, 
        directors, all residents of this state, each of whom, before 
        being authorized to act, must file a written acceptance of 
        the trust position.  The business of other corporations must be 
        managed by a board of at least three directors, unless a greater 
        number is otherwise required by law, elected by ballot by the 
        stockholders or members.  A board of directors of a financial 
        institution referred to in section 47.12 which has less than 
        five members may be increased to not more than five members by 
        order of the commissioner of commerce. 
           Subd. 2.  [VACANCIES.] If the certificate of incorporation 
        or the bylaws so provides, a vacancy in the board of directors 
        may be filled by the remaining directors.  Not more than 
        one-third of the members of the board may be so filled in any 
        one year except any number may be appointed to provide for at 
        least three directors until any subsequent meeting of the 
        stockholders.  
           Subd. 3.  [QUORUM TO DO BUSINESS.] A majority of the 
        directors or trustees constitutes a quorum for the transaction 
        of business.  
           Subd. 4.  [ACTION WITHOUT MEETING.] Any action which might 
        be taken at a meeting of the board of directors, trustees, or 
        managers may be taken without a meeting if done in writing 
        signed by all of the directors, trustees, or managers.  
           Sec. 69.  [RELATIONSHIP TO OTHER LEGISLATION; REVISOR 
        INSTRUCTION.] 
           (a) This act is interrelated with 1995 House File 1184 and 
        its companion bill 1995 Senate File 1134, which may or may not 
        be enacted at the time of enactment of this act and which may or 
        may not be subsequently enacted in the 1995 legislative session. 
           (b) References in this act to "section 47.59" or "section 
        47.60" are to the sections of House File 1184 and Senate File 
        1134 that contain those proposed statutory codings.  If that 
        section 47.59 is not enacted in the 1995 legislative session, 
        references in this act to that section shall be interpreted as 
        referring to Minnesota Statutes 1994, section 51A.385, which is 
        the current statutory section most similar to, and which is the 
        principal source of, the proposed new section 47.59.  If the 
        section 47.60 referred to earlier in this paragraph is not 
        enacted in the 1995 legislative session, references in this act 
        to that section are null and void and of no effect. 
           (c) References in this act to "section 51A.385" are 
        intended to refer to that section of Minnesota Statutes 1994, as 
        amended by any other acts enacted in the 1995 legislative 
        session.  The related legislation referenced in paragraph (a) 
        would repeal section 51A.385.  If that related legislation is 
        enacted and it repeals section 51A.385, the intent of the 
        references in this act to that section is as stated in this 
        paragraph. 
           (d) The revisor of statutes shall, in preparing the 1995 
        Supplement to Minnesota Statutes, change the cross references 
        made in this act to the extent necessary to achieve the 
        intentions stated in this section. 
           Sec. 70.  [REPEALER.] 
           Minnesota Statutes 1994, sections 47.095; 47.30, 
        subdivisions 4 and 6; 48.67; 50.02; 50.07; 50.08; 50.09; 50.10; 
        50.12; 50.15; 50.16; 50.21; and 50.22, are repealed. 
           Presented to the governor May 15, 1995 
           Signed by the governor May 17, 1995, 1:58 p.m.