Office of the Revisor of Statutes
Minnesota Session Laws - 1995, Regular Session
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.
Official Publication of the State of Minnesota
Revisor of Statutes