Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 151-S.F.No. 1330
An act relating to financial institutions; regulating
fees, charges, investments, and time periods;
authorizing certain part-time banking locations;
authorizing reverse stock splits; regulating mortgage
insurance and loans; modifying the application
requirements for credit unions; making corrections and
conforming changes; regulating deposit and investment
of local public funds; modifying a definition;
authorizing a detached facility in Chisago Lakes
Township; amending Minnesota Statutes 1998, sections
46.041, subdivisions 1 and 3; 46.048, subdivisions 1
and 2b; 46.131, subdivision 10; 47.0156; 47.101,
subdivision 3; 47.20, subdivision 6b; 47.203; 47.204,
subdivision 1; 47.27, subdivision 3; 47.52; 47.54,
subdivisions 2 and 3; 47.59, subdivision 12; 47.60,
subdivision 3; 48.15, subdivisions 2a and 3; 48.24,
subdivision 7, and by adding a subdivision; 48A.15,
subdivision 1; 49.36, subdivision 1; 52.01; 52.05,
subdivision 2; 53.03, subdivisions 1, 6, and 7; 55.04,
subdivision 2; 56.02; 56.131, subdivision 1; 58.04,
subdivision 1; 58.06, subdivision 2; 58.08,
subdivision 1; 59A.03, subdivision 2; 60K.11,
subdivision 1; 118A.01, subdivision 2; 168.67; 168.71;
303.25, subdivision 5; 332.15, subdivisions 2 and 3;
332.17; and 332.30; proposing coding for new law in
Minnesota Statutes, chapters 47; 48; 52; and 334;
repealing Minnesota Statutes 1998, sections 47.20,
subdivision 14; and 58.07.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 46.041,
subdivision 1, is amended to read:
Subdivision 1. [FILING; FEE; PUBLIC INSPECTION.] The
incorporators of a bank proposed to be organized under the laws
of this state shall execute and acknowledge a written
application in the form prescribed by the commissioner of
commerce. The application must be signed by two or more of the
incorporators and request a certificate authorizing the proposed
bank to transact business at the place and in the name stated in
the application. The applicant shall file the application with
the department with a $1,000 an $8,000 filing fee and a $500
investigation fee. The commissioner may waive the fee for a
bank to be located in a low- or moderate-income area as defined
in Code of Federal Regulations, title 12, part 25(1), (n)(1) and
(n)(2) and where no other depository institution operates an
office. If the proposed bank is being organized in connection
with a reorganization or merger of an existing bank, the filing
fee is $2,000. The fees must be turned over by the commissioner
to the state treasurer and credited to the general fund. The
application file must be public, with the exception of financial
data on individuals which is private under the Minnesota
Government Data Practices Act and data defined as trade secret
information under section 13.37, subdivision 1, paragraph (b),
which must be given nonpublic classification upon written
request by the applicant.
Sec. 2. Minnesota Statutes 1998, section 46.041,
subdivision 3, is amended to read:
Subd. 3. [COMMENTS, REQUESTS FOR HEARING.] Within 21 15
days after the notice of application has been published, any
person may submit to the commissioner either or both written
comments on an application and a written request for a hearing
on the application. The request must state the nature of the
issues or facts to be presented and the reasons why written
submissions would be insufficient to make an adequate
presentation to the commissioner. Comments challenging the
legality of an application should be submitted separately in
writing.
Written requests for hearing must be evaluated by the
commissioner who may grant or deny the request. A hearing must
generally be granted only if it is determined that written
submissions would be inadequate or that a hearing would
otherwise be beneficial to the decision-making process. A
hearing may be limited to issues considered material by the
commissioner.
If a request for a hearing has been denied, the
commissioner shall notify the applicant and all interested
persons stating the reasons for denial. Interested parties may
submit to the commissioner with simultaneous copies to the
applicant additional written comments on the application within
14 days after the date of the notice of denial. The applicant
shall be provided an additional seven days after the 14-day
deadline has expired within which to respond to any comments
submitted within the 14-day period. A copy of any response
submitted by the applicant shall also be mailed simultaneously
by the applicant to the interested parties. The commissioner
may waive the additional seven-day comment period if so
requested by the applicant.
Sec. 3. Minnesota Statutes 1998, section 46.048,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT.] Whenever a change in the
outstanding voting stock of a banking institution will result in
control or in a change in the control of the banking
institution, the person acquiring control of the banking
institution, including an out-of-state bank holding company,
shall file notice of the proposed acquisition of control with
the commissioner of commerce at least 60 days before the actual
effective date of the change, except that the commissioner may
extend the 60-day period an additional 30 days if in the
commissioner's judgment any material information submitted is
substantially inaccurate or the acquiring party has not
furnished all the information required. The notice must be
accompanied by a filing fee of $3,000 payable to the
commissioner of commerce, unless the person filing the notice
has been associated with the banking institution as an officer
or director for at least three years, in which case the filing
fee is $1,000. No filing fee is required of a person required
to file a notice because of a stock redemption or other
transaction by others that caused the change in control. As
used in this section, the term "control" means the power to
directly or indirectly direct or cause the direction of the
management or policies of the banking institution. A change in
ownership of capital stock that would result in direct or
indirect ownership by a stockholder or an affiliated group of
stockholders of less than 25 percent of the outstanding capital
stock is not considered a change of control. If there is any
doubt as to whether a change in the outstanding voting stock is
sufficient to result in control or to effect a change in the
control, the doubt shall be resolved in favor of reporting the
facts to the commissioner. The commissioner shall use the
criteria established by the Financial Institution Regulatory and
Interest Rate Control Act of 1978, United States Code, title 12,
section 1817(j), and the regulations adopted under it, when
reviewing the acquisition and determining if the acquisition
should or should not be disapproved. Within three days after
making the decision to disapprove a proposed acquisition, the
commissioner shall notify the acquiring party in writing of the
disapproval. The notice must provide a statement of the basis
for the disapproval.
Sec. 4. Minnesota Statutes 1998, section 46.048,
subdivision 2b, is amended to read:
Subd. 2b. [NOTICE.] Upon the filing of a notice:
(1) an acquiring party shall publish once in a newspaper of
general circulation notice of the proposed acquisition in a form
acceptable to the commissioner; and
(2) the commissioner shall accept public comment on a
notice for a period of not less than 30 21 days from the date of
the publication required by clause (1).
Sec. 5. Minnesota Statutes 1998, section 46.131,
subdivision 10, is amended to read:
Subd. 10. Each financial institution described in
subdivision 2 shall pay a fee of $25 $50 to the commissioner of
commerce upon application to the commissioner for approval of a
change in its certificate, charter, articles of incorporation,
bylaws, powers or license. Money collected by the commissioner
under this subdivision shall be deposited in the general fund.
Sec. 6. Minnesota Statutes 1998, section 47.0156, is
amended to read:
47.0156 [CLOSING EFFECTING A PERMANENT CESSATION OF
BUSINESS.]
The permanent closing of a financial institution as defined
in section 47.015 or 47.0151 for purposes, or with a result,
other than authorized in sections 47.015 to 47.0155 is unlawful
unless at least 90 60 days' written notice is given to the
commissioner.
Sec. 7. Minnesota Statutes 1998, section 47.101,
subdivision 3, is amended to read:
Subd. 3. [APPLICATIONS TO DEPARTMENT OF COMMERCE.] An
application by a banking institution to relocate its main office
other than those provided for in subdivision 2 shall
be accompanied by a filing fee of $3,000 payable to the
commissioner of commerce and approved or disapproved by the
commissioner of commerce as provided for in sections 46.041 and
46.044.
Sec. 8. Minnesota Statutes 1998, section 47.20,
subdivision 6b, is amended to read:
Subd. 6b. [DELINQUENCY OR LATE PAYMENT FEES.] Charges or
fees for late payments on conventional loans shall be governed
by chapter 51A for all lenders. A lender making a conventional
loan may assess and collect fees for late payments according to
the provision of section 47.59.
Sec. 9. Minnesota Statutes 1998, section 47.203, is
amended to read:
47.203 [FEDERAL PREEMPTION OVERRIDE.]
The provisions of Public Law Number 96-221, title V, part
A, section 501(a)(1) (United States Code, title 12, section
1735f-7a), do not apply with respect to a loan, mortgage, credit
sale or advance made in this state after June 2, 1981, nor with
respect to a loan, mortgage, credit sale or advance secured by
real property located in this state and made after June 2, 1981.
Sec. 10. Minnesota Statutes 1998, section 47.204,
subdivision 1, is amended to read:
Subdivision 1. [NO USURY LIMITS.] Notwithstanding any law
to the contrary, no limitation on the rate or amount of
interest, discount points, finance charges, or other charges
shall apply to a loan, mortgage, credit sale, or advance which
would have been exempt from the laws of this state pursuant to
Public Law Number 96-221, title V, part A, section 501 (United
States Code, title 12, section 1735f-7a), as amended as of June
2, 1981, but for section 47.203 and which is made in this state
after June 2, 1981.
Sec. 11. [47.207] [PRIVATE MORTGAGE INSURANCE.]
Subdivision 1. [DEFINITIONS.] For the purposes of this
section, the following terms have the meanings given:
(a) "Current fair market value" means the value of the
mortgagor's property determined by an appraisal conducted within
90 days of a mortgagor's written request for cancellation of
private mortgage insurance. The appraisal shall be conducted by
a real estate appraiser, licensed or certified by a state or
federal agency, who is reasonably acceptable to the servicer.
The appraisal may be conducted at either the request of the
lender, mortgagor, or servicer. The mortgagor is responsible
for the cost of the appraisal.
(b) "Lender" means a person who makes or holds a
residential mortgage loan.
(c) "Private mortgage insurance" means insurance paid for
by the mortgagor, including any mortgage guaranty insurance,
against the nonpayment of, or default on, a residential mortgage
loan, other than mortgage insurance made available under the
federal National Housing Act, United States Code, title 38, or
title V of the federal Housing Act of 1949. "Private mortgage
insurance" does not mean lender-paid mortgage insurance.
(d) "Residential mortgage loan" means a loan secured by
either: (1) a mortgage on residential real property; or (2) by
certificates of stock or other evidence of ownership interest in
and proprietary lease from corporations, partnerships, or other
forms of business organizations formed for the purpose of
cooperative ownership of residential real property.
(e) "Servicer" means a person who, through any medium or
mode of communication, engages in the collection or remittance
for, or the right or obligation to collect or remit for, a
lender, mortgagee, note owner, noteholder, or for a person's own
account, of payments, interest, principal, and escrow items such
as insurance and taxes for property subject to a residential
mortgage loan.
Subd. 2. [RIGHT TO CANCEL PRIVATE MORTGAGE
INSURANCE.] With respect to an existing or future residential
mortgage loan, a mortgagor shall have the right to elect, in
writing, to cancel private mortgage insurance in connection with
a residential mortgage loan if all of the following terms and
conditions have been met:
(1) the current unpaid principal balance of the mortgage is
80 percent or less of the current fair market value of the
property;
(2) the mortgagor has not:
(i) been 60 days or longer past due on a mortgage payment
during the 12-month period beginning 24 months before the date
on which the servicer receives the mortgagor's written request
for cancellation; or
(ii) been 30 days or longer past due on a mortgage payment
during the 12 months preceding the date on which the servicer
receives the mortgagor's written request for cancellation;
(3) the mortgage was made at least 24 months prior to the
receipt of a request for cancellation;
(4) the property securing the mortgage loan is
owner-occupied; and
(5) the mortgage has not been pooled with other mortgages
in order to constitute, in whole or in part, collateral for
bonds issued by the state of Minnesota or any political
subdivision of the state of Minnesota or of any agency of any
political subdivision of the state of Minnesota.
Subd. 3. [NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE
INSURANCE.] (a) With respect to each existing or future
residential mortgage loan, a servicer must provide an annual
written notice to the mortgagor currently paying premiums for
private mortgage insurance. The notice must be in 12-point type
or greater and appear substantially as follows:
NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE INSURANCE
If you currently pay private mortgage insurance premiums,
you may have the right under federal law or Minnesota law
to cancel the insurance and stop paying premiums. This
would reduce your total monthly payment.
You may have the right to cancel private mortgage insurance
if the principal balance of your loan is 80 percent or less
of the current market value of your home. Under Minnesota
law, the value of your property can be determined by a
professional appraisal. You need to pay for this
appraisal, but in most cases you will be able to recover
this cost in less than a year if your mortgage insurance is
canceled.
If you wish to learn whether you are eligible to cancel
this insurance, please contact us at (enter address and
phone number of servicer).
(b) The notice required by this subdivision must be on its
own page, but a disclosure notice concerning private mortgage
insurance required by federal law may be included on the same
page as the disclosure notice required by this subdivision. The
page containing the notice required by this subdivision may be
included with other disclosures or notices required by federal
law that are sent to the mortgagor.
(c) If the mortgage has been pooled with other mortgages in
order to constitute, in whole or in part, collateral for bonds
issued by the state of Minnesota or any political subdivision of
the state of Minnesota or of any agency of any political
subdivision of the state of Minnesota and notice of right to
cancel private mortgage insurance is required under federal law,
no notice under this subdivision is required.
Subd. 4. [SERVICER RESPONSE TO CANCELLATION REQUEST.] (a)
Within 30 days of receipt of a mortgagor's written request to
cancel private mortgage insurance, a servicer shall:
(1) provide a written notice to the insurer to cancel the
private mortgage insurance and written notice to the mortgagor
that a request for cancellation has been sent to the insurer if
the servicer determines that the private mortgage insurance
should be canceled;
(2) provide a written response to the mortgagor identifying
all additional information needed from the mortgagor if the
servicer reasonably needs more information from the mortgagor to
determine whether the mortgagor is eligible for cancellation of
private mortgage insurance; or
(3) provide a written notice to the mortgagor of the
reasons for the servicer's refusal to cancel the private
mortgage insurance if the servicer determines that the mortgagor
does not meet the requirements for cancellation of private
mortgage insurance.
(b) If a lender, or any other person involved in the
mortgage transaction, receives a written request for
cancellation of private mortgage insurance, the lender or other
person shall promptly forward the mortgagor's request for
cancellation to the servicer, if the servicer is known to the
lender or other person. If the servicer is not known to the
lender or other person, the lender or other person shall advise
the mortgagor to contact the company to which the mortgagor
sends the monthly payment.
Subd. 5. [LENDER CHARGES; RETURN OF UNEARNED PREMIUM.] (a)
A lender requiring or offering private mortgage insurance shall
make available to the borrower or other person paying the
insurance premium the same premium payment plans as are
available to the lender in paying the private mortgage insurance
premium.
(b) Any refund or rebate for unearned private mortgage
insurance premiums shall be paid to the mortgagor or other
person actually providing the funds for payment of the premium.
(c) A lender or servicer shall not charge the mortgagor a
fee or other consideration for cancellation of the private
mortgage insurance or for any of the acts required by this
section, except that the lender or servicer shall have the right
to recover the cost of an appraisal if the mortgagor elects to
have the lender or servicer perform or arrange for the appraisal.
Subd. 6. [INTERPRETATION.] Nothing in this section shall
be deemed to be inconsistent with the federal Homeowner's
Protection Act of 1998, codified at United States Code, title
12, sections 4901 to 4910, within the meaning of "inconsistent"
as used in section 9 of that act, codified at United States
Code, title 12, section 4908.
Sec. 12. Minnesota Statutes 1998, section 47.27,
subdivision 3, is amended to read:
Subd. 3. "Savings association" shall have the meaning set
forth in section 51.01 51A.02, subdivision 2 7.
Sec. 13. Minnesota Statutes 1998, section 47.52, is
amended to read:
47.52 [AUTHORIZATION.]
(a) With the prior approval of the commissioner, any bank
doing business in this state may establish and maintain detached
facilities provided the facilities are located within: (1) the
municipality in which the principal office of the applicant bank
is located; or (2) 5,000 feet of its principal office measured
in a straight line from the closest points of the closest
structures involved; or (3) a municipality in which no bank is
located at the time of application; or (4) a municipality having
a population of more than 10,000; or (5) a municipality having a
population of 10,000 or less, as determined by the commissioner
from the latest available data from the state demographer, or
for municipalities located in the seven-county metropolitan area
from the metropolitan council, and all the banks having a
principal office in the municipality have consented in writing
to the establishment of the facility.
(b) A detached facility shall not be closer than 50 feet to
a detached facility operated by any other bank and shall not be
closer than 100 feet to the principal office of any other bank,
the measurement to be made in the same manner as provided
above. This paragraph shall not be applicable if the proximity
to the facility or the bank is waived in writing by the other
bank and filed with the application to establish a detached
facility.
(c) A bank is allowed, in addition to other facilities,
part-time deposit-taking locations at elementary and secondary
schools located within the municipality in which the main
banking house or a detached facility is located if they are
established in connection with student education programs
approved by the school administration and consistent with safe,
sound banking practices.
(d) In addition to other facilities, a bank may operate
part-time locations at nursing homes and senior citizen housing
facilities located within the municipality in which the main
banking house or a detached facility is located, if they are
operated in a manner consistent with safe, sound banking
practices.
Sec. 14. Minnesota Statutes 1998, section 47.54,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL ORDER.] If no objection is received by
the commissioner within 21 15 days after the publication and
mailing of the notices, the commissioner shall issue an order
approving the application without a hearing if it is found that
(a) the applicant bank meets current industry standards of
capital adequacy, management quality, and asset condition, (b)
the establishment of the proposed detached facility will improve
the quality or increase the availability of banking services in
the community to be served, and (c) the establishment of the
proposed detached facility will not have an undue adverse effect
upon the solvency of existing financial institutions in the
community to be served. Otherwise, the commissioner shall deny
the application. Any proceedings for judicial review of an
order of the commissioner issued under this subdivision without
a contested case hearing shall be conducted pursuant to the
provisions of the Administrative Procedure Act relating to
judicial review of agency decisions, sections 14.63 to 14.69,
and the scope of judicial review in such proceedings shall be as
provided therein. Nothing herein shall be construed as
requiring the commissioner to conduct a contested case hearing
if no written objection is timely received by the commissioner
from a bank within three miles of the proposed location of the
detached facility.
Sec. 15. Minnesota Statutes 1998, section 47.54,
subdivision 3, is amended to read:
Subd. 3. [OBJECTIONS; HEARING.] If any bank within three
miles of the proposed location of the detached facility objects
in writing within 21 15 days, the commissioner shall consider
the objection. If the objection also requests a hearing, the
objector must include the nature of the issues or facts to be
presented and the reasons why written submissions would be
insufficient to make an adequate presentation to the
commissioner. Comments challenging the legality of an
application should be submitted separately in writing.
Written requests for hearing must be evaluated by the
commissioner who may grant or deny the request. A hearing must
generally be granted only if it is determined that written
submissions would be inadequate or that a hearing would
otherwise be beneficial to the decision-making process. A
hearing may be limited to issues considered material by the
commissioner.
If a request for a hearing has been denied, the
commissioner shall notify the applicant and all interested
persons stating the reasons for denial. Interested parties may
submit to the commissioner with simultaneous copies to the
applicant additional written comments on the application within
14 days after the date of the notice of denial. The applicant
shall be provided an additional seven days after the 14-day
deadline has expired within which to respond to any comments
submitted within the 14-day period. A copy of any response
submitted by the applicant shall also be mailed simultaneously
by the applicant to the interested parties. The commissioner
may waive the additional seven-day comment period if so
requested by the applicant.
Sec. 16. Minnesota Statutes 1998, section 47.59,
subdivision 12, is amended to read:
Subd. 12. [CONSUMER PROTECTIONS.] (a) Financial
institutions shall comply with the requirements of the federal
Truth in Lending Act, United States Code, title 15, sections
1601 to 1693, as the same may be amended from time to time, in
connection with a consumer loan or credit sale for a consumer
purpose where the federal Truth in Lending Act is applicable. A
financial institution shall give the following disclosure to the
borrower in writing at the time an open-end credit account is
established if the financial institution imposes a loan fee,
points, or similar charge that relates to the opening of the
account which is not included in the annual percentage rate
given pursuant to the federal Truth in Lending Act: "YOU HAVE
BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH ARE NOT INCLUDED
IN THE ANNUAL PERCENTAGE RATE. THESE CHARGES MAY BE REFUNDED,
IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR LINE OF CREDIT OR IF
YOU REPAY YOUR LINE OF CREDIT EARLY. THESE CHARGES INCREASE THE
COST OF YOUR CREDIT."
(b) Financial institutions shall comply with the following
consumer protection provisions in connection with a consumer
loan or credit sale for a consumer purpose: sections 325G.02 to
325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to
325G.36, and Code of Federal Regulations, title 12, part 535,
where those statutes or regulations are applicable.
(c) An assignment of a consumer's earnings by the consumer
to a financial institution as payment or as security for payment
of a debt arising out of a consumer loan or consumer credit sale
is unenforceable by the financial institution except where the
assignment: (1) by its terms is revocable at the will of the
consumer; (2) is a payroll deduction plan or preauthorized
payment plan, beginning at the time of the transaction, in which
the consumer authorizes a series of wage deductions as a method
of making each payment; or (3) applies only to wages or other
earnings already earned at the time of the assignment.
Sec. 17. Minnesota Statutes 1998, section 47.60,
subdivision 3, is amended to read:
Subd. 3. [FILING.] Before a person other than a financial
institution as defined by section 47.59 engages in the business
of making consumer small loans, the person shall file with the
commissioner as a consumer small loan lender. The filing must
be on a form prescribed by the commissioner together with a fee
of $150 $250 for each place of business and contain the
following information in addition to the information required by
the commissioner:
(1) evidence that the filer has available for the operation
of the business at the location specified, liquid assets of at
least $50,000; and
(2) a biographical statement on the principal person
responsible for the operation and management of the business to
be certified.
Revocation of the filing and the right to engage in the
business of a consumer small loan lender is the same as in the
case of a regulated lender license in section 56.09.
Sec. 18. [48.056] [REVERSE STOCK SPLIT.]
Subdivision 1. [POWER TO EFFECT.] (a) A banking
institution may effect a reverse stock split by reducing its
outstanding shares of stock if the commissioner finds that the
transaction:
(1) has a legitimate business purpose including, but not
limited to, reducing corporate expenses, simplifying corporate
procedures, or becoming a qualified S corporation under the
Internal Revenue Code of 1986, as amended through December 31,
1998; and
(2) complies with safe and sound banking practices.
(b) The stock reduction is effective upon approval by the
shareholders and the commissioner and filing with the
commissioner and with the secretary of state, of the articles of
amendment to the certificate of incorporation of the banking
institution.
Subd. 2. [FRACTIONAL SHARES.] A banking institution may
issue fractions of a share as a result of a reverse stock split
by reducing its outstanding shares of stock according to this
subdivision. If a banking institution inserts into its
certificate of incorporation a provision prohibiting the issue
of fractions of a share, it shall pay in cash the value of
fractions of a share as of the time when persons entitled to
receive the fractions are determined.
Subd. 3. [PAR VALUE.] Notwithstanding section 300.30, a
banking institution proceeding under this subdivision may divide
its capital into shares greater than $100 each.
Subd. 4. [RIGHTS OF DISSENTING STOCKHOLDERS.] A
stockholder of the banking institution not voting in favor of
the amendment of the certificate of incorporation of the banking
institution to effect a reverse stock split that will impact
upon the stockholder's voting rights in the banking institution
may, at the meeting of the stockholders held on the amendment,
or within 20 days after the meeting, object to the stock
reduction and demand payment for that person's stock. If the
stock reduction takes effect at any time after this demand, the
stockholder may, at any time within 60 days after the demand,
apply to the district court in the county of the banking
institution's principal place of business for the appointment of
three persons to appraise the value of that person's stock. The
court shall appoint the appraisers and designate the time and
place of their first meeting, give directions with regard to
their proceedings the court considers proper, and direct the
time and manner in which payment must be made of the value of
that person's stock to the stockholder. The appraisers shall
meet at the time and place designated, after being duly sworn to
discharge their duties honestly and faithfully, make and certify
a written estimate of the value of the stock at the time of the
appraisal, and deliver one copy to the banking institution and
another to the stockholder. The stockholder and the banking
institution shall each pay one-half of the charges and expenses
of the appraisers.
Sec. 19. Minnesota Statutes 1998, section 48.15,
subdivision 2a, is amended 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 by chapter 50, as of August 1, 1995, for
any state savings bank doing business in this state, or that
become authorized activities, powers, or investments by chapter
50, for state savings banks after August 1, 1995. The
commissioner may not authorize state banks to engage in any
banking activity prohibited by the laws of this state.
Sec. 20. Minnesota Statutes 1998, section 48.15,
subdivision 3, is amended to read:
Subd. 3. [LIMITS ON AUTHORITY TO ACT AS PAYING AGENT FOR
PUBLIC ISSUERS.] No such bank shall act as paying agent of any
municipality or other public issuer of obligations, other than
an issuer within whose corporate limits the principal office of
the bank is situated, unless the bank is authorized to execute
the powers conferred in section 48.38 48A.07.
Sec. 21. Minnesota Statutes 1998, section 48.24,
subdivision 7, is amended to read:
Subd. 7. Obligations of any person, copartnership, limited
liability company, association, or corporation individual or
organization, however organized, in the form of notes or drafts
secured by shipping documents or instruments transferring or
securing title covering feeder livestock which is free from all
other encumbrances, when the market value of the livestock
securing the obligation at the time of the making of the loan is
not less than 115 percentum of the face amount of the notes
covered by such documents, shall be subject under this
subdivision to a limitation of 20 percent of capital and surplus
in addition to 20 percent of capital and surplus as included in
provisions of subdivision 1. Feeder livestock loans as referred
to in this subdivision is defined to include only obligations
secured by liens or giving title to cattle, sheep, goats, hogs
or poultry being fattened for market, but excluding dairy
cattle, milk goats, poultry used for production of eggs, or
barnyard or work animals.
Sec. 22. Minnesota Statutes 1998, section 48.24, is
amended by adding a subdivision to read:
Subd. 10. [GRAIN FORWARD SALE CONTRACTS; LENDING
LIMITS.] Obligations of any individual or organization, however
organized, where the note is secured by a perfected first lien
on stored grain and a perfected assignment of the proceeds of a
forward contract for sale of the grain (1) with a recognized
commodity buyer or broker, reasonably satisfactory to the bank,
(2) where the delivery of grain under the contract will occur
within 270 days, (3) where the grain is insured for full value
against loss by fire or other casualty, and (4) where the value
of the forward contract exceeds 115 percent of the face amount
of the secured note, is subject under this subdivision to a
limitation of ten percent of capital and surplus in addition to
the 20 percent of capital and surplus as included in subdivision
1.
Sec. 23. Minnesota Statutes 1998, section 48A.15,
subdivision 1, is amended to read:
Subdivision 1. [AUTHORIZATION.] A trust company organized
under the laws of this state or a state bank and trust may,
after completing the notification procedure required by this
subdivision, establish and maintain a trust service office at
any office in this state or of any other state or national
bank. A state bank may, after completing the notification
procedure required by this subdivision, permit a trust company
organized under the laws of this state or a state bank and trust
or a national bank in this state that is authorized to exercise
trust powers to establish and maintain a trust service office at
any of its banking offices.
The trust company or state bank and trust and a state bank
at which a trust service office is to be established according
to this section shall jointly file, on forms provided by the
commissioner, a notification of intent to establish a trust
service office. The notification must be accompanied by a
filing fee of $100 payable to the commissioner, to be deposited
in the general fund of the state. No trust service office shall
be established according to this section if disallowed by order
of the commissioner within 45 30 days of the filing of a
complete and acceptable notification of intent to establish a
trust service office. An order of the commissioner to disallow
the establishment of a trust service office under this section
is subject to judicial review under sections 14.63 to 14.69.
Sec. 24. Minnesota Statutes 1998, section 49.36,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENTS.] This consolidation or
merger agreement and certified copy of the proceedings of the
meetings of the respective boards of directors, at which the
making of the agreement was authorized, must be submitted to the
commissioner of commerce for approval with a fee of $250 $2,000
payable to the commissioner of commerce. The agreement shall
not be effective until so approved by the commissioner. The
commissioner shall take action after the documents are
submitted, and is entitled to further information from any party
to the transaction as may be requested by the commissioner, or
as may be obtained upon a hearing directed by the commissioner.
Sec. 25. Minnesota Statutes 1998, section 52.01, is
amended to read:
52.01 [ORGANIZATION.]
Any seven residents of the state may apply to the
commissioner of commerce for permission to organize a credit
union.
A credit union is a cooperative society, incorporated for
the twofold purpose of promoting thrift among its members and
creating a source of credit for them at legitimate rates of
interest for provident purposes.
A credit union is organized in the following manner:
(1) The applicants execute, in duplicate, a certificate of
organization by the terms of which they agree to be bound, which
shall state:
(a) the name and location of the proposed credit union;
(b) the names and addresses of the subscribers to the
certificate and the number of shares subscribed by each;
(2) The applicants submit the following in the form
prescribed by the commissioner of commerce:
(a) a statement of the common bond of the proposed credit
union;
(b) the number of potential members;
(c) the geographic dispersion of the potential members;
(d) evidence of interest, including willingness of
potential members to assume responsibility for leadership and
service;
(e) a two-year forecast of probable levels of assets,
shares and deposits, and income and expense;
(f) the availability of other credit union services to the
potential members;
(g) other information the commissioner requires;
(3) They next prepare and adopt bylaws for the general
governance of the credit union consistent with the provisions of
this chapter, and execute them in duplicate;
(4) The certificate and the bylaws, both executed in
duplicate, are forwarded to the commissioner of commerce with a
$100 application fee $1,000 application fee, which may be waived
by the commissioner for a credit union to be located in a low-
or moderate-income area as defined in Code of Federal
Regulations, title 12, part 25(1), (n)(1) and (n)(2) and where
no other depository institution operates an office;
(5) The commissioner of commerce shall, within 60 days of
the receipt of the certificate, the information required by
paragraph (2), and the bylaws determine whether they comply with
the provisions of this chapter, and whether or not the
organization of the credit union in question would benefit its
members, be economically feasible, and be consistent with the
purposes of this chapter;
(6) Thereupon the commissioner of commerce shall notify the
applicants of the decision. If it is favorable, the
commissioner shall upon receipt of a commitment for insurance of
accounts as required by section 52.24, subdivision 2, issue a
certificate of approval, attached to the duplicate certificate
of organization, and return them with the duplicate bylaws to
the applicants. If it is unfavorable, the applicants may,
within 60 days after the decision, appeal for a review in a
court of competent jurisdiction;
(7) The applicants shall thereupon file the duplicate of
the certificate of organization, with the certificate of
approval attached thereto, with the secretary of state, who
shall make a record of the certificate and return it, with a
certificate of record attached thereto, to the commissioner of
commerce for permanent records; and
(8) Thereupon the applicants shall be a credit union
incorporated in accordance with the provisions of this chapter.
In order to simplify the organization of credit unions, the
commissioner of commerce shall prepare approved forms of
certificate of organization and bylaws, consistent with this
chapter, which may be used by credit union incorporators for
their guidance, and on written application of seven residents of
the state, shall supply them without charge with a blank
certificate of organization and a copy of the form of suggested
bylaws.
Sec. 26. Minnesota Statutes 1998, section 52.05,
subdivision 2, is amended to read:
Subd. 2. [APPLICATION.] Any 25 15 persons representing a
group may apply to the commissioner, advising the commissioner
of the common bond of the group and its number of potential
members, for a determination whether it is feasible for the
group to form a credit union. Upon a determination that it is
not feasible to organize because the number of potential members
is too small, the applicants will be certified by the
commissioner as eligible to petition for membership in an
existing credit union capable of serving the group. If the
credit union so petitioned resolves to accept the group into
membership, it shall follow the bylaw amendment and approval
procedure set forth in section 52.02.
The commissioner shall adopt rules to implement this
subdivision. These rules must provide that:
(1) for the purpose of this subdivision, groups with a
potential membership of less than 1,500 will be considered too
small to be feasible as a separate credit union, unless there
are compelling reasons to the contrary, relevant to the
objectives of this subdivision;
(2) groups with a potential membership in excess of 1,500
will be considered in light of all circumstances relevant to the
objectives of this subdivision; and
(3) all group applications, except for applications from
groups made up of members of existing credit unions or groups
made up of people who have a common employer which qualifies
them for membership in an existing credit union, will be
considered separately from any consideration of the membership
provisions of existing credit unions; except that, groups made
up of members of an existing credit union may be certified under
this subdivision with the agreement of the credit union.
Sec. 27. [52.212] [SENIOR CITIZEN LOCATIONS.]
In addition to its primary member location, a credit union
may operate part-time locations in nursing homes and senior
citizen housing facilities if they are operated in a manner
consistent with safe and sound practices.
Sec. 28. Minnesota Statutes 1998, section 53.03,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION, FEE, NOTICE.] Any corporation
hereafter organized as an industrial loan and thrift company,
shall, after compliance with the requirements set forth in
sections 53.01 and 53.02, file a written application with the
department of commerce for a certificate of authorization. A
corporation that will not sell or issue thrift certificates for
investment as permitted by this chapter need not comply with
subdivision 2b. The application must be in the form prescribed
by the department of commerce. The application must be made in
the name of the corporation, executed and acknowledged by an
officer designated by the board of directors of the corporation,
requesting a certificate authorizing the corporation to transact
business as an industrial loan and thrift company, at the place
and in the name stated in the application. At the time of
filing the application the applicant shall pay a $1,000 filing
fee and a $500 investigation fee $1,500 filing fee if the
corporation will not sell or issue thrift certificates for
investment, and a filing fee of $8,000 if the corporation will
sell or issue thrift certificates for investment. The fees must
be turned over by the commissioner to the state treasurer and
credited to the general fund. The applicant shall also submit a
copy of the bylaws of the corporation, its articles of
incorporation and all amendments thereto at that time. An
application for powers under subdivision 2b must also require
that a notice of the filing of the application must be published
once within 30 days of the receipt of the form prescribed by the
department of commerce, at the expense of the applicant, in a
qualified newspaper published in the municipality in which the
proposed industrial loan and thrift company is to be located,
or, if there be none, in a qualified newspaper likely to give
notice in the municipality in which the company is proposed to
be located. If the department of commerce receives a written
objection to the application from any person within 21 15 days
of the notice having been fully published, the commissioner
shall proceed in the same manner as required under section
46.041, subdivisions 3 and 4, relating to state banks.
Sec. 29. Minnesota Statutes 1998, section 53.03,
subdivision 6, is amended to read:
Subd. 6. [AMENDED CERTIFICATES, THRIFT CERTIFICATES FOR
INVESTMENT, APPLICATION, FEE, NOTICE.] Upon approval by the
commissioner of commerce of a commitment for insurance or
guarantee of certificates to be held for investment as required
in section 53.10, subdivision 3, an industrial loan and thrift
company may apply to the department of commerce for an amended
certificate of authorization and consent to sell and issue
thrift certificates for investment.
The application, in triplicate, must be in the form
prescribed by the department of commerce and filed in its
office. At the time of filing the application, the applicant
shall pay a filing fee of $500 $8,000 and if an application is
contested, 50 percent of an additional fee equal to the actual
costs incurred by the department of commerce in approving or
disapproving the application, payable to the state treasurer and
credited by the treasurer to the general fund, must be paid by
the applicant and 50 percent equally by the intervening
parties. A notice of the filing of the application must be
published once within 30 days of the receipt of the form
prescribed by the department of commerce, at the expense of the
applicant, in a newspaper published in the municipality in which
the place of business under the application is located, or if
there is none, in a newspaper published at the county seat of
the county in which the place of business is located. Not more
than one place of business maintained under a certificate of
authorization may be the subject of an application.
Sec. 30. Minnesota Statutes 1998, section 53.03,
subdivision 7, is amended to read:
Subd. 7. [OBJECTION TO APPLICATION.] Upon receiving
written objection to the application from any person within 20
15 days of the notice having been fully published, the
department of commerce shall order a contested case hearing to
be conducted on the application.
Sec. 31. Minnesota Statutes 1998, section 55.04,
subdivision 2, is amended to read:
Subd. 2. [APPLICATION FOR LICENSE.] Application for
license shall be in writing, under oath, and in the form
prescribed by the commissioner of commerce, and contain the name
and address, both of the residence and place of business, of the
applicant, and if the applicant is a partnership or
unincorporated association, of every member thereof, and if a
corporation, of each officer and director thereof; also the
county and municipality, with street and number, if any, where
the business is to be conducted; and further information the
commissioner of commerce requires. The applicant at the time of
making application shall pay to the commissioner the sum of $250
as a fee for investigating the application, and the additional
sum of $150 as an annual license fee for a period terminating on
the last day of the current calendar year. If the application
is filed after June 30 in any year the additional sum shall be
only $75.
Sec. 32. Minnesota Statutes 1998, section 56.02, is
amended to read:
56.02 [APPLICATION FEE.]
Application for license shall be in writing, under oath,
and in the form prescribed by the commissioner, and contain the
name and the address, both of the residence and place of
business, of the applicant and, if the applicant is a
copartnership or association, of every member thereof, and if a
corporation, of each officer and director thereof; also the
county and municipality, with street and number, if any, where
the business is to be conducted, and such further information as
the commissioner may require. The applicant at the time of
making application, shall pay to the commissioner the sum of
$250 $500 as a fee for investigating the application, and the
additional sum of $150 $250 as an annual license fee for a
period terminating on the last day of the current calendar year;
provided, that if the application is filed after June 30 in any
year the additional sum shall be only $75. In addition to the
annual license fee, every licensee hereunder shall pay to the
commissioner the actual costs of each examination, as provided
for in section 56.10. All moneys collected by the commissioner
under this chapter shall be turned over to the state treasurer
and credited by the treasurer to the general fund of the state.
Every applicant shall also prove, in form satisfactory to
the commissioner, that the applicant has available for the
operation of the business at the location specified in the
application, liquid assets of at least $50,000.
Sec. 33. Minnesota Statutes 1998, section 56.131,
subdivision 1, is amended to read:
Subdivision 1. [INTEREST RATES AND CHARGES.] (a) On any
loan in a principal amount not exceeding $100,000 or 15 percent
of a Minnesota corporate licensee's capital stock and surplus as
defined in section 53.015, if greater, a licensee may contract
for and receive interest, finance charges, and other charges as
provided in section 47.59.
(b) Loans may be interest-bearing or precomputed.
(c) Notwithstanding section 47.59 to the contrary, to
compute time on interest-bearing and precomputed loans,
including, but not limited to the calculation of interest, a day
is considered 1/30 of a month when calculation is made for a
fraction of a calendar month. A year is 12 calendar months. A
calendar month is that period from a given date in one month to
the same numbered date in the following month, and if there is
no same numbered date, to the last day of the following month.
When a period of time includes a whole month and a fraction of a
month, the fraction of a month is considered to follow the whole
month.
In the alternative, for interest-bearing loans, a licensee
may charge interest at the rate of 1/365 of the agreed annual
rate for each actual day elapsed.
(d) With respect to interest-bearing loans and
notwithstanding section 47.59:
(1) Interest must be computed on unpaid principal balances
outstanding from time to time, for the time outstanding. Each
payment must be applied first to the accumulated interest and
the remainder of the payment applied to the unpaid principal
balance; provided however, that if the amount of the payment is
insufficient to pay the accumulated interest, the unpaid
interest continues to accumulate to be paid from the proceeds of
subsequent payments and is not added to the principal balance.
(2) Interest must not be payable in advance or compounded.
However, if part or all of the consideration for a new loan
contract is the unpaid principal balance of a prior loan, then
the principal amount payable under the new loan contract may
include any unpaid interest which has accrued. The unpaid
principal balance of a precomputed loan is the balance due after
refund or credit of unearned interest as provided in paragraph
(e), clause (3). The resulting loan contract is deemed a new
and separate loan transaction for all purposes.
(e) With respect to precomputed loans and notwithstanding
section 47.59 to the contrary:
(1) Loans must be repayable in substantially equal and
consecutive monthly installments of principal and interest
combined, except that the first installment period may be more
or less than one month by not more than 15 days, and the first
installment payment amount may be larger than the remaining
payments by the amount of interest charged for the extra days
and must be reduced by the amount of interest for the number of
days less than one month to the first installment payment; and
monthly installment payment dates may be omitted to accommodate
borrowers with seasonal income.
(2) Payments may be applied to the combined total of
principal and precomputed interest until the loan is fully
paid. Payments must be applied in the order in which they
become due.
(3) If the maturity of the loan is accelerated for any
reason and judgment is entered, the licensee shall credit the
borrower with the same refund as if prepayment in full had been
made on the date the judgment is entered.
(4) Following the final installment as originally scheduled
or deferred, the licensee, for any loan contract which has not
previously been converted to interest-bearing under clause
(7) paragraph (g), may charge interest on any balance remaining
unpaid, including unpaid default or deferment charges, at the
single annual percentage rate permitted by this subdivision
until fully paid.
(5) With respect to a loan secured by an interest in real
estate, and having a maturity of more than 60 months, the
original schedule of installment payments must fully amortize
the principal and interest on the loan. The original schedule
of installment payments for any other loan secured by an
interest in real estate must provide for payment amounts that
are sufficient to pay all interest scheduled to be due on the
loan.
(6) (f) A licensee may contract for and collect a
delinquency charge as provided for in section 47.59, subdivision
6, paragraph (a), clause (4).
(7) (g) A licensee may grant extensions, deferments, or
conversions to interest-bearing as provided in section 47.59,
subdivision 5.
Sec. 34. Minnesota Statutes 1998, section 58.04,
subdivision 1, is amended to read:
Subdivision 1. [RESIDENTIAL MORTGAGE ORIGINATOR LICENSING
REQUIREMENTS.] (a) Beginning August 1, 1999, no person shall act
as a residential mortgage originator, or make residential
mortgage loans without first obtaining a license from the
commissioner according to the licensing procedures provided in
this chapter.
(b) The following persons are exempt from the residential
mortgage originator licensing requirements:
(1) an employee of one mortgage originator licensee or one
person holding a certificate of exemption;
(2) a person engaged solely in commercial mortgage
activities;
(3) a person licensed as a real estate broker under chapter
82, and an individual licensee who is licensed to the broker if:
(i) the individual licensee acts only under the name,
authority, and supervision of the broker to whom the licensee is
licensed;
(ii) the broker obtains a certificate of exemption
according to section 58.05, subdivision 2;
(iii) the broker does not collect an advance fee for its
residential mortgage-related activities; and
(iv) the residential mortgage origination activities are
incidental to the real estate licensee's primary activities as a
real estate broker or salesperson;
(4) an individual licensed as a property/casualty or
life/health insurance agent under chapter 60K if:
(i) the insurance agent acts on behalf of only one
residential mortgage originator, which is in compliance with
chapter 58;
(ii) the insurance agent has entered into a written
contract with the mortgage originator under the terms of which
the mortgage originator agrees to accept responsibility for the
insurance agent's residential mortgage-related activities;
(iii) the insurance agent obtains a certificate of
exemption under section 58.05, subdivision 2; and
(iv) the insurance agent does not collect an advance fee
for the insurance agent's residential mortgage-related
activities;
(5) a person making no more than five residential mortgage
loans with its own funds, during any 12-month period;
(5) (6) a financial institution as defined in section
58.02, subdivision 10;
(6) (7) an agency of the federal government, or of a state
or municipal government;
(7) (8) an employee or employer pension plan making loans
only to its participants;
(8) (9) a person acting in a fiduciary capacity, such as a
trustee or receiver, as a result of a specific order issued by a
court of competent jurisdiction; or
(9) (10) a person exempted by order of the commissioner.
Sec. 35. Minnesota Statutes 1998, section 58.06,
subdivision 2, is amended to read:
Subd. 2. [APPLICATION CONTENTS.] The application must
contain the name and complete business address or addresses of
the license applicant. If the license applicant is a
partnership, limited liability partnership, association, limited
liability company, corporation, or other form of business
organization, the application must contain the names and
complete business addresses of each partner, member, director,
and principal officer. The application must also include a
description of the activities of the license applicant, in the
detail and for the periods the commissioner may require. The
application must also include all of the following:
(a) an affirmation under oath that the applicant:
(1) will maintain competent staff and adequate staffing
levels, through direct employees or otherwise, to meet the
requirements of this chapter;
(2) will advise the commissioner of any material changes to
the information submitted in the most recent application within
ten days of the change;
(3) will advise the commissioner in writing immediately of
any bankruptcy petitions filed against or by the applicant or
licensee;
(4) is financially solvent and in compliance with net worth
requirements;
(5) complies with federal and state tax laws;
(6) complies with sections 345.31 to 345.60, the Minnesota
unclaimed property law; and
(7) is, or that a person in control of the license
applicant is, at least 18 years of age;
(b) information as to the mortgage lending, servicing, or
brokering experience of the applicant and persons in control of
the applicant;
(c) information as to criminal convictions, excluding
traffic violations, of persons in control of the license
applicant;
(d) whether a court of competent jurisdiction has found
that the applicant or persons in control of the applicant have
engaged in conduct evidencing gross negligence, fraud,
misrepresentation, or deceit in performing an act for which a
license is required under this chapter;
(e) whether the applicant or persons in control of the
applicant have been the subject of: an order of suspension or
revocation, cease and desist order, or injunctive order, or
order barring involvement in an industry or profession issued by
this or another state or federal regulatory agency or by the
Secretary of Housing and Urban Development within the ten-year
period immediately preceding submission of the application; and
(f) other information required by the commissioner.
Sec. 36. Minnesota Statutes 1998, section 58.08,
subdivision 1, is amended to read:
Subdivision 1. [REQUIREMENT OF RESIDENTIAL MORTGAGE
ORIGINATORS.] A residential mortgage originator
licensee engaging in servicing a residential mortgage loan shall
continuously maintain a surety bond or irrevocable letter of
credit in an amount not less than $50,000 in a form approved by
the commissioner, issued by an insurance company or bank
authorized to do so in this state. The bond must be available
for the recovery of expenses, fines, and fees levied by the
commissioner under this chapter relating to servicing, and for
losses or damages incurred by borrowers as the result of a
licensee's servicing-related noncompliance with the requirements
of this chapter, sections 325D.43 to 325D.48, and 325F.67 to
325F.69, or breach of contract.
The bond or irrevocable letter of credit must be submitted
with the originator's license application, and evidence of
continued coverage must be submitted with each renewal. Any
change in the bond or letter of credit must be submitted for
approval by the commissioner, within ten days of its execution.
Sec. 37. Minnesota Statutes 1998, section 59A.03,
subdivision 2, is amended to read:
Subd. 2. The applicant at the time of making application,
shall pay to the commissioner the sum of $250 as a fee for
investigating the application, and the additional sum
of $100 $200 as an annual licensee fee for a period terminating
on May 31 of each year. In addition to the annual license fee,
every licensee shall pay to the commissioner the actual costs of
each examination as may be required to be conducted under the
terms of sections 59A.01 to 59A.15.
Sec. 38. Minnesota Statutes 1998, section 60K.11,
subdivision 1, is amended to read:
Subdivision 1. [GROUNDS.] The commissioner may by order
take any or all of the following actions:
(1) deny, suspend, or revoke an insurance agent or agency
license;
(2) censure the licensee; or
(3) impose a civil penalty as provided for in section
45.027, subdivision 6.
In order to take this action the commissioner must find
that the order is in the public interest and that the
applicant,; licensee,; or in the case of an insurance agency,
partner, director, shareholder, officer, or agent of that
insurance agency:
(i) does not intend to or is not in good faith carrying on
the business of an insurance agent;
(ii) has filed an application for a license which is
incomplete in any material respect or contains any statement
which, in light of the circumstances under which it is made,
contains any misrepresentation, or is false, misleading, or
fraudulent;
(iii) has engaged in an act or practice, whether or not
such act or practice involves the business of insurance, which
demonstrates that the applicant or licensee is untrustworthy,
financially irresponsible, or otherwise incompetent or
unqualified to act as an insurance agent or agency;
(iv) has pled guilty, with or without explicitly admitting
guilt, pled nolo contendere, or been convicted of a felony,
gross misdemeanor, or misdemeanor involving moral turpitude,
including, but not limited to, assault or similar conduct;
(v) has violated or failed to comply with any of the
provisions of the insurance laws including chapter 45 or
chapters 60A to 72A or any rule or order under those chapters;
(vi) is permanently or temporarily enjoined by any court of
competent jurisdiction from engaging in or continuing any
conduct or practice involving any aspect of the insurance
business;
(vii) has violated or failed to comply with any order of
the insurance regulator of any other state or jurisdiction;
(viii) has had an insurance agent or agency license denied,
suspended, or revoked, has been censured or reprimanded, has
been the subject of any other discipline imposed by, or has paid
or has been required to pay a monetary penalty or fine to,
another state or jurisdiction;
(ix) has misrepresented the terms of any actual or proposed
insurance contract;
(x) has engaged in any fraudulent, coercive, deceptive, or
dishonest act or practice whether or not such act or practice
involves the business of insurance;
(xi) has improperly withheld, misappropriated, or converted
to the licensee's or applicant's own use any money belonging to
a policyholder, insurer, beneficiary, or other person; or
(xii) has forged another's name to any document whether or
not the document relates to an application for insurance or a
policy of insurance; or
(xiii) has, while performing residential mortgage activity
regulated under chapter 58, violated any notification,
disclosure, or recordkeeping requirement, or any standard of
conduct, imposed by chapter 58.
Sec. 39. Minnesota Statutes 1998, section 118A.01,
subdivision 2, is amended to read:
Subd. 2. [GOVERNMENT ENTITY.] "Government entity" means a
county, city, town, school district, hospital district, public
authority, public corporation, public commission, special
district, any other political subdivision, except an entity
whose investment authority is specified under chapter 11A or
356A.
For the purposes of sections 118A.02 and 118A.03 only, the
term includes an American Indian tribal government entity
located within a federally recognized American Indian
reservation.
Sec. 40. Minnesota Statutes 1998, section 168.67, is
amended to read:
168.67 [SALES FINANCE COMPANY; LICENSE, FEES, REFUND.]
(a) No person shall engage in the business of a sales
finance company in this state without a license therefor as
provided in sections 168.66 to 168.77 provided, however, that no
bank, trust company, savings bank, savings association, or
credit union, whether state or federally chartered, industrial
loan and thrift company, or licensee under the Minnesota
Regulated Loan Act authorized to do business in this state shall
be required to obtain a license under sections 168.66 to 168.77.
(b) The application for a license shall be in writing,
under oath and in the form prescribed by the administrator. The
application shall contain the name of the applicant; date of
incorporation, if incorporated; the address where the business
is or is to be conducted and similar information as to any
branch office of the applicant; the name and resident address of
the owner or partners, or, if a corporation or association, of
the directors, trustees and principal officers, and other
pertinent information the administrator requires.
(c) The licensee fee for the fiscal year beginning July 1
and ending June 30 of the following year, or any part thereof
shall be the sum of $150 $250 for the principal place of
business of the licensee, and the sum of $75 $125 for each
branch of the licensee, maintained in this state. Any licensee
who proves to the satisfaction of the administrator, by
affidavit or other proof satisfactory to the administrator, that
during the 12 calendar months of the immediately preceding
fiscal year, for which the license has been paid that the
licensee has not held retail installment contracts exceeding
$15,000 in amount, shall be entitled to a refund of that portion
of each license fee paid in excess of $25. The administrator
shall certify to the commissioner of finance that the licensee
is entitled to a refund, and payment thereof shall be made by
the state treasurer. The amount necessary to pay for the
refundment of the license fee is appropriated out of the general
fund. All license fees received by the administrator under
sections 168.66 to 168.77 shall be deposited with the state
treasurer.
(d) Each license shall specify the location of the office
or branch and must be conspicuously displayed there. In case
the location be changed, the administrator shall endorse the
change of location on the license.
(e) Upon the filing of such application, and the payment of
the fee, the administrator shall issue a license to the
applicant to engage in the business of a sales finance company
under and in accordance with the provisions of sections 168.66
to 168.77 for a period which shall expire the last day of June
next following the date of its issuance. The license shall not
be transferable or assignable. No licensee shall transact any
business provided for by sections 168.66 to 168.77 under any
other name.
Sec. 41. Minnesota Statutes 1998, section 168.71, is
amended to read:
168.71 [MOTOR VEHICLE RETAIL INSTALLMENT CONTRACT.]
(a)(1) Every retail installment contract shall be in
writing, shall contain all the agreements of the parties, shall
be signed by the retail buyer and seller, and a copy signed by
the retail buyer shall be furnished to such retail buyer at the
time the retail buyer executes the contract. The copy signed by
both the retail buyer and retail seller shall be provided to the
retail buyer within seven days after delivery of the vehicle.
With respect to any contract executed prior to August 1, 1996,
which has not been paid in full by the retail buyer, the retail
seller shall provide such retail buyer a copy signed by both the
retail buyer and retail seller within 120 days after August 1,
1996.
(2) No provisions for confession of judgment or power of
attorney therefor contained in any retail installment contract
or contained in a separate agreement relating thereto, shall be
valid or enforceable.
(3) The holder of a precomputed retail installment contract
may, if the contract so provides, collect a delinquency and
collection charge on each installment in arrears for a period
not less than ten days in an amount not in excess of five
percent of each installment or $5, whichever is greater. In
addition to such delinquency and collection charge, the retail
installment contract, whether interest-bearing or precomputed,
may provide for the payment of attorneys' fees not exceeding 15
percent of the amount due and payable under such contract where
such contract is referred to an attorney not a salaried employee
of the holder of the contract for collection plus the court
costs.
(4) Unless written notice has been given to the retail
buyer of actual or intended assignment of a retail installment
contract, payment thereunder or tender thereof made by the
retail buyer to the last known holder of such contract shall be
binding upon all subsequent holders or assignees.
(5) Upon written request from the retail buyer, the holder
of the retail installment contract shall give or forward to the
retail buyer a written statement of the dates and amounts of
payments and the total amount unpaid under such contract. A
retail buyer shall be given a written receipt for any payment
when made in cash.
(b) The retail installment contract shall contain the
following items:
(1) the cash sale price of the motor vehicle which is the
subject matter of the retail installment contract;
(2) the total amount of the retail buyer's down payment,
whether made in money or goods, or partly in money or partly in
goods;
(3) the difference between items one and two;
(4) the charge, if any, included in the transaction to pay
the balance of an existing purchase money motor vehicle lien
which exceeds the value of the trade-in amount, or for any
insurance and other benefits not included in clause (1),
specifying the types of coverage and taxes, fees, and charges
that actually are or will be paid to public officials or
government agencies, including those for perfecting, releasing,
or satisfying a security interest if such taxes, fees, or
charges are not included in clause (1);
(5) principal balance, which is the sum of items three and
four;
(6) the amount of the finance charge;
(7) the total of payments payable by the retail buyer to
the retail seller and the number of installment payments
required and the amount of each installment expressed in dollars
or percentages, and date of each payment necessary finally to
pay the total of payments which is the sum of item five and item
six.
Provided, however, that said items one to seven inclusive
need not be stated in the terms, sequence or order set forth
above. Provided further, that clauses (6) and (7) may be
disclosed on the assumption that all scheduled payments under
the contract will be made when due.
In lieu of the above clauses, the retail seller may give
the retail buyer disclosures which satisfy the requirements of
the Federal Truth-In-Lending Act in effect as of the time of the
contract, notwithstanding whether or not that act applies to the
transaction.
(c) Every retail seller or sales finance company, if a
charge for insurance on the motor vehicle is included in a
retail installment contract shall within 30 days after execution
of the retail installment contract send or cause to be sent to
the retail buyer a policy or policies or certificate of
insurance, which insurance shall be written by a company
authorized to do business in this state, clearly setting forth
the amount of the premium, the kind or kinds of insurance and
the scope of the coverage and all the terms, exceptions,
limitations, restrictions and conditions of the contract or
contracts of the insurance. The buyer of a motor vehicle under
a retail installment contract shall have the privilege of
purchasing such insurance from an agent or broker of the buyer's
own selection and selecting an insurance company mutually
acceptable to the seller and the buyer; provided, however, that
the inclusion of the cost of the insurance premium in the retail
installment contract when the buyer selects the agent, broker or
company, shall be optional with the seller.
(d) Any sales finance company hereunder may purchase or
acquire from any retail seller any retail installment contract
on such terms and conditions as may be mutually agreed upon
between them.
(e) An acknowledgment by the retail buyer of the delivery
of any such copy or notice as required in subsection (a)
contained in the body of the statement or contract shall be
conclusive proof of delivery in any action or proceeding by or
against any assignee of a retail installment contract.
Sec. 42. Minnesota Statutes 1998, section 303.25,
subdivision 5, is amended to read:
Subd. 5. [SOLICITATION OF BUSINESS.] A foreign trust
association may not maintain an office within this state, but it
may solicit business within this state if banking or trust
associations or corporations organized under the laws of this
state or national banking associations maintaining their
principal offices in this state may solicit business in the
state in which the foreign trust association maintains its
principal office. For purposes of this subdivision,
solicitation of business includes the activities authorized for
state or national banking associations exercising fiduciary
powers maintaining their principal offices in this state
considered a representative trust office established under
section 48.476 48A.14. A foreign trust association must follow
the procedures in section 48A.18 to establish a trust office and
the procedures in section 48A.19 to establish a representative
trust office.
Sec. 43. Minnesota Statutes 1998, section 332.15,
subdivision 2, is amended to read:
Subd. 2. [LICENSE FOR EACH LOCATION.] Each person
operating a debt prorating service shall obtain a license for
each location and place of business, including each branch
office. Such person shall submit a separate application for
each place of business. The full license fee shall be payable
only for one such place of business. For each additional place
of business the license fee shall be $25 $100.
Sec. 44. Minnesota Statutes 1998, section 332.15,
subdivision 3, is amended to read:
Subd. 3. [FEES.] Each applicant, at the time of making
such application, shall pay to the commissioner the sum of $50
$100 as a fee for investigation of the applicant, and the
additional sum of $100 $250 as a license fee. If the
application is denied, said license fee shall be returned to the
applicant.
Sec. 45. Minnesota Statutes 1998, section 332.17, is
amended to read:
332.17 [RENEWAL OF LICENSE.]
Each licensee under the provisions of sections 332.12 to
332.29 shall, not more than 60 nor less than 30 days before its
license is to expire, make application to the commissioner for
renewal of its license. Such application for renewal shall be
on a form prescribed by the commissioner and shall be
accompanied by payment of the sum of $25 as a fee for
investigation of the renewal applicant, the additional sum of
$100 $250 as a license fee, and a bond as required in the case
of an original application. The commissioner may investigate
the licensee and determine its continued fitness as in the case
of an original application. If the commissioner shall renew the
license, said renewal shall be effective for one year from the
date on which the previous license expired.
Sec. 46. Minnesota Statutes 1998, section 332.30, is
amended to read:
332.30 [ACCELERATED MORTGAGE PAYMENT PROVIDER; BOND
REQUIREMENTS.]
(a) Before beginning business in this state, an accelerated
mortgage payment provider, as defined in section 332.13,
subdivision 2, clause (10), shall submit to the commissioner of
commerce an authorization fee of $250 and either:
(1) a surety bond in which the accelerated mortgage payment
provider is the obligor, in an amount determined by the
commissioner; or
(2) if the commissioner agrees to accept it, a deposit:
(i) in cash in an amount equivalent to the bond amount; or
(ii) of authorized securities, as defined in section 50.14,
with an aggregate market value equal to the bond amount. The
cash or securities must be deposited with the state treasurer.
(b) The amount of the bond required by the commissioner
shall vary with the amount of Minnesota client funds held or to
be held by the obligor. For new businesses, the bond must be no
less than $100,000, except as provided in section 332.301. The
commissioner may increase the required bond amount upon 30 days'
notice to the accelerated mortgage payment provider.
(c) If a bond is submitted, it must name as surety an
insurance company authorized to transact fidelity and surety
business in this state. The bond must run to the state of
Minnesota for the use of the state and of any person who may
have a claim against the obligor arising out of the obligor's
activities as an accelerated mortgage payment provider. The
bond must be conditioned that the obligor will not commit any
fraudulent act and will faithfully conform to and abide by the
provisions of accelerated mortgage payment agreements with
Minnesota residents.
If an accelerated mortgage payment provider has failed to
account to a mortgagor or distribute funds to the mortgagee as
required by an accelerated mortgage payment agreement, the
mortgagor or the mortgagor's legal representative or receiver or
the commissioner shall have, in addition to any other legal
remedies, a right of action in the name of the debtor on the
bond or the security given pursuant to this section.
Sec. 47. [334.21] [MOTOR VEHICLE LEASE AGREEMENTS.]
A motor vehicle lease agreement may include the outstanding
balance from a prior motor vehicle loan or lease.
Sec. 48. [CHISAGO LAKES TOWNSHIP; DETACHED BANKING
FACILITY.]
With the prior approval of the commissioner of commerce, a
bank operating its principal office in Marine on St. Croix may
establish and maintain not more than one detached facility in
Chisago Lakes township. A bank desiring to establish such a
detached facility must follow the approval procedure prescribed
in Minnesota Statutes, section 47.54. The establishment of a
detached facility under this section is subject to Minnesota
Statutes, sections 47.51 to 47.57, except to the extent those
sections are inconsistent with this section.
Sec. 49. [REPEALER.]
(a) Minnesota Statutes 1998, section 47.20, subdivision 14,
is repealed.
(b) Minnesota Statutes 1998, section 58.07, is repealed.
Sec. 50. [EFFECTIVE DATE.]
Sections 1 to 7, 14, 15, 17, 23 to 25, 28 to 32, 37, 40,
and 43 to 46 are effective July 1, 1999. Sections 11 and 49,
paragraph (a), are effective July 29, 1999. Section 48 takes
effect the day after compliance by the governing body of Chisago
Lakes township with Minnesota Statutes, section 645.021,
subdivision 3. Sections 8 to 10, 12, 13, 16, 18, 19, 20 to 22,
26, 27, 33, 35, 36, 41, 42, 47, and 49, paragraph (b), are
effective the day following final enactment.
Presented to the governor May 10, 1999
Signed by the governor May 13, 1999, 1:13 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes