Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

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.