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

                            CHAPTER 56-H.F.No. 1084 
                  An act relating to financial institutions; modifying 
                  investment authority and recordkeeping requirements; 
                  regulating certain rates, charges, fees, and 
                  disclosures; exempting certain unstaffed after-hour 
                  drop boxes from detached facilities regulation; 
                  amending Minnesota Statutes 2000, sections 47.10, 
                  subdivision 1; 47.51; 48.03, subdivisions 1 and 2; 
                  48.16; 48.61, subdivision 7; 56.04; 58.02, by adding a 
                  subdivision; 58.14, subdivision 5; and 58.15, 
                  subdivision 1; proposing coding for new law in 
                  Minnesota Statutes, chapter 58; repealing Minnesota 
                  Statutes 2000, sections 48.03, subdivision 3; and 
           Section 1.  Minnesota Statutes 2000, section 47.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY, APPROVAL, LIMITATIONS.] (a) 
        Except as otherwise specially provided, the net book value of 
        land and buildings for the transaction of the business of the 
        corporation, including parking lots and premises leased to 
        others, shall not be more than as follows:  
           (1) for a bank, trust company, savings bank, or stock 
        savings association, if investment is for acquisition and 
        improvements to establish a new bank, or is for improvements to 
        existing property or acquisition and improvements to adjacent 
        property, approval by the commissioner of commerce is not 
        required if the total investment does not exceed 50 percent of 
        its existing capital stock and paid-in surplus.  Upon written 
        prior approval of the commissioner of commerce, a bank, trust 
        company, savings bank, or stock savings association may invest 
        in the property and improvements in clause (1) or for 
        acquisition of nonadjacent property for expansion or future use, 
        if the aggregate of all such investments does not exceed 75 100 
        percent of its existing capital stock and paid-in surplus; 
           (2) for a mutual savings association, five percent of its 
        net assets.  
           (b) For purposes of this subdivision, an intervening 
        highway, street, road, alley, other public thoroughfare, or 
        easement of any kind does not cause two parcels of real property 
        to be nonadjacent. 
           Sec. 2.  Minnesota Statutes 2000, section 47.51, is amended 
        to read: 
           As used in sections 47.51 to 47.57: 
           "Extension of the main banking house" means any structure 
        or stationary mechanical device serving as a drive-in or walk-up 
        facility, or both, which is located within 1,500 feet of the 
        main banking house or detached facility, the distance to be 
        measured in a straight line from the closest points of the 
        closest structures involved and which performs one or more of 
        the functions described in section 47.53.  An unstaffed 
        after-hour depository drop box located anywhere within the 
        municipality where the bank's main office or detached facility 
        is located is also considered an extension of the main banking 
        house even if it is not located within 1,500 feet of the main 
        banking house or detached facility. 
           "Detached facility" means any permanent structure, office 
        accommodation located within the premises of any existing 
        commercial or business establishment, stationary automated 
        remote controlled teller facility, stationary unstaffed cash 
        dispensing or receiving device, located separate and apart from 
        the main banking house which is not an "extension of the main 
        banking house" as above defined, that serves as a drive-in or 
        walk-up facility, or both, with one or more tellers windows, or 
        as a remote controlled teller facility or a cash dispensing or 
        receiving device, and which performs one or more of those 
        functions described in section 47.53. 
           "Bank" means a bank as defined in section 46.046 and any 
        banking office established prior to the effective date of Laws 
        1923, chapter 170, section 1. 
           "Commissioner" means the commissioner of commerce. 
           "Municipality" means the geographical area encompassing the 
        boundaries of any home rule charter or statutory city located in 
        this state, and any detached area, pursuant to section 473.625, 
        operated as a major airport by the metropolitan airports 
        commission pursuant to sections 473.601 to 473.679.  When a bank 
        is located in a township, the term municipality is expanded to 
        mean the geographical area encompassing the boundaries of the 
           Sec. 3.  Minnesota Statutes 2000, section 48.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  The president and cashier of any bank of 
        discount and deposit shall at all times keep an accurate 
        verified list of all its stockholders, with the amount of stock 
        held by each, the dates of all transfers and names of 
        transferees, and shall annually file a copy of such list as it 
        appears on the date of the annual stockholders meeting with the 
           Sec. 4.  Minnesota Statutes 2000, section 48.03, 
        subdivision 2, is amended to read: 
           Subd. 2.  Except as provided in section 300.27, no 
        stockholder in any bank of discount and deposit or in any 
        banking or trust corporation or association shall be personally 
        liable for debts of such bank, corporation or association.  
        Except that the president and cashier of any bank of discount 
        and deposit not insured by the Federal Deposit Insurance 
        Corporation shall keep at all times an accurate list of all its 
        stockholders, with the amount of stock held by each, the dates 
        of all transfers and names of transferees, and on May first, 
        annually, file a copy thereof with the county recorder in the 
        county where said bank is located.  
           Sec. 5.  Minnesota Statutes 2000, section 48.16, is amended 
        to read: 
           No bank or trust company shall pledge, hypothecate, assign, 
        transfer, or create a lien upon or charge against any of its 
        assets except as follows:  
           (1) to the state; 
           (2) to secure public deposits; 
           (3) to secure funds of trustees in bankruptcy; 
           (4) to secure money borrowed in good faith from other 
        banks, trust companies, a financial agency created by act of 
        Congress, or the state in programs specifically authorizing 
        state banks to participate as an eligible local lender; 
           (5) to finance the acquisition of real estate to be carried 
        as an asset as provided for in section 47.10; 
           (6) to secure a liability that arises from a transfer of a 
        direct obligation of, or obligations that are fully guaranteed 
        as to principal and interest by, the United States government or 
        an agency thereof, or obligations of United States 
        government-sponsored entities which are exempt from the 
        registration requirements of the Securities Act of 1933, United 
        States Code, title 15, section 77a, that the bank or trust 
        company is obligated to repurchase; 
           (7) to a counterparty to secure an interest rate swap 
           This section shall not be construed to permit the use of 
        assets as security for public deposits other than the securities 
        made eligible by law for that purpose. 
           Sec. 6.  Minnesota Statutes 2000, section 48.61, 
        subdivision 7, is amended to read: 
           Subd. 7.  [SUBSIDIARIES.] (a) A state bank or trust company 
        may organize, acquire, or invest in a subsidiary located in this 
        state for the purposes of engaging in one or more of the 
        following activities, subject to the prior written approval of 
        the commissioner: 
           (1) any activity, not including receiving deposits or 
        paying checks, that a state bank is authorized to engage in 
        under state law or rule or under federal law or regulation 
        unless the activity is prohibited by the laws of this state; 
           (2) any activity that a bank clerical service corporation 
        is authorized to engage in under section 48.89; and 
           (3) any other activity authorized for a national bank, a 
        bank holding company, or a subsidiary of a national bank or bank 
        holding company under federal law or regulation of general 
        applicability, and approved by the commissioner.  
           (b) A bank or trust company subsidiary may engage in an 
        activity under this section only upon application together with 
        a filing fee of $250 and with the prior written approval of the 
        commissioner.  In approving or denying a proposed activity, the 
        commissioner shall consider the financial and management 
        strength of the bank or trust company, the current written 
        operating plan and policies of the proposed subsidiary 
        corporation, the bank or trust company's community reinvestment 
        record, and whether the proposed activity should be conducted 
        through a subsidiary of the bank or trust company. 
           (c) The aggregate amount of funds invested in either an 
        equity or loan capacity in all of the subsidiaries of the bank 
        or trust company authorized under this subdivision shall not 
        exceed 25 50 percent of the capital stock and paid in surplus of 
        the bank or trust company. 
           (d) A subsidiary organized or acquired under this 
        subdivision is subject to the examination and enforcement 
        authority of the commissioner under chapters 45 and 46 to the 
        same extent as a state bank or trust company. 
           (e) For the purposes of this section, "subsidiary" means a 
        corporation of which more than 50 at least 20 percent of the 
        voting shares are owned or controlled by the bank or trust 
           Sec. 7.  Minnesota Statutes 2000, section 56.04, is amended 
        to read: 
           Upon the filing of the application and payment of these 
        fees, the commissioner shall investigate the facts, and if the 
        commissioner shall find (1) that the financial responsibility, 
        experience, character, and general fitness of the applicant, and 
        of the members thereof if the applicant be a copartnership or 
        association, and of the person with direct responsibility for 
        the operation and management of the proposed office are such as 
        to command confidence and to warrant belief that the business 
        will be operated honestly, fairly, and efficiently within the 
        purposes of this chapter, and primarily for purposes other than 
        making loans to finance the purchase of products or services, 
        other than insurance products authorized in this chapter or 
        chapter 62B, offered by the applicant, a person which controls 
        or is controlled by the applicant, or a person which is 
        controlled by persons which also control the applicant; and (2) 
        that the applicant has available for the operation of the 
        business, at the specified location, liquid assets of at least 
        $50,000 (the foregoing facts being conditions precedent to the 
        issuance of a license under this chapter), the commissioner 
        shall thereupon issue and deliver a license to the applicant to 
        make loans, in accordance with the provisions of this chapter, 
        at the location specified in the application.  If the 
        commissioner shall not so find, the commissioner shall not issue 
        a license and shall notify the applicant of the denial and 
        return to the applicant the sum paid by the applicant as a 
        license fee, retaining the $250 $500 investigation fee to cover 
        the costs of investigating the application.  The commissioner 
        shall approve or deny every application for license hereunder 
        within 60 days from the filing thereof with the fees. 
           If the application is denied, the commissioner shall, 
        within 20 days thereafter, file in the commissioner's office a 
        written decision and findings with respect thereto containing 
        the evidence and the reasons supporting the denial, and 
        forthwith serve upon the applicant a copy thereof. 
           There is hereby appropriated to such persons as are 
        entitled to such refund, from the fund or account in the state 
        treasury to which the money was credited, an amount sufficient 
        to make the refund and payment. 
           Sec. 8.  Minnesota Statutes 2000, section 58.02, is amended 
        by adding a subdivision to read: 
           Subd. 3a.  [ADVERTISEMENT.] "Advertisement" includes, but 
        is not limited to, any illustration, circular, or statement that 
        presents information to the public in either a paper, 
        electronic, or other medium that is intended to attract clients, 
        generate interest, or otherwise make known the existence of the 
        licensee and which addresses services, fees, or products 
        provided by or available through the licensee, including, but 
        not limited to, interest rates, loan origination fees, types of 
        available loans, discount points, closing costs, or sample 
        mortgage terms. 
           Sec. 9.  [58.136] [RATES AND CHARGES.] 
           Notwithstanding any other law to the contrary, a 
        residential mortgage originator making a residential mortgage 
        loan to a borrower located in this state must comply with any 
        applicable limits on the rate and amount of interest, discount 
        points, finance charges, fees, and other charges as found in the 
        laws of this state. 
           Nothing in this section authorizes a residential mortgage 
        originator to make loans on terms and conditions that would not 
        be available to it in the absence of this section. 
           This section applies to residential mortgage originators 
        located in this state and residential mortgage originators 
        located outside this state. 
           Sec. 10.  Minnesota Statutes 2000, section 58.14, 
        subdivision 5, is amended to read: 
           Subd. 5.  [RECORD RETENTION.] A licensee or exempt person 
        must keep and maintain for 26 months the business records, 
        including advertisements, regarding residential mortgage loans 
        applied for, originated, or serviced in the course of its 
           Sec. 11.  Minnesota Statutes 2000, section 58.15, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NONAGENCY DISCLOSURE.] If a residential 
        mortgage originator or exempt person does not contract or offer 
        to contract to act as an agent of a borrower, or accept an 
        advance fee, it must, within 72 hours three business days of 
        accepting an application for a residential mortgage loan, 
        provide the borrower with a written disclosure as provided in 
        subdivision 2. 
           Sec. 12.  [REPEALER.] 
           Minnesota Statutes 2000, sections 48.03, subdivision 3; and 
        58.135, are repealed. 
           Sec. 13.  [EFFECTIVE DATE.] 
           Sections 1 to 7, 11, and 12 are effective the day following 
        final enactment. 
           Presented to the governor April 26, 2001 
           Signed by the governor April 30, 2001, 2:58 p.m.

Official Publication of the State of Minnesota
Revisor of Statutes