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

  
    Laws of Minnesota 1993 

                        CHAPTER 257-S.F.No. 1129 
           An act relating to financial institutions; regulating 
          institutions, deposits, rates and charges, enforcement 
          provisions; modifying the definition of insurance 
          premium finance licensee; amending Minnesota Statutes 
          1992, sections 45.025, by adding a subdivision; 
          46.044; 46.045, by adding a subdivision; 46.048, 
          subdivision 1; 46.09; 47.0156; 47.096; 47.20, 
          subdivision 4a; 47.52; 47.54, subdivision 4; 47.55, 
          subdivision 1; 47.56; 47.58, subdivision 1; 48.04; 
          48.05; 48.09; 48.194; 48.24, subdivisions 1, 7, and 8; 
          48.61, subdivisions 2, 3, and 4; 48.64; 48.86; 49.35; 
          49.36, subdivisions 1 and 4; 51A.02, subdivision 43; 
          52.04, subdivision 1, and by adding a subdivision; 
          52.12; 53.03, subdivision 5; 53.04, by adding a 
          subdivision; 53.09, by adding a subdivision; 56.10; 
          56.12; 56.131, subdivision 1; 56.155, subdivision 1; 
          59A.02, subdivision 3; 80A.14, subdivisions 4 and 9; 
          82B.03, subdivision 2; 300.20, subdivision 2; 300.21; 
          336.4-104; and 540.08; proposing coding for new law in 
          Minnesota Statutes, chapter 56; repealing Minnesota 
          Statutes 1992, sections 46.048, subdivision 2; and 
          48.24, subdivision 4.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 45.025, is 
amended by adding a subdivision to read: 
    Subd. 10.  [ALTERNATIVE COMPLIANCE.] In lieu of complying 
with the provisions of this section with respect to any deposit 
or certificate of deposit, a depository institution defined in 
section 19(b)(1)(A)(i)-(vi) of the Federal Reserve Act, United 
States Code, title 12, section 461, or a deposit broker defined 
in section 29(g) of the Federal Deposit Insurance Act, United 
States Code, title 12, section 1831f(g), may comply with the 
requirements of the Federal Truth in Savings Act and 
regulations, notwithstanding whether or not that act or those 
regulations apply to the deposit or certificate of deposit. 
    Sec. 2.  Minnesota Statutes 1992, section 46.044, is 
amended to read: 
    46.044 [CHARTERS ISSUED, CONDITIONS.] 
    Subdivision 1.  [CHARTERS ISSUED, CONDITIONS.] If (1) the 
applicants are of good moral character and financial integrity, 
(2) there is a reasonable public demand for this bank in this 
location, (3) the organization expenses being paid by the bank 
do not exceed those allowed by section 46.043, (4) the probable 
volume of business in this location is sufficient to insure and 
maintain the solvency of the new bank and the solvency of the 
then existing bank or banks in the locality without endangering 
the safety of any bank in the locality as a place of deposit of 
public and private money, (5) the commissioner of commerce is 
satisfied that the proposed bank will be properly and safely 
managed, and (6) the commissioner is satisfied that the capital 
funds required pursuant to section 48.02 are available and the 
commissioner may accept any reasonable demonstration including 
subscription agreements supported by current financial 
statements, and (7) the applicant, if it is an interstate bank 
holding company, as defined in section 48.92, has provided 
developmental loans as required by section 48.991, and has 
complied with the net new funds reporting requirements of 
section 48.93, the application must be granted; otherwise it 
must be denied.  In case of the denial of the application, the 
commissioner of commerce shall specify the grounds for the 
denial.  A person aggrieved, may obtain judicial review of the 
determination in accordance with chapter 14.  
    Subd. 2.  [EXPIRATION AND EXTENSION OF ORDER.] If a bank 
charter is not activated within 18 months from the date of the 
order, the approval order automatically expires.  Upon request 
of the applicant prior to the automatic expiration date of the 
order, the commissioner may grant reasonable extensions of time 
to the applicant to activate the facility as the commissioner 
deems necessary.  The extensions of time shall not exceed a 
total of an additional 12 months.  If the commissioner's order 
is the subject of an appeal in accordance with chapter 14, the 
time period referred to in this section for activation of the 
bank charter and any extensions shall begin when all appeals or 
rights of appeal from the commissioner's order have concluded or 
expired. 
     Sec. 3.  Minnesota Statutes 1992, section 46.045, is 
amended by adding a subdivision to read: 
    Subd. 4.  [DEPOSIT INSURANCE.] In any case where Minnesota 
Statutes require, either generally or by reference to a specific 
program, that deposits in any financial institution be insured, 
the requirement shall be deemed satisfied if the deposits are 
insured in the requisite amount by an agency of the federal 
government insuring deposits. 
    Sec. 4.  Minnesota Statutes 1992, 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 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.  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 1987 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. 
    Sec. 5.  Minnesota Statutes 1992, section 46.09, is amended 
to read: 
    46.09 [DEPARTMENT OF COMMERCE EXAMINERS OR EMPLOYEES NOT TO 
MAINTAIN INTEREST IN SUPERVISED INSTITUTIONS.] 
    Subdivision 1.  [PROHIBITION.] No person who is an examiner 
of financial institutions or other officer of the department of 
commerce directly responsible for the supervision of financial 
institutions shall be interested, either directly or indirectly, 
as a stockholder, director, officer, trustee, assignee, 
employee, or otherwise, in a bank, savings bank, trust company, 
financial institution, or corporation holding the stock of any 
such corporation within this state, or which carries on a 
banking business within this state, either directly or 
indirectly, or through an affiliated group or chain bank 
operating within this state.  The provisions of this subdivision 
do not apply to the commissioner of commerce. 
    Subd. 2.  [EXCEPTIONS.] Officers and examiners of the 
department of commerce referred to in subdivision 1 may: 
    (1) maintain a demand or trust account in any financial 
institution; 
    (2) maintain a savings, time or share account in any 
financial institution; 
    (3) transact business with any national bank, federally 
chartered savings and loan association or federally chartered 
credit union; 
    (4) transact business with any financial institution or 
licensee subject to the examination by the commissioner of 
commerce to the extent the transaction is on the same terms, 
conditions and to the same extent available to all other 
customers of the financial institution or licensee.  
    Subd. 3.  [LOANS AND CREDIT ADVANCES.] The exceptions 
created in subdivision 2 do not include a loan or advance of 
credit from a financial institution or licensee subject to 
examination by the commissioner of commerce.  A transaction not 
specifically exempt by subdivision 2, clauses (1) to (3), is 
subject to disclosure to the commissioner of commerce upon 
request to determine if a conflict of interest exists or 
interest contemplated by subdivision 1.  
    Subd. 4.  [APPLICATION.] This section applies to those 
employees, examiners, and officers of the department of commerce 
who are directly responsible for the examination and supervision 
of financial institutions or licensees. 
    Sec. 6.  Minnesota Statutes 1992, 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 60 90 days' written notice is given to the 
commissioner. 
    Sec. 7.  Minnesota Statutes 1992, section 47.096, is 
amended to read: 
    47.096 [TIME DEPOSITS; NOTICE OF AUTOMATIC RENEWAL.] 
    If a deposit for a term of one year or more, including a 
savings certificate and a certificate of deposit, is 
automatically renewable by its own terms if not redeemed at a 
specified redemption date, the financial corporation receiving 
the deposit shall give mailed written notice to the owner or 
holder of the deposit not less than 30 days prior to the 
redemption date.  The written notice shall be sent to the last 
known address of the owner or holder as filed with the financial 
corporation, shall state the date of the automatic renewal and 
shall state any penalty diminution of interest or other 
consequences to the owner or holder arising out of the failure 
to redeem prior to automatic renewal.  In lieu of complying with 
the provisions of this section, a financial corporation may 
comply with the requirements of the Federal Truth in Savings Act 
and regulations, notwithstanding whether or not that act or 
those regulations apply to the deposit. 
    Sec. 8.  Minnesota Statutes 1992, section 47.20, 
subdivision 4a, is amended to read: 
    Subd. 4a.  [MAXIMUM INTEREST RATE.] (a) No conventional or 
cooperative apartment loan or contract for deed shall be made at 
a rate of interest or loan yield in excess of a maximum lawful 
interest rate in an amount equal to the Federal National 
Mortgage Association posted yields on 30-year mortgage 
commitments for delivery within 60 days on standard conventional 
fixed-rate mortgages published in the Wall Street Journal for 
the last business day of the second preceding month plus four 
percentage points. 
    (b) On or before the last day of each month the 
commissioner of commerce shall determine, based on available 
statistics, the maximum lawful rate of interest for conventional 
or cooperative apartment loans or contracts for deed for the 
next succeeding month as defined in paragraph (a), and shall 
cause the maximum lawful rate of interest to be published in a 
legal newspaper in Ramsey county on or before the first day of 
each month or as soon thereafter as practicable and in the state 
register on or before the last day of each month; the maximum 
lawful rate of interest to be effective on the first day of that 
month.  
    (1) The maximum lawful interest rate applicable to a 
cooperative apartment loan or contract for deed at the time the 
loan or contract is made is the maximum lawful interest rate for 
the term of the cooperative apartment loan or contract for 
deed.  Notwithstanding the provisions of section 334.01, a 
cooperative apartment loan or contract for deed may provide, at 
the time the loan or contract is made, for the application of 
specified different consecutive periodic interest rates to the 
unpaid principal balance, if no interest rate exceeds the 
maximum lawful interest rate applicable to the loan or contract 
at the time the loan or contract is made.  
     (c) The maximum interest rate that can be charged on a 
conventional loan or a contract for deed, with a duration of ten 
years or less, for the purchase of real estate described in 
section 83.20, subdivision 13, is three percentage points above 
the rate permitted under paragraph (a) or 15.75 percent per 
year, whichever is less.  This clause is effective August 1, 
1992. 
    (2) (d) Contracts for deed executed pursuant to a 
commitment for a contract for deed, or conventional or 
cooperative apartment loans made pursuant to a borrower's 
interest rate commitment or made pursuant to a borrower's loan 
commitment, or made pursuant to a commitment for conventional or 
cooperative apartment loans made upon payment of a forward 
commitment fee including a borrower's loan commitment issued 
pursuant to a forward commitment, which commitment provides for 
consummation within some future time following the issuance of 
the commitment may be consummated pursuant to the provisions, 
including the interest rate, of the commitment notwithstanding 
the fact that the maximum lawful rate of interest at the time 
the contract for deed or conventional or cooperative apartment 
loan is actually executed or made is less than the commitment 
rate of interest, provided the commitment rate of interest does 
not exceed the maximum lawful interest rate in effect on the 
date the commitment was issued.  The refinancing of (a):  (1) an 
existing conventional or cooperative apartment loan, (b) (2) a 
loan insured or guaranteed by the secretary of housing and urban 
development, the administrator of veterans affairs, or the 
administrator of the farmers home administration, or (c) (3) a 
contract for deed by making a conventional or cooperative 
apartment loan is deemed to be a new conventional or cooperative 
apartment loan for purposes of determining the maximum lawful 
rate of interest under this subdivision.  The renegotiation of a 
conventional or cooperative apartment loan or a contract for 
deed is deemed to be a new loan or contract for deed for 
purposes of clause (1) paragraph (b) and for purposes of 
determining the maximum lawful rate of interest under this 
subdivision.  A borrower's interest rate commitment or a 
borrower's loan commitment is deemed to be issued on the date 
the commitment is hand delivered by the lender to, or mailed to 
the borrower.  A forward commitment is deemed to be issued on 
the date the forward commitment is hand delivered by the lender 
to, or mailed to the person paying the forward commitment fee to 
the lender, or to any one of them if there should be more than 
one.  A commitment for a contract for deed is deemed to be 
issued on the date the commitment is initially executed by the 
contract for deed vendor or the vendor's authorized agent. 
    (3) (e) A contract for deed executed pursuant to a 
commitment for a contract for deed, or a loan made pursuant to a 
borrower's interest rate commitment, or made pursuant to a 
borrower's loan commitment, or made pursuant to a forward 
commitment for conventional or cooperative apartment loans made 
upon payment of a forward commitment fee including a borrower's 
loan commitment issued pursuant to a forward commitment at a 
rate of interest not in excess of the rate of interest 
authorized by this subdivision at the time the commitment was 
made continues to be enforceable in accordance with its terms 
until the indebtedness is fully satisfied. 
    Sec. 9.  Minnesota Statutes 1992, 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 not more 
than five detached facilities provided the facilities are 
located within the municipality in which the principal office of 
the applicant bank is located; or within 5,000 feet of its 
principal office measured in a straight line from the closest 
points of the closest structures involved; or within 100 miles 
of its principal office measured in a straight line from the 
closest points of the closest structures involved, if the 
detached facility is within any municipality in which no bank is 
located at the time of application or if the detached facility 
is in a municipality having a population of more than 10,000, as 
determined by the commissioner from the latest available data 
from the state demographer, or if the detached facility is 
located in 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 clause 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) Any bank is allowed, in addition to other facilities, 
one drive-in or walk-up facility located between 150 to 1,500 
feet of the main banking house or within 1,500 feet from a 
detached facility.  The drive-in or walk-up facility permitted 
by this clause is subject to clause (b) and section 47.53. 
    Sec. 10.  Minnesota Statutes 1992, section 47.54, 
subdivision 4, is amended to read: 
    Subd. 4.  [HEARING.] In any case in which the commissioner 
grants a request for a hearing, the commissioner shall fix a 
time for a hearing conducted pursuant to chapter 14 to decide 
whether or not the application will be granted.  A notice of the 
hearing must be published by the applicant in the form 
prescribed by the commissioner in a qualified newspaper 
published in the municipality in which the proposed detached 
facility is to be located, and if there is no such newspaper, 
then at the county seat of the county in a qualified newspaper 
likely to give notice in the municipality in which the proposed 
detached facility is proposed to be located.  The notice must be 
published once, at the expense of the applicants, not less than 
30 days prior to the date of the hearing.  At the hearing the 
commissioner shall consider the application and hear the 
applicants and witnesses that appear in favor of or against the 
granting of the application of the proposed detached facility.  
If an application is contested and a hearing is granted, 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 commissioner of commerce to be 
deposited in the general fund, must be paid by the applicant and 
50 percent equally by the intervening parties. 
    Sec. 11.  Minnesota Statutes 1992, section 47.55, 
subdivision 1, is amended to read: 
    Subdivision 1.  [BANKING FACILITIES IN OPERATION PRIOR TO 
MAY 1, 1971.] A bank may retain and operate one detached 
facility as it may have had in operation prior to May 1, 1971 
without requirement of approval hereunder, provided that its 
function is limited as provided in section 47.53 and its 
location conforms with the provisions of section 47.52.  A bank 
having such a retained detached facility shall be limited to 
operating two five additional detached facilities. 
    Sec. 12.  Minnesota Statutes 1992, section 47.56, is 
amended to read: 
    47.56 [TRANSFER OF LOCATION.] 
    The location of a detached facility may be transferred to 
another location, subject to the same procedures and approval as 
required hereunder for establishing a new detached facility, 
except that the relocation of a detached facility within a 
municipality of 10,000 or less population shall not require 
consent of other banks required in section 47.52.  
     Sec. 13.  Minnesota Statutes 1992, section 47.58, 
subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For the purposes of this 
section, the terms defined in this subdivision have the meanings 
given them.  
    (a) "Reverse mortgage loan" means a loan:  
    (1) Made to a borrower wherein the committed principal 
amount is paid to the borrower in equal or unequal installments 
over a period of months or years, interest is assessed, and 
authorized closing costs are incurred as specified in the loan 
agreement; 
    (2) Which is secured by a mortgage on residential property 
owned solely by the borrower; and 
    (3) Which is due when the committed principal amount has 
been fully paid to the borrower, or upon sale of the property 
securing the loan, or upon the death of the last surviving 
borrower, or upon the borrower terminating use of the property 
as principal residence so as to disqualify the property from the 
homestead credit given in chapter 290A.  
    (b) "Lender" means any bank subject to chapter 48, credit 
union subject to chapter 52, savings bank organized and operated 
pursuant to chapter 50, savings and loan association subject to 
chapter 51A, or any insurance company as defined in section 
60A.02, subdivision 4.  "Lender" also includes any federally 
chartered bank supervised by the comptroller of the currency or 
federally chartered savings and loan association supervised by 
the federal home loan bank board or federally chartered credit 
union supervised by the National Credit Union Administration, to 
the extent permitted by federal law.  
             (c) "Borrower" includes any natural person holding an 
interest in severalty or as joint tenant or tenant-in-common in 
the property securing a reverse mortgage loan.  
             (d) "Outstanding loan balance" means the current net 
amount of money owed by the borrower to the lender whether or 
not that sum is suspended pursuant to the terms of the reverse 
mortgage loan agreement or is immediately due and payable.  The 
outstanding loan balance is calculated by adding the current 
totals of the items described in clauses (1) to (5) and 
subtracting the current totals of the item described in clause 
(6):  
             (1) The sum of all payments made by the lender which are 
necessary to clear the property securing the loan of any 
outstanding mortgage encumbrance or mechanics or material 
supplier's lien.  
             (2) The total disbursements made by the lender to date 
pursuant to the loan agreement as formulated in accordance with 
subdivision 3.  
             (3) All taxes, assessments, insurance premiums and other 
similar charges paid to date by the lender pursuant to 
subdivision 6, which charges were not reimbursed by the borrower 
within 60 days.  
             (4) All actual closing costs which the borrower has 
deferred, if a deferral provision is contained in the loan 
agreement as authorized by subdivision 7.  
             (5) The total accrued interest to date, as authorized by 
subdivision 5.  
             (6) All payments made by the borrower pursuant to 
subdivision 4.  
             (e) "Actual closing costs" mean reasonable charges or sums 
ordinarily paid at the time of closing for the following, 
whether or not retained by the lender:  
             (1) Any insurance premiums on policies covering the 
mortgaged property including but not limited to premiums for 
title insurance, fire and extended coverage insurance, flood 
insurance, and private mortgage insurance.  
    (2) Abstracting, title examination and search, and 
examination of public records related to the mortgaged property. 
    (3) The preparation and recording of any or all documents 
required by law or custom for closing a reverse mortgage loan 
agreement.  
    (4) Appraisal and survey of real property securing a 
reverse mortgage loan.  
    (5) A single service charge, which service charge shall 
include any consideration, not otherwise specified in this 
section as an "actual closing cost," paid by the borrower to the 
lender for or in relation to the acquisition, making, 
refinancing or modification of a reverse mortgage loan, and 
shall also include any consideration received by the lender for 
making a commitment for a reverse mortgage loan, whether or not 
an actual loan follows the commitment.  The service charge shall 
not exceed one percent of the bona fide committed principal 
amount of the reverse mortgage loan.  
    (6) Charges and fees necessary for or related to the 
transfer of real property securing a reverse mortgage loan or 
the closing of a reverse mortgage loan agreement paid by the 
borrower and received by any party other than the lender. 
    Sec. 14.  Minnesota Statutes 1992, section 48.04, is 
amended to read: 
    48.04 [INCREASE AND REDUCTION OF CAPITAL.] 
    No increase or reduction of the capital of any such bank 
banking institution shall be valid until the entire new capital 
has been paid in cash, and certified to the commissioner under 
oath of the president, vice-president, or cashier.  The 
commissioner shall thereupon issue a certificate of that fact 
and of approval thereof.  No reduction of the surplus of 
any such bank banking institution shall be valid until such 
reduction has been approved by the commissioner of commerce.  No 
reduction shall affect the liability of any stockholder for any 
indebtedness incurred prior thereto.  
    Sec. 15.  Minnesota Statutes 1992, section 48.05, is 
amended to read: 
    48.05 [CAPITAL NOT TO BE WITHDRAWN; DIVIDENDS.] 
    No portion of the capital or surplus of any such bank 
banking institution shall ever be withdrawn by any person or in 
any way, either in dividends or otherwise, except upon reduction 
as provided by law.  No dividend on common stock shall be made 
except as provided in section 48.09.  
    Sec. 16.  Minnesota Statutes 1992, section 48.09, is 
amended to read: 
    48.09 [DIVIDENDS; SURPLUS.] 
    At the end of each dividend period, after deducting all 
necessary expenses, losses, amounts receivable more than one 
year overdue and not well secured, interest, and taxes due or 
levied, all of the remaining net profits for the period shall be 
set aside as a surplus fund, if the surplus fund of such bank 
the banking institution is not then equal to one-fifth of the 
capital stock.  If the surplus fund is more than one-fifth of 
the capital stock, ten percent of the remaining net profits for 
the period shall be set aside as a surplus fund until it equals 
50 percent of the capital stock.  The directors may then declare 
a dividend of so much of the remainder as they may think 
expedient, subject to the commissioner's approval.  When in any 
way impaired the surplus fund shall be raised to this percentage 
in like manner.  
    Sec. 17.  Minnesota Statutes 1992, section 48.194, is 
amended to read: 
    48.194 [INSTALLMENT SALES CONTRACTS; LOANS.] 
    A person may enter into a credit sale or service contract 
for sale to a state or national bank doing business in this 
state, and a bank may purchase and enforce the contract under 
the terms and conditions set forth in section 51A.385, 
subdivision subdivisions 2 and 5 to 13.  A state bank or 
national bank may extend credit pursuant to the terms and 
conditions set forth in section 51A.385. 
    Sec. 18.  Minnesota Statutes 1992, section 48.24, 
subdivision 1, is amended to read: 
    Subdivision 1.  The total liabilities to any such bank, as 
principal, guarantor or endorser of any individual, including 
the liabilities of any corporation or limited liability company 
which the individual owns or controls a majority interest, any 
partnership, unincorporated association, limited liability 
company, or corporation, including the liabilities of the 
several members of a partnership or an unincorporated 
association and including the liabilities of the general 
partners but not the limited partners of a partnership, and in 
case of a corporation or limited liability company of all 
subsidiaries thereof in which such corporation or limited 
liability company owns or controls a majority interest, shall 
never exceed 20 percent of its capital actually paid in cash and 
of its actual surplus fund, except that obligations not to 
exceed 25 percent of said capital and surplus to any one 
borrower shall not be included as liabilities for the purposes 
of this section, but shall be liabilities of the borrowers, 
provided they are secured by not less than a like amount of any 
one of the various types of obligations of the United States or 
which are fully guaranteed as to principal and interest by the 
United States, and providing that such bonds or obligations have 
a market value of at least ten percent in excess of the amount 
loaned thereon at the time each loan is made.  
    For the purpose of this section the members of a family 
living together in one household, if borrowed funds are to be 
used in the conduct of a common enterprise, shall be regarded as 
one person and the total liabilities of the members of the 
family shall be limited as herein provided.  The endorser or 
guarantor of any obligation which is exempt from loaning limits 
according to the provisions of this section shall also be exempt 
from such loaning limits to the extent of the amount of 
liability on such obligations for the purposes of this section 
but shall be liable thereon.  Individual extensions of credit 
which result in liabilities of individuals or, corporations, or 
limited liability companies exceeding the limitations set forth 
in this section shall be construed to conform to the provisions 
of this subdivision upon reduction in an amount sufficient to 
reduce the total liability to not more than the legal amount, 
but until paid in full shall not exempt the officer or employee 
of the bank from being personally liable to the bank for the 
amount of the original excess portion of the loan as set forth 
in subdivision 8.  
    Sec. 19.  Minnesota Statutes 1992, section 48.24, 
subdivision 7, is amended to read: 
    Subd. 7.  Obligations of any person, copartnership, limited 
liability company, association, or corporation 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. 20.  Minnesota Statutes 1992, section 48.24, 
subdivision 8, is amended to read: 
    Subd. 8.  When a bank shall allow any individual, 
partnership, limited liability company, unincorporated 
association, or corporation, or any officer or director of the 
bank, to become indebted to it, directly or indirectly, in 
excess of the amount, exclusive of interest permitted by the 
laws of this state, the officer or employee of the bank 
willfully permitting or approving the loan shall be guilty of a 
gross misdemeanor and, in addition thereto, shall be personally 
liable to the bank for the amount of the loan in excess of the 
statutory limit. 
    Sec. 21.  Minnesota Statutes 1992, section 48.61, 
subdivision 2, is amended to read: 
    Subd. 2.  Any such bank or trust company may invest not to 
exceed two five percent of its capital and surplus in shares of 
stock in small business investment companies organized under the 
provisions of the small business investment act of 1958.  
     Sec. 22.  Minnesota Statutes 1992, section 48.61, 
subdivision 3, is amended to read: 
    Subd. 3.  The bank or trust company may invest not to 
exceed ten percent of its capital and surplus in shares of stock 
in any banks or bank holding companies wherein the ownership of 
stock in of the banks or bank holding companies is restricted to 
(1) owned exclusively by bank holding companies or banks, and (2)
at least 51 percent of the voting stock is owned or controlled 
by bank holding companies or banks authorized to do business in 
the state of Minnesota. 
    Sec. 23.  Minnesota Statutes 1992, section 48.61, 
subdivision 4, is amended to read: 
    Subd. 4.  Any such bank or trust company may make equity or 
debt investments in limited partnerships, limited liability 
companies, corporations, or projects designed primarily to 
promote community welfare, such as the rehabilitation or 
development of economically depressed residential, commercial, 
or industrial areas.  A bank or trust company investment in any 
one limited partnership, limited liability company, corporation, 
or project shall not exceed two five percent of its capital and 
surplus and its aggregate investment in all such limited 
partnerships, limited liability companies, corporations, or 
projects shall not exceed five ten percent of its capital and 
surplus.  
     Sec. 24.  Minnesota Statutes 1992, section 48.64, is 
amended to read: 
    48.64 [DEPOSITS OF TRUST FUNDS.] 
    Any person, firm, or corporation appointed by a court of 
competent jurisdiction as representative of the estate of a 
deceased person, or as guardian, or any trustee of a 
firefighters' relief association, or any referee, receiver, or 
trustee appointed by a court of record in this state, may 
deposit funds for safekeeping and disbursing, unless otherwise 
directed by the court, in any bank, credit union, if the 
beneficial owner is a member, or trust company, however 
organized, the deposits of which are insured, in whole or in 
part, by the Federal Deposit Insurance Corporation an agency of 
the federal government insuring deposits, to the extent that the 
funds so deposited are fully insured. 
    Sec. 25.  Minnesota Statutes 1992, section 48.86, is 
amended to read: 
    48.86 [TRUST FUNDS; INVESTMENT OF ACCUMULATIONS.] 
    Any amount not less than $500 received by any trust company 
as executor, administrator, guardian, or other trustee, or by 
order of court, not required for the purposes of such trust, or 
not to be accounted for within one year, it shall invest as soon 
as practicable in authorized securities either then held by it 
or specially procured by it; and the income, less its proper 
charges, shall become part of the trust estate, and the net 
accumulations thereon shall be likewise invested, accounted for, 
and allowed in the settlement of such trust.  
    Except as may be otherwise provided in the governing will, 
trust agreement, court order or other instrument, any amount in 
a trust account may be invested in certificates of deposit, 
share certificates, or savings accounts in any bank or banks, or 
credit union, if the beneficial owner is a member, provided that 
such certificates of deposit, share certificates, or savings 
accounts are fully insured by the federal deposit insurance 
corporation an agency of the federal government insuring 
deposits and receive the prevailing rate of interest on such 
certificates or savings accounts. 
    Sec. 26.  Minnesota Statutes 1992, section 49.35, is 
amended to read: 
    49.35 [CONSOLIDATION OR MERGER AGREEMENT.] 
    The respective boards of directors of the consolidating or 
merging corporations may, by the majority vote of all of the 
members of each board, make or authorize to be made between the 
corporations a written agreement, in duplicate, for the 
consolidation or merger of the corporations.  The agreement 
shall specify each corporation to be a party to the transaction, 
and shall prescribe the terms and conditions thereof; the mode 
of carrying it into effect; the authorized capital stock of the 
consolidated or surviving corporation, which shall not exceed 
the aggregate authorized capital stock of all of the 
corporations that are a party thereto; the name of the 
consolidated or surviving corporation, which may be the name, in 
whole or in part, of any corporation which is a party to the 
agreement, and shall specify the city in which it shall have its 
principal place of business.  It shall name the persons who 
shall constitute the board of directors of the consolidated or 
surviving corporation, but the number and qualifications of 
these persons shall be in accordance with the statutes relating 
to the number and qualifications of directors of that class of 
corporation.  
    Sec. 27.  Minnesota Statutes 1992, 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 payable 
to the commissioner of commerce.  The fee must be paid in equal 
parts by the parties to The agreement, and it 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. 28.  Minnesota Statutes 1992, section 49.36, 
subdivision 4, is amended to read: 
    Subd. 4.  [NOTICE OF ACQUISITION.] The successor bank shall 
give reasonable notice of the acquisition to each of the 
depositors and creditors of an acquired bank or savings 
association within 30 days after the order is activated.  If 
detached facilities are to be closed as a result of transactions 
authorized by this section, adequate notice shall be provided by 
the bank prior to closing, unless the commissioner has acted to 
prevent the probable failure of the bank or savings association. 
    Sec. 29.  Minnesota Statutes 1992, section 51A.02, 
subdivision 43, is amended to read: 
    Subd. 43.  [ORGANIZATION.] "Organization" means a 
corporation, government or governmental subdivision or agency, 
trust, estate, partnership, joint venture, cooperative, limited 
liability company, or association. 
    Sec. 30.  Minnesota Statutes 1992, section 52.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  A credit union has the following powers: 
      (1) to offer its members and other credit unions various 
classes of shares, share certificates, deposits, or deposit 
certificates; 
      (2) to receive the savings of its members either as payment 
on shares or as deposits, including the right to conduct 
Christmas clubs, vacation clubs, and other thrift organizations 
within its membership.  Trust funds received by a real estate 
broker or the broker's salespersons in trust may be deposited in 
a credit union; 
      (3) to make loans to members for provident or productive 
purposes as provided in section 52.16; 
      (4) to make loans to a cooperative society or other 
organization having membership in the credit union; 
      (5) to deposit in state and national banks and trust 
companies authorized to receive deposits; 
      (6) to invest in any investment legal for savings banks or 
for trust funds in the state and, notwithstanding clause (3), to 
invest in and make loans of unsecured days funds (federal funds 
or similar unsecured loans) to financial institutions insured by 
an agency of the federal government and a member of the Federal 
Reserve System or required to maintain reserves at the Federal 
Reserve; 
      (7) to borrow money as hereinafter indicated; 
      (8) to adopt and use a common seal and alter the same at 
pleasure; 
        (9) to make payments on shares of and deposit with any 
other credit union chartered by this or any other state or 
operating under the provisions of the federal Credit Union Act, 
in amounts not exceeding in the aggregate 25 percent of its 
unimpaired assets.  However, payments on shares of and deposit 
with credit unions chartered by other states are restricted to 
credit unions insured by the National Credit Union 
Administration.  The restrictions imposed by this clause do not 
apply to share accounts and deposit accounts of the Minnesota 
corporate credit union in United States central credit union or 
to share accounts and deposit accounts of credit unions in the 
Minnesota corporate credit union; 
        (10) to contract with any licensed insurance company or 
society to insure the lives of members to the extent of their 
share accounts, in whole or in part, and to pay all or a portion 
of the premium therefor; 
        (11) to indemnify each director, officer, or committee 
member, or former director, officer, or committee member against 
all expenses, including attorney's fees but excluding amounts 
paid pursuant to a judgment or settlement agreement, reasonably 
incurred in connection with or arising out of any action, suit, 
or proceeding to which that person is a party by reason of being 
or having been a director, officer, or committee member of the 
credit union, except with respect to matters as to which that 
person is finally adjudged in the action, suit, or proceeding to 
be liable for negligence or misconduct in the performance of 
duties.  The indemnification is not exclusive of any other 
rights to which that person may be entitled under any bylaw, 
agreement, vote of members, or otherwise; 
       (12) upon written authorization from a member, retained at 
the credit union, to make payments to third parties by 
withdrawals from the member's share or deposit accounts or 
through proceeds of loans made to such member, or by permitting 
the credit union to make those payments from the member's funds 
prior to deposit; to permit draft withdrawals from member 
accounts, but a credit union proposing to permit draft 
withdrawals shall notify the commissioner of commerce, in the 
form prescribed, of its intent not less than 90 days prior to 
authorizing draft withdrawals.  The board of directors of a 
credit union may restrict one class of shares to the extent that 
it may not be redeemed, withdrawn, or transferred except upon 
termination of membership in the credit union; 
       (13) to inform its members as to the availability of 
various group purchasing plans which are related to the 
promotion of thrift or the borrowing of money for provident and 
productive purposes by means of informational materials placed 
in the credit union's office, through its publications, or by 
direct mailings to members by the credit union; 
       (14) to facilitate its members' voluntary purchase of types 
of insurance incidental to promotion of thrift or the borrowing 
of money for provident and productive purposes including, but 
not limited to the following types of group or individual 
insurance:  Fire, theft, automobile, life and temporary 
disability; to be the policy holder of a group insurance plan or 
a subgroup under a master policy plan and to disseminate 
information to its members concerning the insurance provided 
thereunder; to remit premiums to an insurer or the holder of a 
master policy on behalf of a credit union member, if the credit 
union obtains written authorization from the member for 
remittance by share or deposit withdrawals or through proceeds 
of loans made by the members, or by permitting the credit union 
to make the payments from the member's funds prior to deposit; 
and to accept from the insurer reimbursement for expenses 
incurred or in the case of credit life and accident and health 
insurance within the meaning of chapter 62B commissions for the 
handling of the insurance.  The amount reimbursed or the 
commissions received may constitute the general income of the 
credit union.  The directors, officers, committee members and 
employees of a credit union shall not profit on any insurance 
sale facilitated through the credit unions; 
        (15) to contract with another credit union to furnish 
services which either could otherwise perform.  Contracted 
services under this clause are subject to regulation and 
examination by the commissioner of commerce like other services; 
     (16) in furtherance of 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, and 
not in limitation of the specific powers hereinbefore conferred, 
to have all the powers enumerated, authorized, and permitted by 
this chapter, and such other rights, privileges and powers 
incidental to, or necessary for, the accomplishment of the 
objectives and purposes of the credit union; 
     (17) to rent safe deposit boxes to its members if the 
credit union obtains adequate insurance or bonding coverage for 
losses which might result from the rental of safe deposit boxes; 
     (18) notwithstanding the provisions of section 52.05, to 
accept deposits of public funds in an amount secured by 
insurance or other means pursuant to chapter 118 or section 
9.031 or other applicable law and to receive deposits of trust 
funds provided that either the provider or the beneficial owner 
of the funds is a member of the credit union accepting the 
deposit; 
     (19) to accept and maintain treasury tax and loan accounts 
of the United States and to pledge collateral to secure the 
treasury tax or loan accounts, in accordance with the 
regulations of the Department of Treasury of the United States; 
     (20) to accept deposits pursuant to section 149.12, 
notwithstanding the provisions of section 52.05, if the deposits 
represent funding of prepaid funeral plans of members; 
     (21) to sell, in whole or in part, real estate secured 
loans provided that:  
     (a) the loan is secured by a first lien; 
     (b) the board of directors approves the sale; 
        (c) if the sale is partial, the agreement to sell a partial 
interest shall, at a minimum:  
        (i) identify the loan or loans covered by the agreement; 
        (ii) provide for the collection, processing, remittance of 
payments of principal and interest, taxes and insurance premiums 
and other charges or escrows, if any; 
        (iii) define the responsibilities of each party in the 
event the loan becomes subject to collection, loss or 
foreclosure; 
        (iv) provide that in the event of loss, each owner shall 
share in the loss in proportion to its interest in the loan or 
loans; 
        (v) provide for the distribution of payments of principal 
to each owner proportionate to its interest in the loan or 
loans; 
        (vi) provide for loan status reports; 
        (vii) state the terms and conditions under which the 
agreement may be terminated or modified; and 
       (d) the sale is without recourse or repurchase unless the 
agreement:  
       (i) requires repurchase of a loan because of any breach of 
warranty or misrepresentation; 
       (ii) allows the seller to repurchase at its discretion; or 
       (iii) allows substitution of one loan for another; 
    (22) in addition to the sale of loans secured by a first 
lien on real estate, to sell, pledge, discount, or otherwise 
dispose of, in whole or in part, to any source, a loan or group 
of loans, other than a self-replenishing line of credit; 
provided, that within a calendar year beginning January 1 the 
total dollar value of loans sold, other than loans secured by 
real estate or insured by a state or federal agency, shall not 
exceed 25 percent of the dollar amount of all loans and 
participating interests in loans held by the credit union at the 
beginning of the calendar year, unless otherwise authorized in 
writing by the commissioner; 
    (23) to designate the par value of the shares of the credit 
union by board resolution; 
    (24) to exercise by resolution the powers set forth in 
United States Code, title 12, section 1757, as amended through 
August 1, 1985 December 31, 1992.  Before exercising each power, 
the board must submit a plan to the commissioner of commerce 
detailing implementation of the power to be used; 
    (25) to offer self-directed individual retirement accounts 
and Keogh accounts and act as custodian and trustee of these 
accounts if: 
    (1) all contributions of funds are initially made to a 
deposit, share or share certificate account in the credit union; 
    (2) any subsequent transfer of funds to other assets is 
solely at the direction of the member and the credit union 
exercises no investment discretion and provides no investment 
advice with respect to plan assets; and 
    (3) the member is clearly notified of the fact that 
National Credit Union Share Insurance Fund coverage is limited 
to funds held in deposit, share or share certificate accounts of 
National Credit Union Share Insurance Fund-insured credit unions.
    Sec. 31.  Minnesota Statutes 1992, section 52.04, is 
amended by adding a subdivision to read: 
    Subd. 2a.  A person may enter into a credit sale or service 
contract for sale to a state or federal credit union doing 
business in this state, and a credit union may purchase and 
enforce the contract under the terms and conditions set forth in 
section 51A.385, subdivisions 2 and 5 to 13. 
    Sec. 32.  Minnesota Statutes 1992, section 52.12, is 
amended to read: 
    52.12 [CAPITAL; ENTRANCE FEES; UNION TO HAVE LIEN.] 
    The capital of a credit union includes shares, share 
certificates, any special class of shares, undivided earnings, 
reserves, and any entrance or membership fees.  The credit union 
shall have a lien on the shares and deposits of a member for any 
sum due to the credit union from the member, or for any loan 
endorsed by that member.  In addition to any other statutory 
right of setoff or lien and subject to any contractual 
provision, if any party to an account is indebted to a credit 
union, the credit union has a right to setoff against any 
account in which the party has or had immediately before death a 
present right of withdrawal.  A credit union may, at its 
discretion, charge an entrance or annual membership fee if 
authorized by the bylaws. 
    Sec. 33.  Minnesota Statutes 1992, section 53.03, 
subdivision 5, is amended to read: 
    Subd. 5.  [PLACE OF BUSINESS.] Not more than one place of 
business may be maintained under any certificate of 
authorization issued subsequent to the enactment of Laws 1943, 
chapter 67, pursuant to the provisions of this chapter, but the 
department of commerce may issue more than one certificate of 
authorization to the same corporation upon compliance with all 
the provisions of this chapter governing an original issuance of 
a certificate of authorization.  To the extent that previously 
filed applicable information remains unchanged, the applicant 
need not refile this information, unless requested.  The filing 
fee for a branch application shall be $500 and the investigation 
fee $250.  If a corporation has been issued more than one 
certificate of authorization, the corporation shall allocate a 
portion of capital stock to each office for which a certificate 
has been issued, in order to comply with the capital 
requirements of sections 53.02 and 53.05, clause (2), which 
sections are applicable to each office and the capital allocated 
thereto in the same manner as if each certificate had been 
issued to a separate corporation.  An industrial loan and thrift 
corporation with deposit liabilities may change one or more of 
its locations upon the written approval of the commissioner of 
commerce.  A fee of $100 must accompany each application to the 
commissioner for approval to change the location of an 
established office.  An industrial loan and thrift corporation 
that does not sell and issue thrift certificates for investment 
may change one or more locations by giving 30 days' written 
notice to the department of commerce which shall promptly amend 
the certificate of authorization accordingly.  No change in 
place of business of a company to a location outside of its 
current trade area or more than 25 miles from its present 
location, whichever distance is greater, shall be permitted 
under the same certificate unless all of the applicable 
requirements of this section have been met. 
    Sec. 34.  Minnesota Statutes 1992, section 53.04, is 
amended by adding a subdivision to read: 
    Subd. 5a.  A person may enter into a credit sale or service 
contract for sale to an industrial loan and thrift company 
operating under this chapter in this state, and an industrial 
loan and thrift company may purchase and enforce the contract 
under the terms and conditions set forth in section 51A.385, 
subdivisions 2 and 5 to 13. 
    Sec. 35.  Minnesota Statutes 1992, section 53.09, is 
amended by adding a subdivision to read: 
    Subd. 4.  The commissioner may honor requests from 
interested parties for interpretive opinions in connection with 
the administration of this chapter.  No provision of this 
chapter or of any other chapter to which this chapter refers 
which imposes any penalty shall apply to any act done or not 
done in conformity with any written interpretive opinion of the 
commissioner, notwithstanding that such written interpretive 
opinion may, after such act or omission, be amended or rescinded 
or be determined by judicial or other authority to be invalid 
for any reason. 
    Sec. 36.  Minnesota Statutes 1992, section 56.10, is 
amended to read: 
    56.10 [EXAMINATIONS.] 
    Subdivision 1.  For the purpose of discovering violations 
of this chapter or securing information lawfully required by the 
commissioner hereunder, the commissioner may, at any time, 
either personally or by a person or persons duly designated, 
investigate the loans and business and examine the books, 
accounts, records, and files used therein, of every licensee and 
of every person who shall be engaged in the business described 
in section 56.01, whether the person shall act or claim to act 
as principal or agent, or under or without the authority of this 
chapter.  For that purpose the commissioner and a duly 
designated representative shall have free access to the offices 
and places of business, books, accounts, papers, records, files, 
safes, and vaults of all such persons.  The commissioner and all 
persons duly designated shall have authority to require the 
attendance of and to examine, under oath, all persons whomsoever 
whose testimony the commissioner may require relative to the 
loan or the business or to the subject matter of any 
examination, investigation, or hearing. 
    Each licensee shall pay to the commissioner such amount as 
may be required under section 46.131, and the commissioner may 
maintain an action for the recovery of such costs in any court 
of competent jurisdiction. 
     Subd. 2.  The commissioner may honor requests from 
interested parties for interpretive opinions in connection with 
the administration of this chapter.  No provision of this 
chapter or of any other chapter to which this chapter refers 
which imposes any penalty shall apply to any act done or omitted 
to be done in conformity with any written interpretive opinion 
of the commissioner, notwithstanding that such written 
interpretive opinion may, after such act or omission, be amended 
or rescinded or be determined by judicial or other authority to 
be invalid for any reason. 
     Sec. 37.  Minnesota Statutes 1992, section 56.12, is 
amended to read: 
    56.12 [ADVERTISING; TAKING OF SECURITY; PLACE OF BUSINESS.] 
    No licensee shall advertise, print, display, publish, 
distribute, or broadcast, or cause or permit to be advertised, 
printed, displayed, published, distributed, or broadcast, in any 
manner any statement or representation with regard to the rates, 
terms, or conditions for the lending of money, credit, goods, or 
things in action which is false, misleading, or deceptive.  The 
commissioner may order any licensee to desist from any conduct 
which the commissioner shall find to be a violation of the 
foregoing provisions. 
    The commissioner may require that rates of charge, if 
stated by a licensee, be stated fully and clearly in such manner 
as the commissioner may deem necessary to prevent 
misunderstanding thereof by prospective borrowers.  In lieu of 
the disclosure requirements of this section and section 56.14, a 
licensee may give the disclosures required by the federal 
Truth-in-Lending Act. 
    A licensee may take a lien upon real estate as security for 
any loan exceeding $2,700 in principal amount made under this 
chapter.  The provisions of sections 47.20 and 47.21 do not 
apply to loans made under this chapter, except as provided in 
this section.  No loan secured by a first lien on a borrower's 
primary residence shall be made pursuant to this section if the 
proceeds of the loan are used to finance the purchase of the 
borrower's primary residence, unless:  
    (1) the proceeds of the loan are used to finance the 
purchase of a manufactured home or a prefabricated building; or 
    (2) the proceeds of the loan are used in whole or in part 
to satisfy the balance owed on a contract for deed.  
    If the proceeds of the loan are used to finance the 
purchase of the borrower's primary residence, the licensee shall 
consent to the subsequent transfer of the real estate if the 
existing borrower continues after transfer to be obligated for 
repayment of the entire remaining indebtedness.  The licensee 
shall release the existing borrower from all obligations under 
the loan instruments, if the transferee (1) meets the standards 
of credit worthiness normally used by persons in the business of 
making loans, including but not limited to the ability of the 
transferee to make the loan payments and satisfactorily maintain 
the property used as collateral, and (2) executes an agreement 
in writing with the licensee whereby the transferee assumes the 
obligations of the existing borrower under the loan 
instruments.  Any such agreement shall not affect the priority, 
validity or enforceability of any loan instrument.  A licensee 
may charge a fee not in excess of one-tenth of one percent of 
the remaining unpaid principal balance in the event the loan is 
assumed by the transferee and the existing borrower continues 
after the transfer to be obligated for repayment of the entire 
assumed indebtedness.  A licensee may charge a fee not in excess 
of one percent of the remaining unpaid principal balance in the 
event the remaining indebtedness is assumed by the transferee 
and the existing borrower is released from all obligations under 
the loan instruments, but in no event shall the fee exceed $150. 
      A licensee making a loan under this chapter secured by a 
lien on real estate shall comply with the requirements of 
section 47.20, subdivision 8.  
      No licensee shall conduct the business of making loans 
under this chapter within any office, room, or place of business 
in which any other business is solicited or engaged in, or in 
association or conjunction therewith, if the commissioner finds 
that the character of the other business is such that it would 
facilitate evasions of this chapter or of the rules lawfully 
made hereunder.  The commissioner may promulgate rules dealing 
with such other businesses. 
     No licensee shall transact the business or make any loan 
provided for by this chapter under any other name or at any 
other place of business than that named in the license.  No 
licensee shall take any confession of judgment or any power of 
attorney.  No licensee shall take any note or promise to pay 
that does not accurately disclose the principal amount of the 
loan, the time for which it is made, and the agreed rate or 
amount of charge, nor any instrument in which blanks are left to 
be filled in after execution.  Nothing herein is deemed to 
prohibit the making of loans by mail or arranging for settlement 
and closing of real estate secured loans by an unrelated 
qualified closing agent at a location other than the licensed 
location. 
    Sec. 38.  Minnesota Statutes 1992, 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 $35,000 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, calculated according to the actuarial 
method, not exceeding the equivalent of the greater of any of 
the following: 
    (1) the total of:  (i) 33 percent per year on that part of 
the unpaid balance of the principal amount not exceeding $750; 
and (ii) 19 percent per year on that part of the unpaid balance 
of the principal amount exceeding $750; or 
    (2) 21.75 percent per year on the unpaid balance of the 
principal amount. 
    (b) On any loan where interest has been calculated 
according to the method provided for in paragraph (a), clause 
(1), interest must be contracted for and earned as provided in 
that provision or at the single annual percentage rate computed 
to the nearest 1/100 of one percent that would earn the same 
total interest at maturity of the contract as would be earned by 
the application of the graduated rates provided in paragraph 
(a), clause (1), when the debt is paid according to the agreed 
terms and the calculations are made according to the actuarial 
method.  
    (c) Loans may be interest-bearing or precomputed. 
      (d) 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.  
        (e) With respect to interest-bearing loans: 
        (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 
(f), clause (3).  The resulting loan contract is deemed a new 
and separate loan transaction for all purposes. 
        (f) With respect to precomputed loans: 
        (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) When any loan contract is paid in full by cash, renewal 
or refinancing, or a new loan, one month or more before the 
final installment due date, a licensee shall refund or credit 
the borrower with the total of the applicable charges for all 
fully unexpired installment periods, as originally scheduled or 
as deferred, which follow the day of prepayment; if the 
prepayment is made other than on a scheduled payment date, the 
nearest scheduled installment payment date must be used in the 
computation; provided further, if the prepayment occurs prior to 
the first installment due date, the licensee may retain 1/30 of 
the applicable charge for a first installment period of one 
month for each day from the date of the loan to the date of 
prepayment, and shall refund or credit the borrower with the 
balance of the total interest contracted for.  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) If an installment, other than the final installment, is 
not paid in full within ten days of its scheduled due date, a 
licensee may contract for and receive a default charge not 
exceeding five percent of the amount of the installment, but not 
less than $4. 
       A default charge under this subdivision may not be 
collected on an installment paid in full within ten days of its 
scheduled due date, or deferred installment due date with 
respect to deferred installments, even though a default or 
deferral charge on an earlier installment has not been paid in 
full.  A default charge may be collected at the time it accrues 
or at any time thereafter. 
       (5) If the parties agree in writing, either in the loan 
contract or in a subsequent agreement, to a deferment of wholly 
unpaid installments, a licensee may grant a deferment and may 
collect a deferment charge as provided in this section.  A 
deferment postpones the scheduled due date of the earliest 
unpaid installment and all subsequent installments as originally 
scheduled, or as previously deferred, for a period equal to the 
deferment period.  The deferment period is that period during 
which no installment is scheduled to be paid by reason of the 
deferment.  The deferment charge for a one-month period may not 
exceed the applicable charge for the installment period 
immediately following the due date of the last undeferred 
payment.  A proportionate charge may be made for deferment for 
periods of more or less than one month.  A deferment charge is 
earned pro rata during the deferment period and is fully earned 
on the last day of the deferment period.  Should a loan be 
prepaid in full during a deferment period, the licensee shall 
make or credit to the borrower a refund of the unearned 
deferment charge in addition to any other refund or credit made 
for prepayment of the loan in full. 
      (6) If two or more installments are delinquent one full 
month or more on any due date, and if the contract so provides, 
the licensee may reduce the unpaid balance by the refund credit 
which would be required for prepayment in full on the due date 
of the most recent maturing installment in default.  Thereafter, 
and in lieu of any other default or deferment charges, the 
single annual percentage rate permitted by this subdivision may 
be charged on the unpaid balance until fully paid. 
    (7) 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 (6), 
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.  
    (8) 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. 
     Sec. 39.  Minnesota Statutes 1992, section 80A.14, 
subdivision 4, is amended to read: 
    Subd. 4.  [BROKER-DEALER.] "Broker-dealer" means any person 
engaged in the business of effecting transactions in securities 
for the account of others or for that person's own account. 
"Broker-dealer" does not include: 
    (1) an agent; 
    (2) an issuer; 
    (3) a trust company; or 
    (4) a bank, savings institution, savings and loan 
association, credit union: 
    (i) acting for the account of others, provided that such 
activities are conducted in compliance with such rules as may be 
adopted by the commissioner; 
    (ii) acting for its own account; or 
    (iii) acting in a fiduciary capacity pursuant to the powers 
and privileges described by sections 48.36 to 48.49 or United 
States Code, title 12, section 92(a); 
    (5) a person who has no place of business in this state if 
that person effects transactions in this state exclusively with 
or through (i) the issuers of the securities involved in the 
transactions, (ii) other broker-dealers, or (iii) banks, savings 
institutions, trust companies, insurance companies, investment 
companies as defined in the Investment Company Act of 1940, 
pension or profit sharing trusts, or other financial 
institutions or institutional buyers, or to broker-dealers, 
whether the purchaser is acting for itself or in some fiduciary 
capacity; or 
         (6) other persons not within the intent of this subsection 
whom the commissioner by rule or order designates. 
    Sec. 40.  Minnesota Statutes 1992, section 80A.14, 
subdivision 9, is amended to read: 
    Subd. 9.  [INVESTMENT ADVISER.] "Investment adviser" means 
any person who, for compensation, engages in the business of 
advising others, either directly or through publications, 
writings or electronic means, as to the value of securities or 
as to the advisability of investing in, purchasing, or selling 
securities, or who, for compensation and as a part of a regular 
business, issues or promulgates analyses or reports concerning 
securities.  "Investment adviser" does not include: 
    (1) a bank, savings institution, credit union, or trust 
company; 
    (2) a lawyer, accountant, engineer, or teacher whose 
performance of these services is solely incidental to the 
practice of that person's profession; 
    (3) a broker-dealer whose performance of these services is 
solely incidental to the conduct of the business as a 
broker-dealer and who receives no special compensation for them; 
    (4) a publisher of any newspaper, news column, newsletter, 
news magazine, or business or financial publication or service, 
whether communicated in hard copy form, or by electronic means, 
or otherwise, that does not consist of the rendering of advice 
on the basis of the specific investment situation of each 
client; or 
    (5) other persons not within the intent of this subdivision 
as the commissioner may by rule or order designate. 
    Sec. 41.  [56.132] [INSTALLMENT SALES CONTRACTS.] 
    A person may enter into a credit sale or service contract 
for sale to a licensee under this chapter doing business in this 
state, and a licensee may purchase and enforce the contract 
under the terms and conditions set forth in section 51A.385, 
subdivisions 2 and 5 to 13. 
    Sec. 42.  Minnesota Statutes 1992, section 56.155, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORIZATION.] No licensee shall, 
directly or indirectly, sell or offer for sale any insurance in 
connection with any loan made under this chapter except as and 
to the extent authorized by this section.  The sale of credit 
life and credit accident and health insurance is subject to the 
provisions of chapter 62B, except that the term of the insurance 
may exceed 60 months if the term of the loan exceeds 60 months.  
Life, accident, and health insurance, or any of them, may be 
written upon or in connection with any loan but must not be 
required as additional security for the indebtedness.  If the 
debtor chooses to procure credit life insurance or credit 
accident and health insurance as security for the indebtedness, 
the debtor shall have the option of furnishing this security 
through existing policies of insurance that the debtor owns or 
controls, or of furnishing the coverage through any insurer 
authorized to transact business in this state.  A statement in 
substantially the following form must be made orally, except for 
loans by mail pursuant to section 56.12, and provided in writing 
in bold face type of a minimum size of 12 points to the borrower 
before the transaction is completed for each credit life and 
accident and health insurance coverage sold: 
    CREDIT LIFE INSURANCE AND CREDIT DISABILITY INSURANCE
    ARE NOT REQUIRED TO OBTAIN CREDIT.  YOU MAY BUY ANY 
    INSURANCE FROM ANYONE YOU CHOOSE OR YOU MAY USE EXISTING 
    INSURANCE.                                       
    The licensee shall disclose whether or not the benefits 
commence as of the first day of disability and shall further 
disclose the number of days that an insured obligor must be 
disabled, as defined in the policy, before benefits, whether 
retroactive or nonretroactive, commence.  In case there are 
multiple obligors under a transaction subject to this chapter, 
no policy or certificate of insurance providing credit accident 
and health benefits may be procured by or through a licensee 
upon more than one of the obligors.  In case there are multiple 
obligors under a transaction subject to this chapter, no policy 
or certificate of insurance providing credit life insurance may 
be procured by or through a licensee upon more than two of the 
obligors in which case they shall be insured jointly.  The 
premium or identifiable charge for the insurance must not exceed 
that filed by the insurer with the department of commerce.  The 
charge, computed at the time the loan is made for a period not 
to exceed the full term of the loan contract on an amount not to 
exceed the total amount required to pay principal and charges, 
may be deducted from the proceeds or may be included as part of 
the principal of any loan.  If a borrower procures insurance by 
or through a licensee, the statement required by section 56.14 
must disclose the cost to the borrower and the type of 
insurance, and the licensee shall cause to be delivered to the 
borrower a copy of the policy, certificate, or other evidence 
thereof, within a reasonable time.  No licensee shall decline 
new or existing insurance which meets the standards set out in 
this section nor prevent any obligor from obtaining this 
insurance coverage from other sources.  Notwithstanding any 
other provision of this chapter, any gain or advantage to the 
licensee or to any employee, affiliate, or associate of the 
licensee from this insurance or the sale or provision thereof is 
not an additional or further charge in connection with the loan; 
nor are any of the provisions pertaining to insurance contained 
in this section prohibited by any other provision of this 
chapter. 
    Sec. 43.  Minnesota Statutes 1992, section 59A.02, 
subdivision 3, is amended to read: 
    Subd. 3.  [LICENSEE.] "Licensee" means a person licensed by 
the commissioner to engage in the business of insurance premium 
financing.  The term does not include a person in the business 
of insurance premium financing exclusively financing premiums 
for business, agricultural, or corporate purposes.  
    Sec. 44.  Minnesota Statutes 1992, section 82B.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [LICENSE NOT REQUIRED.] (a) An officer or 
employee of a corporation, partnership, or other business entity 
may act as a real estate appraiser without obtaining a license 
under this chapter if the corporation, partnership, or other 
business entity in which the person is employed or is an officer 
has an interest in the real estate that is the subject of the 
appraisal as owners, lenders, investors, or insurers. 
    (b) An Notwithstanding licensure under this chapter any 
appraisal conducted by a person exempt under this subdivision is 
only subject to the guidelines for real estate appraisal 
policies and review procedures of the Federal Deposit Insurance 
Corporation, the Federal Savings and Loan Insurance Corporation 
Office of Thrift Supervision, the Federal Reserve Board, the 
Farm Credit Administration, the National Credit Union 
Administration, or the comptroller of the currency, if the 
appraisal was conducted only within the scope and purpose of 
this subdivision. 
    (c) If a real estate appraisal is made by a person who is 
exempt from licensing under this subdivision, the person for 
whom the appraisal is conducted must be given written notice 
that the appraisal was not conducted by a licensed appraiser, 
and the appraisal report must clearly state that it was 
conducted by an interested party and not by a licensed real 
estate appraiser. 
    Sec. 45.  Minnesota Statutes 1992, section 300.20, 
subdivision 2, is amended to read: 
    Subd. 2.  [VACANCIES.] If the certificate of incorporation 
or the bylaws so provides, a vacancy in the board of directors 
may be filled by the remaining directors.  Not more than 
one-third of the members of the board may be so filled in any 
one year except any number may be appointed to provide for at 
least three directors until any subsequent meeting of the 
stockholders.  
    Sec. 46.  Minnesota Statutes 1992, section 300.21, is 
amended to read: 
    300.21 [OFFICERS.] 
    Every domestic corporation, except when otherwise specially 
provided, must have a president, secretary, and treasurer, and 
may have one or more vice-presidents and other officers, as its 
certificate of incorporation or bylaws may provide.  The time 
and manner of their election and their respective duties must be 
prescribed in the certificate of incorporation or in the bylaws. 
Only one president of record may act on behalf of the 
corporation; however, additional officers may be titled 
president for purposes of empowering those additional officers 
to function as managing officers of detached facilities of banks.
    Sec. 47.  Minnesota Statutes 1992, section 336.4-104, is 
amended to read: 
    336.4-104 [DEFINITIONS AND INDEX OF DEFINITIONS.] 
    (a) In this article, unless the context otherwise requires: 
    (1) "Account" means any deposit or credit account with a 
bank, including a demand, time, savings, passbook, share draft, 
or like account, other than an account evidenced by a 
certificate of deposit; 
    (2) "Afternoon" means the period of a day between noon and 
midnight; 
    (3) "Banking day" means the that part of a any day, 
excluding Saturday, Sunday, and holidays, on which a bank is 
open to the public for carrying on substantially all of its 
banking functions; 
    (4) "Clearinghouse" means an association of banks or other 
payors regularly clearing items; 
    (5) "Customer" means a person having an account with a bank 
or for whom a bank has agreed to collect items, including a bank 
that maintains an account at another bank; 
    (6) "Documentary draft" means a draft to be presented for 
acceptance or payment if specified documents, certificated 
securities (section 336.8-102) or instructions for 
uncertificated securities (section 336.8-308), or other 
certificates, statements, or the like are to be received by the 
drawee or other payor before acceptance or payment of the draft; 
    (7) "Draft" means a draft as defined in section 336.3-104 
or an item, other than an instrument, that is an order; 
    (8) "Drawee" means a person ordered in a draft to make 
payment; 
     (9) "Item" means an instrument or a promise or order to pay 
money handled by a bank for collection or payment.  The term 
does not include a payment order governed by article 4A or a 
credit or debit card slip; 
     (10) "Midnight deadline" with respect to a bank is midnight 
on its next banking day following the banking day on which it 
receives the relevant item or notice or from which the time for 
taking action commences to run, whichever is later; 
     (11) "Settle" means to pay in cash, by clearinghouse 
settlement, in a charge or credit or by remittance, or otherwise 
as agreed.  A settlement may be either provisional or final; 
     (12) "Suspends payments" with respect to a bank means that 
it has been closed by order of the supervisory authorities, that 
a public officer has been appointed to take it over, or that it 
ceases or refuses to make payments in the ordinary course of 
business. 
     (b) Other definitions applying to this article and the 
sections in which they appear are: 
     "Agreement for electronic presentment," section 336.4-110 
     "Bank," section 336.4-105 
     "Collecting bank," section 336.4-105 
     "Depositary bank," section 336.4-105 
     "Intermediary bank," section 336.4-105 
     "Payor bank," section 336.4-105 
     "Presenting bank," section 336.4-105 
     "Presentment notice," section 336.4-110 
     (c) The following definitions in other articles apply to 
this article: 
     "Acceptance," section 336.3-409 
     "Alteration," section 336.3-407 
     "Cashier's check," section 336.3-104 
     "Certificate of deposit," section 336.3-104 
     "Certified check," section 336.3-409 
    "Check," section 336.3-104 
    "Good faith," section 336.3-103 
    "Holder in due course," section 336.3-302 
    "Instrument," section 336.3-104 
    "Notice of dishonor," section 336.3-503 
    "Order," section 336.3-103 
    "Ordinary care," section 336.3-103 
    "Person entitled to enforce," section 336.3-301 
    "Presentment," section 336.3-501 
    "Promise," section 336.3-103 
    "Prove," section 336.3-103 
    "Teller's check," section 336.3-104 
    "Unauthorized signature," section 336.3-403 
    (d) In addition, article 1 contains general definitions and 
principles of construction and interpretation applicable 
throughout this article. 
     Sec. 48.  Minnesota Statutes 1992, section 540.08, is 
amended to read: 
    540.08 [INJURY TO CHILD OR WARD; SUIT BY PARENT OR 
GUARDIAN.] 
    A parent may maintain an action for the injury of a minor 
son or daughter.  A general guardian may maintain an action for 
an injury to the ward.  A guardian of a dependent, neglected, or 
delinquent child, appointed by a court having jurisdiction, may 
maintain an action for the injury of the child.  If no action is 
brought by the father or mother, an action for the injury may be 
brought by a guardian ad litem, either before or after the death 
of the parent.  Before a parent receives property as a result of 
the action, the parent shall file a bond as the court prescribes 
and approves as security therefor.  In lieu of this bond, upon 
petition of the parent, the court may order that the property 
received be invested in securities issued by the United States, 
which shall be deposited pursuant to the order of the court, or 
that the property be invested in a savings account, savings 
certificate, or certificate of deposit, or share certificate, in 
a bank, savings and loan association, or trust company, credit 
union in which either the depositor or beneficiary is a member, 
or an annuity or other form of structured settlement, subject to 
the order of the court.  A copy of the court's order and the 
evidence of the deposit shall be filed with the court 
administrator.  Money or assets in an account established by the 
court under this section are not available to the minor child or 
the child's parent or guardian until released by the court to 
the child or the child's parent or guardian.  No settlement or 
compromise of the action is valid unless it is approved by a 
judge of the court in which the action is pending. 
    Sec. 49.  [REPEALER.] 
    Minnesota Statutes 1992, sections 46.048, subdivision 2; 
and 48.24, subdivision 4, are repealed. 
    Sec. 50.  [EFFECTIVE DATE.] 
    Sections 1 to 17, 21 and 22, 24 to 28, 30 to 37, 39 to 42, 
and 44 to 49, are effective the day following final enactment.  
Section 6 is effective October 1, 1993, and section 43 is 
effective June 1, 1993.  Sections 18, 19, 20, and 29 are 
effective retroactive to January 1, 1993.  Section 23 is 
effective the day following final enactment, except that the 
changes relating to limited liability companies are effective 
retroactive to January 1, 1993. 
    Presented to the governor May 15, 1993 
    Signed by the governor May 19, 1993, 8:23 a.m.

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