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1996 Minnesota Session Laws

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                            CHAPTER 414-H.F.No. 2369 
                  An act relating to financial institutions; regulating 
                  consumer credit; modifying rates, fees, and other 
                  terms and conditions; providing clarifying and 
                  technical changes; providing opportunities for state 
                  banks to develop their Minnesota markets through 
                  broader intrastate branching; modifying finance charge 
                  provisions and other provisions for certain 
                  cooperatives; providing technical corrections; 
                  amending Minnesota Statutes 1994, sections 9.031, 
                  subdivision 13; 13.71, by adding a subdivision; 
                  46.041, subdivision 1; 46.044, subdivision 1; 47.10, 
                  subdivision 4; 47.101, subdivisions 2 and 3; 47.20, 
                  subdivision 14; 47.201, subdivision 2; 47.51; 47.62, 
                  subdivision 1; 48.09; 48.10; 48.301; 48.34; 48.845, 
                  subdivision 4; 52.131; 53.01; 53.03, subdivision 1; 
                  53.07, subdivision 2; 118.01, subdivision 1; 168.69; 
                  168.705; 168.71; 168.72, by adding a subdivision; 
                  168.73; 256.99; 300.025; 303.02, subdivision 2; 
                  308A.135, subdivision 3; 308A.165, subdivision 2; 
                  332.21; 332.50, subdivision 2; 334.02; and 334.03; 
                  Minnesota Statutes 1995 Supplement, sections 46.048, 
                  subdivision 2b; 47.20, subdivisions 1 and 9; 47.52; 
                  47.59, subdivisions 2, 3, 4, 5, 6, and by adding a 
                  subdivision; 47.60, subdivision 2; 47.61, subdivision 
                  3; 48.153, subdivision 3a; 48.194; 48.65; 50.1485, 
                  subdivision 1; 50.245, subdivisions 1 and 4; 53.04, 
                  subdivision 3a; 53.09, subdivision 2; 55.10, 
                  subdivision 4; 56.131, subdivisions 2, 4, and 6; 
                  56.14; and 62B.04, subdivision 1; Laws 1995, chapter 
                  171, section 70; proposing coding for new law in 
                  Minnesota Statutes, chapters 49; and 334; repealing 
                  Minnesota Statutes 1994, sections 48.94; 51A.01; 
                  51A.02, subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 
                  13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 
                  27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 
                  41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 
                  55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 
                  51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 
                  51A.12; 51A.13; 51A.131; 51A.14; 51A.15; 51A.16; 
                  51A.17; 51A.19, subdivisions 1, 4, 5, 6, 7, 8, 10, 11, 
                  12, and 13; 51A.20; 51A.21, subdivisions 1, 2, 3, 4, 
                  5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 
                  20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, 
                  subdivision 6; 51A.24; 51A.251; 51A.261; 51A.262; 
                  51A.27; 51A.28; 51A.29; 51A.30; 51A.31; 51A.32; 
                  51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 51A.38; 
                  51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 
                  51A.46; 51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 
                  51A.55; 51A.56; 51A.57; and 53.04, subdivision 3b; 
                  Minnesota Statutes 1995 Supplement, sections 47.201, 
                  subdivision 7; 47.27, subdivision 3; 51A.02, 
                  subdivisions 6, 7, 26, 40, and 54; 51A.19, subdivision 
                  9; 51A.21, subdivision 28; 51A.23, subdivisions 1 and 
                  7; 51A.386; 51A.50; 51A.53; 51A.58; and 53.04, 
                  subdivisions 3c and 4a; Minnesota Rules, parts 
                  2655.0100; 2655.0200; 2655.0300; 2655.0400; 2655.0500; 
                  2655.0600; 2655.0700; 2655.0800; 2655.0900; 2655.1000; 
                  2655.1100; 2655.1200; and 2655.1300. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
                                   ARTICLE 1
                  FINANCIAL INSTITUTIONS TECHNICAL CORRECTIONS 
           Section 1.  Minnesota Statutes 1994, section 9.031, 
        subdivision 13, is amended to read: 
           Subd. 13.  [REQUIRED COMMUNITY REINVESTMENT RATING.] Banks 
        and trust companies designated as depositories must have 
        received ratings of "outstanding" or "satisfactory" as their 
        most recent rating under section 47.83 or under United States 
        Code, title 12, section 2906.  If a state depository receives a 
        rating that is below "satisfactory," the executive council shall 
        revoke its designation as a depository.  The executive council 
        may delay the effective date of the revocation if necessary to 
        allow a reasonable period of time to arrange for a replacement 
        depository.  
           Sec. 2.  Minnesota Statutes 1994, section 13.71, is amended 
        by adding a subdivision to read: 
           Subd. 21.  [BANK CHARTER TRADE SECRETS DATA.] Trade secret 
        data provided in bank charter applications is classified under 
        section 46.041, subdivision 1. 
           Sec. 3.  Minnesota Statutes 1994, section 46.041, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [FILING; FEE; PUBLIC INSPECTION.] The 
        incorporators of a bank proposed to be organized under the laws 
        of this state shall execute and acknowledge a written 
        application in the form prescribed by the commissioner of 
        commerce.  The application must be signed by two or more of the 
        incorporators and request a certificate authorizing the proposed 
        bank to transact business at the place and in the name stated in 
        the application.  The applicant shall file the application with 
        the department with a $1,000 filing fee and a $500 investigation 
        fee.  The fees must be turned over by the commissioner to the 
        state treasurer and credited to the general fund.  The 
        application file must be public, with the exception of financial 
        data on individuals which is private under the Minnesota 
        government data practices act and data defined as trade secret 
        information under section 13.37, subdivision 1, paragraph (b), 
        which must be given nonpublic classification upon written 
        request by the applicant. 
           Sec. 4.  Minnesota Statutes 1994, section 46.044, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CHARTERS ISSUED, CONDITIONS.] An 
        application for a bank charter must be granted 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.  If 
        the application does not satisfy the requirements of this 
        subdivision, 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.  
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 
        46.048, subdivision 2b, is amended to read: 
           Subd. 2b.  [NOTICE.] Upon the filing of an application a 
        notice: 
           (1) an applicant acquiring party shall publish once in a 
        newspaper of general circulation notice of the proposed 
        acquisition in a form acceptable to the commissioner; and 
           (2) the commissioner shall accept public comment on an 
        application a notice for a period of not less than 30 days from 
        the date of the publication required by clause (1). 
           Sec. 6.  Minnesota Statutes 1994, section 47.10, 
        subdivision 4, is amended to read: 
           Subd. 4.  [APPROVAL OF CERTAIN INSIDER AGREEMENTS.] No 
        bank, trust company, savings bank, or savings association may 
        purchase or, sell, or lease real property, personal property, 
        improvements or equipment of a value of $25,000 or more if the 
        purchaser or, seller, lessor, or lessee other than the bank, 
        trust company, savings bank, or savings association has an 
        existing direct or indirect interest in the institution without 
        prior written approval by the commissioner.  Each bank, trust 
        company, savings bank, or savings association must maintain 
        documentation of transactions with interested parties, including 
        personal property leases and purchases or sales of under 
        $25,000, which demonstrates the commercial reasonableness and 
        fair market value of the transaction. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 47.20, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Pursuant to rules the commissioner of 
        commerce finds to be necessary and proper, if any, banks, 
        savings banks, and savings associations organized under the laws 
        of this state or the United States, trust companies, trust 
        companies acting as fiduciaries, and other banking institutions 
        subject to the supervision of the commissioner of commerce, and 
        mortgagees or lenders approved or certified by the secretary of 
        housing and urban development or approved or certified by the 
        administrator of veterans affairs, or approved or certified by 
        the administrator of the farmers home administration or any 
        successor, or approved or certified by the federal home loan 
        mortgage corporation, or approved or certified by the federal 
        national mortgage association, are authorized: 
           (1) To make loans and advances of credit and purchases of 
        obligations representing loans and advances of credit which are 
        insured or guaranteed by the secretary of housing and urban 
        development pursuant to the national housing act, as amended, or 
        the administrator of veterans affairs pursuant to the 
        servicemen's readjustment act of 1944, as amended, or the 
        administrator of the farmers home administration or any 
        successor pursuant to the consolidated farm and rural 
        development act, Public Law Number 87-128, as amended, and to 
        obtain the insurance or guarantees; 
           (2) To make loans secured by mortgages on real property and 
        loans secured by a share or shares of stock or a membership 
        certificate or certificates issued to a stockholder or member by 
        a cooperative apartment corporation which the secretary of 
        housing and urban development, the administrator of veterans 
        affairs, or the administrator of the farmers home administration 
        or any successor has insured or guaranteed or made a commitment 
        to insure or guarantee, and to obtain the insurance or 
        guarantees; 
           (3) To make, purchase, or participate in such loans and 
        advances of credit; including reverse mortgage loans, 
        notwithstanding anything in sections 47.20, subdivision 4b, 
        47.58, and 334.01 and chapter 56 to the contrary; as would be 
        eligible for purchase, in whole or in part, by the federal 
        national mortgage association or the federal home loan mortgage 
        corporation, but without regard to any limitation placed upon 
        the maximum principal amount of an eligible loan; 
           (4) To make, purchase or participate in such loans and 
        advances of credit secured by mortgages on real property which 
        are authorized or allowed by the office of thrift supervision or 
        the office of the comptroller of the currency, or any successor 
        to these federal agencies.  
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 47.20, 
        subdivision 9, is amended to read: 
           Subd. 9.  (1) For purposes of this subdivision the term 
        "mortgagee" shall mean all state banks and trust companies, 
        national banking associations, state and federally chartered 
        savings associations, mortgage banks, savings banks, insurance 
        companies, credit unions or assignees of the above. 
           (a) Each mortgagee requiring funds of a mortgagor to be 
        paid into an escrow, agency or similar account for the payment 
        of taxes or insurance premiums with respect to a mortgaged 
        one-to-four family, owner occupied residence located in this 
        state, unless the account is required by federal law or 
        regulation or maintained in connection with a conventional loan 
        in an original principal amount in excess of 80 percent of the 
        lender's appraised value of the residential unit at the time the 
        loan is made or maintained in connection with loans insured or 
        guaranteed by the secretary of housing and urban development, by 
        the administrator of veterans affairs, or by the administrator 
        of the farmers home administration or any successor, shall 
        calculate interest on such funds at a rate of not less than five 
        three percent per annum.  Such interest shall be computed on the 
        average monthly balance in such account on the first of each 
        month for the immediately preceding 12 months of the calendar 
        year or such other fiscal year as may be uniformly adopted by 
        the mortgagee for such purposes and shall be annually credited 
        to the remaining principal balance on the mortgage, or at the 
        election of the mortgagee, paid to the mortgagor or credited to 
        the mortgagor's account.  If the interest exceeds the remaining 
        balance, the excess shall be paid to the mortgagor or vendee.  
        The requirement to pay interest shall apply to such accounts 
        created prior to June 1, 1976, as well as to accounts created 
        after June 1, 1976 in conjunction with mortgage loans made prior 
        to July 1, 1996. 
           (b) Unless the account is exempt from the requirements of 
        paragraph (a), a mortgagee shall allow a mortgagor to elect to 
        discontinue the escrow account after the seventh anniversary of 
        the date of the mortgage, unless the mortgagor has been more 
        than 30 days delinquent in the previous 12 months.  This 
        paragraph shall apply to accounts created prior to July 1, 1996, 
        as well as to accounts created on or after July 1, 1996.  The 
        mortgagor's election shall be in writing.  If the escrow account 
        has a negative balance or a shortage at the time the mortgagor 
        requests discontinuance, the mortgagee is not obligated to allow 
        discontinuance until the escrow account is balanced or the 
        shortage has been repaid. 
           (c) The mortgagee shall notify the mortgagor within 60 days 
        after the seventh anniversary of the date of the mortgage if the 
        right to discontinue the escrow account is in accordance with 
        paragraph (b).  For mortgage loans entered into, on or prior to 
        July 1, 1989, the notice required by this paragraph shall be 
        provided to the mortgagor by January 1, 1997. 
           (d) A mortgagee may require the mortgagor to reestablish 
        the escrow account if the mortgagor has failed to make timely 
        payments for two consecutive payment periods at any time during 
        the remaining term of the mortgage, or if the mortgagor has 
        failed to pay taxes or insurance premiums when due.  A payment 
        received during a grace period shall be deemed timely. 
           (e) The mortgagee shall, subject to paragraph (b), return 
        any funds remaining in the account to the mortgagor within 60 
        days after receipt of the mortgagor's written notice of election 
        to discontinue the escrow account. 
           (f) The mortgagee shall not charge a direct fee for the 
        administration of the escrow account, nor shall the mortgagee 
        charge a fee or other consideration for allowing the mortgagor 
        to discontinue the escrow account. 
           (2) A mortgagee offering the following option (c) to a 
        mortgagor but not requiring maintenance of escrow accounts as 
        described in clause (1), whether or not the accounts were 
        required by the mortgagee or were optional with the mortgagor, 
        shall offer to each of such mortgagors the following options: 
           (a) the mortgagor may personally manage the payment of 
        insurance and taxes; 
           (b) the mortgagor may open with the mortgagee a passbook 
        savings account carrying the current rate of interest being paid 
        on such accounts by the mortgagee in which the mortgagor can 
        deposit the funds previously paid into the escrow account; or 
           (c) the mortgagor may elect to maintain a noninterest 
        bearing escrow account as described in clause (1) to be serviced 
        by the mortgagee at no charge to the mortgagor. 
           A mortgagee that is not a depository institution offering 
        passbook savings accounts shall instead of offering option (b) 
        above notify its mortgagors (1) that they may open such accounts 
        at a depository institution and (2) of the current maximum legal 
        interest rate on such accounts. 
           A mortgagee offering option (c) above to a mortgagor but 
        not requiring the maintenance of escrow accounts shall notify 
        its mortgagor of the options under (a), (b) and (c).  The notice 
        shall state the option and state that an escrow account is not 
        required by the mortgagee, that the mortgagor is legally 
        responsible for the payment of taxes and insurance, and that the 
        notice is being given pursuant to this subdivision. 
           Notice shall be given within 30 days after the effective 
        date of the provisions of Laws 1977, chapter 350 amending the 
        subdivision, as to mortgagees offering option (c) above to 
        mortgagors but not requiring escrow accounts as of the effective 
        date, or within 30 days after a mortgagee's decision to 
        discontinue requiring escrow accounts if the mortgagee continues 
        to offer option (c) above to mortgagors.  If no reply is 
        received within 30 days, option (c) shall be selected for the 
        mortgagor but the mortgagor may, at any time, select another 
        option. 
           A mortgagee making a new mortgage and offering option (c) 
        above to a prospective mortgagor shall, at the time of loan 
        application, notify the prospective mortgagor of options (a), 
        (b) and (c) above which must be extended to the prospective 
        mortgagor.  The mortgagor shall select one of the options at the 
        time the loan is made. 
           Any notice required by this clause shall be on forms 
        approved by the commissioner of commerce and shall provide that 
        at any time a mortgagor may select a different option.  The form 
        shall contain a blank where the current passbook rate of 
        interest shall be entered by the mortgagee.  Any option selected 
        by the mortgagor shall be binding on the mortgagee. 
           This clause does not apply to escrow accounts which are 
        excepted from the interest paying requirements of clause (1). 
           (3) A mortgagee shall be prohibited from charging a direct 
        fee for the administration of the escrow account. 
           Sec. 9.  Minnesota Statutes 1994, section 47.20, 
        subdivision 14, is amended to read: 
           Subd. 14.  (a) A lender requiring or offering private 
        mortgage insurance shall make available to the borrower or other 
        person paying the insurance premium the same premium payment 
        plans as are available to the lender in paying the private 
        mortgage insurance premium.  
           (b) Any refund or rebate for unearned private mortgage 
        insurance premiums shall be paid to the borrower or other person 
        actually providing the funds for payment of the premium.  
           (c) With regard to first mortgage loans made on or after 
        January 1, 1997, the mortgagor shall have the right to elect, in 
        writing, to cancel borrower-purchased private mortgage insurance 
        if all of the following terms and conditions have been met: 
           (1) if the current unpaid principal balance of a first 
        mortgage is 75 percent or less of the current fair market 
        appraised value of the property.  "Current fair market appraised 
        value" shall be based upon a current appraisal by a real estate 
        appraiser licensed or certified by the appropriate state or 
        federal agency and reasonably acceptable to the lender.  The 
        lender may require the mortgagor to pay for the appraisal; 
           (2) the mortgagor's monthly installments of principal, 
        interest, and escrow obligations have not been more than 30 days 
        past due over the 24-month period immediately preceding the 
        request for cancellation and all accrued late charges have been 
        paid; 
           (3) the mortgage was made at least 24 months prior to the 
        receipt of a request for cancellation of private mortgage 
        insurance; 
           (4) the property securing the mortgage is owner-occupied; 
        and 
           (5) the mortgage has not been pooled with other mortgages 
        in order to constitute, in whole or in part, collateral for 
        bonds issued by the state of Minnesota or any political 
        subdivision of the state of Minnesota or of any agency of any 
        political subdivision of the state of Minnesota. 
           (d) Other than the appraisal fee allowed pursuant to 
        paragraph (c), clause (1), the lender shall not charge the 
        borrower a fee or other consideration for cancellation of the 
        private mortgage insurance. 
           (e) A lender requiring private mortgage insurance shall, 
        after the payment of the 24th monthly premium installment of 
        private mortgage insurance, provide an annual written notice to 
        each mortgagor currently paying premiums for private mortgage 
        insurance.  The notice may be included in the annual statement 
        or may be included in other regular mailings to the mortgagor.  
        The annual notice shall be on its own page, unless included in a 
        private mortgage insurance notice required under the federal 
        Real Estate Settlement Procedures Act, and shall appear 
        substantially as follows: 
            "NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE INSURANCE 
           If you currently pay private mortgage insurance premiums, 
        you may have the right to cancel the insurance and cease paying 
        premiums.  This would permit you to make a lower total monthly 
        mortgage payment.  In most cases, you have the right to cancel 
        private mortgage insurance if the principal balance of your loan 
        is 80 percent or less of the current fair market appraised value 
        of your home.  If you wish to learn whether you are eligible to 
        cancel this insurance, please contact us at (address/phone)." 
           (f) If a mortgage loan governed by paragraph (c) is 
        serviced in accordance with the guidelines of either the Federal 
        National Mortgage Association or the Federal Home Loan Mortgage 
        Corporation, the lender shall cancel private mortgage insurance 
        in accordance with the cancellation guidelines of the applicable 
        entity in effect at the time the request for cancellation is 
        received. 
           Sec. 10.  Minnesota Statutes 1994, section 47.201, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORIZATION.] Notwithstanding the provisions 
        of sections section 334.01, subdivision 1, and 51A.37, 
        subdivision 3, clause (d), any financial institution is 
        authorized to make graduated payment home loans and purchases 
        representing graduated payment home loans pursuant to such rules 
        as the commissioner of commerce finds to be necessary and 
        proper, if any, at an interest rate not in excess of the maximum 
        lawful interest rate prescribed in section 47.20, subdivision 4a.
        Notwithstanding the provisions of section 334.01, subdivision 1, 
        where initial repayments of a graduated payment home loan are 
        less than the total accrued outstanding interest, the excess 
        accrued and unpaid interest may be added to the outstanding loan 
        balance on which interest accrues at the contracted rate. 
           Sec. 11.  Minnesota Statutes 1995 Supplement, section 
        47.61, subdivision 3, is amended to read: 
           Subd. 3.  (a) "Electronic financial terminal" means an 
        electronic information processing device that is established to 
        do either or both of the following: 
           (1) capture the data necessary to initiate financial 
        transactions; or 
           (2) through its attendant support system, store or initiate 
        the transmission of the information necessary to consummate a 
        financial transaction. 
           (b) "Electronic financial terminal" does not include: 
           (1) a telephone; 
           (2) an electronic information processing device that is 
        used internally by a financial institution to conduct the 
        business activities of the institution; or 
           (3) an electronic point-of-sale terminal operated by a 
        retailer that is used to process payments for the purchase of 
        goods and services by consumers, and which also may be used to 
        obtain cash advances or cash back not to exceed $25 and only if 
        incidental to the retail sale transactions, through the use of 
        credit cards or debit cards, provided that the payment 
        transactions using debit cards are subject to the federal 
        Electronic Funds Transfer Act, United States Code, title 12, 
        sections 1693 et seq., and Regulation E of the Federal Reserve 
        Board, Code of Federal Regulations, title 12, subpart 205.2; 
        this clause does not exempt the retailer from liability for 
        negligent conduct or intentional misconduct of the operator 
        under section 47.69, subdivision 5.  
           Sec. 12.  Minnesota Statutes 1994, section 48.09, is 
        amended to read: 
           48.09 [DIVIDENDS; SURPLUS.] 
           Subdivision 1.  [CREATION OF SURPLUS FUND.] 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 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.  
           Subd. 2.  [UNDECLARED NET PROFITS, PRIOR DIVIDEND PERIODS.] 
        Any amount of remaining net profits qualifying for dividend 
        declaration in subdivision 1 and not declared at the end of each 
        annual dividend period may be subject to dividend declaration 
        under the requirements of subdivision 1 during any of the three 
        subsequent annual dividend periods. 
           Sec. 13.  Minnesota Statutes 1994, section 48.10, is 
        amended to read: 
           48.10 [ANNUAL AUDIT; REPORT.] 
           The board of directors of a bank, bank and trust, or trust 
        company shall annually examine the its books of, a bank, 
        either in person, or by appointing an examining committee, or an 
        auditor, who may be an independent auditor or accountant.  The 
        examining committee or auditor shall be solely responsible to 
        the directors.  A report shall be made to the directors as to 
        the scope of the examination or audit, and also to show those 
        assets, excluding marketable securities and fixed assets, which 
        are carried on the books for more than actual value.  This 
        report shall be retained as a permanent record or incorporated 
        in the minutes of the meeting, and a copy of the report shall be 
        sent to the commissioner of commerce. 
           Sec. 14.  Minnesota Statutes 1995 Supplement, section 
        48.153, subdivision 3a, is amended to read: 
           Subd. 3a.  A savings bank organized under chapter 50, a 
        savings association subject to the provisions of sections 51A.01 
        to 51A.57, or a savings association chartered under the laws of 
        the United States, that has its principal place of business in 
        this state, may make a loan for consumer purposes to a natural 
        person in an amount not exceeding $25,000 repayable in 
        installments, and may charge a rate of interest upon the unpaid 
        principal balance of the amount financed of 12 percent a year, 
        or the rate of interest authorized by section 48.195, whichever 
        is greater.  If the rate of interest charged is permitted by 
        section 48.195 at the time the loan is made, the rate does not 
        later become usurious because of a fluctuation in the federal 
        discount rate. 
           Sec. 15.  Minnesota Statutes 1995 Supplement, 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 sections section 47.59, 
        subdivisions 2 and 4 to 14; and 51A.386, subdivision 4.  A state 
        bank or national bank may extend credit pursuant to the terms 
        and conditions set forth in sections 47.59, and 47.60, and 
        51A.386, subdivision 4. 
           Sec. 16.  Minnesota Statutes 1994, section 48.301, is 
        amended to read: 
           48.301 [MULTIPARTY ACCOUNTS.] 
           When any deposit is made in the names of two or more 
        persons jointly, or by any person payable on death (P.O.D.) to 
        another, or by any person in trust for another, the rights of 
        the parties and the financial institution are determined by 
        chapter 528 524.  
           Sec. 17.  Minnesota Statutes 1995 Supplement, section 
        48.65, is amended to read: 
           48.65 [TRUST COMPANIES TO COMPLY WITH CERTAIN LAWS.] 
           No trust company of this state shall conduct a banking 
        business, as defined in section 47.02, exercising deposit taking 
        powers, without fully complying with the provisions of section 
        48.221 relating to the reserve requirements of the state banks.  
           Sec. 18.  Minnesota Statutes 1994, section 48.845, 
        subdivision 4, is amended to read: 
           Subd. 4.  "Affiliated bank" with respect to another bank or 
        a trust company means any bank which is owned or controlled by 
        the corporation which owns or controls that other bank or trust 
        company, including a wholly owned subsidiary of the other bank 
        or trust company.  
           Sec. 19.  Minnesota Statutes 1995 Supplement, section 
        50.1485, subdivision 1, is amended to read: 
           Subdivision 1.  [GENERALLY.] In addition to other 
        investments authorized by law, a savings bank may make, 
        purchase, or invest in: 
           (a) loans secured by the pledge of policies of life 
        insurance, the assignment of which is properly acknowledged by 
        the insurer; 
           (b) consumer loans, which may be unsecured or secured by 
        personal or real property.  Consumer loans include, but are not 
        limited to, closed-end installment loans, single payment loans, 
        nonamortizing loans, open-end revolving line of credit loans, 
        credit card loans and extensions of credit, and overdraft 
        protection loans.  For the purpose of this paragraph, "consumer 
        loan" means a loan made by the savings bank in which:  (1) the 
        debtor is a person other than an organization; (2) the debt is 
        incurred primarily for personal, family, or household purpose; 
        and (3) the debt is payable in installments or a finance charge 
        is made; 
           (c) secured and unsecured loans to organizations and 
        natural persons for business or commercial purposes.  For the 
        purpose of this paragraph, "organization" means a corporation, 
        government or governmental subdivision, or agency, trust, 
        estate, partnership, limited liability partnership, limited 
        liability company, joint venture, cooperative, or association.  
        "Business or commercial purpose" means a purpose other than 
        personal, family, household, or agricultural purpose; 
           (d) secured and unsecured loans for agricultural purposes.  
        For the purpose of this paragraph, "agricultural purpose" means 
        a purpose relating to the production, harvest, exhibition, 
        marketing, transportation, processing, or manufacture of 
        agricultural products.  "Agricultural products" includes 
        agricultural, horticultural, viticultural, and dairy products, 
        livestock, wildlife, poultry, bees, and forest products, and 
        products raised or produced on farms, including processed or 
        manufactured products; 
           (e) credit sale contracts, which means a sale of goods, 
        services, or an interest in land in which credit is granted by a 
        seller who regularly engages as a seller in credit transactions 
        of the same kind, and the debt is payable in installments or a 
        finance charge is made; 
           (f) loans on the security of deposit accounts; 
           (g) real estate loans, subject to the conditions applicable 
        to savings associations under section 51A.38 and Minnesota 
        Statutes 1994, section 51A.385.  "Real estate loans" which 
        include a loan or other obligation secured by a first lien on 
        real estate in fee or in a leasehold extending or renewable 
        automatically for a period of at least ten years beyond the date 
        scheduled for the final principal payment of the loan or 
        obligation, or a transaction out of which a first lien or claim 
        is created against the real estate, including the purchase of 
        the real estate in fee by a savings bank and the concurrent or 
        immediate sale of it on installment contract; 
           (h) secured or unsecured loans for the purpose of repair, 
        improvement, rehabilitation, or furnishing of real estate; 
           (i) loans for the purpose of financing or refinancing an 
        ownership interest in certificates of stock, certificates of 
        beneficial interest, or other evidence of an ownership interest 
        in, or a proprietary lease from, a corporation, limited 
        liability company, trust, limited liability partnership, or 
        partnership formed for the purpose of the cooperative ownership 
        of real estate, secured by the assignment or transfer of 
        certificates or other evidence of ownership of the borrower; 
           (j) loans guaranteed or insured, in whole or in part, by 
        the United States or any of its instrumentalities; 
           (k) issuance of letters of credit or other similar 
        arrangements; and 
           (l) any other type of loan authorized by rules adopted by 
        the commissioner. 
           Sec. 20.  Minnesota Statutes 1995 Supplement, section 
        50.245, subdivision 4, is amended to read: 
           Subd. 4.  [PROCEDURAL REQUIREMENTS.] Procedural 
        requirements equivalent to those contained in sections 48.90 to 
        48.991 48.995 apply to reciprocal interstate branching and 
        acquisitions by savings banks and savings bank holding companies.
           Sec. 21.  Minnesota Statutes 1994, section 52.131, is 
        amended to read: 
           52.131 [MULTIPARTY ACCOUNTS.] 
           When any deposit is made in the names of two or more 
        persons jointly, or by any person payable on death (P.O.D.) to 
        another, or by any person in trust for another, the rights of 
        the parties and the financial institution are determined by 
        chapter 528 524.  
           Sec. 22.  Minnesota Statutes 1994, section 53.01, is 
        amended to read: 
           53.01 [ORGANIZATION.] 
           It is lawful for three or more persons, who desire to form 
        a corporation for the purpose of carrying on primarily the 
        business of loaning money to persons within the conditions set 
        forth in this chapter, to organize, under this chapter, an 
        industrial loan and thrift company, by filing with the secretary 
        of state articles of incorporation, and upon paying the fees 
        prescribed by sections 301.07 and 301.071 or chapter 302A and 
        upon compliance with the procedure provided for the organization 
        and government of ordinary corporations under the laws of this 
        state, and upon compliance with the additional requirements of 
        this chapter prior to receiving authorization to do business. 
           Sec. 23.  Minnesota Statutes 1994, section 53.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION, FEE, NOTICE.] Any corporation 
        hereafter organized as an industrial loan and thrift company, 
        shall, after compliance with the requirements set forth in 
        sections 53.01 and 53.02, file a written application with the 
        department of commerce for a certificate of authorization.  A 
        corporation that will not sell or issue thrift certificates for 
        investment as permitted by this chapter need not comply with 
        subdivision 2b.  The application must be in the form prescribed 
        by the department of commerce.  The application must be made in 
        the name of the corporation, executed and acknowledged by an 
        officer designated by the board of directors of the corporation, 
        requesting a certificate authorizing the corporation to transact 
        business as an industrial loan and thrift company, at the place 
        and in the name stated in the application.  At the time of 
        filing the application the applicant shall pay a $1,000 filing 
        fee and a $500 investigation fee.  The fees must be turned over 
        by the commissioner to the state treasurer and credited to the 
        general fund.  The applicant shall also submit a copy of the 
        bylaws of the corporation, its articles of incorporation and all 
        amendments thereto at that time.  If the application is 
        contested, 50 percent of an additional fee equal to the actual 
        costs incurred by the department of commerce in approving or 
        disapproving the application, payable to the state treasurer and 
        credited to the general fund shall be paid by the applicant and 
        50 percent equally by the intervening parties.  An application 
        for powers under subdivision 2b must also require that a notice 
        of the filing of the application must be published once within 
        30 days of the receipt of the form prescribed by the department 
        of commerce, at the expense of the applicant, in a qualified 
        newspaper published in the municipality in which the proposed 
        industrial loan and thrift company is to be located, or, if 
        there be none, in a qualified newspaper likely to give notice in 
        the municipality in which the company is proposed to be 
        located.  If the department of commerce receives a written 
        objection to the application from any person within 20 21 days 
        of the notice having been fully published a contested case 
        hearing must be conducted on the application.  Notice of a 
        hearing in connection with this section must be published once 
        in the form prescribed by the department of commerce, at the 
        expense of the applicant, in the same manner as a notice of 
        application, the commissioner shall proceed in the same manner 
        as required under section 46.041, subdivisions 3 and 4, relating 
        to state banks. 
           Sec. 24.  Minnesota Statutes 1994, section 53.07, 
        subdivision 2, is amended to read: 
           Subd. 2.  [TEMPORARY RESERVE MINIMUM.] Until an industrial 
        loan and thrift company obtains a commitment for insurance or 
        guarantee of accounts acceptable to the commissioner as required 
        by section 53.10, it shall establish a minimum reserve against 
        the certificates of indebtedness, savings accounts, and savings 
        deposits described in section 53.04, subdivision 5, of not less 
        than ten percent of the amount of indebtedness thus created.  
        Three percent of this indebtedness shall be in cash in the 
        actual possession of the industrial loan company or on demand 
        deposit in approved banks of this state, and seven percent of 
        the total indebtedness may be in bonds admissible for investment 
        by mutual savings banks under the laws of this state. 
           Sec. 25.  Minnesota Statutes 1995 Supplement, section 
        53.09, subdivision 2, is amended to read: 
           Subd. 2.  [REPORT TO COMMISSIONER.] (1) Each industrial 
        loan and thrift company shall annually on or before the first 
        day of March file a report with the commissioner stating in 
        detail, under appropriate heads, its assets and liabilities at 
        the close of business on the last day of the preceding calendar 
        year.  This report shall be made under oath in the form 
        prescribed by the commissioner. 
           (2) Each industrial loan and thrift company which holds 
        authority to accept accounts pursuant to section 53.04, 
        subdivision 5, shall in place of the requirement in clause (1) 
        submit the reports and make the publication required of state 
        banks pursuant to section 48.48.  
           (3) Within 30 days following a change in controlling 
        ownership of the capital stock of an industrial loan and thrift 
        company, it shall file a written report with the commissioner 
        stating in detail the nature of such change in ownership.  
           Sec. 26.  Minnesota Statutes 1995 Supplement, section 
        55.10, subdivision 4, is amended to read: 
           Subd. 4.  [WILL SEARCHES, BURIAL DOCUMENTS PROCUREMENT, AND 
        INVENTORY OF CONTENTS.] (a) Upon being furnished with 
        satisfactory proof of death of a sole lessee or the last 
        surviving co-lessee of a safe deposit box, an employee of the 
        safe deposit company shall open the box and examine the contents 
        in the presence of an employee of the safe deposit company and 
        an individual who appears in person and furnishes an affidavit 
        stating that the individual believes: 
           (1) the box may contain the will or deed to a burial lot or 
        a document containing instructions for the burial of the 
        lessee or that the box may contain property belonging to the 
        estate of the lessee; and 
           (2) the individual is an interested person as defined in 
        this section and wishes to open the box for any one or more of 
        the following purposes: 
           (i) to conduct a will search; 
           (ii) to obtain a document required to facilitate the 
        lessee's wishes regarding body, funeral, or burial arrangements; 
        or 
           (iii) to obtain an inventory of the contents of the box. 
           (b) The safe deposit company may not open the box under 
        this section if it has received a copy of letters of office of 
        the representative of the deceased lessee's estate or other 
        applicable court order.  
           (c) The safe deposit company need not open the box if: 
           (1) the box has previously been opened under this section 
        for the same purpose; 
           (2) the safe deposit company has received notice of a 
        written or oral objection from any person or has reason to 
        believe that there would be an objection; or 
           (3) the lessee's key or combination is not available. 
           (d) For purposes of this section, the term "interested 
        person" means any of the following: 
           (1) a person named as personal representative in a 
        purported will of the lessee; 
           (2) a person who immediately prior to the death of the 
        lessee had the right of access to the box as a deputy; 
           (3) the surviving spouse of the lessee; 
           (4) a devisee of the lessee; 
           (5) an heir of the lessee; or 
           (6) a person designated by the lessee in a writing 
        acceptable to the safe deposit company which is filed with the 
        safe deposit company before death. 
           (e) For purposes of this section, the term "will" includes 
        a will or a codicil. 
           (f) If the box is opened for the purpose of conducting a 
        will search, the safe deposit company shall remove any document 
        that appears to be a will and make a true and correct machine 
        copy thereof, replace the copy in the box, and then deliver the 
        original thereof to the clerk of court for the county in which 
        the lessee resided immediately before the lessee's death, if 
        known to the safe deposit company, otherwise to the clerk of the 
        court for the county in which the safe deposit box is located.  
        The will must be personally delivered or sent by registered 
        mail.  If the interested person so requests, any deed to burial 
        lot or document containing instructions for the burial of the 
        lessee may be copied by the safe deposit box company and the 
        copy or copies thereof delivered to the interested person.  
           (g) If the box is opened for the purpose of obtaining a 
        document required to facilitate the lessee's wishes regarding 
        the body, funeral, or burial arrangements, any such document may 
        be removed from the box and delivered to the interested person 
        with a true and correct machine copy retained in the box.  If 
        the safe deposit box company discovers a document that appears 
        to be a will, the safe deposit company shall act in accordance 
        with paragraph (f). 
           (h) If the box is opened for the purpose of obtaining an 
        inventory of the contents of the box, the employee of the safe 
        deposit company shall make, or cause to be made, an inventory of 
        the contents of the box, to which the employee and the 
        interested person shall attest under penalty of perjury to be 
        correct and complete.  Within ten days of opening the box 
        pursuant to this subdivision, the safe deposit company shall 
        deliver the original inventory of the contents to the court 
        administrator for the county in which the lessee resided 
        immediately before the lessee's death, if known to the safe 
        deposit company, otherwise to the court administrator for the 
        county in which the safe deposit box is located.  The inventory 
        must be personally delivered or sent by registered mail.  If the 
        interested person so requests, the safe deposit company shall 
        make a true and correct copy of any document in the box and 
        deliver that copy to the interested person.  If the contents of 
        the box include a document that appears to be a will, the safe 
        deposit company shall act in accordance with paragraph (f). 
           (i) The safe deposit company need not ascertain the truth 
        of any statement in the affidavit required to be furnished under 
        this subdivision and when acting in reliance upon an affidavit, 
        it is discharged as if it dealt with the personal representative 
        of the lessee.  The safe deposit company is not responsible for 
        the adequacy of the description of any property included in an 
        inventory of the contents of a safe deposit box, nor for 
        conversion of the property in connection with actions performed 
        under this subdivision, except for conversion by intentional 
        acts of the company or its employees, directors, officers, or 
        agents.  If the safe deposit company is not satisfied that the 
        requirements of this subdivision have been met, it may decline 
        to open the box.  
           (j) No contents of a box other than a will and a document 
        required to facilitate the lessee's wishes regarding body, 
        funeral, or burial arrangements may be removed pursuant to this 
        subdivision.  The entire contents of the box, however, may be 
        removed pursuant to section 524.3-1201. 
           Sec. 27.  Minnesota Statutes 1995 Supplement, section 
        56.131, subdivision 4, is amended to read: 
           Subd. 4.  [ADJUSTMENT OF DOLLAR AMOUNTS.] (a) The dollar 
        amounts in this section, sections 53.04, subdivision 3a, 
        paragraph (c), 56.01, 56.12, and 56.125 shall change 
        periodically, as provided in this section, according to and to 
        the extent of changes in the implicit price deflator for the 
        gross domestic product, 1987 = 100, compiled by the United 
        States Department of Commerce, and hereafter referred to as the 
        index.  The index for December 1991 is the reference base index 
        for adjustments of dollar amounts 47.59, subdivision 3.  
           (b) The designated dollar amounts shall change on July 1 of 
        each even-numbered year if the percentage of change, calculated 
        to the nearest whole percentage point, between the index for 
        December of the preceding year and the reference base index is 
        ten percent or more, but; 
           (1) the portion of the percentage change in the index in 
        excess of a multiple of ten percent shall be disregarded and the 
        dollar amounts shall change only in multiples of ten percent of 
        the amounts appearing in Laws 1995, chapter 202, on the date of 
        enactment; and 
           (2) the dollar amounts shall not change if the amounts 
        required by this section are those currently in effect pursuant 
        to Laws 1995, chapter 202, as a result of earlier application of 
        this section.  
           (c) If the index is revised, the percentage of change 
        pursuant to this section shall be calculated on the basis of the 
        revised index.  If a revision of the index changes the reference 
        base index, a revised reference base index shall be determined 
        by multiplying the reference base index then applicable by the 
        rebasing factor furnished by the department of commerce.  If the 
        index is superseded, the index referred to in this section is 
        the one represented by the department of commerce as reflecting 
        most accurately changes in the purchasing power of the dollar 
        for consumers.  
           (d) The commissioner shall announce and publish:  
           (1) on or before April 30 of each year in which dollar 
        amounts are to change, the changes in dollar amounts required by 
        paragraph (b); and 
           (2) promptly after the changes occur, changes in the index 
        required by paragraph (c) including, if applicable, the 
        numerical equivalent of the reference base index under a revised 
        reference base index and the designation or title of any index 
        superseding the index.  
           (e) A person does not violate this chapter with respect to 
        a transaction otherwise complying with this chapter if that 
        person relies on dollar amounts either determined according to 
        paragraph (b), clause (2) or appearing in the last publication 
        of the commissioner announcing the then current dollar amounts.  
           (f) The adjustments provided in this section shall not be 
        affected unless explicitly provided otherwise by law. 
           Sec. 28.  Minnesota Statutes 1995 Supplement, section 
        56.14, is amended to read: 
           56.14 [DUTIES OF LICENSEE.] 
           Every licensee shall: 
           (1) deliver to the borrower (or if there are two or more 
        borrowers to one of them) at the time any loan is made a 
        statement making the disclosures and furnishing the information 
        required by the federal Truth-in-Lending Act, United States 
        Code, title 15, sections 1601 to 1667e, as amended from time to 
        time, with respect to the contract of loan.  A copy of the loan 
        contract may be delivered in lieu of a statement if it discloses 
        the required information; 
           (2) deliver or mail to the borrower without request, a 
        written receipt within 30 days following payment for each 
        payment by coin or currency made on account of any loan wherein 
        charges are computed and paid on unpaid principal balances for 
        the time actually outstanding, specifying the amount applied to 
        charges and the amount, if any, applied to principal, and 
        stating the unpaid principal balance, if any, of the loan; and 
        wherein precomputed charges have been added to the principal of 
        the loan specifying the amount of the payment applied to 
        principal and charges combined, the amount applied to default or 
        extension charges, if any, and stating the unpaid balance, if 
        any, of the precomputed loan contract.  A periodic statement 
        showing a payment received by mail complies with this clause; 
           (3) permit payment to be made in advance in any amount on 
        any contract of loan at any time, but the licensee may apply the 
        payment first to all charges in full at the agreed rate up to 
        the date of the payment; 
           (4) upon repayment of the loan in full, mark indelibly 
        every obligation and security, other than a mortgage or security 
        agreement which secures a new loan to the licensee, signed by 
        the borrower with the word "Paid" or "Canceled," and release any 
        mortgage or security agreement which no longer secures a loan to 
        the licensee, restore any pledge, and cancel and return any 
        note, and any assignment given to the licensee which does not 
        secure a new loan to the licensee within 20 days after the 
        repayment.  For purposes of this requirement, the document 
        including actual evidence of an obligation or security may be 
        maintained, stored, and retrieved in a form or format acceptable 
        to the commissioner under section 46.04, subdivision 3; 
           (5) display prominently in each licensed place of business 
        a full and accurate schedule, to be approved by the 
        commissioner, of the charges to be made and the method of 
        computing the same; furnish a copy of the contract of loan to 
        any person obligated on it or who may become obligated on it at 
        any time upon the request of that person; 
           (6) show in the loan contract or statement of loan the rate 
        or rates of charge on which the charge in the contract is based, 
        expressed in terms of rate or rates per annum.  The rate 
        expression shall be printed in at least 8-point type on the loan 
        statement or copy of the loan contract given to the borrower; 
           (7) if a payment results in the prepayment of three or more 
        installment payments on a precomputed loan, at the same time the 
        receipt required by clause (2) is delivered or mailed within 15 
        days of receipt of the prepayment, deliver or mail to the 
        borrower a notice in at least eight-point type as part of the 
        receipt or together with the receipt.  The notice must contain 
        the following statement:  
           "You have substantially prepaid the installment payments on 
           your loan and may experience an interest savings over the 
           remaining term only if you refinance the balance within the 
           next 30 days." 
           Sec. 29.  Minnesota Statutes 1995 Supplement, section 
        62B.04, subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT LIFE INSURANCE.] (1) The initial 
        amount of credit life insurance shall not exceed the amount of 
        principal repayable under the contract of indebtedness plus an 
        amount equal to one monthly payment.  Thereafter, if the 
        indebtedness is repayable in substantially equal installments 
        according to a predetermined schedule, the amount of insurance 
        on which the premium is calculated shall not exceed be equal to 
        the scheduled indebtedness plus one monthly payment or actual 
        amount of indebtedness, whichever is greater.  If the contract of 
        indebtedness provides for a variable rate of finance charge or 
        interest, the initial rate or the scheduled rates based on the 
        initial index must be used in determining the scheduled amount 
        of indebtedness and subsequent changes to the rate must be 
        disregarded in determining whether the contract is repayable in 
        substantially equal installments according to a predetermined 
        schedule. 
           (2) Notwithstanding clause (1), the amount of credit life 
        insurance written in connection with credit transactions 
        repayable over a specified term exceeding 63 months shall not 
        exceed the greater of:  (i) the actual amount of unpaid 
        indebtedness as it exists from time to time; or (ii) where an 
        indebtedness is repayable in substantially equal installments 
        according to a predetermined schedule, the scheduled amount of 
        unpaid indebtedness, less any unearned interest or finance 
        charges, plus an amount equal to two monthly payments.  If the 
        credit transaction provides for a variable rate of finance 
        charge or interest, the initial rate or the scheduled rates 
        based on the initial index must be used in determining the 
        scheduled amount of unpaid indebtedness and subsequent changes 
        in the rate must be disregarded in determining whether the 
        contract is repayable in substantially equal installments 
        according to a predetermined schedule. 
           (3) Notwithstanding clauses (1) and (2), insurance on 
        educational, agricultural, and horticultural credit transaction 
        commitments may be written on a nondecreasing or level term plan 
        for the amount of the loan commitment. 
           (4) If the contract of indebtedness provides for a variable 
        rate of finance charge or interest, the initial rate or the 
        scheduled rates based on the initial index shall be used in 
        determining the scheduled amount of indebtedness, and subsequent 
        changes to the rate shall be disregarded in determining whether 
        the contract is repayable in substantially equal installments 
        according to a predetermined schedule. 
           Sec. 30.  Minnesota Statutes 1994, section 118.01, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any bank, trust company or thrift 
        institution authorized to do business in this state may, in lieu 
        of the corporate or personal surety bond required to be 
        furnished to secure deposited funds, deposit with the custodian 
        of the funds as collateral security:  (1) certificates of 
        deposit that are fully insured by the Federal Deposit Insurance 
        Corporation or the Federal Savings and Loan Insurance 
        Corporation; (2) notes secured by first mortgages of future 
        maturity, upon which interest is not past due, on improved real 
        estate free from delinquent taxes, within the county wherein the 
        depository is located, or within counties immediately adjoining 
        the county in the state of Minnesota; (3) obligations which are 
        legally authorized investments for debt service funds under 
        section 475.66, subdivision 3; and (4) qualified state or local 
        government obligations acceptable to the treasurer or chief 
        financial officer; and (5) irrevocable standby letters of credit 
        issued by Federal Home Loan Banks to a municipality accompanied 
        by written evidence of the bank's public debt rating 
        contemplated by this subdivision.  Qualified obligations under 
        clause (4) must be general obligations rated "A" or better by 
        Moody's Investors Service, Inc. or Standard & Poor's 
        Corporation; and Federal Home Loan Banks issuing letters of 
        credit under clause (5) must have a rating of "AA" or better by 
        Moody's Investors Service, Inc., or Standard & Poor's 
        Corporation. 
           Sec. 31.  Minnesota Statutes 1994, section 168.69, is 
        amended to read: 
           168.69 [COMPLAINT ALLEGING VIOLATION.] 
           Any retail buyer having reason to believe that sections 
        168.66 to 168.77 relating to the buyer's retail installment 
        contract has been violated may file with the administrator a 
        written complaint setting forth the details of such alleged 
        violation and the administrator, upon receipt of such complaint, 
        may inspect the pertinent books, records, letters and contracts 
        of the licensee, assignee of the licensee or retail seller, and 
        of the retail seller involved, relating to such specific written 
        complaint.  
           Sec. 32.  Minnesota Statutes 1994, section 168.705, is 
        amended to read: 
           168.705 [EXAMINATIONS, SPECIAL INVESTIGATIONS, COSTS.] 
           For the purpose of discovering violations of sections 
        168.66 to 168.77 or securing information lawfully required by 
        the administrator hereunder, the administrator may, at any time, 
        either personally or by a person or persons duly designated by 
        the administrator, investigate the conditional sales contracts 
        and business related to the conditional sales contracts and 
        examine the books, accounts, records, and files used therein, of 
        every licensee, assignee of the licensee, and of every person 
        who shall be engaged in the business of a sales finance company, 
        including the retail seller and assignee of the retail seller, 
        whether the person shall act as principal or agent, or under or 
        without the authority of sections 168.66 to 168.77.  For that 
        purpose, the administrator and the administrator's duly 
        designated representative shall have free access to the offices 
        and places of business, books, accounts, papers, records, files, 
        safes, and vaults of all these persons.  The administrator and 
        all persons duly designated by the administrator shall have 
        authority to require the attendance of and to examine, under 
        oath, all persons whomsoever whose testimony the administrator 
        may require relative to the conditional sales contract or the 
        business or to the subject matter of any examination, 
        investigation, or hearing. 
           The administrator may make an examination of the affairs, 
        business, office, and records of licensees, and of other persons 
        subject to examination under this section, as often as 
        considered necessary.  The administrator may assess a fee 
        covering the necessary costs of an examination or special 
        investigation under this section, section 168.69, or reports 
        filed under section 168.706.  The fee is payable to the 
        administrator on the administrator's request for payment.  The 
        administrator may maintain an action for the recovery of the 
        costs in any court of competent jurisdiction. 
           Sec. 33.  Minnesota Statutes 1994, section 168.71, is 
        amended to read: 
           168.71 [RETAIL INSTALLMENT CONTRACTS.] 
           (a)(1) Every retail installment contract shall be in 
        writing, shall contain all the agreements of the parties, shall 
        be signed by the retail buyer and seller, and a copy thereof 
        signed by the retail buyer shall be furnished to such retail 
        buyer at the time of the execution of retail buyer executes the 
        contract.  The copy signed by both the retail buyer and retail 
        seller shall be provided to the retail buyer within seven days 
        after delivery of the vehicle.  With respect to any contract 
        executed prior to August 1, 1996, which has not been paid in 
        full by the retail buyer, the retail seller shall provide such 
        retail buyer a copy signed by both the retail buyer and retail 
        seller within 120 days after August 1, 1996. 
           (2) No provisions for confession of judgment or power of 
        attorney therefor contained in any retail installment contract 
        or contained in a separate agreement relating thereto, shall be 
        valid or enforceable.  
           (3) The holder of a precomputed retail installment contract 
        may, if the contract so provides, collect a delinquency and 
        collection charge on each installment in arrears for a period 
        not less than ten days in an amount not in excess of five 
        percent of each installment or $5, whichever is greater.  In 
        addition to such delinquency and collection charge, the retail 
        installment contract, whether interest-bearing or precomputed, 
        may provide for the payment of attorneys' fees not exceeding 15 
        percent of the amount due and payable under such contract where 
        such contract is referred to an attorney not a salaried employee 
        of the holder of the contract for collection plus the court 
        costs.  
           (4) Unless written notice has been given to the retail 
        buyer of actual or intended assignment of a retail installment 
        contract, payment thereunder or tender thereof made by the 
        retail buyer to the last known holder of such contract shall be 
        binding upon all subsequent holders or assignees.  
           (5) Upon written request from the retail buyer, the holder 
        of the retail installment contract shall give or forward to the 
        retail buyer a written statement of the dates and amounts of 
        payments and the total amount unpaid under such contract.  A 
        retail buyer shall be given a written receipt for any payment 
        when made in cash.  
           (b) The retail installment contract shall contain the 
        following items: 
           (1) The cash sale price of the motor vehicle which is the 
        subject matter of the retail installment contract; 
           (2) The total amount of the retail buyer's down payment, 
        whether made in money or goods, or partly in money or partly in 
        goods; 
           (3) The difference between items one and two; 
           (4) The charge, if any, included in the transaction for any 
        insurance and other benefits not included in clause (1), 
        specifying the types of coverage and taxes, fees, and charges 
        that actually are or will be paid to public officials or 
        government agencies, including those for perfecting, releasing, 
        or satisfying a security interest if such taxes, fees, or 
        charges are not included in clause (1); 
           (5) Principal balance, which is the sum of items three and 
        four; 
           (6) The amount of the finance charge; 
           (7) The total of payments payable by the retail buyer to 
        the retail seller and the number of installment payments 
        required and the amount of each installment expressed in dollars 
        or percentages, and date of each payment necessary finally to 
        pay the total of payments which is the sum of item five and item 
        six.  
           Provided, however, that said items one to seven inclusive 
        need not be stated in the terms, sequence or order set forth 
        above.  Provided further, that clauses (6) and (7) may be 
        disclosed on the assumption that all scheduled payments under 
        the contract will be made when due. 
           In lieu of the above clauses, the retail seller may give 
        the retail buyer disclosures which satisfy the requirements of 
        the Federal Truth-In-Lending Act in effect as of the time of the 
        contract, notwithstanding whether or not that act applies to the 
        transaction. 
           (c) Every retail seller or sales finance company, if a 
        charge for insurance on the motor vehicle is included in a 
        retail installment contract shall within 30 days after execution 
        of the retail installment contract send or cause to be sent to 
        the retail buyer a policy or policies or certificate of 
        insurance, which insurance shall be written by a company 
        authorized to do business in this state, clearly setting forth 
        the amount of the premium, the kind or kinds of insurance and 
        the scope of the coverage and all the terms, exceptions, 
        limitations, restrictions and conditions of the contract or 
        contracts of the insurance.  The buyer of a motor vehicle under 
        a retail installment contract shall have the privilege of 
        purchasing such insurance from an agent or broker of the buyer's 
        own selection and selecting an insurance company mutually 
        acceptable to the seller and the buyer; provided, however, that 
        the inclusion of the cost of the insurance premium in the retail 
        installment contract when the buyer selects the agent, broker or 
        company, shall be optional with the seller. 
           (d) Any sales finance company hereunder may purchase or 
        acquire from any retail seller any retail installment contract 
        on such terms and conditions as may be mutually agreed upon 
        between them.  
           (e) An acknowledgment by the retail buyer of the delivery 
        of any such copy or notice as required in subsection (a) 
        contained in the body of the statement or contract shall be 
        conclusive proof of delivery in any action or proceeding by or 
        against any assignee of a retail installment contract.  
           Sec. 34.  Minnesota Statutes 1994, section 168.73, is 
        amended to read: 
           168.73 [PREPAYMENT IN FULL, REFUND CREDITS, ALLOWANCE.] 
           Subdivision 1.  [PREPAYMENT IN FULL.] Notwithstanding the 
        provisions of any retail installment contract to the contrary, 
        any retail buyer may pay in full at any time before maturity the 
        debt of any retail installment contract without penalty.  In 
        paying a precomputed retail installment contract in full, the 
        retail buyer shall receive a refund credit thereon for such 
        anticipation of payments.  For contracts with substantially 
        equal scheduled monthly payments remaining after the date of 
        prepayment in full, the refund must be calculated for all fully 
        unexpired monthly payment periods following the date of payment 
        in full.  For all other contracts, the refund must be calculated 
        as of the date in the month following prepayment which 
        corresponds to the original contract date.  The refund shall be 
        calculated according to the actuarial method, less an 
        acquisition cost of $15 which may be deducted from the refund so 
        calculated.  
           Where the amount of the credit for anticipation of payment 
        is less than $1, no refund need be made.  
           The actuarial method means the method of allocating 
        payments on a contract between the principal amount and finance 
        charge at the contract rate charged under section 168.72, 
        whereby a payment is applied first to the accumulated finance 
        charge and then to the unpaid principal balance based on the 
        original terms of the contract and based on the assumption that 
        all payments are made on the due date as originally scheduled or 
        deferred. 
           Subd. 2.  [PARTIAL PREPAYMENT; NOTICE.] If a payment 
        results in the prepayment of three or more installment payments 
        on a precomputed contract, the retail seller or assignee of the 
        retail seller shall within 15 days of receipt of the prepayment, 
        deliver or mail to the retail buyer a notice in at least 
        eight-point type.  The notice must contain the following 
        statement: 
           "You have substantially prepaid the installment payments on 
           your contract and may experience an interest savings over 
           the remaining term only if you refinance the balance within 
           the next 30 days." 
           Sec. 35.  Minnesota Statutes 1994, section 256.99, is 
        amended to read: 
           256.99 [REVERSE MORTGAGE PROCEEDS DISREGARDED.] 
           All reverse mortgage loan proceeds received pursuant to 
        section 47.58, including interest or earnings thereon, shall be 
        disregarded and shall not be considered available to the 
        borrower for purposes of determining initial or continuing 
        eligibility for, or amount of, medical assistance, Minnesota 
        supplemental assistance, general assistance, general assistance 
        medical care, or a federal or state low interest loan or grant.  
        This section applies regardless of the time elapsed since the 
        loan was made or the disposition of the proceeds. 
           For purposes of medical assistance eligibility provided 
        under sections 256B.055, 256B.056, and 256B.06, proceeds from a 
        reverse mortgage must be disregarded as income in the month of 
        receipt but are a resource if retained after the month of 
        receipt.  
           Sec. 36.  Minnesota Statutes 1994, section 300.025, is 
        amended to read: 
           300.025 [ORGANIZATION OF FINANCIAL CORPORATIONS.] 
           (a) Three or more persons may form a corporation for any of 
        the purposes specified in section 47.12 by applying to the 
        department of commerce and complying with all applicable 
        organizational requirements and the conditions set out in 
        clauses (1) to (7).  However, no corporation may be formed under 
        this section if it may be formed under the Minnesota business 
        corporation act.  The incorporators must subscribe a certificate 
        specifying: 
           (1) the corporation's name, which must distinguish it from 
        all other corporations authorized to do business in this state, 
        and must contain the word "company," "corporation," "bank," 
        "association," or "incorporated"; 
           (2) the general nature of the corporation's business and 
        its principal place of business; 
           (3) the period of its duration, if limited; 
           (4) the names and places of residence of the incorporators; 
           (5) the board in which the management of the corporation 
        will be vested, the date of the annual meeting at which it will 
        be elected, and the names and addresses of the board members 
        until the first election, a majority of whom must always be 
        residents of this state; 
           (6) the amount of capital stock, if any, how the capital 
        stock is to be paid in, the number of shares into which it is to 
        be divided, and the par value of each share; and, if there is to 
        be more than one class, a description and the terms of issue of 
        each class, and the method of voting on each class; and 
           (7) the highest amount of indebtedness or liability to 
        which the corporation will at any time be subject. 
           The certificate may contain any other lawful provision 
        defining and regulating the powers and business of the 
        corporation, its officers, directors, trustees, members, and 
        stockholders.  However, a corporation subject to sections 
        section 48.27 and 51A.22, subdivision 2, may show its highest 
        amount of indebtedness to be 30 times the amount of its capital 
        and actual surplus.  
           (b) A person doing business in this state may contest the 
        subsequent registration of a name with the office of the 
        secretary of state as provided in section 5.22. 
           Sec. 37.  Minnesota Statutes 1994, section 303.02, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CORPORATION.] In addition to the meaning set 
        forth in section 300.02, subdivision 2, "corporation" means a 
        corporation formed for profit and includes a cooperative.  
           Sec. 38.  Minnesota Statutes 1994, section 308A.135, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CERTIFICATE.] (a) A certificate must be prepared 
        stating:  
           (1) the vote and meeting of the board adopting a resolution 
        of the proposed amendment; 
           (2) the notice given to members of the meeting that at 
        which the amendment was adopted; 
           (3) the quorum registered at the meeting; and 
           (4) the vote cast adopting the amendment.  
           (b) The certificate must be signed by the chair, 
        vice-chair, president, vice-president, secretary, or assistant 
        secretary and filed with the records of the cooperative.  
           Sec. 39.  Minnesota Statutes 1994, section 308A.165, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADOPTION AND AMENDMENT.] (a) Except as provided 
        in paragraph (b), the bylaws of a cooperative may be adopted or 
        amended at a regular or special members' meeting if:  
           (1) the notice of the meeting contains a summary statement 
        of the proposed bylaws or amendment; 
           (2) a quorum is registered as being present or represented 
        by mail vote if authorized by the board; and 
           (3) the bylaws or amendment is approved by a majority of 
        the votes cast, or for a cooperative with articles or bylaws 
        requiring more than majority approval or other conditions for 
        approval, the bylaws or amendment is approved by a proportion of 
        the votes cast or a number of the total members as required by 
        the articles or bylaws and the conditions for approval in the 
        articles or bylaws have been satisfied. 
           (b) Until the first annual members meeting, the majority of 
        directors may adopt and amend bylaws for the cooperative that 
        are consistent with subdivision 3 if the cooperative does not 
        have any members or stockholders with voting rights. 
           Sec. 40.  Minnesota Statutes 1994, section 332.21, is 
        amended to read: 
           332.21 [CONTRACTS.] 
           Each contract entered into by the licensee and the debtor 
        shall be in writing and signed by both parties.  The licensee 
        shall furnish the debtor with a copy of the signed contract.  
        Each such contract shall set forth (1) the dollar charges agreed 
        upon for the services of the licensee, clearly disclosing to 
        such debtor the total amount which may be retained by licensee 
        for services if the contract is fully performed, which maximum 
        amount would be the origination fee together with 15 percent of 
        the amount scheduled to be liquidated by such contract, (2) the 
        terms upon which the debtor may cancel the contract as set out 
        in section 332.23, (3) all debts which are to be managed by the 
        licensee, including the name of the creditor and the amount of 
        the debt, and (4) such other matter as the commissioner may 
        require by rule.  A contract shall not be effective until a 
        payment has been made to the licensee for distribution to 
        creditors or until three business days after the signing 
        thereof, whichever is later.  Within such period an individual 
        may disaffirm said contract and upon such disaffirmance said 
        contract shall be null and void.  Total fees contained in the 
        contract may be exceeded in relation to creditors under open-end 
        agreements if it is agreed to in the contract and the additional 
        debts so contracted to be prorated do not exceed ten percent of 
        the original debts in the contract or written revisions to the 
        original contract. 
           Sec. 41.  Minnesota Statutes 1994, section 332.50, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ACTS CONSTITUTING.] (a) Whoever issues any check 
        that is dishonored and is not paid within 30 days after mailing 
        a notice of dishonor that includes a citation to this section 
        and section 609.535, and a description of the penalties 
        contained in these sections, in compliance with subdivision 3, 
        is liable to the payee, holder, or agent of the holder for:  (1) 
        the amount of the check plus a civil penalty of up to $100 or up 
        to 100 percent of the value of the check, whichever is greater; 
        (2) interest at the rate payable on judgments pursuant to 
        section 549.09 on the face amount of the check from the date of 
        dishonor; and (3) reasonable attorney fees if the aggregate 
        amount of dishonored checks issued by the issuer to all payees 
        within a six-month period is over $1,250. 
           (b) If the amount of the dishonored check plus any service 
        charges that have been incurred under paragraph (d) or (e) have 
        not been paid within 30 days after having mailed a notice of 
        dishonor in compliance with subdivision 3 but before bringing an 
        action, a payee, holder, or agent of the holder may make a 
        written demand for payment for the liability imposed by 
        paragraph (a) by sending a copy of this section and a 
        description of the liability contained in this section to the 
        issuer's last known address. 
           (c) After notice has been sent but before an action under 
        this section is heard by the court, the plaintiff shall settle 
        the claim if the defendant gives the plaintiff the amount of the 
        check plus court costs, any service charge owed under paragraph 
        (d), and reasonable attorney fees if provided for under 
        paragraph (a), clause (3).  
           (d) A service charge may be imposed immediately on any 
        dishonored check, regardless of mailing a notice of dishonor, if 
        written notice of the service charge was conspicuously displayed 
        on the premises when the check was issued.  The service charge 
        may not exceed $20, except that if the payee uses the services 
        of a law enforcement agency to obtain payment of a dishonored 
        check, a service charge of up to $25 may be imposed if the 
        service charge is used to reimburse the law enforcement agency 
        for its expenses.  A payee may impose only one service charge 
        under this paragraph for each dishonored check.  
           (e) This subdivision prevails over any provision of law 
        limiting, prohibiting, or otherwise regulating service charges 
        authorized by this subdivision, but does not nullify charges for 
        dishonored checks, which do not exceed the charges in paragraph 
        (d) or the actual cost of collection, but in no case more than 
        $30, or terms or conditions for imposing the charges which have 
        been agreed to by the parties to an express contract. 
           Sec. 42.  Laws 1995, chapter 171, section 70, is amended to 
        read: 
           Sec. 70.  [REPEALER.] 
           Minnesota Statutes 1994, sections 47.095; 47.30, 
        subdivisions 4 and 6; 48.67; 50.02; 50.07; 50.08; 50.09; 50.10; 
        50.12; 50.15; 50.16; 50.21; and 50.22, are repealed. 
           Sec. 43.  [CAPITAL REQUIREMENTS FOR TRUST COMPANIES; 
        REENACTMENT OF REPEALED SECTION.] 
           Notwithstanding Minnesota Statutes, section 645.36, 
        Minnesota Statutes, section 48.67, inadvertently repealed in 
        Laws 1995, chapter 171, section 70, is reenacted as of the 
        effective date of Laws 1995, chapter 171, section 70. 
           Sec. 44.  [REPEALER.] 
           (a) Minnesota Statutes 1994, sections 51A.01; 51A.02, 
        subdivisions 1, 2, 3, 4, 5, 8, 9, 10, 11, 12, 13, 14, 15, 16, 
        17, 18, 19, 20, 21, 22, 23, 24, 25, 27, 28, 29, 30, 31, 32, 33, 
        34, 35, 36, 37, 38, 39, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 
        51, 52, 53, 55, and 56; 51A.03; 51A.04; 51A.041; 51A.05; 51A.06; 
        51A.065; 51A.07; 51A.08; 51A.09; 51A.10; 51A.11; 51A.12; 51A.13; 
        51A.131; 51A.14; 51A.15; 51A.16; 51A.17; 51A.19, subdivisions 1, 
        4, 5, 6, 7, 8, 10, 11, 12, and 13; 51A.20; 51A.21, subdivisions 
        1, 2, 3, 4, 5, 6a, 6b, 7, 8, 9, 10, 11, 12, 13, 14, 15, 17, 18, 
        20, 21, 22, 23, 24, 25, 26, and 27; 51A.22; 51A.23, subdivision 
        6; 51A.24; 51A.251; 51A.261; 51A.262; 51A.27; 51A.28; 51A.29; 
        51A.30; 51A.31; 51A.32; 51A.33; 51A.34; 51A.35; 51A.361; 51A.37; 
        51A.38; 51A.40; 51A.41; 51A.42; 51A.43; 51A.44; 51A.45; 51A.46; 
        51A.47; 51A.48; 51A.51; 51A.52; 51A.54; 51A.55; 51A.56; and 
        51A.57; Minnesota Statutes 1995 Supplement, sections 47.201, 
        subdivision 7; 47.27, subdivision 3; 51A.02, subdivisions 6, 7, 
        26, 40, and 54; 51A.19, subdivision 9; 51A.21, subdivision 28; 
        51A.23, subdivisions 1 and 7; 51A.386; 51A.50; 51A.53; and 
        51A.58, are repealed. 
           (b) Minnesota Statutes 1994, section 48.94, is repealed. 
           (c) Minnesota Rules, parts 2655.0100; 2655.0200; 2655.0300; 
        2655.0400; 2655.0500; 2655.0600; 2655.0700; 2655.0800; 
        2655.0900; 2655.1000; 2655.1100; 2655.1200; and 2655.1300, are 
        repealed. 
           Sec. 45.  [EFFECTIVE DATE.] 
           Sections 1 to 5, 7 to 9, 11, 12, 16, 20 to 27, 30, 33, 35, 
        42, 43, and 44, paragraphs (b) and (c), are effective the day 
        following final enactment.  Section 44, paragraph (a), is 
        effective July 1, 1998. 
           Sections 10, 14, 15, 19, and 36 are effective on the 
        effective date of the repeals in section 44, paragraph (a). 
                                   ARTICLE 2
                          CONSUMER CREDIT UNIFORM CODE
                       CLARIFICATION AND DEVELOPMENT ACT
           Section 1.  Minnesota Statutes 1995 Supplement, section 
        47.59, subdivision 2, is amended to read: 
           Subd. 2.  [APPLICATION.] This section does not apply to 
        loans and other Extensions of credit or purchases of extensions 
        of credit by financial institutions under sections 47.20, 47.21, 
        47.201, 47.204, 47.58, 47.60, 48.153, 48.185, 48.195, 59A.01 to 
        59A.15, 168.66 to 168.77, 334.01, 334.011, 334.012, 334.021, 
        334.06, and 334.061 to 334.19. may, but need not, be made 
        according to those sections in lieu of the authority set forth 
        in this section to the extent those sections authorize the 
        financial institution to make extensions of credit or purchase 
        extensions of credit under those sections.  If a financial 
        institution elects to make an extension of credit or to purchase 
        an extension of credit under those other sections, the extension 
        of credit or the purchase of an extension of credit is subject 
        to those sections and not this section, except this subdivision, 
        and except as expressly provided in those sections.  A financial 
        institution may also charge an organization a rate of interest 
        and any charges agreed to by the organization and may calculate 
        and collect finance and other charges in any manner agreed to by 
        that organization.  Except for extensions of credit a financial 
        institution elects to make under section 334.01, 334.011, 
        334.012, 334.021, 334.06, or 334.061 to 334.19, chapter 334 does 
        not apply to extensions of credit made according to this section 
        or the sections listed in this subdivision.  This subdivision 
        does not authorize a financial institution to extend credit or 
        purchase an extension of credit under any of the sections listed 
        in this subdivision if the financial institution is not 
        authorized to do so under those sections.  A financial 
        institution extending credit under any of the sections listed in 
        this subdivision shall specify in the promissory note, contract, 
        or other loan document the section under which the extension of 
        credit is made. 
           Sec. 2.  Minnesota Statutes 1995 Supplement, section 47.59, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FINANCE CHARGE FOR LOANS.] (a) With respect to a 
        loan, including a loan pursuant to open-end credit but excluding 
        open-end credit pursuant to a credit card, a financial 
        institution may contract for and receive a finance charge on the 
        unpaid balance of the principal amount not to exceed the greater 
        of:  
           (1) an annual percentage rate not exceeding 21.75 percent; 
        or 
           (2) 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.  
           With respect to open-end credit pursuant to a credit card, 
        the financial institution may contract for and receive a finance 
        charge on the unpaid balance of the principal amount at an 
        annual percentage rate not exceeding 18 percent per year. 
           (b) On a loan where the finance charge is calculated 
        according to the method provided for in paragraph (a), clause 
        (2), the finance charge must be contracted for and earned as 
        provided in that provision or at the single annual percentage 
        rate computed to the nearest .001 one-tenth of one percent that 
        would earn the same total finance charge at maturity of the 
        contract as would be earned by the application of the graduated 
        rates provided in paragraph (a), clause (2), when the debt is 
        paid according to the agreed terms and the calculations are made 
        according to the actuarial method. 
           (c) With respect to a loan, the finance charge must be 
        considered not to exceed the maximum annual percentage rate 
        permitted under this section if the finance charge contracted 
        for and received does not exceed the equivalent of the maximum 
        annual percentage rate calculated in accordance with Code of 
        Federal Regulations, title 12, part 226, but using the 
        definition of finance charge provided in this section.  
           (d) This subdivision does not limit or restrict the manner 
        of calculating the finance charge, whether by way of add-on, 
        discount, discount points, precomputed charges, single annual 
        percentage rate, variable rate, interest in advance, 
        compounding, average daily balance method, or otherwise, if the 
        annual percentage rate does not exceed that permitted by this 
        section.  Discount points permitted by this paragraph and not 
        collected but included in the principal amount must not be 
        included in the amount on which credit insurance premiums are 
        calculated and charged. 
           (e) With respect to a loan secured by real estate, if a 
        finance charge is calculated or collected in advance, or 
        included in the principal amount of the loan, and the borrower 
        prepays the loan in full, the financial institution shall credit 
        the borrower with a refund of the charge to the extent that the 
        annual percentage rate yield on the loan would exceed the 
        maximum rate permitted under paragraph (a), taking into account 
        the prepayment.  The refund need not be made if it would be less 
        than $5.  
           (f) With respect to all other loans, if the finance charge 
        is calculated or collected in advance, or included in the 
        principal amount of the loan, and the borrower prepays the loan 
        in full, the financial institution shall credit the borrower 
        with a refund of the charge to the extent the annual percentage 
        rate yield on the loan would exceed the annual percentage rate 
        on the loan as originally determined under paragraph (a) and 
        taking into account the prepayment.  The refund need not be made 
        if it would be less than $5.  
           (g) For the purpose of calculating the refund under this 
        subdivision, the financial institution may assume that the 
        contract was paid before the date of prepayment according to the 
        schedule of payments under the loan and that all payments were 
        paid on their due dates. 
           (h) For loans repayable in substantially equal successive 
        monthly installments, the financial institution may calculate 
        the refund under paragraph (f) as the portion of the finance 
        charge allocable on an actuarial basis to all wholly unexpired 
        payment periods following the date of prepayment, based on the 
        annual percentage rate on the loan as originally determined 
        under paragraph (a), and for the purpose of calculating the 
        refund may assume that all payments are made on the due date. 
           (i) The dollar amounts in this subdivision and subdivision 
        6, paragraph (a), clause (4), shall change periodically, as 
        provided in this section, according to and to the extent of 
        changes in the implicit price deflator for the gross domestic 
        product, 1987 = 100, compiled by the United States Department of 
        Commerce, and hereafter referred to as the index.  The index for 
        December 1991 is the reference base index for adjustments of 
        dollar amounts. 
           (j) The designated dollar amounts shall change on July 1 of 
        each even-numbered year if the percentage of change, calculated 
        to the nearest whole percentage point, between the index for 
        December of the preceding year and the reference base index is 
        ten percent or more; but 
           (1) the portion of the percentage change in the index in 
        excess of a multiple of ten percent shall be disregarded and the 
        dollar amounts shall change only in multiples of ten percent of 
        the amounts appearing in Laws 1995, chapter 202, on May 24, 
        1995; and 
           (2) the dollar amounts shall not change if the amounts 
        required by this section are those currently in effect pursuant 
        to Laws 1995, chapter 202, as a result of earlier application of 
        this section. 
           (k) If the index is revised, the percentage of change 
        pursuant to this section shall be calculated on the basis of the 
        revised index.  If a revision of the index changes the reference 
        base index, a revised reference base index shall be determined 
        by multiplying the reference base index then applicable by the 
        rebasing factor furnished by the department of commerce.  If the 
        index is superseded, the index referred to in this section is 
        the one represented by the department of commerce as reflecting 
        most accurately changes in the purchasing power of the dollar 
        for consumers. 
           (l) The commissioner shall announce and publish: 
           (1) on or before April 30 of each year in which dollar 
        amounts are to change, the changes in dollar amounts required by 
        paragraph (j); and 
           (2) promptly after the changes occur, changes in the index 
        required by paragraph (k) including, if applicable, the 
        numerical equivalent of the reference base index under a revised 
        reference base index and the designation or title of any index 
        superseding the index. 
           (m) A person does not violate this chapter with respect to 
        a transaction otherwise complying with this chapter if that 
        person relies on dollar amounts either determined according to 
        paragraph (j), clause (2), or appearing in the last publication 
        of the commissioner announcing the then current dollar amounts. 
           (n) The adjustments provided in this section shall not be 
        affected unless explicitly provided otherwise by law. 
           Sec. 3.  Minnesota Statutes 1995 Supplement, section 47.59, 
        subdivision 4, is amended to read: 
           Subd. 4.  [FINANCE CHARGE FOR CREDIT SALES MADE BY A THIRD 
        PARTY.] (a) A person may enter into a credit sale contract for 
        sale to a financial institution and a financial institution may 
        purchase and enforce the contract, if the annual percentage rate 
        provided for in the contract does not exceed that permitted in 
        this section, or, in the case of contracts governed by sections 
        168.66 to 168.77, the rates permitted by those 
        sections subdivision 4a. 
           (b) The annual percentage rate may not exceed the 
        equivalent of the greater of either of the following:  
           (1) the total of:  
           (i) 36 percent per year on that part of the unpaid balances 
        of the amount financed that is $300 or less; 
           (ii) 21 percent per year on that part of the unpaid 
        balances of the amount financed which exceeds $300 but does not 
        exceed $1,000; and 
           (iii) 15 percent per year on that part of the unpaid 
        balances of the amount financed which exceeds $1,000; or 
           (2) 19 percent per year on the unpaid balances of the 
        amount financed.  
           (c) This subdivision does not limit or restrict the manner 
        of calculating the finance charge whether by way of add-on, 
        discount, discount points, single annual percentage rate, 
        precomputed charges, variable rate, interest in advance, 
        compounding, or otherwise, if the annual percentage rate 
        calculated under paragraph (d) does not exceed that permitted by 
        this section.  The finance charge may be contracted for and 
        earned at the single annual percentage rate that would earn the 
        same finance charge as the graduated rates when the debt is paid 
        according to the agreed terms and the finance charge is 
        calculated under paragraph (d).  If the finance charge is 
        calculated and collected in advance, or included in the 
        principal amount of the contract, and the borrower prepays the 
        contract in full, the financial institution shall credit the 
        borrower with a refund of the charge to the extent the annual 
        percentage rate yield on the contract would exceed the annual 
        percentage rate on the contract as originally determined under 
        paragraph (d) and taking into account the prepayment.  For the 
        purpose of calculating the refund under this subdivision, the 
        financial institution may assume that the contract was paid 
        before the date of prepayment according to the schedule of 
        payments under the contract and that all payments were paid on 
        their due dates.  For contracts repayable in substantially equal 
        successive monthly installments, the financial institution may 
        calculate the refund as the portion of the finance charge 
        allocable on an actuarial basis to all wholly unexpired payment 
        periods following the date of prepayment, based on the annual 
        percentage rate on the contract as originally determined under 
        paragraph (d), and for the purpose of calculating the refund may 
        assume that all payments are made on the due date.  
           (d) The annual percentage rate must be calculated in 
        accordance with Code of Federal Regulations, title 12, part 226, 
        except that the following will not in any event be considered a 
        finance charge:  
           (1) a charge as a result of delinquency or default under 
        subdivision 6 if made for actual unanticipated late payment, 
        delinquency, default, or other similar occurrence, and a charge 
        made for an extension or deferment under subdivision 5, unless 
        the parties agree that these charges are finance charges; 
           (2) an additional charge under subdivision 6; or 
           (3) a discount, if a financial institution purchases a 
        contract evidencing a credit sale at less than the face amount 
        of the obligation or purchases or satisfies obligations of a 
        cardholder according to a credit card and the purchase or 
        satisfaction is made at less than the face amount of the 
        obligation.  
           Sec. 4.  Minnesota Statutes 1995 Supplement, section 47.59, 
        is amended by adding a subdivision to read: 
           Subd. 4a.  [FINANCE CHARGE FOR MOTOR VEHICLE RETAIL 
        INSTALLMENT SALES.] A retail installment contract evidencing the 
        retail installment sale of a motor vehicle as defined in section 
        168.66 is subject to the finance charge limitations in 
        paragraphs (a) and (b). 
           (a) The finance charge authorized by this subdivision in a 
        retail installment sale may not exceed the following annual 
        percentage rates: 
           (1) Class 1.  A motor vehicle designated by the 
        manufacturer by a year model of the same or not more than one 
        year before the year in which the sale is made, 18 percent per 
        year. 
           (2) Class 2.  A motor vehicle designated by the 
        manufacturer by a year model of two to three years before the 
        year in which the sale is made, 19.75 percent per year. 
           (3) Class 3.  Any motor vehicle not in Class 1 or Class 2, 
        23.25 percent per year. 
           (b) A sale of a manufactured home made after July 31, 1983, 
        is governed by this subdivision for purposes of determining the 
        lawful finance charge rate, except that the maximum finance 
        charge for a Class 1 manufactured home may not exceed 14.5 
        percent per year.  A retail installment sale of a manufactured 
        home that imposes a finance charge that is greater than the rate 
        permitted by this subdivision is lawful and enforceable in 
        accordance with its terms until the indebtedness is fully 
        satisfied if the rate was lawful when the sale was made. 
           Sec. 5.  Minnesota Statutes 1995 Supplement, section 47.59, 
        subdivision 5, is amended to read: 
           Subd. 5.  [EXTENSIONS AND, DEFERMENTS, AND CONVERSION TO 
        INTEREST BEARING.] (a) The parties may agree in writing, either 
        in the loan contract or credit sale contract or in a subsequent 
        agreement, to a deferment of wholly unpaid installments.  For 
        precomputed loans and credit sale contracts, the manner of 
        deferment charge shall be determined as provided for 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 
        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.  If a loan or credit 
        sale is prepaid in full during a deferment period, the financial 
        institution 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 or credit sale in full.  
           For the purpose of this subdivision, "applicable charge" 
        means the amount of finance charge attributable to each monthly 
        installment period for the loan or credit sale contract.  The 
        applicable charge is computed as if each installment period were 
        one month and any charge for extending the first installment 
        period beyond the one month, or reduction in charge for a first 
        installment less than one month, is ignored.  The applicable 
        charge for any installment period is that which would have been 
        made for the period had the loan been made on an 
        interest-bearing basis at the single annual percentage rate 
        provided for in the contract based upon the assumption that all 
        payments were made according to schedule.  For convenience in 
        computation, the financial institution may round the single 
        annual rate to the nearest one quarter of one percent. 
           (b) Subject to a refund of unearned finance or deferment 
        charge required by this section, a financial institution may 
        convert a loan or credit sale contract to an interest bearing 
        balance, if: 
           (1) the loan contract or credit sale contract so provides 
        and is subject to a change of the terms of the written agreement 
        between the parties; or 
           (2) the loan contract so provides and two or more 
        installments are delinquent one full month or more on any due 
        date. 
           Thereafter, and in lieu of any other default, extension, or 
        deferment charges, the single annual percentage rate must be 
        determined under the applicable charge provisions of this 
        subdivision. 
           Sec. 6.  Minnesota Statutes 1995 Supplement, section 47.59, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ADDITIONAL CHARGES.] (a) In addition to the 
        finance charges permitted by this section, a financial 
        institution may contract for and receive the following 
        additional charges that may be included in the principal amount 
        financed of the loan or credit sale unpaid balances:  
           (1) official fees and taxes; 
           (2) charges for insurance as described in paragraph (b); 
           (3) with respect to a loan or credit sale contract secured 
        by real estate, the following "closing costs," if they are bona 
        fide, reasonable in amount, and not for the purpose of 
        circumvention or evasion of this section: 
           (i) fees or premiums for title examination, abstract of 
        title, title insurance, surveys, or similar purposes; 
           (ii) fees for preparation of a deed, mortgage, settlement 
        statement, or other documents, if not paid to the financial 
        institution; 
           (iii) escrows for future payments of taxes, including 
        assessments for improvements, insurance, and water, sewer, and 
        land rents; 
           (iv) fees for notarizing deeds and other documents; 
           (v) appraisal and credit report fees; and 
           (vi) fees for determining whether any portion of the 
        property is located in a flood zone and fees for ongoing 
        monitoring of the property to determine changes, if any, in 
        flood zone status; 
           (4) a delinquency charge on a payment, including the 
        minimum payment due in connection with the open-end credit, not 
        paid in full on or before the tenth day after its due date in an 
        amount not to exceed five percent of the amount of the payment 
        or $5.20, whichever is greater; 
           (5) for a returned check or returned automatic payment 
        withdrawal request, an amount not in excess of the service 
        charge limitation in section 332.50; and 
           (6) charges for other benefits, including insurance, 
        conferred on the borrower that are of a type that is not for 
        credit. 
           (b) An additional charge may be made for insurance written 
        in connection with the loan or credit sale contract, which may 
        be included in the principal amount financed of the loan or 
        credit sale unpaid balances:  
           (1) with respect to insurance against loss of or damage to 
        property, or against liability arising out of the ownership or 
        use of property, if the financial institution furnishes a clear, 
        conspicuous, and specific statement in writing to the borrower 
        setting forth the cost of the insurance if obtained from or 
        through the financial institution and stating that the borrower 
        may choose the person through whom the insurance is to be 
        obtained; 
           (2) with respect to credit insurance or mortgage insurance 
        providing life, accident, health, or unemployment coverage, if 
        the insurance coverage is not required by the financial 
        institution, and this fact is clearly and conspicuously 
        disclosed in writing to the borrower, and the borrower gives 
        specific, dated, and separately signed affirmative written 
        indication of the borrower's desire to do so after written 
        disclosure to the borrower of the cost of the insurance; and 
           (3) with respect to the vendor's single interest insurance, 
        but only (i) to the extent that the insurer has no right of 
        subrogation against the borrower; and (ii) to the extent that 
        the insurance does not duplicate the coverage of other insurance 
        under which loss is payable to the financial institution as its 
        interest may appear, against loss of or damage to property for 
        which a separate charge is made to the borrower according to 
        clause (1); and (iii) if a clear, conspicuous, and specific 
        statement in writing is furnished by the financial institution 
        to the borrower setting forth the cost of the insurance if 
        obtained from or through the financial institution and stating 
        that the borrower may choose the person through whom the 
        insurance is to be obtained. 
           (c) In addition to the finance charges and other additional 
        charges permitted by this section, a financial institution may 
        contract for and receive the following additional charges in 
        connection with open-end credit, which may be included in the 
        principal amount financed of the loan or balance upon which the 
        finance charge is computed:  
           (1) annual charges, not to exceed $50 per annum, payable in 
        advance, for the privilege of opening and maintaining open-end 
        credit; 
           (2) charges for the use of an automated teller machine; 
           (3) charges for any monthly or other periodic payment 
        period in which the borrower has exceeded or, except for the 
        financial institution's dishonor would have exceeded, the 
        maximum approved credit limit, in an amount not in excess of the 
        service charge permitted in section 332.50; 
           (4) charges for obtaining a cash advance in an amount not 
        to exceed the service charge permitted in section 332.50; and 
           (5) charges for check and draft copies and for the 
        replacement of lost or stolen credit cards.  
           (d) In addition to the finance charges and other additional 
        charges permitted by this section, a financial institution may 
        contract for and receive a one-time loan administrative fee not 
        exceeding $25 in connection with closed-end credit, which may be 
        included in the amount financed or principal balance upon which 
        the finance charge is computed.  This paragraph applies only to 
        closed-end credit in an original principal amount of $4,320 or 
        less.  The determination of an original principal amount must 
        exclude the administrative fee contracted for and received 
        according to this paragraph. 
           Sec. 7.  Minnesota Statutes 1995 Supplement, section 47.60, 
        subdivision 2, is amended to read: 
           Subd. 2.  [AUTHORIZATION, TERMS, CONDITIONS, AND 
        PROHIBITIONS.] (a) In lieu of the interest, finance charges, or 
        fees in any other law, a consumer small loan lender may charge 
        the following:  
           (i) (1) on any amount up to and including $50, a charge of 
        $5.50 may be added; 
           (ii) (2) on amounts in excess of $50, but not more than 
        $100, a charge may be added equal to ten percent of the loan 
        proceeds plus a $5 administrative fee; 
           (iii) (3) on amounts in excess of $100, but not more than 
        $250, a charge may be added equal to seven percent of the loan 
        proceeds with a minimum of $10 plus a $5 administrative fee; 
           (iv) (4) for amounts in excess of $250 and not greater than 
        the maximum in subdivision 1, paragraph (a), a charge may be 
        added equal to six percent of the loan proceeds with a minimum 
        of $17.50 plus a $5 administrative fee.  
           (b) The term of a loan made under this section shall be for 
        no more than 30 calendar days.  
           (c) After maturity, the contract rate must not exceed 2.75 
        percent per month of the remaining loan proceeds after the 
        maturity date calculated at a rate of 1/30 of the monthly rate 
        in the contract for each calendar day the balance is outstanding.
           (d) No insurance charges or other charges must be permitted 
        to be charged, collected, or imposed on a consumer small loan 
        except as authorized in this section.  
           (e) On a loan transaction in which cash is advanced in 
        exchange for a personal check, a return check charge may be 
        charged as authorized by section 332.50, subdivision 2, 
        paragraph (d).  
           (f) A loan made under this section must not be repaid by 
        the proceeds of another loan made under this section by the same 
        lender or related interest.  The proceeds from a loan made under 
        this section must not be applied to another loan from the same 
        lender or related interest.  No loan to a single borrower made 
        pursuant to this section shall be split or divided and no single 
        borrower shall have outstanding more than one loan with the 
        result of collecting a higher charge than permitted by this 
        section or in an aggregate amount of principal exceed at any one 
        time the maximum of $350.  
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 53.04, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  (a) The right to make loans, secured or 
        unsecured, at the rates and on the terms and other conditions 
        permitted in section 47.59 under chapters 47 and 334.  Loans 
        made under this authority must be in amounts in compliance with 
        section 53.05, clause (7).  The right to extend credit or lend 
        money and to collect and receive charges therefor as provided by 
        chapter 334.  The provisions of sections 47.20 and 47.21 do not 
        apply to loans made under this subdivision, except as 
        specifically provided in this subdivision.  Nothing in this 
        subdivision is deemed to supersede, repeal, or amend any 
        provision of section 53.05.  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.  
           (b) Loans made under this subdivision at a rate of interest 
        not in excess of that provided for in paragraph (a) may be 
        secured by real or personal property, or both.  If the proceeds 
        of a loan secured by a first lien on the borrower's primary 
        residence are used to finance the purchase of the borrower's 
        primary residence, the loan must comply with the provisions of 
        section 47.20.  
           (c) A loan made under this subdivision that is secured by 
        real estate and that is in a principal amount of $12,000 or more 
        and a maturity of 60 months or more may contain a provision 
        permitting discount points, if the loan does not provide a loan 
        yield in excess of the maximum rate of interest permitted by 
        this subdivision.  
           (d) An agency or instrumentality of the United States 
        government or a corporation otherwise created by an act of the 
        United States Congress or a lender approved or certified by the 
        secretary of housing and urban development, or approved or 
        certified by the administrator of veterans affairs, or approved 
        or certified by the administrator of the farmers home 
        administration, or approved or certified by the federal home 
        loan mortgage corporation, or approved or certified by the 
        federal national mortgage association, that engages in the 
        business of purchasing or taking assignments of mortgage loans 
        and undertakes direct collection of payments from or enforcement 
        of rights against borrowers arising from mortgage loans, is not 
        required to obtain a certificate of authorization under this 
        chapter in order to purchase or take assignments of mortgage 
        loans from persons holding a certificate of authorization under 
        this chapter. 
           (d) This subdivision does not authorize an industrial loan 
        and thrift company to make loans under an overdraft checking 
        plan. 
           Sec. 9.  Minnesota Statutes 1995 Supplement, section 
        56.131, subdivision 2, is amended to read: 
           Subd. 2.  [ADDITIONAL CHARGES.] In addition to the charges 
        provided for by this section and section 56.155, and 
        notwithstanding section 47.59, subdivision 5 6, to the contrary, 
        no further or other amount whatsoever, shall be directly or 
        indirectly charged, contracted for, or received for the loan 
        made, except actual out of pocket expenses of the licensee to 
        realize on a security after default, and except for the 
        following additional charges which may be included in the 
        principal amount of the loan:  
           (a) lawful fees and taxes paid to any public officer to 
        record, file, or release security; 
           (b) with respect to a loan secured by an interest in real 
        estate, the following closing costs, if they are bona fide, 
        reasonable in amount, and not for the purpose of circumvention 
        or evasion of this section; provided the costs do not exceed one 
        percent of the principal amount or $400, whichever is greater: 
           (1) fees or premiums for title examination, abstract of 
        title, title insurance, surveys, or similar purposes; 
           (2) fees, if not paid to the licensee, an employee of the 
        licensee, or a person related to the licensee, for preparation 
        of a mortgage, settlement statement, or other documents, fees 
        for notarizing mortgages and other documents, and appraisal 
        fees; 
           (c) the premium for insurance in lieu of perfecting and 
        releasing a security interest to the extent that the premium 
        does not exceed the fees described in paragraph (a); 
           (d) discount points and appraisal fees may not be included 
        in the principal amount of a loan secured by an interest in real 
        estate when the loan is a refinancing for the purpose of 
        bringing the refinanced loan current and is made within 24 
        months of the original date of the refinanced loan.  For 
        purposes of this paragraph, a refinancing is not considered to 
        be for the purpose of bringing the refinanced loan current if 
        new funds advanced to the customer, not including closing costs 
        or delinquent installments, exceed $1,000; 
           (e) the one-time loan administrative fee in section 47.59, 
        subdivision 6, paragraph (d). 
           Sec. 10.  Minnesota Statutes 1995 Supplement, section 
        56.131, subdivision 6, is amended to read: 
           Subd. 6.  [DISCOUNT POINTS.] A loan made under this section 
        that is secured by real estate and that is in a principal amount 
        of $12,000 or more and has a maturity of 60 months or more may 
        contain a provision permitting discount points, if the loan does 
        not provide a loan yield in excess of the maximum rate of 
        interest permitted by this section.  Loan yield means the annual 
        rate of return obtained by a licensee computed as the annual 
        percentage rate is computed under Federal Regulation Z.  If the 
        loan is prepaid in full, the licensee must make a refund to the 
        borrower to the extent that the loan yield will exceed the 
        maximum rate of interest provided by this section when the 
        prepayment is taken into account.  Discount points permitted by 
        this subdivision and not collected but included in the principal 
        amount must not be included in the amount on which credit 
        insurance premiums are calculated and charged. 
           Sec. 11.  Minnesota Statutes 1994, section 168.72, is 
        amended by adding a subdivision to read: 
           Subd. 5.  In lieu of this section and sections 168.66, 
        subdivisions 9, 10, and 11; 168.71; 168.73; and 168.74, a retail 
        seller may proceed under section 47.59 relating to credit sales 
        made by a third party.  In cases where the retail seller 
        proceeds under section 47.59, the remaining provisions of 
        sections 168.66 to 168.77 apply notwithstanding section 47.59. 
           Sec. 12.  Minnesota Statutes 1994, section 334.02, is 
        amended to read: 
           334.02 [USURIOUS INTEREST; RECOVERY.] 
           Every person who for any such loan or forbearance shall 
        have paid or delivered any greater sum or value than in section 
        334.01 allowed to be received may, personally or through 
        personal representatives, recover in an action against the 
        person who shall have received the same, or the receiver's 
        personal representatives, the full amount of interest or premium 
        so paid, with costs, if action is brought within two years after 
        such payment or delivery.  This section does not apply when the 
        loan or forbearance is made by a lender and the lender is liable 
        for the penalty provided in subject to section 47.59 or 48.196 
        or chapter 56 in connection with the loan or forbearance.  For 
        purposes of this section, the term "lender" means a bank or 
        savings bank organized under the laws of this state, a federally 
        chartered savings and loan association or savings bank, a 
        savings association organized under chapter 51A, a federally 
        chartered credit union, a credit union organized under chapter 
        52, an industrial loan and thrift company organized under 
        chapter 53, a licensed lender under chapter 56, or a mortgagee 
        or lender approved or certified by the secretary of housing and 
        urban development or approved or certified by the administrator 
        of veterans affairs.  
           Sec. 13.  Minnesota Statutes 1994, section 334.03, is 
        amended to read: 
           334.03 [USURIOUS CONTRACTS INVALID; EXCEPTIONS.] 
           All bonds, bills, notes, mortgages, and all other contracts 
        and securities, and all deposits of goods, or any other thing, 
        whereupon or whereby there shall be reserved, secured, or taken 
        any greater sum or value for the loan or forbearance of any 
        money, goods, or things in action than prescribed, except such 
        instruments which are taken or received in accordance with and 
        in reliance upon the provisions of any statute, shall be void 
        except as to a holder in due course.  No merely clerical error 
        in the computation of interest, made without intent to avoid the 
        provisions of this chapter, shall constitute usury.  Interest at 
        the rate of 1/12 of eight percent for every 30 days shall not be 
        construed to exceed eight percent per annum; nor shall the 
        payment of interest in advance of one year, or any less time, at 
        a rate not exceeding eight percent per annum constitute usury; 
        and nothing herein shall prevent the purchase of negotiable 
        mercantile paper, usurious or otherwise, for a valuable 
        consideration, by a purchaser without notice, at any price 
        before the maturity of the same, when there has been no intent 
        to evade the provisions of this chapter, or where such purchase 
        has not been a part of the original usurious transactions; but 
        where the original holder of a usurious note sells the same to 
        an innocent purchaser, the maker thereof, or the maker's 
        representatives, may recover back from the original holder the 
        amount of principal and interest paid on the note.  This section 
        does not apply when the loan or forbearance is made by a lender 
        and the lender is liable for the penalty provided in subject to 
        section 47.59 or 48.196 or chapter 56 in connection with the 
        loan or forbearance.  For purposes of this section, the term 
        "lender" means a bank or savings bank organized under the laws 
        of this state, a federally chartered savings and loan 
        association or savings bank, a savings association organized 
        under chapter 51A, a federally chartered credit union, a credit 
        union organized under chapter 52, an industrial loan and thrift 
        company organized under chapter 53, a licensed lender under 
        chapter 56, or a mortgagee or lender approved or certified by 
        the secretary of housing and urban development or approved or 
        certified by the administrator of veterans affairs. 
           Sec. 14.  [334.062] [AGRICULTURAL COOPERATIVES AND FARM 
        SUPPLY.] 
           Notwithstanding sections 334.01 and 334.011, a cooperative 
        organized for agricultural purposes under chapter 308A, or a 
        similar statute of another state and registered to conduct 
        business in this state, and other persons or entities engaged in 
        an agricultural retail or farm supply business, may impose, 
        charge, and collect a finance charge on goods, products, and 
        services, including sales and open- and closed-end credit 
        transactions that do not exceed a monthly rate of 1-1/2 percent 
        or an annual rate of 18 percent, and the delinquency and 
        collection charge authorized under section 334.171, provided, 
        however, for a cooperative, the finance, delinquency, and 
        collection charge is the same for member and nonmember patrons. 
           Sec. 15.  [REPEALER.] 
           Minnesota Statutes 1994, section 53.04, subdivision 3b; and 
        Minnesota Statutes 1995 Supplement, section 53.04, subdivisions 
        3c and 4a, are repealed. 
           Sec. 16.  [EFFECTIVE DATE.] 
           Sections 1, 3 to 9, 11 to 13, and 15 are effective the day 
        following final enactment. 
                                   ARTICLE 3
                        BANKING SERVICES DEVELOPMENT ACT
           Section 1.  Minnesota Statutes 1994, section 47.101, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BANKING INSTITUTIONS; CERTAIN RELOCATIONS, 
        APPLICATIONS, NOTICE, APPROVAL.] A banking institution defined 
        in section 48.01, subdivision 2, desiring to relocate its main 
        office within the lesser of a radius of three miles measured in 
        a straight line or the municipality, as defined in section 
        47.51, in which it is located shall submit an application notify 
        the commissioner of commerce in a form prescribed by the 
        commissioner of commerce., an investigation fee of $500 and 
        additional fees as prescribed in section 46.041 if subsequently 
        processed under subdivision 3.  After the application is deemed 
        to be complete and accepted by the commissioner of commerce, The 
        applicant shall publish once in a form prescribed by the 
        commissioner a notice of the filing of the 
        application relocation in a qualified newspaper published in the 
        municipalities municipality where the banking institution is 
        located and relocating if different.  If there are no such 
        newspapers, then notice of the filing shall be published in 
        qualified newspapers likely to give notice in the existing and 
        proposed municipalities municipality.  The applicant shall cause 
        the notice to be publicly displayed in its lobby and sent by 
        certified mail to all banking institutions within three miles of 
        the proposed location measured in a straight line.  Upon 
        expiration of a period of 21 days for comment, the commissioner, 
        after considering the applicable conditions for issuance of the 
        bank charter defined in section 46.044, shall within 60 days 
        approve or disapprove the application.  
           Sec. 2.  Minnesota Statutes 1994, section 47.101, 
        subdivision 3, is amended to read: 
           Subd. 3.  [APPLICATIONS TO DEPARTMENT OF COMMERCE.] An 
        application by a banking institution to relocate its main office 
        outside a radius of three miles measured in a straight line 
        other than those provided for in subdivision 2 shall be approved 
        or disapproved by the commissioner of commerce as provided for 
        in sections 46.041 and 46.044. 
           Sec. 3.  Minnesota Statutes 1994, section 47.51, is amended 
        to read: 
           47.51 [DETACHED BANKING FACILITIES; DEFINITIONS.] 
           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 150 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. 
           "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 
        township.  
           Sec. 4.  Minnesota Statutes 1995 Supplement, 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:  (1) the municipality in which the principal 
        office of the applicant bank is located; or within (2) 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 (3) a municipality in which 
        no bank is located at the time of application; or if the 
        detached facility is in (4) a municipality having a population 
        of more than 10,000,; or if the detached facility is located in 
        (5) a municipality having a population of 10,000 or less, as 
        determined by the commissioner from the latest available data 
        from the state demographer, or for municipalities located in the 
        seven-county metropolitan area from the metropolitan council, 
        and all the banks having a principal office in the municipality 
        have consented in writing to the establishment of the facility. 
           (b) A detached facility shall not be closer than 50 feet to 
        a detached facility operated by any other bank and shall not be 
        closer than 100 feet to the principal office of any other bank, 
        the measurement to be made in the same manner as provided 
        above.  This paragraph shall not be applicable if the proximity 
        to the facility or the bank is waived in writing by the other 
        bank and filed with the application to establish a detached 
        facility. 
           (c) 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 paragraph (b) and section 47.53. 
           (d) A bank is allowed, in addition to other facilities, 
        part-time deposit-taking locations at elementary and secondary 
        schools located within the municipality in which the main 
        banking house or a detached facility is located if they are 
        established in connection with student education programs 
        approved by the school administration and consistent with safe, 
        sound banking practices. 
           (e) (d) A bank whose home state is Minnesota as defined in 
        section 48.92 is allowed, in addition to facilities otherwise 
        permitted, to establish and operate a de novo detached facility 
        in a location in the host states of Iowa, North Dakota, South 
        Dakota, and Wisconsin not more than 30 miles from its principal 
        office measured in a straight line from the closest points of 
        the closest structures involved and subject to requirements of 
        sections 47.54 and 47.561 and the following additional 
        requirements and conditions: 
           (1) there is in effect in the host state a law, rule, or 
        ruling that permits Minnesota home state banks to establish de 
        novo branches in the host state under conditions substantially 
        similar to those imposed by the laws of Minnesota as determined 
        by the commissioner; and 
           (2) there is in effect a cooperative agreement between the 
        home and host state banking regulators to facilitate their 
        respective regulation and supervision of the bank including the 
        coordination of examinations. 
           For purposes of this paragraph, "host state" means a state 
        other than the home state, as defined in section 48.92. 
           Sec. 5.  Minnesota Statutes 1994, section 47.62, 
        subdivision 1, is amended to read: 
           Subdivision 1.  Any person may establish and maintain one 
        or more electronic financial terminals.  Any financial 
        institution may provide for its customers the use of an 
        electronic financial terminal by entering into an agreement with 
        any person who has established and maintains one or more 
        electronic financial terminals if that person authorizes use of 
        the electronic financial terminal to all financial institutions 
        on a nondiscriminatory basis pursuant to section 
        47.64.  Electronic financial terminals to be established and 
        maintained in this state by financial institutions located in 
        states other than Minnesota must file a notification to the 
        commissioner as required in this section.  The notification may 
        be in the form lawfully required by the state regulator 
        responsible for the examination and supervision of that 
        financial institution.  If there is no such requirement, then 
        notification must be in the form required by this section for 
        Minnesota financial institutions. 
           Sec. 6.  Minnesota Statutes 1994, section 48.34, is amended 
        to read: 
           48.34 [BRANCH BANKS PROHIBITED.] 
           No bank or trust company organized under the laws of this 
        state shall maintain a branch bank or receive deposits or pay 
        checks within this state, except at its own banking house, and 
        except as authorized by sections 47.51 to 47.57 and, 47.61 to 
        47.74, and 49.411.  The commissioner shall take possession of 
        and liquidate the business and affairs of any state bank or 
        trust company violating the provisions of this section, in the 
        manner prescribed by law for the liquidation of insolvent state 
        banks and trust companies. 
           Sec. 7.  [49.411] [INTERSTATE BANK MERGERS AFFECTING 
        INTERSTATE BRANCHING.] 
           Subdivision 1.  [PURPOSE.] It is the express intent of this 
        section to permit interstate branching by mergers under section 
        102 of the Riegle-Neal Interstate Banking and Branching 
        Efficiency Act of 1994, Public Law Number 103-328, according to 
        this section. 
           Subd. 2.  [DEFINITIONS.] As used in this section, unless 
        the context clearly indicates otherwise, the following terms 
        have the meanings given them. 
           (a) "Bank" has the meaning given in United States Code, 
        title 12, section 1813(h) with the following exceptions:  (1) 
        the term does not include a foreign bank as defined in United 
        States Code, title 12, section 3101(7); and (2) the term 
        includes a foreign bank organized under the laws of a territory 
        of the United States, Puerto Rico, Guam, American Samoa, or the 
        Virgin Islands, the deposits of which are insured by the Federal 
        Deposit Insurance Corporation. 
           (b) "Bank holding company" has the meaning given in United 
        States Code, title 12, section 1841(a)(1). 
           (c) "Bank supervisory agency" means: 
           (1) an agency of another state with the primary 
        responsibility for chartering and supervising banks; and 
           (2) the Office of the Comptroller of the Currency, the 
        Federal Deposit Insurance Corporation, the Board of Governors of 
        the Federal Reserve System, and any successor to these agencies. 
           (d) "Branch" has the meaning given in United States Code, 
        title 12, section 1813(o). 
           (e) "Commissioner" means the commissioner of commerce. 
           (f) "Control" has the meaning given in section 46.048, 
        subdivision 1. 
           (g) "Home state" has the meaning given in section 48.92, 
        subdivision 6, except in relation to foreign banks, for which 
        home state means the state determined to be the home state of 
        the foreign bank under United States Code, title 12, section 
        3103(c). 
           (h) "Home state regulator" means, with respect to an 
        out-of-state state bank, the bank supervisory agency of the 
        state in which the bank is chartered. 
           (i) "Host state" means a state other than the home state of 
        a bank in which the bank maintains or seeks to establish and 
        maintain a branch. 
           (j) "Interstate merger transaction" means: 
           (1) the merger or consolidation of banks with different 
        home states, and the conversion of branches of any bank involved 
        in the merger or consolidation into branches of the resulting 
        bank; or 
           (2) the purchase of all or substantially all of the assets 
        including all or substantially all of the branches of a bank 
        whose home state is different from the home state of the 
        acquiring bank. 
           (k) "Out-of-state bank" has the meaning given in section 
        48.92, subdivision 11. 
           (l) "Out-of-state state bank" means a bank chartered under 
        the laws of any state other than Minnesota. 
           (m) "Resulting bank" means a bank that has resulted from an 
        interstate merger transaction under this section. 
           (n) "State" means any state of the United States, the 
        District of Columbia, or any territory of the United States, 
        Puerto Rico, Guam, American Samoa, the Trust Territory of the 
        Pacific Islands, the Virgin Islands, and the Northern Mariana 
        Islands. 
           (o) "Minnesota bank" means a bank whose home state is 
        Minnesota. 
           (p) "Minnesota state bank" means a bank chartered under the 
        laws of Minnesota. 
           Subd. 3.  [AUTHORITY OF STATE BANKS TO ESTABLISH INTERSTATE 
        BRANCHES BY MERGER.] With the prior approval of the 
        commissioner, a Minnesota state bank may establish, maintain, 
        and operate one or more branches in a state other than Minnesota 
        as a result of an interstate merger transaction in which the 
        Minnesota state bank is the resulting bank.  Not later than the 
        date on which the required application for the interstate merger 
        transaction is filed with the responsible federal bank 
        supervisory agency, the applicant Minnesota state bank shall 
        file with the commissioner an application on a form prescribed 
        by the commissioner and pay the fee prescribed by section 
        49.36.  The applicant shall also comply with the applicable 
        provisions of sections 49.33 to 49.41.  After considering the 
        criteria in section 49.36, subdivision 3, the commissioner may 
        approve the interstate merger transaction and the operation of 
        branches outside of Minnesota by the Minnesota state bank.  Such 
        an interstate merger transaction may be consummated only after 
        the applicant has received the commissioner's written approval. 
           Subd. 4.  [INTERSTATE MERGER TRANSACTIONS AND BRANCHING 
        PERMITTED.] (a) One or more Minnesota banks may enter into an 
        interstate merger transaction with one or more out-of-state 
        banks under this section, and an out-of-state bank resulting 
        from the transaction may maintain and operate the branches in 
        Minnesota of a Minnesota bank that participated in the 
        transaction if the conditions and filing requirements of this 
        section are met. 
           (b) An interstate merger transaction resulting in the 
        acquisition by an out-of-state bank of a Minnesota state bank, 
        or all or substantially all of the branches of a Minnesota state 
        bank, shall not be permitted under this section unless the 
        Minnesota state bank has been in continuous operation, on the 
        date of the acquisition, for at least five years.  For purposes 
        of this paragraph, a bank that has been chartered solely for the 
        purpose of, and does not open for business before, acquiring 
        control of, or acquiring all or substantially all of the assets 
        of, an existing bank is considered to have been in existence for 
        the same period of time as the bank to be acquired.  For 
        determining the time period of existence of a bank, the time 
        period begins after the issuance of a certificate of 
        authorization and from the date the approved bank actually opens 
        for business. 
           Subd. 5.  [NOTICE AND FILING REQUIREMENT.] An out-of-state 
        bank that will be the resulting bank under an interstate merger 
        transaction involving a Minnesota state bank shall notify the 
        commissioner of the proposed merger not later than the date on 
        which it files an application for an interstate merger 
        transaction with the responsible federal bank supervisory 
        agency, and shall submit a copy of that application to the 
        commissioner and pay the filing fee, if any, required by the 
        commissioner.  A Minnesota state bank that is a party to an 
        interstate merger transaction shall comply with sections 49.33 
        to 49.41 and with other applicable state and federal laws.  An 
        out-of-state bank that is the resulting bank in such an 
        interstate merger transaction shall provide satisfactory 
        evidence to the commissioner of compliance with applicable 
        requirements of the bank's home state. 
           Subd. 6.  [POWERS; ADDITIONAL BRANCHES.] (a) An 
        out-of-state state bank that establishes and maintains one or 
        more branches in Minnesota under this section may conduct any 
        activities at the branch or branches that are authorized under 
        the laws of this state for Minnesota state banks. 
           (b) A Minnesota state bank may conduct any activities at or 
        in connection with a branch outside Minnesota that are 
        permissible for a bank chartered by the host state where the 
        branch is located, except to the extent that the activities are 
        expressly prohibited by the laws of this state or by any rule or 
        order of the commissioner applicable to the Minnesota state 
        bank.  The commissioner may waive the prohibition if the 
        commissioner determines, by rule or order, that the involvement 
        of out-of-state branches of Minnesota state banks in particular 
        activities would not threaten the safety or soundness of the 
        banks. 
           (c) An out-of-state bank that has established or acquired a 
        branch in Minnesota under this section may establish or acquire 
        additional branches in Minnesota to the same extent that a 
        Minnesota bank may establish or acquire a branch in Minnesota 
        under applicable federal and state law where a bank involved in 
        the transaction could have established, acquired, or operated 
        the additional branches if the bank had not been a party to the 
        merger transaction. 
           Subd. 7.  [EXAMINATIONS; PERIODIC REPORTS; COOPERATIVE 
        AGREEMENTS; ASSESSMENT OF FEES.] (a) To the extent consistent 
        with paragraph (c), the commissioner may make examinations of a 
        branch established and maintained in this state under this 
        section by an out-of-state state bank as the commissioner 
        considers necessary to determine whether the branch is being 
        operated in compliance with the laws of this state and according 
        to safe and sound banking practices.  Section 46.04 applies to 
        the examinations. 
           (b) The commissioner may prescribe requirements for 
        periodic reports regarding an out-of-state bank that operates a 
        branch in Minnesota under this section.  The required reports 
        must be provided by the bank or by the bank supervisory agency 
        having primary responsibility for the bank.  Reporting 
        requirements prescribed by the commissioner under this paragraph 
        must be:  (1) consistent with the reporting requirements 
        applicable to Minnesota state banks; and (2) appropriate for the 
        purpose of enabling the commissioner to carry out 
        responsibilities under this section. 
           (c) The commissioner may enter into cooperative, 
        coordinating, and information-sharing agreements with any other 
        bank supervisory agencies or any organization affiliated with or 
        representing one or more bank supervisory agencies with respect 
        to the periodic examination or other supervision of a branch in 
        Minnesota of an out-of-state state bank, or a branch of a 
        Minnesota state bank in a host state.  The commissioner may 
        accept the parties' reports of examination and reports of 
        investigation in lieu of conducting the commissioner's own 
        examinations or investigations. 
           (d) The commissioner may enter into contracts with a bank 
        supervisory agency that has concurrent jurisdiction over a 
        Minnesota state bank or an out-of-state state bank operating a 
        branch in this state under this section to engage the services 
        of the agency's examiners at a reasonable rate of compensation, 
        or to provide the services of the commissioner's examiners to 
        the agency at a reasonable rate of compensation. 
           (e) The commissioner may enter into joint examinations or 
        joint enforcement actions with other bank supervisory agencies 
        having concurrent jurisdiction over a branch in Minnesota of an 
        out-of-state state bank or a branch of a Minnesota state bank in 
        a host state.  However, the commissioner may at any time take 
        the actions independently if the commissioner considers the 
        actions to be necessary or appropriate to carry out 
        responsibilities under this section or to ensure compliance with 
        the laws of this state.  In the case of an out-of-state state 
        bank, the commissioner shall recognize the exclusive authority 
        of the home state regulator over corporate governance matters 
        and the primary responsibility of the home state regulator with 
        respect to safety and soundness matters. 
           (f) Each out-of-state state bank that maintains one or more 
        branches in this state may be assessed and charged according to 
        section 46.131 as if it were a Minnesota state bank and, if 
        assessed, shall pay supervisory and examination fees according 
        to the laws of this state and rules of the commissioner.  The 
        fees may be shared with other bank supervisory agencies or an 
        organization affiliated with or representing one or more bank 
        supervisory agencies according to agreements between the parties 
        and the commissioner. 
           Subd. 8.  [ENFORCEMENT.] If the commissioner determines 
        that a branch maintained by an out-of-state state bank in this 
        state is being operated in violation of the laws of this state, 
        or that the branch is being operated in an unsafe and unsound 
        manner, the commissioner has the authority to take all 
        enforcement actions the commissioner would be empowered to take 
        if the branch were a Minnesota state bank.  The commissioner 
        shall promptly give notice to the home state regulator of each 
        enforcement action taken against an out-of-state state bank and, 
        to the extent practicable, shall consult and cooperate with the 
        home state regulator in pursuing and resolving enforcement 
        action. 
           Subd. 9.  [NOTICE OF SUBSEQUENT MERGER.] Each out-of-state 
        state bank that has established and maintains a branch in this 
        state under this section shall give at least 60 days' prior 
        written notice or, in the case of an emergency transaction, 
        shorter notice as is consistent with applicable state or federal 
        law to the commissioner of any merger, consolidation, or other 
        transaction that would cause a change of control with respect to 
        the bank or any bank holding company that controls the bank, 
        with the result that an application would be required to be 
        filed under United States Code, title 12, section 1817(j), or 
        the federal Bank Holding Company Act of 1956, as amended, United 
        States Code, title 12, section 1841, et seq. 
           Subd. 10.  [SEVERABILITY.] If a provision of this section, 
        or the application of the provision, is found by any court of 
        competent jurisdiction in the United States to be invalid as to 
        a bank, bank holding company, foreign bank, or other person or 
        circumstances, or to be superseded by federal law, the remaining 
        provisions of this section shall not be affected and shall 
        continue to apply to a bank, bank holding company, foreign bank, 
        or other person or circumstance. 
           Sec. 8.  Minnesota Statutes 1995 Supplement, section 
        50.245, subdivision 1, is amended to read: 
           Subdivision 1.  [AUTHORITY FOR BRANCH OFFICES.] A savings 
        bank may establish five any number of detached facilities as may 
        be approved by the commissioner of commerce pursuant to sections 
        47.51 to 47.57 in the territories of Hennepin and Anoka 
        counties.  The savings bank shall not change the location of a 
        detached facility without prior written approval of the 
        commissioner of commerce.  A savings bank may establish a loan 
        production office, without restriction as to geographical 
        location, upon written notice to the commissioner of commerce. 
           Sec. 9.  [EFFECTIVE DATE.] 
           Sections 1 to 5 and 8 are effective the day following final 
        enactment.  Sections 6 and 7 are effective June 1, 1997. 
           Presented to the governor March 30, 1996 
           Signed by the governor April 2, 1996, 12:35 p.m.

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