1.1 	A bill for an act
1.2 	relating to commerce; abolishing the time-price
1.3 	doctrine; requiring compliance with truth-in-lending
1.4 	laws for business lending; amending Minnesota Statutes
1.5 	2004, sections 47.59, subdivisions 12, 13; 334.01, by
1.6 	adding a subdivision.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 47.59,
1.9 	subdivision 12, is amended to read:
1.10 		Subd. 12.Consumer protections.  (a) Financial
1.11 	institutions shall comply with the requirements of the federal
1.12 	Truth in Lending Act, United States Code, title 15, sections
1.13 	1601 to 1693, as the same may be amended from time to time~~,~~:  (1) 
1.14 	in connection with a consumer loan or credit sale for a consumer
1.15 	purpose where the federal Truth in Lending Act is applicable;
1.16 	and (2) in connection with a business loan or credit sale for a
1.17 	business purpose where the federal Truth in Lending Act would be
1.18 	applicable if the loan or credit sale were a loan or credit sale
1.19 	to a consumer.  A financial institution shall give the following
1.20 	disclosure to the borrower in writing at the time an open-end
1.21 	credit account is established if the financial institution
1.22 	imposes a loan fee, points, or similar charge that relates to
1.23 	the opening of the account which is not included in the annual
1.24 	percentage rate given pursuant to the federal Truth in Lending
1.25 	Act:  "YOU HAVE BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH
1.26 	ARE NOT INCLUDED IN THE ANNUAL PERCENTAGE RATE.  THESE CHARGES
2.1 	MAY BE REFUNDED, IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR
2.2 	LINE OF CREDIT OR IF YOU REPAY YOUR LINE OF CREDIT EARLY.  THESE
2.3 	CHARGES INCREASE THE COST OF YOUR CREDIT."
2.4 	(b) Financial institutions shall comply with the following
2.5 	consumer protection provisions in connection with a consumer
2.6 	loan or credit sale for a consumer purpose:  sections 325G.02 to
2.7 	325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to
2.8 	325G.36, and Code of Federal Regulations, title 12, part 535,
2.9 	where those statutes or regulations are applicable.
2.10 	(c) An assignment of a consumer's earnings by the consumer
2.11 	to a financial institution as payment or as security for payment
2.12 	of a debt arising out of a consumer loan or consumer credit sale
2.13 	is unenforceable by the financial institution except where the
2.14 	assignment:  (1) by its terms is revocable at the will of the
2.15 	consumer; (2) is a payroll deduction plan or preauthorized
2.16 	payment plan, beginning at the time of the transaction, in which
2.17 	the consumer authorizes a series of wage deductions as a method
2.18 	of making each payment; or (3) applies only to wages or other
2.19 	earnings already earned at the time of the assignment.

2.20 	Sec. 2. Minnesota Statutes 2004, section 47.59,
2.21 	subdivision 13, is amended to read:
2.22 		Subd. 13.Loans and contracts other than consumer loans
2.23 	and contracts.  Loans and credit sale contracts other than
2.24 	consumer loans and consumer credit sale contracts are not
2.25 	subject to the provisions and limitations of subdivisions 9; 10;
2.26 	11, paragraph (b); and 12, paragraphs (b) and (c).

2.27 	Sec. 3. Minnesota Statutes 2004, section 334.01, is
2.28 	amended by adding a subdivision to read:
2.29 		Subd. 4.Time-price doctrine abolished. The doctrine of
2.30 	common law known as the time-price doctrine is abolished in this
2.31 	state.

2.32 	Sec. 4. EFFECTIVE DATE.
 2.33 	Sections 1 to 3 are effective January 1, 2006, and apply to
2.34 	transactions entered into on or after that date.