1999 Minnesota Statutes

CHAPTER 47. Financial corporations

     47.01 Definitions. 

    Subdivision 1.    Terms.  Unless the language or 
 context clearly indicates that a different meaning is intended, 
 the following terms, for the purposes of this chapter, shall be 
 given the meanings ascribed to them.  

    Subd. 2.    Bank.  A bank is a corporation under public 
 control, having a place of business where credits are opened by 
 the deposit or collection of money and currency, subject to be 
 paid or remitted upon draft, check, or order, and where money is 
 advanced, loaned on stocks, bonds, bullion, bills of exchange, 
 and promissory notes, and where the same are received for 
 discount or sale; and all persons and copartnerships, 
 respectively, so operating, are bankers.  The term does not 
 include a savings bank. 

    Subd. 3.    Savings bank.  A savings bank is a 
 corporation authorized to do business under chapter 50.  

    Subd. 4.    Trust company.  A trust company is a 
 corporation under like control authorized, within prescribed 
 limitations, to act as a safe deposit company, trustee or 
 representative for or under any court, public or private 
 corporation, or individual, and as surety or guarantor.  

    Subd. 5.    Savings association.  A savings association 
 is a corporation under like control authorized to accumulate 
 funds to be loaned to persons to assist them in acquiring homes 
 and which is organized pursuant to the provisions of chapter 51A 
 and includes savings associations of both mutual and stock 
 organization. 

    HIST: (7635) RL s 2967; 1982 c 473 s 4; 1995 c 171 s 4,5; 1995 
 c 202 art 1 s 25 

     47.015 Closing on certain days. 

    Subdivision 1.    Financial institutions.  As used in 
 this section the term "financial institution" shall include 
 banks, trust companies, banks and trust companies, savings 
 banks, industrial loan and thrift companies having outstanding 
 certificates of indebtedness for investment, savings 
 associations, national banking associations, federal reserve 
 banks, federal savings associations, and federal savings banks 
 doing business in this state, and includes any branch or 
 detached facility of any of them. 

    Subd. 2.    Saturday; Monday following holiday.  Any 
 financial institution in the state may remain closed on any 
 Saturday and on any Monday next following a Sunday on which 
 falls a holiday designated by any law of this state.  Any 
 Saturday or any Monday on which any financial institution 
 remains closed is a holiday and not a business day with respect 
 to that institution.  Any act which by law or contract may be 
 performed on any such Saturday or Monday, at, by, or with 
 respect to any such financial institution remaining closed on 
 such day may be performed on the next succeeding regular 
 business day.  No liability or loss of rights on the part of any 
 person or financial institution shall result from such closing.  

    Subd. 3.    May remain open on Mondays or holidays.  
 Any financial institution in the state may remain open for the 
 transaction of business on any such Monday or on any holiday 
 designated by any law of this state, and on any such day any 
 financial institution in this state may accept, certify or pay 
 checks, drafts or other instruments, may charge the same against 
 the accounts of customers, and may receive payment of notes, 
 drafts and other instruments, all to the same extent and with 
 the same legal effect as if such day were a regular business 
 day, but nothing herein contained shall affect the due date of 
 any time instrument.  

    Subd. 4.    Permissive closing on Good Friday.  A 
 financial institution may close for up to three hours on Good 
 Friday.  The financial institution shall post on its premises a 
 written notice of the closing. 

    HIST: 1949 c 38 s 1; 1951 c 128 s 1; 1953 c 61 s 1; 1953 c 445 
 s 1; 1955 c 9 s 1; 1955 c 202 s 1; 1955 c 229 s 1; 1955 c 631 s 
 1; 1955 c 787 s 1; 1981 c 220 s 5; 1Sp1985 c 13 s 178; 1989 c 
 166 s 2; 1992 c 587 art 1 s 6; 1995 c 171 s 6 

     47.0151 Emergency suspension of business, definitions. 

    Subdivision 1.  For the purposes of sections 47.0151 to 
 47.0155, the terms defined in this section have the meanings 
 given them, unless the context requires otherwise.  

    Subd. 2.  "Commissioner" means the commissioner of commerce.

    Subd. 3.  "Financial institution" includes a bank, a 
 savings bank, a trust company, any branch or agency of a foreign 
 banking organization, a person or association of persons 
 lawfully carrying on the business of banking, a savings 
 association, and, so far as the provisions of sections 47.0151 
 to 47.0155 are consistent with federal law, national banks and 
 federal savings associations, and includes any branch or 
 detached facility of any of them. 

    Subd. 4.  "Officer" means the person designated by the 
 board of directors, board of trustees, or other governing body 
 of a financial institution, to act for the financial institution 
 in carrying out the provisions of sections 47.0151 to 47.0155 
 or, in the absence of a designation or of the officer or 
 officers designated, the president or any other officer 
 currently in charge of the operations of the financial 
 institution or of the office or offices in question.  

    Subd. 5.  "Office" means any place at which a financial 
 institution transacts its business or conducts operations 
 related to its business.  

    Subd. 6.  "Emergency" means any condition or occurrence 
 which may interfere physically with the conduct of normal 
 business operations at one or more or all of the offices of a 
 financial institution and which poses an imminent or existing 
 threat to the safety or security of persons or property, or 
 both.  An emergency includes but is not limited to fire; flood; 
 earthquake; hurricane; wind, rain, or snow storms; labor 
 disputes and strikes; power failures; transportation failures; 
 interruption of communication facilities; shortages of fuel, 
 housing, food, transportation or labor; robbery or attempted 
 robbery; actual or threatened enemy attack; epidemics or other 
 catastrophes, riots; civil commotions; and other acts of 
 lawlessness or violence.  

    HIST: 1971 c 318 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1Sp1985 c 13 s 179; 1995 c 202 art 1 sec 25 

     47.0152 Power of commissioner. 

    Whenever the commissioner is of the opinion that an 
 emergency exists, or is impending, in the state or in a part of 
 it, the commissioner may, by proclamation, authorize financial 
 institutions located in the affected area to close any or all of 
 their offices.  In addition, if the commissioner is of the 
 opinion that an emergency exists, or is impending, which 
 affects, or may affect, a particular financial institution or a 
 particular office of it, but not financial institutions located 
 in the area generally, the commissioner may authorize the 
 particular financial institution or office affected, to close or 
 to temporarily relocate.  The office closed shall remain closed 
 until the commissioner proclaims that the emergency has ended, 
 or until an earlier time when the officers of the financial 
 institution determine that an office, closed because of the 
 emergency, should reopen, and, in either event, for the further 
 time reasonably necessary to reopen.  The provisions of section 
 47.101 shall be waived for a temporary location established due 
 to an emergency.  

    HIST: 1971 c 318 s 2; 1Sp1985 c 13 s 180; 1986 c 444 

     47.0153 Powers of officers. 

    Subdivision 1.  When the officers of a financial 
 institution are of the opinion that an emergency exists, or is 
 impending, which affects, or may affect, a financial 
 institution's offices, they shall have the authority, in the 
 reasonable exercise of their discretion, to determine not to 
 open any of its offices on any business day or, if having 
 opened, to close an office during the continuation of the 
 emergency, even if the commissioner does not issue a 
 proclamation of emergency.  The office closed shall remain 
 closed until the time that the officers determine the emergency 
 has ended, and for the further time reasonably necessary to 
 reopen.  No financial institution office shall remain closed for 
 more then 48 consecutive hours, excluding other legal holidays, 
 without the prior approval of the commissioner. 

    Subd. 2.  The officers of a financial institution may close 
 the financial institution or one or more of the financial 
 institution's offices on a day designated, by the President of 
 the United States or the governor as a day of national mourning, 
 rejoicing, or other special observance.  

    HIST: 1971 c 318 s 3; 1994 c 382 s 2 

     47.0154 Notice to commissioner. 

    A financial institution closing an office or offices 
 pursuant to the authority granted under section 47.0153, 
 subdivision 1, shall give as prompt notice of its action, as 
 conditions will permit and by any means available, to the 
 commissioner.  

    HIST: 1971 c 318 s 4; 1994 c 382 s 3 

     47.0155 Effect of closing.  

    Any day on which a financial institution, or any of its 
 offices, is closed during all or part of its normal business 
 hours pursuant to sections 47.0151 to 47.0155 shall be, with 
 respect to the financial institution or, if not all of its 
 offices are closed, then with respect to the office which is 
 closed, a legal holiday for all purposes with respect to any 
 financial institution business of any character.  No liability, 
 or loss of rights of any kind, on the part of any financial 
 institution, or director, officer, or employee thereof, shall 
 accrue or result by virtue of any closing authorized by sections 
 47.0151 to 47.0155.  

    The provisions of sections 47.0151 to 47.0155 shall be 
 construed and applied as being in addition to, and not in 
 substitution for or limitation of, any other law of this state 
 or of the United States, authorizing the closing of a financial 
 institution or excusing the delay by a financial institution in 
 the performance of its duties and obligations because of 
 emergencies or conditions beyond the financial institution's 
 control, or otherwise.  

    HIST: 1971 c 318 s 5 

     47.0156 Closing effecting a permanent cessation of 
  business. 

    The permanent closing of a financial institution as defined 
 in section 47.015 or 47.0151 for purposes, or with a result, 
 other than authorized in sections 47.015 to 47.0155 is unlawful 
 unless at least 60 days' written notice is given to the 
 commissioner. 

    HIST: 1Sp1985 c 13 s 181; 1993 c 257 s 6; 1999 c 151 s 6 

     47.016 Disposition of credit insurance income. 

    Subdivision 1.    Definitions.  (a) For the purpose of 
 this section, the following terms have the meanings given them.  

    (b) "Credit insurance" means credit life, accident and 
 health insurance, and credit involuntary unemployment insurance 
 as defined in section 62B.02.  

    (c) "Officer," "director," "employee," and "shareholder" 
 include the spouse and minor children of the officer, director, 
 employee, or shareholder.  

    (d) "Interest" includes ownership through a spouse or minor 
 children; ownership through a broker, nominee, or agent; and 
 ownership through a corporation, partnership, association, joint 
 venture, or proprietorship.  

    (e) "Financial institution" means any person who lends 
 money and sells credit insurance to the borrower.  

    Subd. 2.    Scope and purpose.  This section applies to 
 sales of credit insurance by employees, officers, directors, and 
 shareholders of a financial institution and by corporations, 
 partnerships, associations, and other entities in which these 
 persons have an interest.  The purposes of this section are (1) 
 to prohibit employees, officers, directors, members, and 
 shareholders of financial institutions from benefiting 
 personally on the sale of credit insurance to loan customers and 
 (2) to encourage marketing of credit insurance through the use 
 of financial facilities only under arrangements which assure 
 that employees, officers, directors, and shareholders do not 
 receive benefits not shared with all stockholders or members of 
 the financial institution.  

    Subd. 3.    Distribution of credit insurance income.  No 
 employee, officer, director, or shareholder of a financial 
 institution, nor a corporation, partnership, association, or 
 other entity in which these persons have an interest, may retain 
 commissions or other income from the sale of credit insurance in 
 connection with a loan made by the financial institution.  All 
 such income received by these persons or by a corporation, 
 partnership, association, or other entity in which these persons 
 have an interest, must be turned over to the financial 
 institution.  Nothing in this section prohibits a financial 
 institution from receiving the income directly in the form of 
 commissions or as compensation for use of its premises, 
 personnel, and good will.  

    HIST: 1983 c 250 s 8; 1993 c 343 s 1 

     47.02 "Bank" and "savings bank." 

    A "bank" is a corporation having a place of business in 
 this state, where credits are opened by the deposit of money or 
 currency, or the collection of the same, subject to be paid or 
 remitted on draft, check, or order; and where money is loaned or 
 advanced on stocks, bonds, bullion, bills of exchange, or 
 promissory notes, and where the same are received for discount 
 or sale.  A "savings bank" is a corporation authorized to do 
 business under chapter 50.  Every "bank" or "savings bank" in 
 this state shall at all times be under the supervision and 
 subject to the control of the commissioner of commerce, and when 
 so conducted the business shall be known as "banking."  

    HIST: (7636) 1907 c 111 s 1; 1909 c 103 s 1; 1983 c 289 s 114 
 subd 1; 1984 c 655 art 1 s 92; 1995 c 171 s 7 

     47.03 Use of certain words permitted.  

    Subdivision 1.  No individual, partnership, unincorporated 
 association, or corporation, except as specifically authorized 
 by the laws of this state, who does not hold an effective 
 certificate of authority, issued by the commissioner of 
 commerce, to engage in the business of banking and is not 
 subject to and complying with all the provisions of law relating 
 to banks shall engage in such business, or make use of the words 
 "bank," "banker," or "banking," or any derivative or compound of 
 any such words, or any word or words in a foreign language 
 having the same or a similar meaning, in its business name or in 
 any sign, symbol, token, letterhead, circular, advertisement, or 
 any other written or printed matter, in such manner as might 
 indicate to any person that such individual, partnership, 
 unincorporated association, or corporation is authorized to 
 engage in the business of banking.  This subdivision shall not 
 apply to any holding company affiliate or affiliate as defined 
 in the Act of Congress, known as the Banking Act of 1933, nor to 
 any insurance company authorized to engage in the insurance 
 business in the state of Minnesota.  

    Subd. 2.  Every individual, partnership, unincorporated 
 association, or corporation which shall violate any of the 
 provisions of this section shall forfeit to the state the sum of 
 not to exceed $100 for each day the violation shall continue, as 
 determined by the court, to be recovered in a civil action to be 
 brought by the attorney general in the name of the state at the 
 request of the commissioner of commerce, and may be enjoined 
 from any further violation in an action brought in the name of 
 the state for that purpose.  

    HIST: (7637) 1907 c 111 s 2; 1945 c 133 s 1; 1983 c 289 s 114 
 subd 1; 1984 c 655 art 1 s 92 

  47.04 Repealed, 1945 c 133 s 3 

  47.05 Repealed, 1945 c 133 s 3 

     47.07 Companies subject to provisions.  

    All companies, associations, and corporations organized 
 under any law of this state, other than those relating to the 
 organization of banks and trust companies, which assume or 
 exercise any of the functions, powers, or privileges conferred 
 upon banks or trust companies under any law of this state, shall 
 be subject to all the limitations, penalties, and requirements 
 incident or pertaining to these functions, powers, or 
 privileges; and the stockholders or persons forming the same 
 shall be liable in the same manner and to the same extent as if 
 these companies, associations, and corporations were organized 
 as banks or trust companies under this chapter.  

    HIST: (7655) RL s 2982 

     47.08 Articles of incorporation filed with commissioner. 

    All persons proposing to incorporate and organize any 
 financial institution, whether defined or described as such by 
 the laws of the state, shall, before doing any business in the 
 state as a corporation, and before filing their articles of 
 incorporation with the secretary of state or with any other 
 officer with whom the law requires such articles to be filed or 
 recorded, file a copy of such articles with the commissioner of 
 commerce.  

    HIST: (7656) 1911 c 323 s 1; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92 

     47.09 Advertisements.  

    No such financial institution shall, directly, indirectly, 
 or by inference of any kind, display, represent, hold out or 
 otherwise advertise as its capital, resources, assets or 
 financial strength or ability or availability therefor, any 
 capital, resources, or assets of any other financial institution 
 or institutions, whether or not such other financial institution 
 or institutions are in any way connected with such financial 
 institution through or by way of a holding company or other 
 corporation or similar structure; nor shall any such financial 
 institution, the capital stock of which is, in whole or in part, 
 controlled or owned by any such holding company, other 
 corporation or similar structure, display, represent, hold out 
 or otherwise advertise that it is affiliated with or has any 
 other connection with such company, corporation or similar 
 structure other than that which truly and actually exists; and 
 no such financial institution shall advertise as its capital any 
 amount other or greater than the amount of actual paid-in 
 capital, which it shall have at the time of the appearance of 
 such advertisement, and no such financial institution shall 
 advertise in any way the aggregate or individual responsibility 
 or financial worth of its stockholders, or in any manner seek to 
 convey the impression that the financial resources of its 
 stockholders above the limit provided by law are available for 
 the purpose of meeting its liabilities.  

    HIST: (7657) 1911 c 323 s 2; 1925 c 169; 1931 c 380 

  47.095 Repealed, 1995 c 171 s 70 

     47.096 Time deposits; notice of automatic renewal. 

    If a deposit for a term of one year or more, including a 
 savings certificate and a certificate of deposit, is 
 automatically renewable by its own terms if not redeemed at a 
 specified redemption date, the financial corporation receiving 
 the deposit shall give mailed written notice to the owner or 
 holder of the deposit not less than 30 days prior to the 
 redemption date.  The written notice shall be sent to the last 
 known address of the owner or holder as filed with the financial 
 corporation, shall state the date of the automatic renewal and 
 shall state any penalty diminution of interest or other 
 consequences to the owner or holder arising out of the failure 
 to redeem prior to automatic renewal.  In lieu of complying with 
 the provisions of this section, a financial corporation may 
 comply with the requirements of the Federal Truth in Savings Act 
 and regulations, notwithstanding whether or not that act or 
 those regulations apply to the deposit. 

    HIST: 1976 c 187 s 1; 1993 c 257 s 7 

     47.10 Real estate; acquisition, holding. 

    Subdivision 1.    Authority, approval, limitations.  (a) 
 Except as otherwise specially provided, the net book value of 
 land and buildings for the transaction of the business of the 
 corporation, including parking lots and premises leased to 
 others, shall not be more than as follows:  

    (1) for a bank, trust company, savings bank, or stock 
 savings association, if investment is for acquisition and 
 improvements to establish a new bank, or is for improvements to 
 existing property or acquisition and improvements to adjacent 
 property, approval by the commissioner of commerce is not 
 required if the total investment does not exceed 50 percent of 
 its existing capital stock and paid-in surplus.  Upon written 
 prior approval of the commissioner of commerce, a bank, trust 
 company, savings bank, or stock savings association may invest 
 in the property and improvements in clause (1) or for 
 acquisition of nonadjacent property for expansion or future use, 
 if the aggregate of all such investments does not exceed 75 
 percent of its existing capital stock and paid-in surplus; 

    (2) for a mutual savings association, five percent of its 
 net assets.  

    (b) For purposes of this subdivision, an intervening 
 highway, street, road, alley, other public thoroughfare, or 
 easement of any kind does not cause two parcels of real property 
 to be nonadjacent. 

    Subd. 2.    Books and records.  With the exception of 
 annual amortization charges which are made in accordance with 
 generally accepted accounting principles, no state bank, trust 
 company, savings bank, or savings association shall decrease the 
 actual cost of the investment as shown on its books by a charge 
 to any of its capital accounts unless approved by the 
 commissioner. 

    Subd. 3.    Leasehold place of business; approval of 
 certain lease agreements.  No bank, trust company, savings 
 bank, or savings association may acquire real property and 
 improvements of any nature to it for its place of business by 
 lease agreement if the lessor has an existing direct or indirect 
 interest in the management or ownership of the bank, trust 
 company, savings bank, or savings association without prior 
 written approval by the commissioner.  This includes subsequent 
 amendments and associated leasehold improvements.  A lessee's 
 expenditures to maintain the leasehold premises consistent with 
 ordinary business conditions and within the preapproved lease 
 agreement does not constitute an amendment requiring prior 
 written approval. 

    Subd. 4.    Approval of certain insider agreements.  No 
 bank, trust company, savings bank, or savings association may 
 purchase, sell, or lease real property, personal property, 
 improvements or equipment of a value of $25,000 or more if the 
 purchaser, 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. 

    HIST: (7648) RL s 2976; 1941 c 37 s 1; 1955 c 104 s 1; 1957 c 
 601 s 4; 1982 c 473 s 5; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1987 c 349 art 1 s 5,6; 1992 c 587 art 1 s 7; 1995 c 171 
 s 8; 1995 c 202 art 1 s 25; art 2 s 2; 1996 c 414 art 1 s 6 

     47.101 Place of business; relocation, disposal. 

    Subdivision 1.    Approval.  A bank, trust company, 
 savings bank, or savings association may change its location, 
 dispose of its place of business, and acquire another upon the 
 written approval of the commissioner of commerce or otherwise as 
 provided for in this section.  

    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 notify the commissioner of 
 commerce in a form prescribed by the commissioner of commerce.  
 The applicant shall publish once in a form prescribed by the 
 commissioner a notice of the relocation in a qualified newspaper 
 published in the municipality where the banking institution is 
 located.  If there are no such newspapers, then notice shall be 
 published in qualified newspapers likely to give notice in the 
 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.  

    Subd. 3.    Applications to department of commerce.  An 
 application by a banking institution to relocate its main office 
 other than those provided for in subdivision 2 shall be 
 accompanied by a filing fee of $3,000 payable to the 
 commissioner of commerce and approved or disapproved by the 
 commissioner of commerce as provided for in sections 46.041 and 
 46.044. 

    HIST: 1982 c 473 s 6; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1985 c 248 s 13,14; 1989 c 166 s 3; 1992 c 587 art 1 s 
 8; 1995 c 202 art 1 s 25; 1996 c 414 art 3 s 1,2; 1999 c 151 s 7 

     47.11 Selection of name. 

    Before execution of the certificate of incorporation of any 
 such corporation or conduct of business under an assumed name, 
 its proposed name or proposed assumed name shall be submitted to 
 the commissioner of commerce, who shall compare it with those of 
 corporations operating in the state, and if it is likely to be 
 mistaken for any of them, or to confuse the public as to the 
 character of its business, or is otherwise objectionable, 
 additional names shall be submitted until a satisfactory one is 
 selected, whereupon the commissioner shall issue a certificate 
 of approval thereof.  

    HIST: (7644) RL s 2972; 1983 c 289 s 114 subd 1; 1984 c 655 
 art 1 s 92; 1986 c 444; 1995 c 202 art 1 s 5 

     47.12 Financial corporations. 

    Corporations may be formed for any one of the following 
 purposes: 

    (1) Carrying on the business of banking, by receiving 
 deposits, buying, selling, and discounting notes, bills, and 
 other evidences of debt legal for investment, domestic or 
 foreign, dealing in gold and silver bullion and foreign coins, 
 issuing circulating notes, and loaning money upon real estate or 
 personal security or upon the creditworthiness of the borrower; 

    (2) Establishing and conducting clearing houses, for 
 effecting, in one place, the speedy and systematic daily 
 exchange and adjustment of balances between banks and bankers in 
 any municipality, town, or county, establishing and enforcing 
 uniform methods of conducting the banking business in such 
 locality, and adjusting disputes or misunderstandings between 
 members of such clearing house engaged in the banking business; 

    (3) Creating and conducting savings banks for the 
 reception, on deposit, of money offered for that purpose, the 
 investment thereof, and the declaring, crediting, and paying of 
 dividends or interest thereon, as authorized and provided by 
 law; 

    (4) Transacting business as a trust company in conformity 
 with the laws relating thereto; and 

    (5) Carrying on, in accordance with law, the business of 
 savings associations.  

    HIST: (7441) RL s 2847; 1965 c 171 s 3; 1995 c 171 s 9 

     47.14 Certificate, how accompanied.  

    The certificate of incorporation, when presented to the 
 commissioner of commerce, shall be accompanied, in the case of a 
 bank, with the certificate of a solvent bank in this state of 
 the deposit therein, in cash, to the credit of the proposed 
 bank, and payable upon its order when countersigned by the 
 commissioner of commerce, of an amount equal to its capital 
 stock, surplus and undivided profits.  In the case of a 
 reorganization of a former national bank, it shall also be 
 accompanied with the written consent of the holders of a 
 majority of its former capital stock.  In the case of a savings 
 bank, it shall be accompanied with proof of four weeks' 
 published notice of the intention of the incorporators to 
 organize the same, specifying its proposed name and location, 
 and the names of the proposed incorporators, and that a majority 
 thereof reside in the county of its proposed location, and a 
 sworn declaration by each proposed trustee that the trustee will 
 perform the duties as such to the best of that person's ability, 
 according to law, with proof of the record of such declaration 
 with the county recorder; and if there is a savings bank 
 organized and doing business in such county, a copy of such 
 notice shall be served by mail on such bank at least 15 days 
 before the filing of such certificate. 

    HIST: (7645) RL s 2973; 1965 c 171 s 4; 1976 c 181 s 2; 1983 c 
 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444 

     47.15 Bylaws, where filed.  

    Within 90 days after the adoption of bylaws or any 
 amendment thereof, a certified copy of the same shall be filed 
 with the commissioner of commerce.  

    HIST: (7647) RL s 2975; 1983 c 289 s 114 subd 1; 1984 c 655 
 art 1 s 92 

     47.16 Certification by commissioner. 

    Subdivision 1.  If the commissioner of commerce is 
 satisfied that the corporation has been organized for legitimate 
 purposes, and under such conditions as to merit and have public 
 confidence, and that all provisions of law applicable to every 
 branch of business in which, by the terms of its certificate, it 
 is authorized to engage, have been complied with, the 
 commissioner shall so certify.  When the original certificate 
 and the certificate of incorporation from the secretary of state 
 is filed with the commissioner of commerce, the commissioner 
 shall, within 60 days thereafter, execute and deliver to it a 
 certificate of authority. 

    Subd. 2. Repealed, 1982 c 473 s 30 

    HIST: (7646) RL s 2974; 1955 c 820 s 11; 1980 c 541 s 1; 1983 
 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444; 1989 c 
 166 s 4 

  47.17 Repealed, 1981 c 220 s 18 

     47.18 "Corporation"; "agency." 

    For the purpose of this section and section 47.19, the term 
 "corporation" shall be construed to mean any bank, savings bank, 
 trust company, insurance company, or savings association 
 organized under the laws of this state; and the term "agency" 
 shall be construed to mean the federal home loan bank of the 
 district of which this state is a part, or of an adjoining 
 district if convenience shall so require, or other financial 
 corporation, association or agency created by any act of 
 Congress.  

    HIST: (7658-1) 1933 c 101 s 1; 1995 c 202 art 1 s 25 

     47.19 Corporation may be member or stockholder of 
  federal agency. 

    Any corporation is hereby empowered and authorized to 
 become a member of, or stockholder in, any such agency, and to 
 that end to purchase stock in, or securities of, or deposit 
 money with, such agency and/or to comply with any other 
 conditions of membership or credit; to borrow money from such 
 agency upon such rates of interest, not exceeding the contract 
 rate of interest in this state, and upon such terms and 
 conditions as may be agreed upon by such corporation and such 
 agency, for the purpose of making loans, paying withdrawals, 
 paying maturities, paying debts, and for any other purpose not 
 inconsistent with the objects of the corporation; provided, that 
 the aggregate amount of the indebtedness, so incurred by such 
 corporation, which shall be outstanding at any time shall not 
 exceed 25 percent of the then total assets of the corporation; 
 to assign, pledge and hypothecate its bonds, mortgages or other 
 assets; and, in case of savings associations, to repledge with 
 such agency the shares of stock in such association which any 
 owner thereof may have pledged as collateral security, without 
 obtaining the consent thereunto of such owner, as security for 
 the repayment of the indebtedness so created by such corporation 
 and as evidenced by its note or other evidence of indebtedness 
 given for such borrowed money; and to do any and all things 
 which shall or may be necessary or convenient in order to comply 
 with and to obtain the benefits of the provisions of any act of 
 Congress creating such agency, or any amendments thereto.  

    HIST: (7658-2) 1933 c 101 s 2; 1995 c 202 art 1 s 25 

     47.20 Lending authority of financial institutions. 

    Subdivision 1.    General authority.  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 subdivision 4b, sections 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.  

    Subd. 2.    Definitions.  For the purposes of this 
 section the terms defined in this subdivision have the meanings 
 given them: 

    (1) "Actual closing costs" mean reasonable charges for or 
 sums paid for the following, whether or not retained by the 
 mortgagee or lender: 

    (a) Any insurance premiums including but not limited to 
 premiums for title insurance, fire and extended coverage 
 insurance, flood insurance, and private mortgage insurance, but 
 excluding any charges or sums retained by the mortgagee or 
 lender as self-insured retention. 

    (b) Abstracting, title examination and search, and 
 examination of public records. 

    (c) The preparation and recording of any or all documents 
 required by law or custom for closing a conventional or 
 cooperative apartment loan. 

    (d) Appraisal and survey of real property securing a 
 conventional loan or real property owned by a cooperative 
 apartment corporation of which a share or shares of stock or a 
 membership certificate or certificates are to secure a 
 cooperative apartment loan. 

    (e) A single service charge, which includes any 
 consideration, not otherwise specified herein as an "actual 
 closing cost" paid by the borrower and received and retained by 
 the lender for or related to the acquisition, making, 
 refinancing or modification of a conventional or cooperative 
 apartment loan, and also includes any consideration received by 
 the lender for making a borrower's interest rate commitment or 
 for making a borrower's loan commitment, whether or not an 
 actual loan follows the commitment.  The term service charge 
 does not include forward commitment fees.  The service charge 
 shall not exceed one percent of the original bona fide principal 
 amount of the conventional or cooperative apartment loan, except 
 that in the case of a construction loan, the service charge 
 shall not exceed two percent of the original bona fide principal 
 amount of the loan.  That portion of the service charge imposed 
 because the loan is a construction loan shall be itemized and a 
 copy of the itemization furnished the borrower.  A lender shall 
 not collect from a borrower the additional one percent service 
 charge permitted for a construction loan if it does not perform 
 the service for which the charge is imposed or if third parties 
 perform and charge the borrower for the service for which the 
 lender has imposed the charge. 

    (f) Charges and fees necessary for or related to the 
 transfer of real or personal property securing a conventional or 
 cooperative apartment loan or the closing of a conventional or 
 cooperative apartment loan paid by the borrower and received by 
 any party other than the lender. 

    (2) "Contract for deed" means an executory contract for the 
 conveyance of real estate, the original principal amount of 
 which is less than $100,000.  A commitment for a contract for 
 deed shall include an executed purchase agreement or earnest 
 money contract wherein the seller agrees to finance any part or 
 all of the purchase price by a contract for deed. 

    (3) "Conventional loan" means a loan or advance of credit, 
 other than a loan or advance of credit made by a credit union or 
 made pursuant to section 334.011, to a noncorporate borrower in 
 an original principal amount of less than $100,000, secured by a 
 mortgage upon real property containing one or more residential 
 units or upon which at the time the loan is made it is intended 
 that one or more residential units are to be constructed, and 
 which is not 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, and 
 which is not made pursuant to the authority granted in 
 subdivision 1, clause (3) or (4).  The term mortgage does not 
 include contracts for deed or installment land contracts. 

    (4) "Cooperative apartment loan" means a loan or advance of 
 credit, other than a loan or advance of credit made by a credit 
 union or made pursuant to section 334.011, to a noncorporate 
 borrower in an original principal amount of less than $100,000, 
 secured by a security interest on a share or shares of stock or 
 a membership certificate or certificates issued to a stockholder 
 or member by a cooperative apartment corporation, which may be 
 accompanied by an assignment by way of security of the 
 borrower's interest in the proprietary lease or occupancy 
 agreement in property issued by the cooperative apartment 
 corporation and which is not 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.  

    (5) "Cooperative apartment corporation" means a corporation 
 or cooperative organized under chapter 308A or 317A, the 
 shareholders or members of which are entitled, solely by reason 
 of their ownership of stock or membership certificates in the 
 corporation or association, to occupy one or more residential 
 units in a building owned or leased by the corporation or 
 association.  

    (6) "Forward commitment fee" means a fee or other 
 consideration paid to a lender for the purpose of securing a 
 binding forward commitment by or through the lender to make 
 conventional loans to two or more credit worthy purchasers, 
 including future purchasers, of residential units, or a fee or 
 other consideration paid to a lender for the purpose of securing 
 a binding forward commitment by or through the lender to make 
 conventional loans to two or more credit worthy purchasers, 
 including future purchasers, of units to be created out of 
 existing structures pursuant to chapter 515B, or a fee or other 
 consideration paid to a lender for the purpose of securing a 
 binding forward commitment by or through the lender to make 
 cooperative apartment loans to two or more credit worthy 
 purchasers, including future purchasers, of a share or shares of 
 stock or a membership certificate or certificates in a 
 cooperative apartment corporation; provided, that the forward 
 commitment rate of interest does not exceed the maximum lawful 
 rate of interest effective as of the date the forward commitment 
 is issued by the lender. 

    (7) "Borrower's interest rate commitment" means a binding 
 commitment made by a lender to a borrower wherein the lender 
 agrees that, if a conventional or cooperative apartment loan is 
 made following issuance of and pursuant to the commitment, the 
 conventional or cooperative apartment loan shall be made at a 
 rate of interest not in excess of the rate of interest agreed to 
 in the commitment, provided that the rate of interest agreed to 
 in the commitment is not in excess of the maximum lawful rate of 
 interest effective as of the date the commitment is issued by 
 the lender to the borrower. 

    (8) "Borrower's loan commitment" means a binding commitment 
 made by a lender to a borrower wherein the lender agrees to make 
 a conventional or cooperative apartment loan pursuant to the 
 provisions, including the interest rate, of the commitment, 
 provided that the commitment rate of interest does not exceed 
 the maximum lawful rate of interest effective as of the date the 
 commitment is issued and the commitment when issued and agreed 
 to shall constitute a legally binding obligation on the part of 
 the mortgagee or lender to make a conventional or cooperative 
 apartment loan within a specified time period in the future at a 
 rate of interest not exceeding the maximum lawful rate of 
 interest effective as of the date the commitment is issued by 
 the lender to the borrower; provided that a lender who issues a 
 borrower's loan commitment pursuant to the provisions of a 
 forward commitment is authorized to issue the borrower's loan 
 commitment at a rate of interest not to exceed the maximum 
 lawful rate of interest effective as of the date the forward 
 commitment is issued by the lender. 

    (9) "Finance charge" means the total cost of a conventional 
 or cooperative apartment loan including extensions or grant of 
 credit regardless of the characterization of the same and 
 includes interest, finders fees, and other charges levied by a 
 lender directly or indirectly against the person obtaining the 
 conventional or cooperative apartment loan or against a seller 
 of real property securing a conventional loan or a seller of a 
 share or shares of stock or a membership certificate or 
 certificates in a cooperative apartment corporation securing a 
 cooperative apartment loan, or any other party to the 
 transaction except any actual closing costs and any forward 
 commitment fee.  The finance charges plus the actual closing 
 costs and any forward commitment fee, charged by a lender shall 
 include all charges made by a lender other than the principal of 
 the conventional or cooperative apartment loan.  The finance 
 charge, with respect to wraparound mortgages, shall be computed 
 based upon the face amount of the wraparound mortgage note, 
 which face amount shall consist of the aggregate of those funds 
 actually advanced by the wraparound lender and the total 
 outstanding principal balances of the prior note or notes which 
 have been made a part of the wraparound mortgage note.  

    (10) "Lender" means any person making a conventional or 
 cooperative apartment loan, or any person arranging financing 
 for a conventional or cooperative apartment loan.  The term also 
 includes the holder or assignee at any time of a conventional or 
 cooperative apartment loan. 

    (11) "Loan yield" means the annual rate of return obtained 
 by a lender over the term of a conventional or cooperative 
 apartment loan and shall be computed as the annual percentage 
 rate as computed in accordance with sections 226.5 (b), (c), and 
 (d) of Regulation Z, Code of Federal Regulations, title 12, 
 section 226, but using the definition of finance charge provided 
 for in this subdivision.  For purposes of this section, with 
 respect to wraparound mortgages, the rate of interest or loan 
 yield shall be based upon the principal balance set forth in the 
 wraparound note and mortgage and shall not include any interest 
 differential or yield differential between the stated interest 
 rate on the wraparound mortgage and the stated interest rate on 
 the one or more prior mortgages included in the stated loan 
 amount on a wraparound note and mortgage.  

    (12) "Person" means an individual, corporation, business 
 trust, partnership or association or any other legal entity. 

    (13) "Residential unit" means any structure used 
 principally for residential purposes or any portion thereof, and 
 includes a unit in a common interest community, a nonowner 
 occupied residence, and any other type of residence regardless 
 of whether the unit is used as a principal residence, secondary 
 residence, vacation residence, or residence of some other 
 denomination. 

    (14) "Vendor" means any person or persons who agree to sell 
 real estate and finance any part or all of the purchase price by 
 a contract for deed.  The term also includes the holder or 
 assignee at any time of the vendor's interest in a contract for 
 deed. 

    Subd. 3.    Conventional or cooperative loans and 
 obligations.  Notwithstanding the provisions of section 
 334.01, lenders are authorized to make conventional or 
 cooperative apartment loans and purchases of obligations 
 representing conventional or cooperative apartment loans 
 pursuant to rules 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 subdivision 
 4a.  Contract for deed vendors are authorized to charge interest 
 on contracts for deed at an interest rate not in excess of the 
 maximum lawful interest rate prescribed in subdivision 4a. 

    Subd. 4. Repealed, 1981 c 351 s 14 

    Subd. 4a.    Maximum interest rate.  (a) No conventional 
 or cooperative apartment loan or contract for deed shall be made 
 at a rate of interest or loan yield in excess of a maximum 
 lawful interest rate in an amount equal to the Federal National 
 Mortgage Association posted yields on 30-year mortgage 
 commitments for delivery within 60 days on standard conventional 
 fixed-rate mortgages published in the Wall Street Journal for 
 the last business day of the second preceding month plus four 
 percentage points. 

    (b) The maximum lawful interest rate applicable to a 
 cooperative apartment loan or contract for deed at the time the 
 loan or contract is made is the maximum lawful interest rate for 
 the term of the cooperative apartment loan or contract for 
 deed.  Notwithstanding the provisions of section 334.01, a 
 cooperative apartment loan or contract for deed may provide, at 
 the time the loan or contract is made, for the application of 
 specified different consecutive periodic interest rates to the 
 unpaid principal balance, if no interest rate exceeds the 
 maximum lawful interest rate applicable to the loan or contract 
 at the time the loan or contract is made.  

    (c) The maximum interest rate that can be charged on a 
 conventional loan or a contract for deed, with a duration of ten 
 years or less, for the purchase of real estate described in 
 section 83.20, subdivisions 11 and 13, is three percentage 
 points above the rate permitted under paragraph (a) or 15.75 
 percent per year, whichever is less.  This paragraph is 
 effective August 1, 1992. 

    (d) Contracts for deed executed pursuant to a commitment 
 for a contract for deed, or conventional or cooperative 
 apartment loans made pursuant to a borrower's interest rate 
 commitment or made pursuant to a borrower's loan commitment, or 
 made pursuant to a commitment for conventional or cooperative 
 apartment loans made upon payment of a forward commitment fee 
 including a borrower's loan commitment issued pursuant to a 
 forward commitment, which commitment provides for consummation 
 within some future time following the issuance of the commitment 
 may be consummated pursuant to the provisions, including the 
 interest rate, of the commitment notwithstanding the fact that 
 the maximum lawful rate of interest at the time the contract for 
 deed or conventional or cooperative apartment loan is actually 
 executed or made is less than the commitment rate of interest, 
 provided the commitment rate of interest does not exceed the 
 maximum lawful interest rate in effect on the date the 
 commitment was issued.  The refinancing of:  (1) an existing 
 conventional or cooperative apartment loan, (2) a loan insured 
 or guaranteed by the secretary of housing and urban development, 
 the administrator of veterans affairs, or the administrator of 
 the farmers home administration, or (3) a contract for deed by 
 making a conventional or cooperative apartment loan is deemed to 
 be a new conventional or cooperative apartment loan for purposes 
 of determining the maximum lawful rate of interest under this 
 subdivision.  The renegotiation of a conventional or cooperative 
 apartment loan or a contract for deed is deemed to be a new loan 
 or contract for deed for purposes of paragraph (b) and for 
 purposes of determining the maximum lawful rate of interest 
 under this subdivision.  A borrower's interest rate commitment 
 or a borrower's loan commitment is deemed to be issued on the 
 date the commitment is hand delivered by the lender to, or 
 mailed to the borrower.  A forward commitment is deemed to be 
 issued on the date the forward commitment is hand delivered by 
 the lender to, or mailed to the person paying the forward 
 commitment fee to the lender, or to any one of them if there 
 should be more than one.  A commitment for a contract for deed 
 is deemed to be issued on the date the commitment is initially 
 executed by the contract for deed vendor or the vendor's 
 authorized agent. 

    (e) A contract for deed executed pursuant to a commitment 
 for a contract for deed, or a loan made pursuant to a borrower's 
 interest rate commitment, or made pursuant to a borrower's loan 
 commitment, or made pursuant to a forward commitment for 
 conventional or cooperative apartment loans made upon payment of 
 a forward commitment fee including a borrower's loan commitment 
 issued pursuant to a forward commitment at a rate of interest 
 not in excess of the rate of interest authorized by this 
 subdivision at the time the commitment was made continues to be 
 enforceable in accordance with its terms until the indebtedness 
 is fully satisfied. 

    Subd. 4b.    Future appreciation of mortgaged property.  
 Notwithstanding any other provision of this chapter, including 
 section 47.203, with respect to any conventional loan pursuant 
 to which the mortgagee or lender shall receive any share of 
 future appreciation of the mortgaged property, the following 
 limitations shall apply: 

    (1) The share of future appreciation of the mortgaged 
 property which the lender or mortgagee may receive shall be 
 limited to the proportionate amount produced by dividing the 
 lesser of the acquisition cost or fair market value of the 
 mortgaged property at the time the conventional loan is made 
 into the original principal amount of the conventional loan; 
 provided that in no event shall the annual rate of return 
 obtained by the lender or mortgagee over the term of the 
 conventional loan exceed the maximum lawful interest rate 
 prescribed in subdivision 4a. 

    (2) The lender or mortgagee shall not receive any share of 
 future appreciation of the mortgaged property except (a) upon 
 sale or transfer of the mortgaged property or any interest 
 therein, whether by lease, deed, contract for deed or otherwise, 
 whether for consideration or by gift or in the event of death, 
 or otherwise, and whether voluntarily, involuntarily, or by 
 operation of law, provided that if the mortgagor or mortgagors 
 own the mortgaged property as cotenants, the transfer of the 
 mortgaged property or any interest therein from one of such 
 cotenants to another cotenant, whether by reason of death or 
 otherwise, shall not be considered a sale or transfer, and a 
 taking by eminent domain shall not be considered a sale or 
 transfer unless it is a total taking for which payment is made 
 for the full value of the mortgaged property, and a casualty 
 loss shall not be considered a sale or transfer unless the 
 proceeds of any insurance claim made in connection with such 
 casualty loss are applied to prepay the principal of the 
 conventional loan; or (b) upon the stated maturity of the loan, 
 if the loan is made pursuant to or in connection with a specific 
 housing program undertaken by a city, housing and rehabilitation 
 authority, port authority, or other political subdivision or 
 agency of the state. 

    (3) Before the loan is made, the lender shall disclose to 
 the mortgagor or mortgagors the terms and conditions upon which 
 the lender or mortgagee shall receive any share of future 
 appreciation of the mortgaged property. 

    Minnesota Statutes, subdivision 6a, shall not be construed 
 to prohibit the lender or mortgagee from declaring the entire 
 debt of a conventional loan subject to this subdivision due and 
 payable upon a sale or transfer of the mortgaged property or any 
 interest therein, as provided in clause (2).  

    The commissioner may from time to time make, amend and 
 rescind rules, forms and orders necessary to carry out the 
 provisions of this subdivision.  The provisions of this 
 subdivision shall not apply to loans made pursuant to the 
 program authorized by Laws 1981, chapter 97. 

    Subd. 5.    Prepayment penalty.  (a) Unless the 
 mortgagor waives its right to prepay the mortgage loan without 
 penalty, in a uniform written disclosure waiver approved by the 
 commissioner and signed by the mortgagor, no conventional loan 
 or loan authorized in subdivision 1 shall contain a provision 
 requiring or permitting the imposition of a penalty in the event 
 the loan or advance of credit is prepaid.  The prepayment 
 penalty shall not exceed the lesser of two percent of the unpaid 
 principal balance or 60 days interest on the unpaid principal 
 balance.  A lender that offers a mortgage loan with a prepayment 
 penalty shall also offer a mortgage loan without a prepayment 
 penalty. 

    This section does not permit the imposition of a prepayment 
 penalty in the event that the property securing the mortgage 
 loan is sold or the mortgage loan is prepaid in part.  No 
 prepayment penalty may be enforced after 42 months from the date 
 of the mortgage loan. 

    (b) A precomputed conventional loan or precomputed loan 
 authorized in subdivision 1 shall provide for a refund of the 
 precomputed finance charge according to the actuarial method if 
 the loan is paid in full by cash, renewal or refinancing, or a 
 new loan, one month or more before the final installment due 
 date.  The actuarial method for the purpose of this section is 
 the amount of interest attributable to each fully unexpired 
 monthly installment period of the loan contract following the 
 date of prepayment in full, calculated as if the loan was made 
 on an interest-bearing basis at the rate of interest provided 
 for in the note based on the assumption that all payments were 
 made according to schedule.  A precomputed loan for the purpose 
 of this section means a loan for which the debt is expressed as 
 a sum comprised of the principal amount and the amount of 
 interest for the entire term of the loan computed actuarially in 
 advance on the assumption that all scheduled payments will be 
 made when due, and does not include a loan for which interest is 
 computed from time to time by application of a rate to the 
 unpaid principal balance, interest-bearing loans, or 
 simple-interest loans.  For the purpose of calculating a refund 
 for precomputed loans under this section, any portion of the 
 finance charge for extending the first payment period beyond one 
 month may be ignored.  Nothing in this section shall be 
 considered a limitation on discount points or other finance 
 charges charged or collected in advance, and nothing in this 
 section shall require a refund of the charges in the event of 
 prepayment.  Nothing in this section shall be considered to 
 supersede section 47.204. 

    Subd. 6.    Conventional loans on primary residences; 
 consent to transfer.  If the purpose of a conventional loan is 
 to enable a borrower to purchase a one to four family dwelling 
 for the borrower's primary residence, the lender shall consent 
 to the subsequent transfer of the real estate if the existing 
 borrower continues after transfer to be obligated for repayment 
 of the entire remaining indebtedness.  The lender shall release 
 the existing borrower from all obligations under the loan 
 instruments, if the transferee (1) meets the standards of credit 
 worthiness normally used by persons in the business of making 
 conventional loans, including but not limited to the ability of 
 the transferee to make the loan payments and satisfactorily 
 maintain the real estate used as collateral, and (2) executes an 
 agreement in writing with the lender whereby the transferee 
 assumes the obligations of the existing borrower under the loan 
 instruments.  Any such agreement shall not affect the priority, 
 validity or enforceability of any loan instrument.  A lender may 
 charge a fee not in excess of one-tenth of one percent of the 
 remaining unpaid principal balance in the event the loan or 
 advance of credit is assumed by the transferee and the existing 
 borrower continues after the transfer to be obligated for 
 repayment of the entire assumed indebtedness.  A lender may 
 charge a fee not in excess of one percent of the remaining 
 unpaid principal balance in the event the remaining indebtedness 
 is assumed by the transferee and the existing borrower is 
 released from all obligations under the loan instruments.  This 
 subdivision applies to all conventional loans made on or after 
 June 1, 1979, and before May 9, 1981. 

    Subd. 6a.    Loan assumptions.  If the purpose of a 
 conventional loan, or loan made pursuant to the authority 
 granted in subdivision 1, clause (3) or (4), is to enable a 
 borrower to purchase a one to four family dwelling for the 
 borrower's primary residence, the lender shall consent to the 
 subsequent transfer of the real estate and shall release the 
 existing borrower from all obligations under the loan 
 instruments, if the transferee (1) meets the standards of credit 
 worthiness normally used by persons in the business of making 
 conventional loans, including but not limited to the ability of 
 the transferee to make the loan payments and satisfactorily 
 maintain the real estate used as collateral, (2) executes an 
 agreement in writing with the lender whereby the transferee 
 assumes the obligations of the existing borrower under the loan 
 instruments, and (3) executes an agreement in writing to pay 
 interest on the remaining obligation at a new interest rate not 
 to exceed the lender's current market rate of interest on 
 similar loans at the time of the transfer, the most recently 
 published monthly index of the federal home loan mortgage 
 corporation auction yields or the existing interest rate 
 provided for by the terms of the note, whichever is greater.  
 Any such agreement shall not affect the priority, validity or 
 enforceability of any loan instrument.  

    Subd. 6b.    Delinquency or late payment fees.  A lender 
 making a conventional loan may assess and collect fees for late 
 payments according to the provision of section 47.59. 

    Subd. 6c.    Extension of certain loan assumptions.  
 Conventional loans made on or after June 1, 1979, and before May 
 9, 1981, continue to be assumable under the provisions of 
 Minnesota Statutes 1984, section 47.20, subdivision 6, until 
 October 1, 1990. 

    Subd. 7.    Discount points prohibited.  (1) No 
 conventional loan made on or after the effective date of Laws 
 1977, chapter 350 and prior to May 31, 1979 shall contain a 
 provision requiring or permitting the imposition, directly or 
 indirectly, of any discount points, whether or not actually 
 denominated as discount points, on any person.  Conventional or 
 cooperative apartment loans made on or after May 31, 1979 may 
 contain provisions permitting discount points, if the loan does 
 not provide a loan yield in excess of that permitted by 
 subdivision 4a.  The loan yield is computed using the amount 
 resulting when the discount points are included in the finance 
 charge. 

    (2) Forward commitment fees are not discount points within 
 the meaning of this subdivision. 

    (3) No charges, fees, or sums permitted by this section 
 which are paid to and received by a lender may be increased for 
 purposes of evading compliance with this subdivision. 

    Subd. 8.    Conventional loan provisions.  A lender 
 making a conventional loan shall comply with the following: 

    (1) The promissory note and mortgage evidencing a 
 conventional loan shall be printed in not less than the 
 equivalent of 8-point type, .075 inch computer type, or 
 elite-size typewritten numerals, or shall be legibly handwritten.

    (2) The mortgage evidencing a conventional loan shall 
 contain a provision whereby the lender agrees to furnish the 
 borrower with a conformed copy of the promissory note and 
 mortgage at the time they are executed or within a reasonable 
 time after recordation of the mortgage. 

    (3) The mortgage evidencing a conventional loan shall 
 contain a provision whereby the lender, if it intends to 
 foreclose, agrees to give the borrower written notice of any 
 default under the terms or conditions of the promissory note or 
 mortgage, by sending the notice by certified mail to the address 
 of the mortgaged property or such other address as the borrower 
 may have designated in writing to the lender. The lender need 
 not give the borrower the notice required by this paragraph if 
 the default consists of the borrower selling the mortgaged 
 property without the required consent of the lender.  The 
 mortgage shall further provide that the notice shall contain the 
 following provisions: 

    (a) the nature of the default by the borrower, 

    (b) the action required to cure the default, 

    (c) a date, not less than 30 days from the date the notice 
 is mailed by which the default must be cured, 

    (d) that failure to cure the default on or before the date 
 specified in the notice may result in acceleration of the sums 
 secured by the mortgage and sale of the mortgaged premises, and 

    (e) that the borrower has the right to reinstate the 
 mortgage after acceleration, and 

    (f) that the borrower has the right to bring a court action 
 to assert the nonexistence of a default or any other defense of 
 the borrower to acceleration and sale. 

    Subd. 9.    Escrow accounts.  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 homeowner's 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 
 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 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 escrowing for taxes and homeowner's insurance 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.  The 
 lender or mortgage broker shall, with respect to mortgages made 
 on or after August 1, 1997, notify an applicant for a mortgage 
 of the applicant's rights under this paragraph.  This notice 
 shall be given at or prior to the closing of the mortgage loan 
 and shall read substantially as follows: 

              "NOTICE OF RIGHT TO DISCONTINUE ESCROW

    If your mortgage loan involves an escrow account for taxes 
 and homeowner's insurance, you may have the right in five years 
 to discontinue the account and pay your own taxes and 
 homeowner's insurance.  If you are eligible to discontinue the 
 escrow account, you will be notified in five years." 

    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) Effective January 1, 1998, the requirements of 
 paragraph (b), regarding the mortgagor's election to discontinue 
 the escrow account, and paragraph (c), regarding notification to 
 mortgagor, shall apply when the fifth anniversary of the date of 
 the mortgage has been reached. 

    (e) 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. 

    (f) 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. 

    (g) 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. 

    Subd. 10.    Waiver.  Except as provided in subdivision 
 5, the provisions of this section may not be waived by any oral 
 or written agreement executed by any person. 

    Subd. 11. Repealed, 1Sp1985 c 13 s 376 

    Subd. 12. Repealed, 1Sp1985 c 13 s 376 

    Subd. 13.    Conventional loan usury penalties.  Any 
 conventional loan having an interest rate or loan yield in 
 excess of the maximum lawful interest rate provided for in 
 subdivision 4a shall be usurious and subject to the same 
 penalties as a loan made in violation of section 334.01.  Any 
 lender intentionally violating any other provision of this 
 section shall be fined not more than $100 for each offense. 

    Subd. 13a.    Contract for deed or cooperative apartment 
 loan usury penalties.  Any contract for deed or cooperative 
 apartment loan having an interest rate in excess of the maximum 
 lawful interest rate provided for in subdivision 4a is 
 usurious.  No contract for deed or cooperative apartment loan is 
 unenforceable solely because the interest rate thereon is 
 usurious.  Persons who have paid usurious interest may recover 
 an amount not to exceed five times the usurious portion of the 
 interest paid under the contract for deed or cooperative 
 apartment loan plus attorneys' fees from the person to whom the 
 interest has been paid.  The penalty provisions of chapter 334, 
 do not apply to usurious contracts for deed or cooperative 
 apartment loans. 

    Subd. 14. Repealed, 1999 c 151 s 49 

    Subd. 15.  Repealed, 1983 c 215 s 16; 1984 c 474 s 7; 
 1985 c 306 s 26; 1987 c 292 s 36; 1989 c 350 art 16 s 7 

    HIST: (7658-3) 1935 c 49 s 1; 1937 c 88 s 1; 1969 c 579 s 1; 
 1976 c 196 s 1; 1976 c 300 s 2; 1977 c 350 s 1; 1978 c 529 s 
 2-4; 1979 c 48 s 1,3; 1979 c 279 s 1-8; 1980 c 373 s 1-5; 1981 c 
 137 s 1,2,4-8; 1981 c 351 s 1-9; 1982 c 424 s 7; 1982 c 632 s 1; 
 1983 c 215 s 1; 1983 c 288 s 1-3; 1983 c 289 s 114 subd 1; 1984 
 c 474 s 1; 1984 c 655 art 1 s 92; 1985 c 203 s 1; 1985 c 306 s 
 1; 1Sp1985 c 16 art 2 s 43; 1Sp1985 c 18 s 1; 1986 c 358 s 2; 
 1986 c 444; 1Sp1986 c 3 art 1 s 6; 1989 c 144 art 2 s 1; 1989 c 
 304 s 137; 1992 c 587 art 1 s 9-11; 1993 c 257 s 8; 1994 c 382 s 
 4; 1995 c 171 s 10,11; 1995 c 202 art 2 s 3,4; 1996 c 414 art 1 
 s 7-9; 1997 c 157 s 7,8; 1999 c 11 art 3 s 1; 1999 c 151 s 8 

     47.201 Graduated payment mortgages and cooperative 
  apartment loans. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision shall have the 
 meanings given them: 

    (1) "Financial institution" means a state bank or trust 
 company, a national banking association, a state or federally 
 chartered savings association, a mortgage bank, or savings bank. 

    (2) "Graduated payment home loan" means a conventional or 
 cooperative apartment loan made pursuant to section 47.20 and 
 subject to the provisions therein, whereunder initial periodic 
 repayments are lower than those under the standard conventional 
 or cooperative apartment loan having equal periodic repayments, 
 and gradually rise to a predetermined point after which they 
 remain constant. 

    Subd. 2.    Authorization.  Notwithstanding the 
 provisions of sections 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. 

    Subd. 3.    Graduated payments.  A graduated payment 
 home loan may provide that periodic repayments of principal and 
 interest on graduated payment home loans may increase in amounts 
 not exceeding the following: 

    (a) 7.5 percent annually during a period of five years or 
 less; 

    (b) 6.5 percent annually during a period of six years; 

    (c) 5.5 percent annually during a period of seven years; 

    (d) 4.5 percent annually during a period of eight years; 

    (e) 3.5 percent annually during a period of nine years; and 

    (f) 3 percent annually during a period of ten years. 

    No graduated payment home loan may provide for principal 
 and interest increases after its first ten years.  The increases 
 in payments of principal and interest provided in clauses (a) to 
 (f) are independent and one graduation period may not be used in 
 conjunction with another period. 

    Subd. 4.    Changes restricted.  Payments of principal 
 and interest may not be changed more than once a year.  The 
 first change may not occur until one year after the date of the 
 first payment under the graduated payment home loan. 

    Subd. 5.    Conversion rights.  Borrowers taking a 
 graduated payment home loan shall have the right to convert, at 
 a time chosen by the borrower, to a standard nongraduated 
 payment conventional loan or cooperative apartment loan.  No 
 assessment or penalties shall be made if the borrower chooses to 
 convert at the interest rate and outstanding principal of the 
 graduated payment home loan. 

    Subd. 6.    Disclosure.  Each prospective borrower shall 
 receive materials explaining in reasonably simple terms the 
 graduated payment home loan offered and a comparable standard 
 conventional loan or cooperative apartment loan instrument with 
 a fixed interest rate and level payments.  The material shall 
 include: 

    (a) A comparison of the terms of the graduated payment home 
 loan and a standard conventional loan or cooperative apartment 
 loan; 

    (b) Payment schedules for both types of instruments and the 
 total payment in dollars over the full term of the loan; 

    (c) A description of the conversion option; and 

    (d) A prominent statement that borrowers have the option to 
 elect a standard conventional loan or cooperative apartment loan 
 instrument. 

    Subd. 7.    Savings associations; first lien.  
 Capitalization of interest resulting from any negative 
 amortization of a graduated payment home loan made by a savings 
 association shall not change the status of the mortgage as a 
 first lien against the property securing the loan pursuant to 
 section 51A.38, subdivision 5.  The capitalization of interest 
 in a negative amortization shall not be considered as a loan or 
 debt separate from the graduated payment mortgage contracted for 
 at the time of loan origination. 

    HIST: 1979 c 239 s 1; 1981 c 351 s 10; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92; 1995 c 171 s 12; 1995 c 202 art 1 s 
 25; 1996 c 414 art 1 s 10,44; 1997 c 157 s 67; 1998 c 260 s 1 

  47.202 Repealed, 1996 c 310 s 1 

     47.203 Federal preemption override. 

    The provisions of Public Law Number 96-221, title V, part 
 A, section 501(a)(1) (United States Code, title 12, section 
 1735f-7a), do not apply with respect to a loan, mortgage, credit 
 sale or advance made in this state after June 2, 1981, nor with 
 respect to a loan, mortgage, credit sale or advance secured by 
 real property located in this state and made after June 2, 1981. 

    HIST: 1980 c 599 s 4; 1980 c 604 s 4; 1981 c 351 s 11; 1Sp1981 
 c 4 art 1 s 47; 1999 c 151 s 9 

     47.204 Temporary removal of mortgage usury limits. 

    Subdivision 1.    No usury limits.  Notwithstanding any 
 law to the contrary, no limitation on the rate or amount of 
 interest, discount points, finance charges, or other charges 
 shall apply to a loan, mortgage, credit sale, or advance which 
 would have been exempt from the laws of this state pursuant to 
 Public Law Number 96-221, title V, part A, section 501 (United 
 States Code, title 12, section 1735f-7a), as amended as of June 
 2, 1981, but for section 47.203 and which is made in this state 
 after June 2, 1981. 

    Subd. 2.    Enforceable throughout term.  If the rate or 
 amount of interest, discount points, finance charges, or other 
 charges are permitted by this section at the time the loan, 
 mortgage, credit sale or advance is made, the rate or amount of 
 interest, discount points, finance charges or other charges are 
 permitted throughout the original term of the agreement and any 
 extension agreed upon by the borrower and the lender or their 
 respective successors in interest.  

    HIST: 1981 c 351 s 12; 1984 c 576 s 4; 1987 c 349 art 1 s 7; 
 1999 c 151 s 10 

     47.205 Assignment of mortgage; duties; penalties. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them. 

    (a) "Lender" means all state banks and trust companies, 
 national banking associations, state and federally chartered 
 savings associations, mortgage banks, savings banks, insurance 
 companies, credit unions making a loan, or any person making a 
 conventional loan as defined under section 47.20, subdivision 2, 
 clause (3) or cooperative apartment loan as defined under 
 section 47.20, subdivision 2, clause (4).  A "selling lender" is 
 a lender who sells, assigns, or transfers the servicing of a 
 loan, to a "purchasing lender or a servicing agent." 

    (b) "Loan" means all loans and advances of credit 
 authorized under section 47.20, subdivision 1, clauses (1) to 
 (4) and conventional loans as defined under section 47.20, 
 subdivision 2, clause (3) or cooperative apartment loan as 
 defined under section 47.20, subdivision 2, clause (4). 

    (c) "Escrow account" means 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. 

    (d) "Person" means an individual, corporation, business 
 trust, partnership or association, or any other legal entity. 

    Subd. 2.    Assignment or sale of mortgage loans.  If 
 the servicing of mortgage loans financing one-to-four family 
 owner occupied residences located in this state is sold or 
 assigned to another person: 

    (1) the selling lender shall notify the mortgagor of the 
 sale no more than ten days after the actual date of transfer.  
 The notification must include the name, address, and telephone 
 number of the person who will assume responsibility for 
 servicing and accept payments for the mortgage loan and the 
 notification must also include a detailed written financial 
 breakdown, including but not limited to, interest rate, monthly 
 payment amount, and current escrow balance; 

    (2) the purchasing lender shall issue corrected coupon or 
 payment books, if used, and shall provide notification to the 
 mortgagor within 20 days after the first payment to the 
 purchasing lender is due, of the name, address, and telephone 
 number of the person from whom the mortgagor can receive 
 information regarding the servicing of the loan, and shall 
 inform the mortgagor of any changes made regarding the mortgage 
 escrow accounts or servicing requirements including, but not 
 limited to, interest rate, monthly payment amount, and current 
 escrow balance; and 

    (3) the purchasing lender shall respond within 15 business 
 days to a written request for information from a mortgagor.  A 
 written response must include the telephone number of the 
 company representative who can assist the mortgagor. 

    Subd. 3.    Administration of escrow accounts.  Each 
 lender requiring funds of a mortgagor to be paid into an escrow 
 account for payment of taxes or insurance premiums with respect 
 to a mortgaged one-to-four family owner occupied residence 
 located in this state shall make payments for the taxes or 
 insurance from the escrow account in a timely manner as these 
 obligations become due provided that funds paid into the account 
 by the mortgagor are sufficient for the payment.  If there is a 
 shortage of funds, the lender shall promptly notify the 
 mortgagor of the shortage.  If the lender fails to make timely 
 payments, the lender is liable to the mortgagor for actual 
 damages caused by the failure to pay the amounts when due and is 
 subject to penalties provided in subdivision 4, except that the 
 lender may present any legal defense in any subsequent hearing.  
 The lender is permitted to make a payment on behalf of the 
 mortgagor even though there are not sufficient funds in a 
 particular account to cover the payment. 

    Subd. 4.    Penalties.  If a lender fails to comply with 
 the requirements of subdivisions 2 and 3, the lender is liable 
 to the mortgagor for actual damages caused by the violation.  In 
 addition, the lender is liable to the mortgagor for $500 per 
 occurrence if the violation of subdivision 2 or 3 was due to the 
 lender's failure to exercise reasonable care.  

    HIST: 1986 c 358 s 1; 1987 c 349 art 1 s 8,9; 1995 c 171 s 13 

     47.206 Interest rate or discount point agreements. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them. 

    (a) "Lender" means a person or entity referred to in 
 section 47.20, subdivision 1, a credit union, or a person making 
 a conventional loan as defined under section 47.20, subdivision 
 2, clause (3), or cooperative apartment loan as defined under 
 section 47.20, subdivision 2, clause (4), except that 
 conventional loans or cooperative apartment loans include any 
 loan or advance of credit in an original principal balance of 
 less than $200,000.  "Lender" also means a mortgage broker as 
 defined in paragraph (e). 

    (b) "Loan" means loans and advances of credit authorized 
 under section 47.20, subdivision 1, clauses (1) to (4), and 
 conventional loans as defined under section 47.20, subdivision 
 2, clause (3), or cooperative apartment loans as defined under 
 section 47.20, subdivision 2, clause (4), except that 
 conventional loans or cooperative apartment loans also include 
 all loans and advances of credit in an original principal 
 balance of less than $200,000.  "Loan" does not include a loan 
 or advance of credit secured by a mortgage upon real property 
 containing more than one residential unit or secured by a 
 security interest in shares of more than one residential unit in 
 a building owned or leased by a cooperative apartment 
 corporation. 

    (c) "Borrower" means a natural person who has submitted an 
 application for a loan to a lender. 

    (d) "Interest rate or discount point agreement" or 
 "agreement" means a contract between a lender and a borrower 
 under which the lender agrees, subject to the lender's 
 underwriting and approval requirements, to make a loan at a 
 specified interest rate or number of discount points, or both, 
 and the borrower agrees to make a loan on those terms.  The term 
 also includes an offer by a lender that is accepted by a 
 borrower under which the lender promises to guarantee or lock in 
 an interest rate or number of discount points, or both, for a 
 specific period of time. 

    (e) "Mortgage broker" includes: 

    (1) a person who performs or offers to perform the 
 activities of "mortgage brokering" or "soliciting, placing, or 
 negotiating a residential mortgage loan" as defined by chapter 
 58; or 

    (2) the employees of a person described in clause (1). 

    Subd. 2.    Disclosures.  A lender offering borrowers 
 the opportunity to enter into an agreement in advance of closing 
 shall disclose, in writing, to the borrowers at the time the 
 offer is made:  (1) a definite expiration date or term of the 
 agreement, which may not be less than the reasonably anticipated 
 closing date or time required to process, approve, and close the 
 loan; (2) the circumstances, if any, under which the borrower 
 will be permitted to close at a lower rate of interest or points 
 than expressed in the agreement; (3) the steps required to 
 process, approve, and close the loan, including the actions 
 required of the borrower and lender; (4) that the agreement is 
 enforceable by the borrower; and (5) the consideration required 
 for the agreement. 

    Subd. 3.    Agreements to be in writing.  A borrower or 
 lender may not maintain an action on an agreement unless the 
 agreement is in writing or is permitted by subdivision 4, 
 expresses consideration, sets forth the relevant terms and 
 conditions, and is signed by the borrower and the lender.  

    Subd. 4.    Oral agreements and acceptances prohibited.  
 A lender may not offer or induce a borrower to accept an oral 
 agreement and a borrower may not be permitted to orally accept 
 an agreement, provided that if the borrower and lender have not 
 executed a written agreement, this subdivision does not prohibit 
 the offer and acceptance of an oral agreement which is offered 
 and accepted during a period no greater than ten days before 
 closing. 

    Subd. 5.    Statement of current terms not an offer.  An 
 oral or written statement of current loan terms and conditions, 
 including interest rates and number of discount points, is not 
 an offer or an inducement by a lender to enter into an 
 agreement.  A written statement of current loan terms and 
 conditions must be accompanied by a disclaimer that the 
 statement is not an offer to enter into an agreement and that an 
 offer may only be made pursuant to subdivisions 3 and 4. 

    Subd. 6.    Prohibited acts.  A person, including a 
 lender, may not advise, encourage, or induce a borrower or third 
 party to misrepresent information that is the subject of a loan 
 application or to violate the terms of the agreement.  Neither a 
 mortgage lender nor a mortgage broker shall advertise mortgage 
 terms, including interest rate and discount points, which were 
 not available from the lender or broker on the date or dates 
 specified in the advertisement.  For purposes of this section, 
 "advertisement" shall include a list or sampler of mortgage 
 terms compiled from information provided by the lender or 
 broker, with or without charge to the lender or broker, by a 
 newspaper, and shall also include advertising on the Internet. 

    Subd. 7.    Penalties.  (a) Except as provided in 
 paragraph (c), a lender who violates this section or who causes 
 unreasonable delay in processing a loan application beyond the 
 expiration date of the agreement is liable to the borrower for a 
 penalty in an amount not to exceed the borrower's actual 
 out-of-pocket damages, including the present value of the 
 increased interest costs over the normal life of the loan, or 
 specific performance of the agreement.  This paragraph applies 
 to an agreement entered into after January 1, 1987. 

    (b) In addition to the penalty in paragraph (a), a lender 
 is liable to the borrower for $500 for each violation of this 
 section or for unreasonable delay in processing a loan 
 application which causes the agreement to expire before closing. 

    (c) A lender who violates subdivision 4 is jointly and 
 severally liable to the borrower for specific performance of the 
 agreement or for a penalty in the amount of $500 or an amount 
 not to exceed the borrower's actual out-of-pocket damages, 
 including the present value of the increased costs over the 
 normal life of the loan, whichever is greater, due to the good 
 faith reliance of the borrower on the lender's oral 
 representation. 

    (d) For purposes of this subdivision, evidence of 
 unreasonable delay includes, but is not limited to: 

    (1) failure of the lender to return telephone calls or 
 otherwise respond to the borrower's inquiries concerning the 
 status of the loan; 

    (2) the addition by the lender of new requirements for 
 processing or approving the loan that were not disclosed to the 
 borrower under subdivision 2, clause (3), unless the 
 requirements result from governmental agency or secondary 
 mortgage market changes, other than changes in interest rates, 
 that occur after the date of the agreement; or 

    (3) failure by the lender to take actions necessary to 
 process or approve the loan within a reasonable period of time, 
 if the borrower provided information requested by the lender in 
 a timely manner. 

    HIST: 1987 c 336 s 5; 1996 c 439 art 5 s 1; 1997 c 157 s 9; 
 1998 c 343 art 2 s 1 

*   NOTE:  The amendment to subdivision 1 by Laws 1998, chapter 
*343, article 2, section 1, is effective August 1, 1999.  Laws 
*1998, chapter 343, article 2, section 5.

     47.207 Private mortgage insurance. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the following terms have the meanings given: 

    (a) "Current fair market value" means the value of the 
 mortgagor's property determined by an appraisal conducted within 
 90 days of a mortgagor's written request for cancellation of 
 private mortgage insurance.  The appraisal shall be conducted by 
 a real estate appraiser, licensed or certified by a state or 
 federal agency, who is reasonably acceptable to the servicer.  
 The appraisal may be conducted at either the request of the 
 lender, mortgagor, or servicer.  The mortgagor is responsible 
 for the cost of the appraisal. 

    (b) "Lender" means a person who makes or holds a 
 residential mortgage loan. 

    (c) "Private mortgage insurance" means insurance paid for 
 by the mortgagor, including any mortgage guaranty insurance, 
 against the nonpayment of, or default on, a residential mortgage 
 loan, other than mortgage insurance made available under the 
 federal National Housing Act, United States Code, title 38, or 
 title V of the federal Housing Act of 1949.  "Private mortgage 
 insurance" does not mean lender-paid mortgage insurance. 

    (d) "Residential mortgage loan" means a loan secured by 
 either:  (1) a mortgage on residential real property; or (2) by 
 certificates of stock or other evidence of ownership interest in 
 and proprietary lease from corporations, partnerships, or other 
 forms of business organizations formed for the purpose of 
 cooperative ownership of residential real property. 

    (e) "Servicer" means a person who, through any medium or 
 mode of communication, engages in the collection or remittance 
 for, or the right or obligation to collect or remit for, a 
 lender, mortgagee, note owner, noteholder, or for a person's own 
 account, of payments, interest, principal, and escrow items such 
 as insurance and taxes for property subject to a residential 
 mortgage loan. 

    Subd. 2.    Right to cancel private mortgage insurance.  
 With respect to an existing or future residential mortgage loan, 
 a mortgagor shall have the right to elect, in writing, to cancel 
 private mortgage insurance in connection with a residential 
 mortgage loan if all of the following terms and conditions have 
 been met: 

    (1) the current unpaid principal balance of the mortgage is 
 80 percent or less of the current fair market value of the 
 property; 

    (2) the mortgagor has not: 

    (i) been 60 days or longer past due on a mortgage payment 
 during the 12-month period beginning 24 months before the date 
 on which the servicer receives the mortgagor's written request 
 for cancellation; or 

    (ii) been 30 days or longer past due on a mortgage payment 
 during the 12 months preceding the date on which the servicer 
 receives the mortgagor's written request for cancellation; 

    (3) the mortgage was made at least 24 months prior to the 
 receipt of a request for cancellation; 

    (4) the property securing the mortgage loan is 
 owner-occupied; and 

    (5) the mortgage has not been pooled with other mortgages 
 in order to constitute, in whole or in part, collateral for 
 bonds issued by the state of Minnesota or any political 
 subdivision of the state of Minnesota or of any agency of any 
 political subdivision of the state of Minnesota. 

    Subd. 3.    Notice of right to cancel private mortgage 
 insurance.  (a) With respect to each existing or future 
 residential mortgage loan, a servicer must provide an annual 
 written notice to the mortgagor currently paying premiums for 
 private mortgage insurance.  The notice must be in 12-point type 
 or greater and appear substantially as follows: 

    NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE INSURANCE 

    

    If you currently pay private mortgage insurance premiums, 
    you may have the right under federal law or Minnesota law 
    to cancel the insurance and stop paying premiums.  This 
    would reduce your total monthly payment. 

    

    You may have the right to cancel private mortgage insurance 
    if the principal balance of your loan is 80 percent or less 
    of the current market value of your home.  Under Minnesota 
    law, the value of your property can be determined by a 
    professional appraisal.  You need to pay for this 
    appraisal, but in most cases you will be able to recover 
    this cost in less than a year if your mortgage insurance is 
    canceled. 

    

    If you wish to learn whether you are eligible to cancel 
    this insurance, please contact us at (enter address and 
    phone number of servicer). 

    (b) The notice required by this subdivision must be on its 
 own page, but a disclosure notice concerning private mortgage 
 insurance required by federal law may be included on the same 
 page as the disclosure notice required by this subdivision.  The 
 page containing the notice required by this subdivision may be 
 included with other disclosures or notices required by federal 
 law that are sent to the mortgagor. 

    (c) If the mortgage has been pooled with other mortgages in 
 order to constitute, in whole or in part, collateral for bonds 
 issued by the state of Minnesota or any political subdivision of 
 the state of Minnesota or of any agency of any political 
 subdivision of the state of Minnesota and notice of right to 
 cancel private mortgage insurance is required under federal law, 
 no notice under this subdivision is required. 

    Subd. 4.    Servicer response to cancellation request.  
 (a) Within 30 days of receipt of a mortgagor's written request 
 to cancel private mortgage insurance, a servicer shall: 

    (1) provide a written notice to the insurer to cancel the 
 private mortgage insurance and written notice to the mortgagor 
 that a request for cancellation has been sent to the insurer if 
 the servicer determines that the private mortgage insurance 
 should be canceled; 

    (2) provide a written response to the mortgagor identifying 
 all additional information needed from the mortgagor if the 
 servicer reasonably needs more information from the mortgagor to 
 determine whether the mortgagor is eligible for cancellation of 
 private mortgage insurance; or 

    (3) provide a written notice to the mortgagor of the 
 reasons for the servicer's refusal to cancel the private 
 mortgage insurance if the servicer determines that the mortgagor 
 does not meet the requirements for cancellation of private 
 mortgage insurance. 

    (b) If a lender, or any other person involved in the 
 mortgage transaction, receives a written request for 
 cancellation of private mortgage insurance, the lender or other 
 person shall promptly forward the mortgagor's request for 
 cancellation to the servicer, if the servicer is known to the 
 lender or other person.  If the servicer is not known to the 
 lender or other person, the lender or other person shall advise 
 the mortgagor to contact the company to which the mortgagor 
 sends the monthly payment. 

    Subd. 5.    Lender charges; return of unearned premium.  
 (a) A lender requiring or offering private mortgage insurance 
 shall make available to the borrower or other person paying the 
 insurance premium the same premium payment plans as are 
 available to the lender in paying the private mortgage insurance 
 premium. 

    (b) Any refund or rebate for unearned private mortgage 
 insurance premiums shall be paid to the mortgagor or other 
 person actually providing the funds for payment of the premium. 

    (c) A lender or servicer shall not charge the mortgagor a 
 fee or other consideration for cancellation of the private 
 mortgage insurance or for any of the acts required by this 
 section, except that the lender or servicer shall have the right 
 to recover the cost of an appraisal if the mortgagor elects to 
 have the lender or servicer perform or arrange for the appraisal.

    Subd. 6.    Interpretation.  Nothing in this section 
 shall be deemed to be inconsistent with the federal Homeowner's 
 Protection Act of 1998, codified at United States Code, title 
 12, sections 4901 to 4910, within the meaning of "inconsistent" 
 as used in section 9 of that act, codified at United States 
 Code, title 12, section 4908. 

    HIST: 1999 c 151 s 11 

     47.208 Delivery of satisfaction of mortgage. 

    Subdivision 1.    Delivery required.  Upon written 
 request, a good and valid satisfaction of mortgage in recordable 
 form shall be delivered to any party paying the full and final 
 balance of a mortgage indebtedness that is secured by Minnesota 
 real estate; such delivery shall be in hand or by certified mail 
 postmarked within 45 days of the receipt of the written request 
 to the holder of any interest of record in said mortgage and 
 within 45 days of the payment of all sums due thereon. 

    Subd. 2.    Penalty.  If a lender fails to comply with 
 the requirements of subdivision 1, the lender may be held liable 
 to the party paying the balance of the mortgage debt, for a 
 civil penalty of up to $500, in addition to any actual damages 
 caused by the violation. 

    HIST: 1987 c 336 s 6 

     47.209 Manufactured home financing; property tax 
  collection requirement. 

    Subdivision 1.    Applicability.  This section applies 
 to any agreement entered into after December 31, 1992, for the 
 financing or refinancing of a purchase of a manufactured home.  
 As used in this section and section 277.17, "lender" includes a 
 state bank and trust company, national banking association, 
 state or federally chartered savings association, mortgage bank, 
 savings bank, insurance company, credit union, or a dealer as 
 defined in section 327B.01, subdivision 7, that enters into an 
 agreement for financing or refinancing a purchase of a 
 manufactured home.  

    Subd. 2.    Condition of financing agreement.  Each 
 agreement must contain a statement that it is a condition of the 
 agreement that the borrower must agree to pay all taxes on the 
 manufactured home when due. 

    Subd. 3.    Collection of delinquent taxes.  Within 30 
 days of receipt of a notice of delinquency from a county under 
 section 277.17, the lender must notify the mortgagor that the 
 tax must be paid in full no later than 60 days from the date of 
 issuance of the notice.  The notice must inform the mortgagor 
 that if the tax is not paid by that date, the lender may pay the 
 delinquent tax, together with any penalty and interest then due, 
 in full to the county.  The notice may inform the mortgagor of 
 the lender's option to begin foreclosure proceedings.  The 
 county may only request payment and collection of taxes that 
 have been delinquent for no longer than one year under this 
 section.  The county must notify the lender if the owner of the 
 manufactured home pays the delinquent taxes at any time during 
 the 60 days after the notice has been issued. 

    HIST: 1991 c 291 art 15 s 1; 1992 c 511 art 2 s 1; 1995 c 171 
 s 14 

     47.21 Laws prescribing type of security not to apply. 

    No other law in this state prescribing the nature, amount 
 or form of security or requiring security upon which loans or 
 advances of credit may be made, or prescribing or limiting 
 interest rates upon loans or advances of credit, or prescribing 
 or limiting the period for which loans or advances of credit may 
 be made, shall be deemed to apply to loans, advances of credit 
 or purchases made pursuant to section 47.20, subdivisions 1, 3 
 and 4a. 

    (1) Such institutions may invest in notes or bonds secured 
 by mortgage or trust deed insured pursuant to section 47.20, 
 subdivision 1, clause (2), and in securities issued by national 
 mortgage associations; 

    (2) The notes, bonds and other securities herein made 
 eligible for investment may be used wherever, by statute, 
 collateral is required as security for the deposit of public or 
 other funds; or deposits are required to be made with any public 
 official or department; or an investment of capital or surplus, 
 or a reserve or other fund, is required to be maintained 
 consisting of designated securities. 

    HIST: (7658-4) 1935 c 49 s 2; 1937 c 88 s 2; 1976 c 300 s 3; 
 1981 c 351 s 13 

     47.23 Savings departments.  

    Subdivision 1.  Except as specifically authorized by other 
 laws of this state, no individual, partnership, unincorporated 
 association, or corporation, other than a savings bank, safe 
 deposit company, or trust company, holding an effective 
 certificate of authority or license issued by the commissioner 
 of commerce and subject to and complying with all of the 
 provisions of law relating to such savings banks, safe deposit 
 companies, and trust companies, respectively, shall in any 
 manner display or make use of any sign, symbol, token, 
 letterhead, card, circular, or advertisement stating, 
 representing, or indicating authorization to transact the 
 business which a savings bank, safe deposit company, or trust 
 company usually does, or under these provisions is authorized to 
 do; nor shall any such individual, partnership, unincorporated 
 association, or corporation use the words "savings" or "trust" 
 or "safe deposit" alone or in combination in title or name or 
 otherwise, or in any manner solicit business or make loans or 
 solicit or receive deposits or transact business as a savings 
 bank, safe deposit company, or trust company; except that a 
 state bank, or trust company, regularly incorporated and 
 authorized to do business under the laws of this state, may 
 establish and maintain a savings department under the 
 supervision of the commissioner of commerce, and may solicit and 
 receive deposits in this savings department and advertise the 
 same as such, and every such trust company having a savings 
 department shall use in its name or title, in addition to the 
 word "trust", the word "savings".  Savings deposits received by 
 such a trust company shall be invested only in authorized 
 securities, as defined by law, and the trust company shall keep 
 on hand, at all times, such securities in an amount at least 
 equal to the amount of the deposits, and these securities shall 
 be the representative of, and the fund for, applicable first and 
 exclusively to the payments of, the savings deposits.  Deposits 
 received by the trust company subject to its right to require 
 notice of withdrawal evidenced by passbooks or by written 
 receipt or agreement shall be deemed savings deposits.  

    Subd. 2.  Any old line life insurance company which does 
 not in any manner display or make use of any sign, symbol, 
 token, letterhead, card, circular, or advertisement representing 
 or indicating that it is authorized to transact any business 
 which a savings bank, safe deposit company, or trust company 
 usually does and which does not attempt to do any such business; 
 and which uses the word "trust" in its name in combination with 
 other words in such a manner that it is apparent that the 
 company is not either a savings bank, safe deposit company, or 
 trust company, and does not attempt to do any of the business 
 which a savings bank, safe deposit company, or trust company 
 usually does, shall not be prohibited from so using such word 
 "trust" in its name.  

    Subd. 3.  Every individual, partnership, unincorporated 
 association, or corporation which shall violate any of the 
 provisions of this section shall forfeit to the state the sum of 
 not to exceed $100 for each day the violation shall continue, to 
 be recovered in a civil action to be brought by the attorney 
 general in the name of the state at the request of the 
 commissioner of commerce, and may be enjoined from any further 
 violation in an action brought in the name of the state for that 
 purpose.  

    HIST: (7651) RL s 2978; 1909 c 178 s 1; 1915 c 236 s 1; 1929 c 
 77 s 1; 1945 c 133 s 2; 1961 c 298 s 1; 1983 c 289 s 114 subd 1; 
 1984 c 655 art 1 s 92; 1986 c 444 

     47.24 Failure to report; forfeitures.  

    Every corporation which shall fail to make and transmit to 
 the commissioner of commerce, within ten days after the time 
 prescribed by law therefor, any report required by the 
 provisions of this chapter, or by other lawful authority, or 
 shall fail to include therein any matter required by the 
 commissioner of commerce, shall forfeit to the state the sum of 
 $100 for every day that the report is withheld or delayed or 
 that it shall fail to report any such omitted matter.  

    HIST: (7652) RL s 2979; 1983 c 289 s 114 subd 1; 1984 c 655 
 art 1 s 92 

     47.25 Notice of meetings.  

    At least 30 days prior to any annual, and at least ten days 
 prior to any special, meeting of its stockholders, mailed notice 
 shall be given to each stockholder, specifying the time, place, 
 and purpose thereof; also a notice of any resolution or 
 proposition on which action is proposed to be taken.  

    HIST: (7653) RL s 2980 

     47.26 Violations.  

    Every officer, agent, or employee of any corporation or 
 copartnership, and every other individual, who shall knowingly 
 and willfully do or omit anything, the doing or omission of 
 which on the part of any corporation, copartnership, or 
 individual is in violation of any of the provisions of this 
 chapter and who continues or repeats such act or omission for or 
 during more than ten successive days, shall be guilty of a 
 felony.  

    HIST: (7654) RL s 2981 

     47.27 Definitions. 

    Subdivision 1.  Unless the language or context clearly 
 indicates that a different meaning is intended, the words, 
 terms, and phrases defined in subdivisions 2, 3 and 4, shall, 
 for the purposes of sections 47.27 to 47.30, be given the 
 meanings subjoined to them.  

    Subd. 2.  "Savings bank" shall have the meaning set forth 
 in sections 47.01 and 47.02.  

    Subd. 3.  "Savings association" shall have the meaning set 
 forth in section 51A.02, subdivision 7.  

    Subd. 4.  "Federal association" means a savings 
 association, savings and loan association or savings bank 
 organized under that certain act of Congress known as The Home 
 Owners Loan Act of 1933, and acts amendatory thereof. 

    HIST: 1949 c 337 s 1; 1984 c 592 s 1; 1995 c 171 s 15; 1995 c 
 202 art 1 s 25; 1996 c 414 art 1 s 45; 1997 c 157 s 67; 1998 c 
 254 art 1 s 9; 1998 c 260 s 1; 1999 c 151 s 12 

     47.28 Savings banks may convert into savings 
  associations. 

    Subdivision 1.  Any savings bank organized and existing 
 under and by virtue of the law of this state may amend its 
 articles of incorporation so as to convert itself into a savings 
 association, by complying with the following requirements and 
 procedure: 

    The savings bank by a two-thirds vote of the entire board 
 of directors, at any regular or special meeting of said board 
 duly called for that purpose, shall (a) pass a resolution 
 declaring their intention to convert the savings bank into a 
 savings association, and (b) cause an application in writing to 
 be executed, by such persons as the directors may direct, in the 
 form prescribed by the department of commerce, requesting a 
 certificate of authorization (charter) as a savings association 
 to transact business at the place and in the name stated in the 
 application.  The amendments proposed to the articles of 
 incorporation and bylaws shall be included as part of the 
 application.  

    The application shall be submitted to, considered and acted 
 upon by the department of commerce in the same manner and by the 
 same standards as applications are submitted, considered and 
 acted upon under chapter 51A.  

    Subd. 2.  If the certificate of authorization (charter) be 
 issued, the articles of incorporation may then be amended so as 
 to convert the savings bank into a savings association by 
 following the procedure prescribed for amending articles of 
 incorporation of savings banks. 

    Subd. 3.  Upon receipt of the fees required for filing and 
 recording amended articles of incorporation of savings banks, 
 the secretary of state shall record the amended articles of 
 incorporation and certify that fact thereon, whereupon the 
 conversion of such savings bank into a savings association shall 
 become final and complete and thereafter said corporation shall 
 have the powers and be subject to the duties and obligations 
 prescribed by the laws of this state applicable to savings 
 associations. 

    Subd. 4. Repealed by amendment, 1995 c 171 s 16 

    Subd. 5.  The resulting association shall as soon as 
 practicable and within such time not extending beyond three 
 years from the date the conversion becomes final and complete 
 and by such methods as the department of commerce shall direct, 
 cause its organization, its securities and investments, the 
 character of its business, and the methods of transacting the 
 same to conform to the laws applicable to savings associations.  

    HIST: 1949 c 337 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1985 c 248 s 70; 1986 c 444; 1995 c 171 s 16; 1995 c 202 
 art 1 s 6 

  47.29 Repealed, 1997 c 157 s 72 

     47.30 Savings association may convert into savings bank. 

    Subdivision 1.  Any capital stock savings association 
 organized and existing under and by virtue of the laws of this 
 state may amend its articles of incorporation so as to convert 
 itself into a savings bank, by complying with the following 
 requirements and procedure: 

    A meeting of the shareholders shall be held upon not less 
 than 15 days' written notice to each shareholder, served either 
 personally or by mail prepaid, directed to the shareholder's 
 last known post office address according to the records of the 
 association, stating the time, place and purpose of such meeting.

    At such meeting, the shareholders may by two-thirds vote 
 (according to the book value of said shares) of those present in 
 person or by proxy pass a resolution declaring their intention 
 to convert such association into a savings bank and setting 
 forth the names of the proposed first board of directors.  A 
 copy of the minutes of such meeting verified by the affidavit of 
 the chair and the secretary of the meeting, shall be filed in 
 the office of the department of commerce within ten days after 
 the meeting.  Such copy, when so filed, shall be evidence of the 
 holding of such meeting and of the action taken.  

    Subd. 2.  An application for a certificate authorizing a 
 savings bank to transact business, in the form required by 
 sections 46.041 and 46.046, shall be submitted to, considered 
 and acted upon by the department of commerce in the same manner 
 and by the same standards as applications are submitted, 
 considered and acted upon under sections 46.041, 46.044, 46.046, 
 and 50.01.  The fees required by section 46.041 shall be paid 
 and the amendments proposed to the articles of incorporation and 
 bylaws shall be included as part of the application.  

    Subd. 3.  If the department of commerce grants the 
 application, the certificate of authorization (charter) shall be 
 issued as provided by section 46.041, and the articles of 
 incorporation may then be amended so as to convert the savings 
 association into a savings bank by following the procedure 
 prescribed for amending articles of incorporation of savings 
 associations:  Provided, that the proposed amended articles 
 shall contain the names of, and be signed by, the proposed first 
 board of directors.  

    Subd. 4. Repealed, 1995 c 171 s 70 

    Subd. 5.  Upon receipt of the fees required for filing and 
 recording amended articles of incorporation of savings 
 associations, the secretary of state shall record the amended 
 articles of incorporation and certify that fact thereon, 
 whereupon the conversion of such savings association into a 
 savings bank shall become final and complete and thereafter the 
 signers of said amended articles and their successors shall be a 
 corporation, and have the powers and be subject to the duties 
 and obligations prescribed by the laws of this state applicable 
 to savings banks. 

    Subd. 6. Repealed, 1995 c 171 s 70 

    Subd. 7.  The resulting savings bank shall as soon as 
 practicable and within such time not extending beyond three 
 years from the date the conversion becomes final and complete 
 and by such methods as the commissioner of commerce shall 
 direct, cause its organization, its securities and investments, 
 the character of its business, and the methods of transacting 
 the same to conform to the laws applicable to savings banks.  

    HIST: 1949 c 337 s 4; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1985 c 248 s 16,17,70; 1986 c 444; 1995 c 171 s 19-22 

  47.31 Repealed, 1997 c 157 s 72 

  47.32 Repealed, 1997 c 157 s 72 

     47.325 Appeal and judicial review. 

    A savings bank aggrieved by any action or inaction of the 
 commissioner under sections 47.27 to 47.30 may appeal under 
 sections 14.63 to 14.69.  The scope of judicial review in the 
 proceedings is as provided in those sections. 

    HIST: 1995 c 171 s 24; 1998 c 254 art 1 s 10 

     47.41 Negotiable instruments, facsimile signatures, 
  disbursement of public funds.  

    Any public officer or other person who is authorized singly 
 or in conjunction with another or others, to sign checks, 
 drafts, warrants, warrant-checks, vouchers or other orders on 
 public funds on deposit in a depository bank may authorize the 
 bank to honor any such instrument bearing a facsimile of that 
 person's signature and to charge the same to the account upon 
 which drawn, as fully as though it bore a manually written 
 signature.  Instruments so honored shall be wholly operative and 
 binding in favor of the bank although such facsimile signature 
 shall have been affixed without authority of such officer or 
 other person.  Any one or more or all of the signatures upon any 
 such instrument may be facsimile as herein provided.  As here 
 used "public funds" means funds of the state or of any county, 
 city, town, school district, any political subdivision of the 
 state, or of any commission, board, department or agency of any 
 thereof.  

    HIST: 1955 c 96 s 1; 1973 c 123 art 5 s 7; 1986 c 444 

     47.42 Facsimile signatures, officer not liable.  

    If the governing body of the depositor political 
 subdivision, or of any commission, board, department or agency 
 thereof, by resolution approves the action of the public officer 
 or other person in the use of such facsimile, and shall have 
 insured the depositor with an insurance company authorized to do 
 business in this state, in such amount and form as the governing 
 body approves, against loss of any public funds withdrawn upon 
 unauthorized use of such facsimile signature, such public 
 officer or other person shall not be personally liable for loss, 
 if any, resulting from the use of any such facsimile signature 
 unless the loss occurs by reason of that person's own wrongful 
 act.  

    HIST: 1955 c 96 s 2; 1986 c 444 

     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 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.  

    HIST: 1971 c 855 s 1; 1977 c 378 s 1; 1979 c 220 s 1; 1981 c 
 220 s 6; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1985 c 
 248 s 18; 1986 c 444; 1996 c 414 art 3 s 3 

     47.52 Authorization. 

    (a) With the prior approval of the commissioner, any bank 
 doing business in this state may establish and maintain detached 
 facilities provided the facilities are located within:  (1) the 
 municipality in which the principal office of the applicant bank 
 is located; or (2) 5,000 feet of its principal office measured 
 in a straight line from the closest points of the closest 
 structures involved; or (3) a municipality in which no bank is 
 located at the time of application; or (4) a municipality having 
 a population of more than 10,000; or (5) a municipality having a 
 population of 10,000 or less, as determined by the commissioner 
 from the latest available data from the state demographer, or 
 for municipalities located in the seven-county metropolitan area 
 from the metropolitan council, and all the banks having a 
 principal office in the municipality have consented in writing 
 to the establishment of the facility. 

    (b) A detached facility shall not be closer than 50 feet to 
 a detached facility operated by any other bank and shall not be 
 closer than 100 feet to the principal office of any other bank, 
 the measurement to be made in the same manner as provided 
 above.  This paragraph shall not be applicable if the proximity 
 to the facility or the bank is waived in writing by the other 
 bank and filed with the application to establish a detached 
 facility. 

    (c) A bank is allowed, in addition to other facilities, 
 part-time deposit-taking locations at elementary and secondary 
 schools located within the municipality in which the main 
 banking house or a detached facility is located if they are 
 established in connection with student education programs 
 approved by the school administration and consistent with safe, 
 sound banking practices. 

    (d) In addition to other facilities, a bank may operate 
 part-time locations at nursing homes and senior citizen housing 
 facilities located within the municipality in which the main 
 banking house or a detached facility is located, if they are 
 operated in a manner consistent with safe, sound banking 
 practices. 

    HIST: 1971 c 855 s 2; 1974 c 221 s 1; 1977 c 378 s 2; 1980 c 
 444 s 1; 1981 c 220 s 7; 1987 c 161 s 1; 1993 c 257 s 9; 1995 c 
 202 art 2 s 5; art 4 s 5; 1996 c 305 art 1 s 129; 1996 c 414 art 
 3 s 4; 1999 c 151 s 13 

     47.521 Closed bank location; authorization. 

    Where the commissioner has determined that an existing 
 state bank or national banking association is about to fail or 
 has failed and it is in the public interest to prevent the loss 
 of banking services in the community affected, the limitations 
 on location and number of detached facilities in section 47.52 
 do not apply to an application to establish a detached facility 
 in the same locality.  In the event the commissioner has 
 determined that it is necessary and in the public interest to 
 act immediately on the application, the commissioner may waive 
 the requirements of section 47.54. 

    HIST: 1983 c 242 s 2 

     47.53 Functions of a facility. 

    A detached facility may provide any service or perform any 
 function that may be offered or performed at the bank's main 
 banking house.  

    HIST: 1971 c 855 s 3; 1977 c 378 s 3; 1980 c 468 s 1 

     47.54 Notices and approval procedures. 

    Subdivision 1.    Application.  Any bank desiring to 
 establish a detached facility shall execute and acknowledge a 
 written application in the form prescribed by the commissioner 
 and shall file the application in the commissioner's office with 
 a fee of $500.  The applicant shall within 30 days of the 
 receipt of the form prescribed by the commissioner publish a 
 notice of the filing of the application in a qualified newspaper 
 published in the municipality in which the proposed detached 
 facility is to be located, and if there is no such newspaper, 
 then in a qualified newspaper likely to give notice in the 
 municipality in which the proposed detached facility is to be 
 located.  In addition to the publication, the applicant must 
 mail a copy of the notice by certified mail to every bank 
 located within three miles of the proposed location of the 
 detached facility, measured in the manner provided in section 
 47.52. 

    Subd. 2.    Approval order.  If no objection is received 
 by the commissioner within 15 days after the publication and 
 mailing of the notices, the commissioner shall issue an order 
 approving the application without a hearing if it is found that 
 (a) the applicant bank meets current industry standards of 
 capital adequacy, management quality, and asset condition, (b) 
 the establishment of the proposed detached facility will improve 
 the quality or increase the availability of banking services in 
 the community to be served, and (c) the establishment of the 
 proposed detached facility will not have an undue adverse effect 
 upon the solvency of existing financial institutions in the 
 community to be served.  Otherwise, the commissioner shall deny 
 the application.  Any proceedings for judicial review of an 
 order of the commissioner issued under this subdivision without 
 a contested case hearing shall be conducted pursuant to the 
 provisions of the Administrative Procedure Act relating to 
 judicial review of agency decisions, sections 14.63 to 14.69, 
 and the scope of judicial review in such proceedings shall be as 
 provided therein.  Nothing herein shall be construed as 
 requiring the commissioner to conduct a contested case hearing 
 if no written objection is timely received by the commissioner 
 from a bank within three miles of the proposed location of the 
 detached facility.  

    Subd. 3.    Objections; hearing.  If any bank within 
 three miles of the proposed location of the detached facility 
 objects in writing within 15 days, the commissioner shall 
 consider the objection.  If the objection also requests a 
 hearing, the objector must include the nature of the issues or 
 facts to be presented and the reasons why written submissions 
 would be insufficient to make an adequate presentation to the 
 commissioner.  Comments challenging the legality of an 
 application should be submitted separately in writing. 

    Written requests for hearing must be evaluated by the 
 commissioner who may grant or deny the request.  A hearing must 
 generally be granted only if it is determined that written 
 submissions would be inadequate or that a hearing would 
 otherwise be beneficial to the decision-making process.  A 
 hearing may be limited to issues considered material by the 
 commissioner. 

    If a request for a hearing has been denied, the 
 commissioner shall notify the applicant and all interested 
 persons stating the reasons for denial.  Interested parties may 
 submit to the commissioner with simultaneous copies to the 
 applicant additional written comments on the application within 
 14 days after the date of the notice of denial.  The applicant 
 shall be provided an additional seven days after the 14-day 
 deadline has expired within which to respond to any comments 
 submitted within the 14-day period.  A copy of any response 
 submitted by the applicant shall also be mailed simultaneously 
 by the applicant to the interested parties.  The commissioner 
 may waive the additional seven-day comment period if so 
 requested by the applicant. 

    Subd. 4.    Hearing.  In any case in which the 
 commissioner grants a request for a hearing, or makes the 
 independent determination that a hearing is warranted on the 
 basis of the conditions in subdivision 3, the commissioner shall 
 fix a time for a hearing conducted pursuant to chapter 14 to 
 decide whether or not the application will be granted.  A notice 
 of the hearing must be published by the applicant in the form 
 prescribed by the commissioner in a qualified newspaper 
 published in the municipality in which the proposed detached 
 facility is to be located, and if there is no such newspaper, 
 then in a qualified newspaper likely to give notice in the 
 municipality in which the proposed detached facility is to be 
 located.  The notice must be published once, at the expense of 
 the applicants, not less than 30 days prior to the date of the 
 hearing.  At the hearing the commissioner shall consider the 
 application and hear the applicants and witnesses that appear in 
 favor of or against the granting of the application of the 
 proposed detached facility.  If an application is contested and 
 a hearing is granted, 50 percent of an additional fee equal to 
 the actual costs incurred by the department of commerce in 
 approving or disapproving the application, payable to the 
 commissioner of commerce to be deposited in the general fund, 
 must be paid by the applicant and 50 percent equally by the 
 intervening parties. 

    Subd. 5.    Decision after hearing.  If upon the 
 hearing, it appears to the commissioner that the requirements 
 for approval contained in subdivision 2 have been met, the 
 commissioner shall, not later than 90 days after the hearing, 
 issue an order approving the application.  If the commissioner 
 shall decide that the application should not be granted, the 
 commissioner shall issue an order to that effect and forthwith 
 give notice by certified mail to the applicant.  

    Subd. 6.    Expiration and extension of order.  If a 
 facility is not activated within 18 months from the date of the 
 order, the approval order automatically expires.  Upon request 
 of the applicant prior to the automatic expiration date of the 
 order, the commissioner may grant reasonable extensions of time 
 to the applicant to activate the facility as the commissioner 
 deems necessary.  The extensions of time shall not exceed a 
 total of an additional 12 months.  If the commissioner's order 
 is the subject of an appeal in accordance with chapter 14, the 
 time period referred to in this section for activation of the 
 facility and any extensions shall begin when all appeals or 
 rights of appeal from the commissioner's order have concluded or 
 expired. 

    HIST: 1971 c 855 s 4; 1977 c 378 s 4; 1979 c 64 s 1; 1981 c 
 220 s 8; 1982 c 424 s 130; 1983 c 247 s 25; 1983 c 250 s 3; 1984 
 c 576 s 7; 1986 c 444; 1987 c 384 art 2 s 1; 1989 c 166 s 5; 
 1990 c 422 s 10; 1992 c 587 art 1 s 12; 1993 c 257 s 10; 1994 c 
 382 s 5; 1999 c 151 s 14,15 

     47.55 Existing banking facilities or branches of savings 
  associations. 

    Subdivision 1.    Banking facilities in operation prior to 
 May 1, 1971.  A bank may retain and operate one detached 
 facility as it may have had in operation prior to May 1, 1971 
 without requirement of approval hereunder.  

    Subd. 2.    Facilities of banks or branches of savings 
 associations in operation prior to acquisition.  The purchase 
 of assets and assumption of liabilities of an existing detached 
 facility of another bank or branch of a savings association or 
 savings bank must follow the notice and approval procedures in 
 section 47.54 to establish and maintain a new detached facility 
 of the acquiring bank at that location but need not obtain the 
 consent of other banks as required by section 47.52. 

    HIST: 1971 c 855 s 5; 1977 c 378 s 5; 1992 c 587 art 1 s 13; 
 1993 c 257 s 11; 1995 c 202 art 1 s 25; 1997 c 157 s 10 

     47.56 Transfer of location. 

    The location of a detached facility transferred to another 
 location outside of a radius of three miles measured in a 
 straight line is subject to the same procedures and approval as 
 required hereunder for establishing a new detached facility.  
 The location of a detached facility transferred to another 
 location within the lesser of a radius of three miles measured 
 in a straight line from the existing location or the 
 municipality, as defined in section 47.51, in which it is 
 located is subject to the same procedures and approval as are 
 required in section 47.101, subdivision 2.  The relocation of a 
 detached facility within a municipality of 10,000 or less 
 population shall not require consent of other banks required in 
 section 47.52.  

    HIST: 1971 c 855 s 6; 1993 c 257 s 12; 1995 c 202 art 2 s 6; 
 1997 c 157 s 11 

     47.561 Identification of detached facility. 

    A detached facility must be properly identified at its 
 location in a manner which includes the name of the parent 
 bank.  A detached facility in existence on March 19, 1982 must 
 comply with this section by December 31, 1982. 

    HIST: 1982 c 473 s 7 

     47.57 Violation; penalties.  

    A violation of sections 47.51 to 47.57 shall be subject to 
 penalties applicable to violations of laws affecting banks.  In 
 addition, a violation of sections 47.51 to 47.57 may be enjoined 
 by a civil action for injunction by any aggrieved bank.  

    HIST: 1971 c 855 s 7 

     47.58 Reverse mortgage loans. 

    Subdivision 1.    Definitions.  For the purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given them.  

    (a) "Reverse mortgage loan" means a loan:  

    (1) Made to a borrower wherein the committed principal 
 amount is paid to the borrower in equal or unequal installments 
 over a period of months or years, interest is assessed, and 
 authorized closing costs are incurred as specified in the loan 
 agreement; 

    (2) Which is secured by a mortgage on residential property 
 owned solely by the borrower; and 

    (3) Which is due when the committed principal amount has 
 been fully paid to the borrower, or upon sale of the property 
 securing the loan, or upon the death of the last surviving 
 borrower, or upon the borrower terminating use of the property 
 as principal residence so as to disqualify the property from the 
 homestead credit given in chapter 290A.  

    (b) "Lender" means any bank subject to chapter 48, credit 
 union subject to chapter 52, savings bank organized and operated 
 pursuant to chapter 50, savings association subject to chapter 
 51A, or any insurance company as defined in section 60A.02, 
 subdivision 4.  "Lender" also includes any federally chartered 
 bank supervised by the comptroller of the currency or federally 
 chartered savings association supervised by the federal home 
 loan bank board or federally chartered credit union supervised 
 by the National Credit Union Administration, to the extent 
 permitted by federal law.  

    (c) "Borrower" includes any natural person holding an 
 interest in severalty or as joint tenant or tenant-in-common in 
 the property securing a reverse mortgage loan.  

    (d) "Outstanding loan balance" means the current net amount 
 of money owed by the borrower to the lender whether or not that 
 sum is suspended pursuant to the terms of the reverse mortgage 
 loan agreement or is immediately due and payable.  The 
 outstanding loan balance is calculated by adding the current 
 totals of the items described in clauses (1) to (5) and 
 subtracting the current totals of the item described in clause 
 (6): 

    (1) The sum of all payments made by the lender which are 
 necessary to clear the property securing the loan of any 
 outstanding mortgage encumbrance or mechanics or material 
 supplier's lien.  

    (2) The total disbursements made by the lender to date 
 pursuant to the loan agreement as formulated in accordance with 
 subdivision 3.  

    (3) All taxes, assessments, insurance premiums and other 
 similar charges paid to date by the lender pursuant to 
 subdivision 6, which charges were not reimbursed by the borrower 
 within 60 days.  

    (4) All actual closing costs which the borrower has 
 deferred, if a deferral provision is contained in the loan 
 agreement as authorized by subdivision 7.  

    (5) The total accrued interest to date, as authorized by 
 subdivision 5.  

    (6) All payments made by the borrower pursuant to 
 subdivision 4.  

    (e) "Actual closing costs" mean reasonable charges or sums 
 ordinarily paid at the time of closing for the following, 
 whether or not retained by the lender:  

    (1) Any insurance premiums on policies covering the 
 mortgaged property including but not limited to premiums for 
 title insurance, fire and extended coverage insurance, flood 
 insurance, and private mortgage insurance.  

    (2) Abstracting, title examination and search, and 
 examination of public records related to the mortgaged property. 

    (3) The preparation and recording of any or all documents 
 required by law or custom for closing a reverse mortgage loan 
 agreement.  

    (4) Appraisal and survey of real property securing a 
 reverse mortgage loan.  

    (5) A single service charge, which service charge shall 
 include any consideration, not otherwise specified in this 
 section as an "actual closing cost," paid by the borrower to the 
 lender for or in relation to the acquisition, making, 
 refinancing or modification of a reverse mortgage loan, and 
 shall also include any consideration received by the lender for 
 making a commitment for a reverse mortgage loan, whether or not 
 an actual loan follows the commitment.  The service charge shall 
 not exceed one percent of the bona fide committed principal 
 amount of the reverse mortgage loan.  

    (6) Charges and fees necessary for or related to the 
 transfer of real property securing a reverse mortgage loan or 
 the closing of a reverse mortgage loan agreement paid by the 
 borrower and received by any party other than the lender. 

    Subd. 2.    Authorization.  Pursuant to rules which the 
 commissioner of commerce may find to be necessary and proper, if 
 any, and subject to federal laws and regulations, lenders may 
 make investments in reverse mortgage loans and purchases of 
 obligations representing reverse mortgage loans, provided the 
 aggregate total of committed principal of the investment in 
 reverse mortgage loans by any bank, savings bank, or savings 
 association, does not exceed five percent of that lender's total 
 deposits and savings accounts.  This limitation shall be 
 determined at each June 30 and December 31 for the following 
 six-month period.  Any decline in the total of deposits and 
 savings accounts subsequent to a determination may be 
 disregarded.  Security for loans made under this section shall 
 be a first lien on residential property (a) which the borrower 
 occupies as principal residence and which qualifies for 
 homestead classification pursuant to section 273.13, and (b) to 
 which the borrower alone has title.  

    Subd. 3.    Payment; repayment; amount.  The committed 
 principal amount of a reverse mortgage loan shall be paid to the 
 borrower over the period of months or years as specified in the 
 loan agreement.  The borrower and lender may, by written 
 agreement, amend the loan agreement from time to time.  Pursuant 
 to the terms of the contract the borrower shall make repayment 
 to the lender:  

    (a) upon payment to the borrower of the final installment 
 unless, by written agreement between the borrower and lender 
 whereunder the borrower agrees to periodically pay the lender 
 interest accruing on the outstanding loan balance, repayment of 
 the outstanding loan balance is postponed until default in 
 payment of interest or until the occurrence of any of the events 
 specified in clauses (b) to (e); 

    (b) upon sale of the property securing the loan; 

    (c) upon the death of the last surviving borrower; 

    (d) upon the borrower terminating use of the property as 
 principal residence so as to disqualify the property from 
 homestead classification under section 273.13; or 

    (e) upon renegotiation of the terms of the reverse mortgage 
 loan agreement, unless the parties agree in writing to postpone 
 repayment.  

    Except as otherwise provided in this subdivision, the 
 outstanding loan balance as projected by the lender to the 
 anticipated time of payment to the borrower of the final 
 installment of committed principal shall not exceed 80 percent 
 of the appraised value of the property at inception of the 
 loan.  If upon reappraisal of the property made at any time 
 during the term of the loan, the projected outstanding loan 
 balance does not exceed 70 percent of the reappraised value of 
 the property, the schedule of the lender's installment payments 
 may be extended and the amount of the committed principal amount 
 increased, provided the revised outstanding loan balance at 
 payment of the lender's final installment of committed principal 
 does not exceed 80 percent of the reappraised value of the 
 property.  

    Subd. 4.    Extension; early repayment.  The 
 installments may be extended by written agreement of the parties 
 and repayment or partial repayment of the outstanding loan 
 balance may be made at any time without penalty, except that 
 partial repayment may be made not more often than once per year 
 and in no amount less than $1,000.  The borrower may cancel the 
 reverse mortgage loan at any time without penalty by payment of 
 the outstanding loan balance.  

    Subd. 5.    Interest.  Notwithstanding the provisions of 
 section 334.01, subdivision 1, lenders may make reverse mortgage 
 loans and purchases of obligations representing reverse mortgage 
 loans, at an interest rate or loan yield not in excess of the 
 maximum lawful interest rate prescribed for conventional loans 
 by section 47.20, subdivision 4a.  If section 47.20, subdivision 
 4a expires, the interest rate last published pursuant to the 
 provisions of section 47.20, subdivision 4a shall be the maximum 
 lawful interest rate for reverse mortgage loans.  A contract 
 rate within the maximum lawful interest rate applicable to a 
 reverse mortgage loan at the time the loan is made shall be the 
 maximum lawful interest rate for the term of the reverse 
 mortgage loan.  

    Notwithstanding the provisions of section 334.01, 
 subdivision 1, a reverse mortgage loan agreement may provide 
 that interest will be added to the outstanding loan balance 
 monthly as it accrues, with interest accruing on the outstanding 
 loan balance at a rate not to exceed the rate of interest 
 permitted under this subdivision at the time of the signing of 
 the original loan agreement or any subsequent extension 
 agreement.  

    Subd. 6.    Taxes; insurance.  The borrower shall pay 
 real estate taxes, assessments and insurance premiums on the 
 property securing the loan, and the lender may require the 
 borrower to provide evidence of payment.  Mortgage registry tax 
 required under sections 287.01 to 287.12 must be paid at the 
 time of the recording or registering of the original reverse 
 mortgage.  If the borrower does not make timely payment the 
 lender may pay taxes, assessments, insurance premiums and other 
 similar charges for the protection of the property securing its 
 loan and may add these payments to the outstanding loan balance 
 if not repaid by the borrower within 60 days after the borrower 
 receives notice that the lender has made the payment. 

    Subd. 7.    Loan closing.  The lender may require the 
 borrower to pay no more than actual closing costs incurred in 
 connection with the making, closing, disbursing or extending of 
 a reverse mortgage loan.  A reverse mortgage loan agreement or 
 extension agreement may provide for deferral of payment of any 
 portion of actual closing costs. Deferred closing costs shall be 
 added to the outstanding loan balance as provided in subdivision 
 1, clause (e).  Unless the agreement provides for deferral, 
 actual closing costs shall be paid by the borrower at the time 
 of signing the agreement.  

    Upon signing a reverse mortgage loan agreement or 
 extension agreement the lender shall furnish to the borrower:  

    (a) A schedule showing the projected pattern of the 
 outstanding loan balance over the period of the agreement; 

    (b) A statement indicating in detail the charges and fees 
 the borrower has paid or is obligated to pay to the lender or to 
 any other person in connection with the loan; and 

    (c) Any other information required by state or federal 
 law.  

    Subd. 8.    Counseling; requirement; penalty.  A lender, 
 mortgage banking company, or other mortgage lender not related 
 to the mortgagor must keep a certificate on file documenting 
 that the borrower, prior to entering into the reverse mortgage 
 loan, received counseling as defined in this subdivision from an 
 organization that meets the requirements of section 462A.28, 
 subdivision 1, and is a housing counseling agency approved by 
 the Department of Housing and Urban Development.  The 
 certificate must be signed by the mortgagor and the counselor 
 and include the date of the counseling, the name, address, and 
 telephone number of both the mortgagor and the organization 
 providing counseling.  A failure by the lender to comply with 
 this subdivision results in a $1,000 civil penalty payable to 
 the mortgagor.  For the purposes of this subdivision, 
 "counseling" means the following services are provided to the 
 borrower: 

    (1) a review of the advantages and disadvantages of reverse 
 mortgage programs; 

    (2) an explanation of how the reverse mortgage affects the 
 borrower's estate and public benefits; 

    (3) an explanation of the lending process; 

    (4) a discussion of the borrower's supplemental income 
 needs; and 

    (5) an opportunity to ask questions of the counselor. 

    HIST: 1979 c 265 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1Sp1985 c 14 art 4 s 5,6; 1986 c 444; 1Sp1986 c 3 art 1 
 s 7; 1991 c 201 s 1; 1991 c 291 art 20 s 1; 1993 c 257 s 13; 
 1995 c 202 art 1 s 7,25 

     47.59 Financial institution credit extension maximum 
  rates. 

    Subdivision 1.    Definitions.  For purposes of this 
 section, the following definitions shall apply. 

    (a) "Actuarial method" has the meaning given the term in 
 the Code of Federal Regulations, title 12, part 226, and 
 appendix J thereto. 

    (b) "Annual percentage rate" has the meaning given the term 
 in the Code of Federal Regulations, title 12, part 226, but 
 using the definition of "finance charge" used in this section. 

    (c) "Borrower" means a debtor under a loan or a purchaser 
 or debtor under a credit sale contract. 

    (d) "Business purpose" means a purpose other than a 
 personal, family, household, or agricultural purpose. 

    (e) "Cardholder" means a person to whom a credit card is 
 issued or who has agreed with the financial institution to pay 
 obligations arising from the issuance to or use of the card by 
 another person. 

    (f) "Consumer loan" means a loan made by a financial 
 institution in which: 

    (1) the debtor is a person other than an organization; 

    (2) the debt is incurred primarily for a personal, family, 
 or household purpose; and 

    (3) the debt is payable in installments or a finance charge 
 is made. 

    (g) "Credit" means the right granted by a financial 
 institution to a borrower to defer payment of a debt, to incur 
 debt and defer its payment, or to purchase property or services 
 and defer payment. 

    (h) "Credit card" means a card or device issued under an 
 arrangement pursuant to which a financial institution gives to a 
 cardholder the privilege of obtaining credit from the financial 
 institution or other person in purchasing or leasing property or 
 services, obtaining loans, or otherwise.  A transaction is 
 "pursuant to a credit card" only if credit is obtained according 
 to the terms of the arrangement by transmitting information 
 contained on the card or device orally, in writing, by 
 mechanical or electronic methods, or in any other manner.  A 
 transaction is not "pursuant to a credit card" if the card or 
 device is used solely in that transaction to: 

    (1) identify the cardholder or evidence the cardholder's 
 creditworthiness and credit is not obtained according to the 
 terms of the arrangement; 

    (2) obtain a guarantee of payment from the cardholder's 
 deposit account, whether or not the payment results in a credit 
 extension to the cardholder by the financial institution; or 

    (3) effect an immediate transfer of funds from the 
 cardholder's deposit account by electronic or other means, 
 whether or not the transfer results in a credit extension to the 
 cardholder by the financial institution. 

    (i) "Credit sale contract" means a contract evidencing a 
 credit sale.  "Credit sale" means a sale of goods or services, 
 or an interest in land, in which: 

    (1) credit is granted by a seller who regularly engages as 
 a seller in credit transactions of the same kind; and 

    (2) the debt is payable in installments or a finance charge 
 is made. 

    (j) "Finance charge" has the meaning given in the 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 default or delinquency 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; 

    (3) a discount, if a financial institution purchases a loan 
 at less than the face amount of the obligation or purchases or 
 satisfies obligations of a cardholder pursuant to a credit card 
 and the purchase or satisfaction is made at less than the face 
 amount of the obligation; 

    (4) fees paid by a borrower to a broker, provided the 
 financial institution or a person described in subdivision 4 
 does not require use of the broker to obtain credit; or 

    (5) a commission, expense reimbursement, or other sum 
 received by a financial institution or a person described in 
 subdivision 4 in connection with insurance described in 
 subdivision 6. 

    (k) "Financial institution" means a state or federally 
 chartered bank, a state or federally chartered bank and trust, a 
 trust company with banking powers, a state or federally 
 chartered saving bank, a state or federally chartered savings 
 association, an industrial loan and thrift company, or a 
 regulated lender. 

    (l) "Loan" means: 

    (1) the creation of debt by the financial institution's 
 payment of money to the borrower or a third person for the 
 account of the borrower; 

    (2) the creation of debt pursuant to a credit card in any 
 manner, including a cash advance or the financial institution's 
 honoring a draft or similar order for the payment of money drawn 
 or accepted by the borrower, paying or agreeing to pay the 
 borrower's obligation, or purchasing or otherwise acquiring the 
 borrower's obligation from the obligee or the borrower's 
 assignee; 

    (3) the creation of debt by a cash advance to a borrower 
 pursuant to an overdraft line of credit arrangement; 

    (4) the creation of debt by a credit to an account with the 
 financial institution upon which the borrower is entitled to 
 draw immediately; 

    (5) the forbearance of debt arising from a loan; and 

    (6) the creation of debt pursuant to open-end credit. 

    "Loan" does not include the forbearance of debt arising 
 from a sale or lease, a credit sale contract, or an overdraft 
 from a person's deposit account with a financial institution 
 which is not pursuant to a written agreement to pay overdrafts 
 with the right to defer repayment thereof. 

    (m) "Official fees" means: 

    (1) fees and charges which actually are or will be paid to 
 public officials for determining the existence of or for 
 perfecting, releasing, terminating, or satisfying a security 
 interest or mortgage relating to a loan or credit sale, and any 
 separate fees or charges which actually are or will be paid to 
 public officials for recording a notice described in section 
 580.032, subdivision 1; and 

    (2) premiums payable for insurance in lieu of perfecting a 
 security interest or mortgage otherwise required by a financial 
 institution in connection with a loan or credit sale, if the 
 premium does not exceed the fees and charges described in clause 
 (1), which would otherwise be payable. 

    (n) "Organization" means a corporation, government, 
 government subdivision or agency, trust, estate, partnership, 
 joint venture, cooperative, limited liability company, limited 
 liability partnership, or association. 

    (o) "Person" means a natural person or an organization. 

    (p) "Principal" means the total of: 

    (1) the amount paid to, received by, or paid or repayable 
 for the account of, the borrower; and 

    (2) to the extent that payment is deferred: 

    (i) the amount actually paid or to be paid by the financial 
 institution for additional charges permitted under this section; 
 and 

    (ii) prepaid finance charges. 

    Subd. 2.    Application.  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, 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. 

    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 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. 

    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 a retail 
 installment sale of a motor vehicle as defined in section 
 168.66, the annual percentage rates permitted by 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.  

    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. 

    Subd. 5.    Extensions, 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, the single annual percentage rate and other 
 charges must be determined as provided under this section for 
 interest-bearing transactions. 

    Subd. 6.    Additional charges.  (a) For purposes of 
 this subdivision, "financial institution" includes a person 
 described in subdivision 4, paragraph (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 
 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 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 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 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 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. 

    Subd. 7.    Advances to perform covenants of borrower or 
 purchaser.  (a) If the agreement with respect to a loan or 
 credit sale contract contains covenants by the borrower or 
 purchaser to perform certain duties pertaining to insuring or 
 preserving collateral and the financial institution according to 
 the agreement pays for performance of the duties on behalf of 
 the borrower or purchaser, the financial institution may add to 
 the debt or contract balance the amounts so advanced.  Before or 
 within a reasonable time not less than 30 days after advancing 
 any sums, the financial institution shall state to the borrower 
 or purchaser in writing the amount of sums advanced or to be 
 advanced, any charges with respect to this amount, and any 
 revised payment schedule and, if the duties of the borrower or 
 purchaser performed by the financial institution pertain to 
 insurance, a brief description of the insurance paid for or to 
 be paid for by the financial institution including the type and 
 amount of coverages.  Additional information need not be given.  
 The actions of the financial institution pursuant to this 
 subdivision shall not be deemed to cure the borrower's failure 
 to perform covenants in the loan or credit sale contract, unless 
 the loan or credit sale contract expressly provides otherwise. 

    (b) A finance charge equal to that specified in the loan 
 agreement or credit sale contract may be made for sums advanced 
 under paragraph (a). 

    Subd. 8.    Attorney's fees.  With respect to a loan or 
 credit sale, the agreement may provide for payment by the 
 borrower of the attorney's fees and court costs incurred in 
 connection with collection or foreclosure.  This subdivision is 
 not a limitation on attorney's fees that may be charged to an 
 organization. 

    Subd. 9.    Right to prepay.  The borrower or purchaser 
 may prepay in full the unpaid balance of a consumer loan or 
 credit sale contract, at any time without penalty.  

    Subd. 10.    Credit insurance.  (a) The sale of credit 
 insurance or mortgage insurance is subject to chapters 61A, 62A, 
 and 62B, as applicable, and the rules adopted under those 
 chapters, if any.  In case there are multiple consumers 
 obligated under a transaction subject to this chapter, no policy 
 or certificate of insurance providing credit life insurance may 
 be procured by or through a financial institution or person 
 described in subdivision 2 upon more than two of the consumers, 
 in which case they may be insured jointly.  

    (b) A financial institution that provides credit insurance 
 in relation to open-end credit may calculate the charge to the 
 borrower in each billing cycle by applying the current premium 
 rate to the balance in the manner permitted with respect to 
 finance charges by the provisions on finance charge in this 
 section.  

    (c) Upon prepayment in full of a consumer loan or credit 
 sale contract by the proceeds of credit insurance or mortgage 
 insurance, the consumer or the consumer's estate is entitled to 
 a refund of any portion of a separate charge for insurance that 
 by reason of prepayment is retained by the financial institution 
 or returned to it by the insurer, unless the charge was computed 
 from time to time on the basis of the balances of the consumer's 
 loan or credit sale contract.  

    (d) This section does not require a financial institution 
 to grant a refund to the consumer if all refunds due to the 
 consumer under paragraph (c) amount to less than $5 and, except 
 as provided in paragraph (c), does not require the financial 
 institution to account to the consumer for any portion of a 
 separate charge for insurance because:  

    (1) the insurance is terminated by performance of the 
 insurer's obligation; 

    (2) the financial institution pays or accounts for premiums 
 to the insurer in amounts and at times determined by the 
 agreement between them; or 

    (3) the financial institution receives directly or 
 indirectly under a policy of insurance a gain or advantage not 
 prohibited by law.  

    (e) Except as provided in paragraph (d), the financial 
 institution shall promptly make or cause to be made an 
 appropriate refund to the consumer with respect to a separate 
 charge made to the consumer for insurance if:  

    (1) the insurance is not provided or is provided for a 
 shorter term than for which the charge to the borrower for 
 insurance was computed; or 

    (2) the insurance terminates before the end of the term for 
 which it was written because of prepayment in full or otherwise. 

    (f) If a financial institution requires insurance, upon 
 notice to the borrower, the borrower has the option of providing 
 the required insurance through an existing policy of insurance 
 owned or controlled by the borrower, or through a policy to be 
 obtained and paid for by the borrower, but the financial 
 institution for reasonable cause may decline the insurance 
 provided by the borrower.  

    Subd. 11.    Property and liability insurance.  (a) 
 Except as otherwise provided in this section and subject to the 
 provisions on additional charges and maximum finance charges in 
 this section, a financial institution may agree to sell, as an 
 agent, property and liability insurance, and may contract for 
 and receive a charge for this insurance separate from and in 
 addition to other charges.  This section does not authorize the 
 issuance of the insurance prohibited under any statute or rule 
 governing the business of insurance nor does it authorize a 
 financial institution to underwrite insurance.  

    (b) This section does not apply to an insurance premium 
 loan.  A financial institution may request cancellation of a 
 policy of property or liability insurance only after the 
 borrower's default or in accordance with a written authorization 
 by the borrower.  In either case, the cancellation does not take 
 effect until written notice is delivered to the borrower or 
 mailed to the borrower at the borrower's address as stated by 
 the borrower.  The notice must state that the policy may be 
 canceled on a date not less than ten days after the notice is 
 delivered, or, if the notice is mailed, not less than 13 days 
 after it is mailed.  A cancellation may not take effect until 
 those notice periods expire.  

    Subd. 12.    Consumer protections.  (a) Financial 
 institutions shall comply with the requirements of the federal 
 Truth in Lending Act, United States Code, title 15, sections 
 1601 to 1693, as the same may be amended from time to time, in 
 connection with a consumer loan or credit sale for a consumer 
 purpose where the federal Truth in Lending Act is applicable.  A 
 financial institution shall give the following disclosure to the 
 borrower in writing at the time an open-end credit account is 
 established if the financial institution imposes a loan fee, 
 points, or similar charge that relates to the opening of the 
 account which is not included in the annual percentage rate 
 given pursuant to the federal Truth in Lending Act:  "YOU HAVE 
 BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH ARE NOT INCLUDED 
 IN THE ANNUAL PERCENTAGE RATE.  THESE CHARGES MAY BE REFUNDED, 
 IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR LINE OF CREDIT OR IF 
 YOU REPAY YOUR LINE OF CREDIT EARLY.  THESE CHARGES INCREASE THE 
 COST OF YOUR CREDIT." 

    (b) Financial institutions shall comply with the following 
 consumer protection provisions in connection with a consumer 
 loan or credit sale for a consumer purpose:  sections 325G.02 to 
 325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to 
 325G.36, and Code of Federal Regulations, title 12, part 535, 
 where those statutes or regulations are applicable.  

    (c) An assignment of a consumer's earnings by the consumer 
 to a financial institution as payment or as security for payment 
 of a debt arising out of a consumer loan or consumer credit sale 
 is unenforceable by the financial institution except where the 
 assignment:  (1) by its terms is revocable at the will of the 
 consumer; (2) is a payroll deduction plan or preauthorized 
 payment plan, beginning at the time of the transaction, in which 
 the consumer authorizes a series of wage deductions as a method 
 of making each payment; or (3) applies only to wages or other 
 earnings already earned at the time of the assignment. 

    Subd. 13.    Loans and contracts other than consumer loans 
 and contracts.  Loans and credit sale contracts other than 
 consumer loans and consumer credit sale contracts are not 
 subject to the provisions and limitations of subdivisions 9; 10; 
 11, paragraph (b); and 12.  

    Subd. 14.    Effect of violations on rights of parties.  
 (a) If a financial institution has violated any provision of 
 this section applying to collection of finance or other charges, 
 the borrower or purchaser under a credit sale contract may 
 recover from the financial institution actual damages and, in an 
 action other than a class action, a penalty in an amount 
 determined by the court but not less than $100 nor more than 
 $1,000.  With respect to violations arising from other than 
 open-end credit transactions, no action may be brought according 
 to this paragraph and no set-off or recoupment may be asserted 
 according to this paragraph more than one year after the making 
 of the debt.  

    (b) A borrower or purchaser under a credit sale contract is 
 not obligated to pay a charge in excess of that allowed by this 
 section and has a right of refund of any excess charge paid.  A 
 refund may not be made by reducing the borrower's or purchaser's 
 obligation by the amount of the excess charge, unless the 
 financial institution has notified the borrower or purchaser 
 that the borrower or purchaser may request a refund and the 
 borrower or purchaser has not so requested within 30 days 
 thereafter.  If the borrower or purchaser has paid an amount in 
 excess of the lawful obligation under the agreement, the 
 borrower or purchaser may recover the excess amount from the 
 financial institution that made the excess charge or from an 
 assignee of the financial institution's rights that undertakes 
 direct collection of payments from or enforcement of rights 
 against borrowers or purchasers arising from the debt.  

    (c) If a financial institution has contracted for or 
 received a charge in excess of that allowed by this section, or 
 if a borrower or purchaser under a credit sale contract is 
 entitled to a refund and a person liable to the borrower or 
 purchaser refuses to make a refund within a reasonable time 
 after demand, the borrower or purchaser may recover from the 
 financial institution or the person liable in an action other 
 than a class action a penalty in an amount determined by the 
 court but not less than $100 nor more than $1,000.  With respect 
 to excess charges arising from other than open-end credit 
 transactions, no action according to this paragraph may be 
 brought more than one year after the making of the debt.  For 
 purposes of this paragraph, a reasonable time is presumed to be 
 30 days.  

    (d) A violation of this section does not impair rights on a 
 debt.  

    (e) A financial institution is not liable for a penalty 
 under paragraph (a) or (c) if it notifies the borrower or 
 purchaser under a credit sale contract of a violation before the 
 financial institution receives from the borrower or purchaser 
 written notice of the violation or the borrower or purchaser has 
 brought an action under this section, and the financial 
 institution corrects the violation within 45 days after 
 notifying the borrower or purchaser.  If the violation consists 
 of a prohibited agreement, giving the borrower or purchaser a 
 corrected copy of the writing containing the violation is 
 sufficient notification and correction.  If the violation 
 consists of an excess charge, correction must be made by an 
 adjustment or refund.  

    (f) A financial institution may not be held liable in an 
 action brought under this section for a violation of this 
 section if the financial institution shows by a preponderance of 
 evidence that the violation was not intentional and resulted 
 from a bona fide error notwithstanding the maintenance of 
 procedures reasonably adopted to avoid the error.  

    (g) In an action in which it is found that a financial 
 institution has violated this section, the court shall award to 
 the borrower or the purchaser under a credit sale contract the 
 costs of the action and to the borrower's or purchaser's 
 attorneys their reasonable fees.  

    HIST: 1995 c 202 art 3 s 1; 1996 c 414 art 2 s 1-6; 1997 c 157 
 s 12-16; 1999 c 151 s 16 

     47.60 Consumer small loans. 

    Subdivision 1.    Definitions.  For purposes of this 
 section, the terms defined have the meanings given them:  

    (a) "Consumer small loan" is a loan transaction in which 
 cash is advanced to a borrower for the borrower's own personal, 
 family, or household purpose.  A consumer small loan is a 
 short-term, unsecured loan to be repaid in a single 
 installment.  The cash advance of a consumer small loan is equal 
 to or less than $350.  A consumer small loan includes an 
 indebtedness evidenced by but not limited to a promissory note 
 or agreement to defer the presentation of a personal check for a 
 fee.  

    (b) "Consumer small loan lender" is a financial institution 
 as defined in section 47.59 or a person registered with the 
 commissioner and engaged in the business of making consumer 
 small loans.  

    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:  

    (1) on any amount up to and including $50, a charge of 
 $5.50 may be added; 

    (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; 

    (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; 

    (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.  

    Subd. 3.    Filing.  Before a person other than a 
 financial institution as defined by section 47.59 engages in the 
 business of making consumer small loans, the person shall file 
 with the commissioner as a consumer small loan lender.  The 
 filing must be on a form prescribed by the commissioner together 
 with a fee of $250 for each place of business and contain the 
 following information in addition to the information required by 
 the commissioner:  

    (1) evidence that the filer has available for the operation 
 of the business at the location specified, liquid assets of at 
 least $50,000; and 

    (2) a biographical statement on the principal person 
 responsible for the operation and management of the business to 
 be certified.  

    Revocation of the filing and the right to engage in the 
 business of a consumer small loan lender is the same as in the 
 case of a regulated lender license in section 56.09.  

    Subd. 4.    Books of account; annual report; schedule of 
 charges; disclosures.  (a) A lender filing under subdivision 3 
 shall keep and use in the business books, accounts, and records 
 as will enable the commissioner to determine whether the filer 
 is complying with this section. 

    (b) A lender filing under subdivision 3 shall annually on 
 or before March 15 file a report to the commissioner giving the 
 information the commissioner reasonably requires concerning the 
 business and operations during the preceding calendar year.  

    (c) A lender filing under subdivision 3 shall display 
 prominently in each 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 those charges.  A lender 
 shall furnish a copy of the contract of loan to a person 
 obligated on it or who may become obligated on it at any time 
 upon the request of that person.  This is in addition to any 
 disclosures required by the federal Truth in Lending Act, United 
 States Code, title 15.  

    (d) A lender filing under subdivision 3 shall, upon 
 repayment of the loan in full, mark indelibly every obligation 
 signed by the borrower with the word "Paid" or "Canceled" within 
 20 days after repayment.  

    (e) A lender filing under subdivision 3 shall display 
 prominently, in each licensed place of business, a full and 
 accurate statement of the charges to be made for loans made 
 under this section.  The statement of charges must be displayed 
 in a notice, on plastic or other durable material measuring at 
 least 12 inches by 18 inches, headed "CONSUMER NOTICE REQUIRED 
 BY THE STATE OF MINNESOTA."  The notice shall include, 
 immediately above the statement of charges, the following 
 sentence, or a substantially similar sentence approved by the 
 commissioner:  "These loan charges are higher than otherwise 
 permitted under Minnesota law.  Minnesota law permits these 
 higher charges only because short-term small loans might 
 otherwise not be available to consumers.  If you have another 
 source of a loan, you may be able to benefit from a lower 
 interest rate and other loan charges."  The notice must not 
 contain any other statement or information, unless the 
 commissioner has determined that the additional statement or 
 information is necessary to prevent confusion or inaccuracy.  
 The notice must be designed with a type size that is large 
 enough to be readily noticeable and legible.  The form of the 
 notice must be approved by the commissioner prior to its use. 

    Subd. 5.    Complaints alleging violation.  A person 
 obligated to or having been obligated to a consumer small loan 
 lender filing under subdivision 3 and having reason to believe 
 that this section has been violated may file with the 
 commissioner a written complaint setting forth the details of 
 the alleged violation.  The commissioner, upon receipt of the 
 complaint, may inspect the pertinent books, records, letters, 
 and contracts of the lender and borrower involved.  The 
 commissioner may assess against the lender a fee covering the 
 necessary costs of an investigation under this section.  The 
 commissioner may maintain an action for the recovery of the 
 costs in a court of competent jurisdiction. 

    Subd. 6.    Penalties for violation.  A person or the 
 person's members, officers, directors, agents, and employees who 
 violate or participate in the violation of any of the provisions 
 of this section may be liable in the same manner as in section 
 56.19. 

    HIST: 1995 c 202 art 3 s 2; 1996 c 305 art 1 s 14; 1996 c 414 
 art 2 s 7; 1999 c 151 s 17 

     47.605 Loan solicitation; unrequested checks regulated. 

    Subdivision 1.    Definitions.  (a) For purposes of this 
 section, the terms defined in this subdivision have the meanings 
 given. 

    (b) "Facsimile check" means a document that resembles a 
 negotiable check, money order, draft, or other instrument. 

    (c) "Live check" means a negotiable check, money order, 
 draft, or other instrument that may be used by a consumer to 
 activate a loan.  

    Subd. 2.    Unrequested checks.  No financial 
 institution or other lender may offer to make a loan by mailing 
 to a Minnesota resident a live check payable to the addressee, 
 which the addressee is requested to endorse and then cash, 
 deposit, or otherwise negotiate as a means of accepting the loan 
 offered, except as provided in subdivision 3.  This section does 
 not apply if the addressee already has an open-end credit 
 arrangement or business relationship with the financial 
 institution or other lender or if the addressee has requested in 
 writing that the live check be mailed to the addressee.  

    Subd. 3.    Effect of live checks.  (a) The addressee is 
 not liable for any loan contracted or allegedly contracted by 
 means of a live check that violates subdivision 2, unless the 
 live check is offered in compliance with the requirements in 
 paragraphs (b) to (g). 

    (b) The live check, regardless of its form, must not be 
 negotiable after a period no longer than 30 days after the date 
 shown on the live check.  Printed material accompanying the live 
 check must advise the consumer to void and destroy the live 
 check if it is not going to be negotiated, and must be 
 substantially similar to the following disclosure: 

    "THIS IS A SOLICITATION FOR A LOAN--READ THE ENCLOSED 
 DISCLOSURES BEFORE SIGNING AND CASHING THIS CHECK." 

    (c) Notification of the loan agreement must be on the back 
 of the live check so that the consumer is advised that by 
 signing the back of the live check the consumer will have 
 activated a loan transaction.  The following disclosure must 
 appear on the back of the live check: 

    "By endorsing this instrument, you agree to repay this loan 
 according to the terms of the Loan Agreement, which you 
 acknowledge receiving and which provides you with the contract 
 terms in connection with this loan transaction." 

    (d) Opt-out provisions of United States Code, title 15, 
 section 1681b(e), must be noted by reference in printed 
 materials that accompany the live check. 

    (e) Live check loan solicitations must be mailed in 
 envelopes with no indication that a negotiable instrument is 
 contained in the mailing.  Envelopes must be marked with 
 instructions to the postal service stating that the item is not 
 to be forwarded if the intended addressee is no longer at the 
 location. 

    (f) The creditor who receives a negotiated live check must 
 execute the following steps consistent with the structure of the 
 creditor's business: 

    (1) ensure that the instrument is placed in the consumer's 
 loan folder, record, or other filing procedure consistent with 
 the creditor's business which will enable recovery of the item, 
 or an exact facsimile of the original document; and 

    (2) provide to the customer a coupon book or billing 
 statement or other medium consistent with the creditor's 
 business practice as confirmation of the activation of the loan. 

    (g) In the event that a live check is stolen or incorrectly 
 received by someone other than the intended payee, and the live 
 check is fraudulently cashed or otherwise negotiated, the 
 following safeguards for the consumer must be triggered: 

    (1) the creditor, upon receipt of notification that the 
 consumer did not negotiate the live check, shall provide, and 
 the consumer may complete, a statement confirming that the 
 consumer did not deposit, cash, or otherwise negotiate the live 
 check; 

    (2) completion of the confirmation statement must be 
 facilitated by the creditor by providing the consumer the 
 opportunity to fill it out at a local location of the creditor, 
 by mail, or both, and by explaining that the consumer is 
 relieved from any liability on the loan.  The creditor shall 
 also provide the consumer with a contact person to provide 
 assistance if required; and 

    (3) upon submitting a completed confirmation statement to 
 the creditor, the consumer who was the intended payee shall have 
 no liability for the loan obligation, absent any fraud by that 
 consumer. 

    Subd. 4.    Facsimile checks.  No financial institution 
 or other lender shall mail to a Minnesota resident a 
 solicitation for a cash loan that includes a facsimile check 
 payable to the addressee unless: 

    (1) the facsimile check contains on the front and back, in 
 at least a 30-point bold font, the words: 

    "This is not a check"; 

    (2) the opt-out provisions of United States Code, title 15, 
 section 1681b(e), are noted by reference in printed materials 
 that accompany the facsimile check; and 

    (3) the solicitation is mailed in an envelope that does not 
 make it appear that a negotiable instrument is contained in the 
 mailing. 

    HIST: 1998 c 335 s 1 

     47.61 Electronic funds transfer facilities; definitions. 

    Subdivision 1.  For the purposes of sections 47.61 to 
 47.74, unless the context requires otherwise, the following 
 terms shall have the meanings given them. 

    Subd. 2.  "Commissioner" means the commissioner of commerce.

    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; 

    (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; 

    (4) stored-value cards to only process transactions other 
 than those authorized by this section.  Stored-value cards are 
 transaction cards having magnetic stripes or computer chips that 
 enable electronic value to be added or deducted as needed; or 

    (5) a personal computer possessed by and operated 
 exclusively by the account holder. 

    Subd. 4.  "Financial institution" means a national banking 
 association, federal savings association, or federal credit 
 union having its main office in this state, or a bank, savings 
 bank, savings association, credit union, industrial loan and 
 thrift company, or regulated lender under chapter 56 established 
 and operating under the laws of this state.  

    Subd. 4a.  "Minnesota transmission facility" means:  (1) a 
 transmission facility which is owned or controlled by financial 
 institutions located in Minnesota; (2) a transmission facility 
 owned or controlled by a bank holding company or savings and 
 loan holding company if domiciled or headquartered in Minnesota; 
 or (3) a transmission facility established in Minnesota and 
 approved by the commissioner under section 47.65, subdivision 1, 
 as of August 1, 1990.  

    Subd. 5. Repealed, 1983 c 102 s 3 

    Subd. 6.  "Retailer" means a person primarily engaged in 
 the business of selling goods or services to consumers or a 
 person who owns or operates a mall area. 

    Subd. 7.  "Transmission facility" means the electronic 
 system which is used to forward from one financial institution, 
 its affiliate, or agent, to one or more financial institutions, 
 their affiliates, or agents, financial transaction data 
 originating from an electronic financial terminal and its 
 attendant support system. 

    HIST: 1978 c 469 s 1; 1983 c 252 s 1; 1983 c 289 s 114 subd 1; 
 1984 c 655 art 1 s 92; 1987 c 41 s 1; 1990 c 491 art 3 s 1; 1995 
 c 202 art 1 s 25; art 2 s 7; 1996 c 414 art 1 s 11; 1997 c 157 s 
 17 

     47.62 Authorization. 

    Subdivision 1.    General authority.  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. 

    Subd. 2.    Approval required.  No electronic financial 
 terminal shall be established by a person other than a state or 
 federal savings association, state or federal savings bank, 
 state or federal credit union, or state bank or national banking 
 association unless the commissioner has approved the 
 establishment of the terminal. 

    Subd. 3.    Application and required findings.  
 Application for authorization shall be made in the manner 
 prescribed by rule.  The commissioner shall grant authorization 
 for the establishment of an electronic financial terminal if the 
 commissioner finds that: 

    (a) There is reason to believe that the terminal will be 
 properly and safely managed; 

    (b) The applicant is financially sound; 

    (c) The proposed charges for making the services of the 
 terminal available to financial institutions are fair, 
 equitable, and nondiscriminatory; 

    (d) The applicant has furnished all of the information 
 required by rule; 

    (e) The terminal applicant will not gain an unfair 
 competitive advantage because the terminal is not operationally 
 available to other financial institutions or their data 
 processors within a reasonable period of time. 

    If the commissioner has not denied the application within 
 45 days of its submission, the authorization shall be deemed to 
 be granted. 

    Subd. 4.    Multiple terminals.  When more than one 
 electronic financial terminal is established and maintained at a 
 single place of business by the same person, or if a person 
 wishes to make an application that encompasses more than one 
 place of business or location, a single application and fee 
 shall be sufficient.  For each application, a $100 fee shall be 
 paid to the commissioner, and for each application for a change 
 in pricing structure, a $10 fee shall be paid to the 
 commissioner.  If the $100 fee or the $10 fee is less than the 
 costs incurred by the commissioner in approving or disapproving 
 the application, the fee shall be equal to those costs. 

    Subd. 5.    Establishment by notice.  A bank, savings 
 bank, savings association, or credit union organized under the 
 laws of this state may, after completing the notification 
 procedure required by this subdivision, establish and maintain 
 one or more electronic financial terminals.  The filing must be 
 on forms provided by the commissioner.  No electronic financial 
 terminal may be established under sections 47.61 to 47.74 if 
 disallowed by order of the commissioner within 15 days of the 
 filing of a complete and acceptable notification of the intent 
 to establish an electronic financial terminal. 

    Subd. 6.    Relocation; procedure.  An application or 
 notification to relocate an existing financial terminal outside 
 a radius of three miles measured in a straight line must be 
 approved by, or a notification must be filed with, the 
 commissioner of commerce as provided for in this section. 

    HIST: 1978 c 469 s 2; 1983 c 102 s 1; 1986 c 444; 1995 c 171 s 
 25; 1995 c 202 art 1 s 8; art 2 s 8-10; 1996 c 414 art 3 s 5 

     47.63 Functions of an electronic financial terminal. 

    Financial transactions which may be performed by an 
 electronic financial terminal shall be limited to the 
 disbursement of funds under a preauthorized credit agreement, 
 the withdrawal of funds from a customer's account, the deposit 
 of funds in a customer's account, the receiving of cash or 
 checks, the disbursement of cash, the payment of loan payments, 
 and the transfer of funds to or from one or more accounts in one 
 or more financial institutions.  All permitted transactions must 
 be made pursuant to a preexisting contractual agreement between 
 the financial institution and an account holder.  Accounts may 
 not be opened at an electronic financial terminal located 
 separate and apart from a financial institution's principal 
 office, branch, or detached facility.  Any retailer may also 
 operate a device which is capable of performing the functions of 
 an electronic financial terminal for any internal business 
 activity of that retailer. 

    HIST: 1978 c 469 s 3; 1987 c 41 s 2 

     47.64 Operation of an electronic financial terminal. 

    Subdivision 1.  (a) Any person establishing and maintaining 
 an electronic financial terminal located separate and apart from 
 a financial institution's principal office, branch, or detached 
 facility for use by one type of financial institution shall, 
 upon written request, make its services available to any 
 requesting financial institution of similar type on a fair, 
 equitable, and nondiscriminatory basis.  A financial institution 
 requesting use of an electronic financial terminal shall be 
 permitted its use only if the financial institution conforms to 
 reasonable technical operation standards which have been 
 established by the electronic financial terminal provider.  For 
 purposes of this subdivision, the types of financial 
 institutions are:  (1) commercial banks and savings banks; (2) 
 credit unions, industrial loan and thrift companies, and 
 regulated lenders under chapter 56; and (3) savings 
 associations.  The services of an electronic financial terminal 
 may be made available to any type of financial institution.  
 After March 1, 1979, or earlier if determined by the 
 commissioner to be technically feasible, an electronic financial 
 terminal which is used by or made available to one type of 
 financial institution shall be made available, upon request, to 
 other types of financial institutions on a fair, equitable, and 
 nondiscriminatory basis.  The charges required to be paid to any 
 person establishing and maintaining an electronic financial 
 terminal shall be related to an equitable proportion of the 
 direct costs of establishing, operating, and maintaining the 
 terminal plus a reasonable return on those costs to the owner of 
 the terminal.  The charges may provide for amortization of 
 development costs and capital expenditures over a reasonable 
 period of time. 

    (b) Any person establishing and maintaining an electronic 
 financial terminal located on and as a part of a financial 
 institution's principal office, branch, detached facility, or 
 lending office where deposits are not taken may, at the 
 financial institution's option, (1) maintain the electronic 
 financial terminal for the exclusive use of the financial 
 institution's customers; or (2) maintain the electronic 
 financial terminal for the use of the financial institution's 
 customers and make some or all of the electronic financial 
 terminal's services available to any other requesting financial 
 institution on a fair, equitable, and nondiscriminatory basis. 

    Subd. 2.  If a person establishing and maintaining an 
 electronic financial terminal makes it available for use by one 
 or more federal savings associations or one or more federal 
 credit unions and their customers, the federal savings 
 association or federal credit union shall agree to grant to any 
 financial institution use of all similar devices owned, 
 maintained, or used by it.  A state chartered financial 
 institution or a national bank may participate upon contractual 
 agreement in the use of a device which is capable of performing 
 the functions of an electronic financial terminal and is owned 
 or operated by one or more federal savings associations or 
 federal credit unions. 

    Subd. 3.  Any agreement or charge between a person 
 establishing an electronic financial terminal and the person at 
 whose location the terminal is established shall be upon such 
 commercially reasonable terms and conditions as are agreed to by 
 the parties.  A person at whose location an electronic financial 
 terminal is established and maintained may limit the kind of 
 financial transaction functions which the terminal may perform. 
 If the electronic financial terminal is not located on the 
 premises of a financial institution's principal office, branch, 
 or detached facility, the person shall make available upon 
 request every financial transaction function which the terminal 
 does perform to all financial institutions, their affiliates, or 
 agents on a nondiscriminatory basis.  A function involving 
 either a bank credit card authorized pursuant to section 48.185 
 or other credit card authorized under any other similar open end 
 consumer credit sales plan need not be made so available. 

    Subd. 4.  An electronic financial terminal located separate 
 and apart from a financial institution's principal office, 
 branch, or detached facility, if staffed, shall be operated 
 exclusively by a person who is not employed by any financial 
 institution, any financial institution holding company, or 
 subsidiary thereof.  However, persons assisting customers of 
 financial institutions at the site of the terminal may be 
 trained by employees of a financial institution, financial 
 institution holding company, or subsidiary thereof, and nothing 
 in this section shall be construed to prohibit periodic 
 servicing of an electronic financial terminal by an employee of 
 a financial institution, financial institution holding company, 
 or subsidiary thereof. 

    Subd. 5.  To insure payment to any person who suffers loss 
 due to negligence or intentional misconduct in the operation of 
 an electronic financial terminal any person seeking to establish 
 an electronic financial terminal shall, at the option of the 
 commissioner, file with the commissioner's office either a 
 financial statement in an acceptable form, or a bond, rider to 
 an existing bond, or other collateral security acceptable to and 
 in an amount set by the commissioner.  The commissioner shall 
 permit the filing of a financial statement in lieu of a bond or 
 other security only if the financial statement demonstrates that 
 the person seeking to establish the electronic financial 
 terminal has the financial ability to insure payment to any 
 person who suffers loss due to negligence or intentional 
 misconduct in the operation of the electronic financial 
 terminal.  If the filing of a financial statement is permitted, 
 additional periodic financial information shall be filed as 
 required by the commissioner. 

    Subd. 6.  A customer of a bank, savings bank, savings 
 association, or credit union located outside Minnesota may, with 
 the consent of the person establishing an electronic financial 
 terminal, use the terminal for the withdrawal of funds and for 
 the inquiry as to the balance in that customer's accounts 
 maintained with that institution.  Nothing in sections 47.61 to 
 47.74 shall be construed to authorize any person, other than a 
 financial institution, to engage in business which is only 
 legally authorized to be engaged in by financial institutions. 

    Subd. 7.    Prohibition.  An agreement to share 
 electronic financial terminals may not contain provisions 
 distinguishing between cards issued by United States financial 
 institutions and cards issued by Canadian financial institutions 
 relative to a fee that may be charged to a card holder by the 
 owner or operator of an electronic financial terminal, if the 
 terminal is located within 50 miles of the Canadian border, and 
 the enforcement of any such provision is prohibited. 

    HIST: 1978 c 469 s 4; 1983 c 102 s 2; 1983 c 250 s 4; 1983 c 
 252 s 2; 1986 c 444; 1987 c 41 s 3-5; 1995 c 171 s 26; 1995 c 
 202 art 1 s 25; 1997 c 157 s 18 

     47.65 Transmission facility. 

    Subdivision 1.  Any person may establish a transmission 
 facility in this state upon approval by the commissioner 
 pursuant to the provisions of this section, except that a 
 financial institution may establish a transmission facility in 
 this state after giving the commissioner written notice of its 
 intent to do so, provided that the commissioner does not issue 
 an order disallowing such establishment within 15 days after 
 receiving a completed notice.  Any such notice must be made 
 using a form prescribed by the commissioner.  A transmission 
 facility which is used by, or made available to, any financial 
 institution must be made available to all other financial 
 institutions upon request of such financial institution and 
 agreement by the financial institution to pay fees on a fair, 
 equitable, and nondiscriminatory basis.  A person requesting use 
 of a transmission facility shall be permitted its use only if 
 the person conforms to reasonable technical operating standards 
 which have been established by the transmission facility 
 provider.  The charges required to be paid to any person 
 establishing a transmission facility shall be related to an 
 equitable proportion of the direct costs of establishing, 
 operating and maintaining such facility plus a reasonable return 
 on those costs to the owner of the facility.  The charges may 
 provide for amortization of development costs and capital 
 expenditures over a reasonable period of time. 

    Subd. 1a.  A Minnesota transmission facility which is used 
 by, or made available to, any other Minnesota transmission 
 facility must be made available on fair, equitable, and 
 nondiscriminatory terms to all other Minnesota transmission 
 facilities upon request of such Minnesota transmission 
 facility.  Such person requesting use of a Minnesota 
 transmission facility shall be permitted its use only if the 
 person conforms to reasonable technical operating standards 
 which have been established by the Minnesota transmission 
 facility. 

    The charges required to be paid to any Minnesota 
 transmission facility shall be related to the costs of 
 establishing, operating, and maintaining such facility plus a 
 reasonable return on those costs to the owner of the facility 
 and may provide for amortization of development costs and 
 capital expenditures over a reasonable period of time; provided 
 such charges as may be separately determined and established 
 from time to time by each Minnesota transmission facility are 
 fair, equitable, and nondiscriminatory. 

    Subd. 1b.  Nothing in subdivision 1a shall prevent a 
 corporation contracting with Minnesota state and local 
 governmental units to provide electronic benefits transfer or 
 electronic fund transfer services from utilizing their point of 
 service terminals, networks, or attendant support systems for 
 commercial purposes. 

    Subd. 2.  Before installation and operation, a transmission 
 facility application by a person who is required to submit an 
 application under subdivision 1 shall be submitted to the 
 commissioner on a form provided by the commissioner which states:

    (a) The location where the transmission facility will be 
 operated; 

    (b) The ownership of the transmission facility; 

    (c) If applicable, the bonding or insurance company which 
 has provided the bond for the transmission facility; and 

    (d) Such other information as the commissioner requires. 

    If the commissioner finds that (a) the facility will be 
 properly and safely managed, (b) the applicant is financially 
 sound, (c) there is a reasonable probability of success for the 
 facility, (d) the proposed charges for making the services of 
 the facility available to financial institutions are fair, 
 equitable and nondiscriminatory, and (e) all information has 
 been furnished by the applicant, the commissioner shall approve 
 the application within 90 days.  If the commissioner has not 
 denied the application within 90 days of the submission of the 
 application, the authorization shall be deemed granted.  For 
 each application, a $500 fee shall be paid to the commissioner.  
 For each application for change in pricing structure, a $50 fee 
 shall be paid to the commissioner.  If the $500 fee or the $50 
 fee is less than the costs incurred by the commissioner in 
 approving or disapproving the application, the application fee 
 shall be equal to those costs. 

    Subd. 3.  To insure payment to any person who suffers loss 
 due to negligence or intentional misconduct in the operation of 
 a transmission facility any person seeking to establish a 
 transmission facility shall, at the option of the commissioner, 
 file in the commissioner's office either a financial statement 
 in an acceptable form, or a bond, rider to an existing bond, or 
 other collateral security acceptable to and in an amount set by 
 the commissioner.  The commissioner shall permit the filing of a 
 financial statement in lieu of a bond or other security only if 
 the financial statement demonstrates that the person seeking to 
 establish the transmission facility has the financial ability to 
 insure payment to any person who suffers loss due to negligence 
 or intentional misconduct in the operation of the transmission 
 facility.  If the filing of a financial statement is permitted, 
 additional periodic financial information shall be filed as 
 required by the commissioner. 

    HIST: 1978 c 469 s 5; 1986 c 444; 1990 c 491 art 3 s 2,3; 1995 
 c 171 s 27,28 

     47.66 Examination. 

    An electronic financial terminal or a transmission facility 
 may be examined by the commissioner to the extent permitted by 
 law as to any financial transaction by, with, or involving a 
 financial institution solely for the purpose of reconciling 
 accounts and verifying the security and accuracy of such 
 electronic financial terminals or transmission facilities, 
 including any supporting equipment, structures, or systems.  All 
 facts and information obtained in the course of such examination 
 shall not be disclosed except as otherwise provided by law.  The 
 person examined shall pay examination fees as determined by the 
 commissioner. 

    HIST: 1978 c 469 s 6 

     47.67 Advertising. 

    No advertisement by a person which relates to an electronic 
 financial terminal may be inaccurate or misleading with respect 
 to such a terminal.  Except with respect to direct mailings by 
 financial institutions to their customers, the advertising of 
 rate of interest paid on accounts in connection with electronic 
 financial terminals is prohibited.  Any advertisement, either on 
 or off the site of an electronic financial terminal, promoting 
 the use or identifying the location of an electronic financial 
 terminal, which identifies any financial institution, group or 
 combination of financial institutions, or third parties as 
 owning or providing for the use of its services is prohibited.  
 The following shall be expressly permitted: 

    (a) a simple directory listing placed at the site of an 
 electronic financial terminal identifying the particular 
 financial institutions using its services; 

    (b) the use of a generic name, either on or off the site of 
 an electronic financial terminal, which does not promote or 
 identify any particular financial institution, group or 
 combination of financial institutions, or any third parties; 

    (c) media advertising or direct mailing of information by a 
 financial institution or retailer identifying locations of 
 electronic financial terminals and promoting their usage; 

    (d) any advertising, whether on or off the site, relating 
 to electronic financial terminals, or the services performed at 
 the electronic financial terminals located on the premises of 
 the main office, or any office or detached facility of any 
 financial institution; 

    (e) a coupon or other promotional advertising that is 
 printed upon the reverse side of the receipt or record of each 
 transaction required under section 47.69, subdivision 6; and 

    (f) promotional advertising displayed on the electronic 
 screen. 

    HIST: 1978 c 469 s 7; 1987 c 41 s 6; 1995 c 202 art 2 s 11 

     47.68 Electronic financial terminal security. 

    Every person establishing and maintaining an electronic 
 financial terminal and every financial institution using an 
 electronic financial terminal shall adopt and maintain 
 safeguards to insure the safety of funds, items, and other 
 information, which safeguards shall include security devices 
 consistent with the appropriate requirements specified under the 
 federal Bank Protection Act of 1968, Public Law Number 90-389, 
 or such alternative security precautions as are approved by the 
 commissioner. 

    HIST: 1978 c 469 s 8 

     47.69 Consumer privacy. 

    Subdivision 1.  To protect the privacy of customers using 
 electronic financial terminals, including any supporting 
 equipment, structures or systems, information received by or 
 processed through such terminals, supporting equipment, 
 structures or systems shall be treated and used only in 
 accordance with applicable law relating to the dissemination and 
 disclosure of such information.  The person establishing and 
 maintaining an electronic financial terminal, including any 
 supporting equipment, structures or systems, shall take such 
 steps as are reasonably necessary to restrict disclosure of 
 information to that necessary to complete the transaction and to 
 safeguard any information received or obtained about a customer 
 or that customer's account from misuse by any person staffing an 
 electronic financial terminal, including any supporting 
 equipment, structures or systems. 

    Subd. 2.  The commissioner shall have the authority by rule 
 to require each person operating pursuant to sections 47.61 to 
 47.74 to supply information to customers using electronic 
 financial terminals of the person's consumer protection policies 
 including the rights and liabilities of the consumer and 
 protection against wrongful and unnecessary or accidental 
 disclosure of confidential information. 

    Subd. 3.  Every financial institution using an electronic 
 financial terminal shall maintain reasonable procedures to 
 minimize losses from unauthorized withdrawals from its 
 customers' accounts by use of an electronic financial terminal.  
 After a customer makes a bona fide deposit or payment at an 
 electronic financial terminal and has received a receipt, any 
 loss due to theft or other reason shall not be borne by the 
 customer; provided, loss due to the nonpayment or dishonor of a 
 check, or other order for payment, deposited at an electronic 
 financial terminal shall be governed by the applicable 
 provisions of chapter 336.  A financial institution shall be 
 liable for all unauthorized withdrawals unless the unauthorized 
 withdrawal was due to the loss or theft of the customer machine 
 readable card, including a debit card, in which case the 
 customer shall be liable, subject to a maximum liability of $50, 
 for those unauthorized withdrawals made prior to the time the 
 financial institution is notified of the loss or theft.  With 
 respect to debit card transactions, this subdivision applies to 
 unauthorized withdrawals made from an electronic financial 
 terminal or from an electronic point-of-sale terminal operated 
 by a retailer, described in section 47.61, subdivision 3, 
 paragraph (b), clause (3).  The limitation on liability is 
 effective only if the issuer is notified of unauthorized charges 
 contained in a bill within 60 days of receipt of the bill by the 
 person in whose name the card is issued.  For purposes of this 
 subdivision, "unauthorized withdrawal" means a withdrawal by a 
 person other than the customer without actual authority to 
 initiate the withdrawal and from which the customer receives no 
 benefit.  The term does not include any withdrawal that is:  (1) 
 initiated by a person who was furnished with the card by the 
 customer, unless the customer has notified the financial 
 institution involved that transfers by that person are no longer 
 authorized; (2) initiated with fraudulent intent by the customer 
 or any person acting in concert with the customer; or (3) 
 initiated by the financial institution or its employee.  

    Subd. 4.  No person's social security number shall be used 
 as the personal identification number or as any code to activate 
 any electronic financial terminal. 

    Subd. 5.  Any customer of a financial institution may bring 
 a civil action against any person violating any subdivision of 
 this section in the district court in the county of the alleged 
 violator's residence or principal place of business or in the 
 county wherein the alleged violation occurred.  Upon adverse 
 adjudication, the defendant shall be liable for actual damages, 
 or $500, whichever is greater, punitive damages when applicable, 
 together with the court costs and reasonable attorneys' fees 
 incurred by the plaintiff.  The court may provide such equitable 
 relief as it deems necessary or proper, including enjoining the 
 defendant from further violations.  If the unauthorized 
 withdrawal was due to the negligent conduct or the intentional 
 misconduct of an operator or person establishing and maintaining 
 an electronic financial terminal other than a financial 
 institution or agent of a financial institution, that operator 
 or person establishing and maintaining an electronic financial 
 terminal or its agent is liable and subject to a civil action 
 under this subdivision by the financial institution considered 
 liable under subdivision 3 that has reimbursed the customer. 

    Subd. 6.  Every financial institution using an electronic 
 financial terminal shall provide its customers a receipt or 
 record of each transaction initiated at the terminal, and shall 
 provide its customers a transaction statement at least quarterly 
 specifying types, dates, and amounts of all electronic financial 
 terminal transactions for the previous statement period. 

    HIST: 1978 c 469 s 9; 1986 c 444; 1987 c 349 art 1 s 10; 1995 
 c 202 art 2 s 12,13; 1998 c 295 s 1 

     47.70 Antitrust. 

    No person engaged in electronic financial terminal or 
 transmission facility activities shall contract, combine, or 
 conspire to restrain trade in the market for electronic 
 financial terminals, or engage in any anticompetitive practices 
 to the detriment of the public interest.  Notwithstanding 
 section 325D.55, subdivision 2, the provisions of sections 
 325D.49 to 325D.66 shall apply to persons engaged in electronic 
 financial terminal or transmission facility activities. 

    Nothing in sections 47.61 to 47.74 shall operate or be 
 construed to create an exception to the antitrust laws of the 
 United States for any contract or combination required or 
 authorized by sections 47.61 to 47.74. 

    HIST: 1978 c 469 s 10 

     47.71 Rules. 

    Subdivision 1.  The commissioner may promulgate such rules 
 as are reasonably necessary to carry out and make effective the 
 provisions and purposes of sections 47.61 to 47.74. 

    Subd. 2.  Deleted, 1995 c 233 art 2 s 56 

    HIST: 1978 c 469 s 11; 1980 c 486 s 1; 1982 c 424 s 130; 1984 
 c 640 s 32 

     47.72 Cease and desist order; injunction; penalties. 

    Subdivision 1.  If the commissioner determines that a 
 person, other than a national bank, federal savings association, 
 or federal credit union, is violating or about to violate 
 sections 47.61 to 47.74 or any rule promulgated thereunder or is 
 engaged or about to engage in an unsafe, unsound, unfair, or 
 discriminatory practice, the commissioner may: 

    (a) issue and serve on such person a cease and desist order 
 which shall become effective at the time specified therein, and 
 remain effective and enforceable as provided therein, except to 
 the extent that it is stayed, modified, terminated, or set aside 
 by action of the commissioner or review in court; 

    (b) serve notice on such person who has established and 
 maintains a transmission facility or an electronic financial 
 terminal of intent to revoke or suspend its approval to 
 establish and maintain the transmission facility or electronic 
 financial terminal. 

    When acting pursuant to this subdivision, the commissioner 
 shall furnish the person against whom the action is being taken 
 with a statement of alleged violations or practices. 

    Subd. 2.  If the violation or the unsound, unsafe, unfair 
 or discriminatory practice continues 15 days after service of a 
 notice of intention to revoke or suspend a person's approval to 
 establish and maintain a transmission facility or electronic 
 financial terminal, the commissioner may revoke or suspend such 
 approval. 

    Subd. 3.  The commissioner may bring an action in district 
 court to enjoin violations of sections 47.61 to 47.74 or any 
 rule promulgated thereunder, or to enforce compliance with the 
 provisions of sections 47.61 to 47.74 or any rule promulgated 
 thereunder, and may refer the matter to the attorney general.  
 The court may also impose a penalty not exceeding $5,000 per 
 violation. 

    HIST: 1978 c 469 s 12; 1985 c 248 s 70; 1986 c 444; 1995 c 202 
 art 1 s 25 

     47.73 Hearing. 

    Any person aggrieved with a cease and desist order, 
 revocation, suspension, or denial of an application to establish 
 an electronic financial terminal or transmission facility may 
 request a hearing.  Within seven days after receipt of a written 
 request with respect to a cease and desist order, revocation, or 
 suspension, or 45 days with respect to a denial of an 
 application, the commissioner shall hold a formal hearing which 
 shall be conducted pursuant to chapter 14.  No revocation or 
 suspension shall be effective until after a hearing if a hearing 
 is requested.  Notwithstanding section 14.53, all costs of the 
 hearing shall be paid by the aggrieved party. 

    HIST: 1978 c 469 s 13; 1982 c 424 s 130 

     47.74 Federal institutions; application. 

    The provisions of sections 47.61 to 47.74 shall apply to 
 national banks, federal savings associations, and federal credit 
 unions to the extent permitted by federal law. 

    HIST: 1978 c 469 s 14; 1995 c 202 art 1 s 25 

     47.75 Limited trusteeship. 

    Subdivision 1.    Retirement and medical savings accounts. 
  A commercial bank, savings bank, savings association, credit 
 union, or industrial loan and thrift company may act as trustee 
 or custodian under the Federal Self-Employed Individual Tax 
 Retirement Act of 1962, as amended, of a medical savings account 
 under the Federal Health Insurance Portability and 
 Accountability Act of 1996, as amended, and also under the 
 Federal Employee Retirement Income Security Act of 1974, as 
 amended.  The trustee or custodian may accept the trust funds if 
 the funds are invested only in savings accounts or time deposits 
 in the commercial bank, savings bank, savings association, 
 credit union, or industrial loan and thrift company.  All funds 
 held in the fiduciary capacity may be commingled by the 
 financial institution in the conduct of its business, but 
 individual records shall be maintained by the fiduciary for each 
 participant and shall show in detail all transactions engaged 
 under authority of this subdivision.  

    Subd. 2. Repealed, 1984 c 576 s 27 

    HIST: 1982 c 473 s 8; 1984 c 473 s 1; 1995 c 202 art 1 s 25; 
 1997 c 157 s 19 

     47.76 Required savings account. 

    A federal or state chartered financial institution, 
 including, but not limited to, a bank, savings association, 
 savings bank, or credit union, shall offer to a Minnesota 
 resident a savings account to promote thrift that has no service 
 charge or fee, if such an account has an average monthly balance 
 of more than $50. 

    HIST: 1987 c 161 s 2; 1995 c 202 art 1 s 25 

     47.77 Transfer of accounts prohibited; notice on closing.

    (a) No financial institution shall initiate a transfer of a 
 deposit account to another deposit account bearing different 
 identification information without sending at least 30 days' 
 prior notice to at least one of the deposit account holders at 
 the last known address on file with the financial institution.  
 If the new account is subject to different terms, the financial 
 institution must obtain the written consent of at least one of 
 the deposit account holders before the new terms become 
 effective. 

    (b) No financial institution shall initiate a closure of a 
 deposit account without first sending at least one of the 
 deposit account holders a notice of intent to close the deposit 
 account.  The notice must be sent to the deposit account 
 holder's last known address on file with the financial 
 institution at least 30 days before the financial institution 
 closes the deposit account; except that, if the financial 
 institution has reasonable suspicion to believe that account is 
 being used in connection with a check-related fraud or other 
 crime or that funds will not be available to pay items drawn on 
 the account, the notice may be sent the same day as the account 
 is closed. 

    (c) As used in this section, the following terms have the 
 meanings given them.  "Deposit account" means a contract of 
 deposit of funds between a depositor and a financial 
 institution, and includes a checking account, savings account, 
 certificate of deposit share account, and other like 
 arrangement.  "Financial institution" means any organization 
 authorized to do business under state or federal laws relating 
 to financial institutions, including, without limitation, banks 
 and trust companies, savings banks, savings associations, 
 industrial loan and thrift companies, and credit unions. 

    HIST: 1987 c 349 art 1 s 11; 1995 c 202 art 1 s 25 

     47.78 Contracts to accept and receive deposits-honor and 
  pay withdrawals. 

    (a) Notwithstanding any other law to the contrary, a 
 financial institution, the "customer institution," may contract 
 with another financial institution, the "service institution," 
 to grant the service institution the authority to render 
 services to the customer institution's depositors, borrowers or 
 other customers, provided notice of the proposed contract is 
 given to the commissioner and the commissioner does not object 
 to the contract within 30 days of the notice. 

    (b) For purposes of this section:  "Financial institution" 
 means a national banking association, federal savings 
 association, or federal credit union having its main office in 
 this state, or a bank, savings bank, savings association, or 
 credit union established and operating under the laws of this 
 state; and "services" means accepting and receiving deposits, 
 honoring and paying withdrawals, issuing money orders, cashiers' 
 checks, and travelers' checks or similar instruments, cashing 
 checks or drafts, receiving loan payments, receiving or 
 delivering cash and instruments and securities, disbursing loan 
 proceeds by machine, and any other transactions authorized by 
 section 47.63. 

    The term also includes a bank subsidiary of a bank holding 
 company or affiliated savings association to the extent agency 
 activities are permitted under section 18 of the Federal Deposit 
 Insurance Act, United States Code, title 12, section 1828, as 
 amended, effective September 29, 1995, and title I, Riegle-Neal 
 Interstate Banking and Branching Efficiency Act of 1994. 

    (c) A contract entered into pursuant to this section may 
 include authority to conduct transactions at or through any 
 principal office, branch, or detached facility of either 
 financial institution which is a party to the contract, and the 
 service institution is not considered a branch of the customer 
 institution for purposes of section 48.34. 

    HIST: 1993 c 52 s 1; 1995 c 202 art 4 s 6 

  47.80 Repealed, 1995 c 202 art 4 s 26 

  47.81 Repealed, 1995 c 202 art 4 s 26 

  47.82 Repealed, 1995 c 202 art 4 s 26 

  47.83 Repealed, 1995 c 202 art 4 s 26 

  47.84 Repealed, 1995 c 202 art 4 s 26 

  47.85 Repealed, 1995 c 202 art 4 s 26