332.23 FEES, PAYMENTS, AND CANCELLATIONS.
Subdivision 1. Origination fee, credit background report cost.
The licensee may charge
an origination fee of not more than $25 and collect from the debtor the actual cost of a credit
background report obtained from a credit reporting agency not related to or affiliated with the
licensee or if affiliated, the total cost of the report may not exceed $8. The costs to the debtor of
said origination fee and credit background report may be made from the originating amount paid
by the debtor to the licensee. The cost of only one credit background report may be collected from
the debtor in any 12-month period.
Subd. 2. Withdrawal of fee.
The licensee may withdraw and retain as partial payment of
the licensee's total fee not more than 15 percent of any sum deposited with the licensee by the
debtor for distribution. The remaining 85 percent must be disbursed to listed creditors pursuant
to and in accordance with the contract between the debtor and the licensee within 35 days after
receipt unless the reasonable payment of one or more of the debtor's obligations requires that the
funds be held for a longer period so as to accumulate a sum certain or where the debtor's payment
is returned for nonsufficient funds, then no longer than 42 days. Total payment to licensee for
services rendered, excluding the origination fee and any credit background report, shall not
exceed 15 percent of funds deposited with licensee by debtor for distribution.
Subd. 3. Cancellation.
All contracts with debtors for debt prorating service shall contain on
their face, in easily readable characters, a provision entitling either party to cancel the contract
without cause upon 30 days' written notice. The contract shall automatically terminate upon the
payment of all listed debts and fees. In the event of cancellation by either party, the licensee shall
notify the debtor's creditors of such cancellation within ten days thereof.
Subd. 4. Additional contracts; recurring payments.
Separate and additional contracts shall
be entered into by the licensee and debtor for the management of any debt not listed in any other
executory contract or for any increase in the size of any debt included in any other contract,
provided, the licensee shall not charge any origination fee for any such additional contract.
No fees or charges shall be received or retained by the licensee for any handling of recurrent
payments. Recurrent payments shall include current rent, house, utility, telephone, maintenance
as defined in section
, child support, insurance premium and such other payments as the
commissioner may by rule prescribe.
Subd. 5. Advance payments.
Notwithstanding anything herein to the contrary no fees
or charges shall be received or retained for any payments by the debtor made more than the
following number of days in advance of the date specified in the contract on which they are
due: (a) 42 days in the case of contracts requiring monthly payments; (b) 15 days in the case
of contracts requiring biweekly payments; or (c) seven days in the case of contracts requiring
weekly payments. For those contracts which do not require payments in specified amounts, a
payment shall be deemed an advance payment to the extent it exceeds twice the average regular
payment theretofore made by the debtor pursuant to that contract. This subdivision shall not apply
when it is the intention of the debtor to use such advance payments to satisfy future payment of
obligations due within 30 days under the contract.
Subd. 6. Consent of creditors.
The licensee shall actively seek to obtain the consent of all
creditors to the plan of distribution set forth in the contract. Failure to obtain such consent of all
such creditors within 60 days of the date upon which the contract is executed shall entitle the
debtor to cancel the contract within 120 days of the date of such execution without liability to pay
any cancellation fee. Consent by a creditor may be express and in writing, or may be evidenced
by acceptance of a payment made pursuant to the plan of distribution set forth in the contract. The
licensee shall notify the debtor within ten days after the expiration of the 60 day period prescribed
in this subdivision of any failure to obtain the required consent and of the debtor's right to cancel
without penalty. Such notice shall be in such form as the commissioner shall prescribe. Nothing
contained in this section shall be deemed to require the return of any origination fee and any fees
earned by the licensee prior to cancellation or default.
Subd. 7. Excess charges.
If a licensee contracts for, receives or makes any charge in excess
of the maximum permitted by sections
, except as the result of an accidental and
bona fide error, the licensee's contract with the debtor shall be void and the licensee shall return to
the debtor the amount of all moneys received from the debtor or on the debtor's behalf from the
commencement of the contract which have not been distributed to creditors.
Subd. 8. Payments held in trust.
Any payment received by a licensee from or on behalf of a
debtor shall be held in trust by the licensee from the moment it is received. The licensee shall not
commingle such payment with the licensee's own property or funds, but shall maintain a separate
trust account and deposit in such account all such payments received. All disbursements, whether
to the debtor or to the creditors of the debtor, or to the licensee, shall be made from such account.
History: 1969 c 1120 s 12; 1971 c 441 s 5-8; 1978 c 772 s 62; 1985 c 248 s 70; 1986 c 444;
1995 c 202 art 2 s 30,31; 1997 c 157 s 62-64