2006 Minnesota Statutes

CHAPTER 50. SAVINGS BANKS

50.001 APPLICATION FOR CERTIFICATE OF AUTHORITY; PROCEDURE.
The procedures for the application and issuance of a certificate of authority to a savings bank
organized pursuant to section 47.12 shall be those applicable to a state bank in sections 46.041
to 46.045.
History: 1995 c 171 s 33; 2005 c 69 art 3 s 5

50.01 EXPEDIENCY ASCERTAINED.
To enable the commissioner of commerce to determine the expediency of the organization of
a savings bank, as in this chapter prescribed, the commissioner shall investigate and ascertain:
(1) whether greater convenience of access to a savings bank will be afforded to any
considerable number of depositors by opening the proposed bank;
(2) whether the population in the vicinity of the location of the bank affords reasonable
promise of adequate support therefor; and
(3) whether the responsibility, character, and general fitness of the persons named as directors
in the certificate are such as to command the confidence of the community in the proposed bank.
History: (7700) RL s 3009; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444;
1995 c 171 s 34

50.02 [Repealed, 1995 c 171 s 70]

50.03 [Repealed, 1997 c 157 s 72]

50.04 BONDS OF TRUSTEES OR DIRECTORS.
Every director, before entering upon any duties, shall give bond to the state in a penal sum
of not less than $5,000, with sureties approved by the commissioner of commerce, conditioned
for the faithful discharge of those duties, and file the same with the commissioner of commerce.
An action may be maintained on this bond by any person aggrieved by breach of any of its
conditions, upon leave granted by any judge of the district court, for such damages as the plaintiff
may be entitled to, not exceeding its amount; and like successive actions may be maintained until
such amount is exhausted.
History: (7703) RL s 3012; 1976 c 181 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1
s 92; 1986 c 444; 1995 c 171 s 35

50.05 BONDS OF OFFICERS AND EMPLOYEES.
A savings bank shall be protected against loss by reason of the unlawful act of its officers
or employees by a surety bond in an amount approved by the board of directors and issued by a
solvent corporate surety in good standing authorized to do business in this state, or by a fidelity
insurance policy written by a solvent insurance company in good standing authorized to do
business in this state. The commissioner of commerce or the board of directors of the savings
bank may require an increase of the amount of the bond whenever either deems it necessary.
This section shall not require the bonding or insuring of officers or directors of a savings bank
not having active management or control of the savings bank or of employees of a savings bank
not holding positions of trust. Any bond given or contract of insurance secured shall be in favor
of the savings bank.
History: (7704) RL s 3013; 1986 c 444; 1995 c 171 s 36

50.06 DIRECTORS.
    Subdivision 1. Authority and qualifications. The business of every such stock savings bank
shall be managed by a board of not less than seven directors who are residents of this state. Each
director must file a written acceptance of the position before the director is authorized to act. The
persons named in the certificate of authorization shall constitute the first board.
    Subd. 2. Classes. In its certificate of incorporation, a corporation may establish classes of its
directors and the terms for each class. No class may be elected for a term of less than one year, or
more than five years, and the term of office of at least one class must expire each year.
    Subd. 3. Vacancies. Each vacancy shall be filled by the board as soon as practicable, at a
regular meeting thereof, except when a resolution reducing the number of directors named in its
charter to a number not less than seven shall have been incorporated into its bylaws, and a copy
thereof filed with the commissioner of commerce, in which case vacancies shall not be filled until
the number has been reduced to that specified in this resolution. The number may be increased
to any number specified in a like resolution, consented to, in writing, by the commissioner of
commerce.
    Subd. 4. Quorum to do business. A majority of the directors constitutes a quorum for
the transaction of business.
    Subd. 5. Action without meeting. Any action which might be taken at a meeting of the
board of directors may be taken without a meeting if done in writing signed by all of the directors.
History: (7705) RL s 3014; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1995 c 171
s 37; 2005 c 69 art 1 s 14

50.065 OFFICERS.
Every savings bank, except when otherwise specially provided, must have a president,
secretary, and treasurer, and may have one or more vice-presidents and other officers, as its
certificate of incorporation or bylaws may provide. The time and manner of their election and
their respective duties must be prescribed in the certificate of incorporation or in the bylaws. Only
one president of record may act on behalf of the savings bank; however, additional officers may
be titled president for purposes of empowering those additional officers to function as managing
officers of detached facilities of banks.
History: 2005 c 69 art 1 s 15

50.07 [Repealed, 1995 c 171 s 70]

50.08 [Repealed, 1995 c 171 s 70]

50.085 POWERS.
    Subdivision 1. Generally. Every savings bank incorporated pursuant to or operating under
this chapter shall be a body corporate; shall have all the powers enumerated, authorized, and
permitted by this chapter and other applicable law; shall have other rights, privileges, and powers
as may be incidental to or reasonably necessary or appropriate for the accomplishment of the
objects and purposes of the savings bank; and shall have those powers possessed by corporations
organized under chapter 302A.
    Subd. 2. Borrowing. A savings bank may borrow money and issue its obligations for the
borrowed money, including, but not limited to, obligations, bonds, notes, or other debt securities,
except as otherwise provided by this chapter or by rules of the commissioner of commerce. An
obligation, bond, note, or other debt security may include a written provision subordinating
the debt to claims of other creditors or of depositors. Borrowings may be secured by property
of the savings bank.
    Subd. 3. Facilitating organizations. A savings bank may become a member of, purchase
stock or securities in, deposit money with, deal with, make reasonable payments or contributions
to, or comply with any other conditions of membership or credit from any corporation or agency
of the United States or of this state, or of any other organization to the extent the corporation,
agency, or organization assists in furthering or facilitating the saving bank's purposes, powers, or
community responsibilities.
    Subd. 4. Loans, contracts, and leases. A savings bank may make, sell, purchase, invest
in, and participate or otherwise deal in loans and installment sale contracts and other forms of
indebtedness, and take any manner of security for the loans and contracts. A savings bank may
also acquire and lease or participate in the acquisition and leasing of personal property.
    Subd. 5. Savings, loans, investment. A savings bank may acquire deposits in the form of
demand accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts,
time deposits, money market deposit accounts, treasury tax and loan accounts, and other types of
deposits, and pay interest or dividends on those accounts, except that interest or dividends must
not be paid on demand deposit accounts. No capital stock savings bank shall accept deposits in a
sum exceeding 30 times the amount of its capital stock and its actual surplus.
    Subd. 6. Insurance of accounts. A savings bank may obtain and maintain insurance of its
deposit accounts by the Federal Deposit Insurance Corporation or any other federal agency
established for the purpose of insuring deposit accounts in savings banks.
    Subd. 7. Safe deposit boxes. A savings bank may maintain and let safes, boxes, or other
receptacles for the safekeeping of personal property upon agreed upon terms and conditions. This
subdivision does not supersede any inconsistent provision of statute.
    Subd. 8. Drafts. A savings bank may issue drafts and similar instruments drawn on the
savings bank to aid in effecting withdrawals and for other purposes of the savings bank; accept
for payment at a future date drafts drawn upon it by its customers; and issue, advise, or confirm
letters of credit authorizing holders to draw drafts upon it or its correspondents.
    Subd. 9. Fiscal agent. A savings bank may act as fiscal agent of the United States, and, when
so designated by the Secretary of Treasury, perform, under regulations the secretary prescribes, all
reasonable duties as fiscal agent of the United States as the secretary may require; and act as agent
for any instrumentality of the United States and as agent of this state and any instrumentality of it.
    Subd. 10. Servicing. A savings bank may service loans and investments for others.
    Subd. 11. Insurance agency. (a) A savings bank located and doing business in any place
where the population does not exceed 5,000 inhabitants as shown by the last preceding decennial
census may, directly or through a subsidiary, subject to any rules adopted by the commissioner,
act as an agent for any property-casualty, life, or other insurance company authorized by the
commissioner to do business in this state. Except as provided in paragraph (c), a savings bank
may not directly or through a subsidiary act as an agent for any property-casualty, life, or other
insurance company in any place where the population exceeds 5,000 inhabitants as shown by
the last preceding decennial census.
(b) To the extent allowed under paragraphs (a) and (c), a savings bank or its subsidiary
may solicit or sell insurance and collect premiums on policies issued by the insurance company
and may receive for these services the fees and commissions agreed upon between the savings
bank and the insurance company.
(c) A savings bank may, directly or through a subsidiary, act as an agent for any
property-casualty, life, or other insurance company in a place where the population exceeds 5,000
inhabitants as shown by the last preceding decennial census, if:
(1) the savings bank is a direct or indirect subsidiary of a state or federal savings association
or of a state or federal savings association holding company that, prior to August 1, 1995, had a
license from the commissioner to solicit or sell insurance of the type in question, or directly or
indirectly controlled a subsidiary that held such a license; or
(2) the savings bank is a successor to a state or federal savings association as a result of
merger, charter conversion, or otherwise, which association, prior to August 1, 1995, held a
license from the commissioner to solicit or sell insurance of the type in question, or directly or
indirectly controlled a subsidiary that held such a license.
    Subd. 12. Limited trusteeship. A savings bank may act as trustee or custodian of a
self-employed retirement plan under the federal Self-Employed Individual Tax Retirement Act of
1962, as amended, and of an individual retirement account under the federal Employee Retirement
Income Security Act of 1974, as amended, to the same extent permitted for state banks under
section 48.15. All funds held in a fiduciary capacity by the savings bank under the authority of
this subdivision may be commingled and consolidated for appropriate purposes of investment
if records reflecting each separate beneficial interest are maintained by the fiduciary unless the
responsibility is lawfully assumed by another appropriate party.
    Subd. 13. Escrow. A savings bank may engage in an escrow business.
    Subd. 14. Trust powers. Upon application to and approval by the commissioner of
commerce, a savings bank may act as trustee, executor, administrator, personal representative,
conservator, custodian, guardian, or in any other fiduciary capacity in which state banks, trust
companies, or other corporations are permitted to act, and receive reasonable compensation for it.
A savings bank that has qualified and obtained a certificate, as provided in section 48.37, may use
in its corporate name or title, in addition to the words "savings bank" or other words permitted
by law, the words "trust" or "trust company," and may display and make use of signs, symbols,
tokens, letterheads, cards, circulars, and advertising stating or indicating that it is authorized to
transact the business authorized by those sections, and a savings bank using the words "trust" or
"trust company" is not required to use the word "state" in its corporate name. A savings bank may
not invest, pursuant to section 50.1465, in a corporation that engages in activities described in this
subdivision, without first obtaining the approval of the commissioner of commerce.
    Subd. 15. Securing deposits. In addition to the authority conferred in subdivision 2, a
savings bank may pledge, hypothecate, assign or transfer, or create a lien upon or charge against
its assets to secure: (1) public funds, including money or deposits of the United States or any
instrumentality of it and of this state or any instrumentality of it; (2) money or deposits of a trustee
in bankruptcy; (3) money borrowed in good faith from other banks, trust companies, financial
institutions, or any financial agency created by act of Congress; (4) the acquisition of real estate to
be carried as an asset as provided in section 47.10; (5) a liability that arises from a transfer of a
direct obligation of, or obligations that are fully guaranteed as to principal and interest by, the
United States government or an agency of it that the savings bank is obligated to repurchase; (6)
money and deposits held in escrow; (7) money and deposits if acting as a corporate fiduciary; and
(8) treasury tax and loan accounts as provided in section 50.171.
    Subd. 16. Data processing services. A savings bank may provide data processing services to
others and act as a custodian of records for others on a for-profit basis and utilize data processing
services and place records of the savings bank for storage and safekeeping with another person
for a fee.
    Subd. 17. Electronic financial terminals. A savings bank may directly or indirectly acquire,
place, and operate, or participate in the acquisition, placement, and operation of, electronic
financial terminals and transmission facilities, in accordance with the requirements of sections
47.61 to 47.74.
    Subd. 18. Additional powers authorized for state banks. A savings bank may exercise
the powers that are specifically enumerated by law for banks authorized to do business under
chapter 48.
    Subd. 19. Parity provision. (a) In addition to other investments authorized by law and the
powers conferred by this chapter, and subject to the regulation of the commissioner of commerce,
a savings bank may, directly or through a subsidiary, undertake any activities, exercise any
powers, or make any investments that any state bank or national bank located or doing business in
this state may undertake, exercise, or make as of August 1, 1995.
(b) The commissioner may authorize a savings bank to undertake any activities, exercise any
powers, or make any investments that become authorized activities, powers, or investments after
August 1, 1995, for any state bank or national bank located or doing business in this state.
(c) Subject to rules adopted by the commissioner, and subject to the investment limits in
section 50.1465, a subsidiary of a savings bank may undertake any activities, exercise any powers,
or make any investments not authorized for any state bank or national bank but authorized as
of August 1, 1995, for any state bank or national bank subsidiary located and doing business in
this state.
(d) The commissioner may authorize a subsidiary of a savings bank to undertake any
activities, exercise any powers, or make any investments that become authorized activities,
powers, or investments after August 1, 1995, for any state bank or national bank subsidiary
located and doing business in this state.
(e) The commissioner at any time may limit any activity, power, or investment for any
savings bank or savings bank subsidiary under this subdivision or section 50.1465, subdivision
1 , clauses (2) and (3), for supervisory, legal, or safety and soundness reasons. A savings bank
aggrieved by an action of the commissioner under this subdivision may appeal the action, and the
proceedings shall be conducted pursuant to sections 14.63 to 14.69.
History: 1995 c 171 s 38; 1998 c 331 s 36; 2005 c 69 art 3 s 6

50.09 [Repealed, 1995 c 171 s 70]

50.10 [Repealed, 1995 c 171 s 70]

50.11 SECURITIES HELD FOR SAFEKEEPING; SAFE DEPOSIT BOXES;
LIMITATION OF LIABILITY.
A savings bank may receive for safekeeping for its depositors obligations of the United
States or its possessions or of a state or territory of the United States, or of any political
subdivision of any such state or territory, and it may provide for, and hire to, its depositors safe
deposit boxes in which to keep securities and valuable papers, but the liability of a savings bank
to any person or association of persons on account of hiring such safe deposit box or boxes
shall in no event exceed $20,000.
History: (7710) 1923 c 312 s 1; 1995 c 171 s 39

50.12 [Repealed, 1995 c 171 s 70]

50.13 REAL ESTATE.
A savings bank may purchase, hold, or convey land sold upon foreclosure of mortgages
owned by it, or upon judgments or decrees in its favor, or in settlement of debts, or received in
exchange as part of the consideration of real estate sold by it. Real estate so received in exchange
shall not be carried on the books of the bank at a price exceeding the cost of that exchanged,
less the cash payment, and all real estate so acquired shall be sold within ten years after its
acquirement, unless the time is extended by the commissioner of commerce on application of
the board of directors.
History: (7713) RL s 3021; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1995 c 171 s 40

50.14 AUTHORIZED SECURITIES.
    Subdivision 1. Definition. Except as it relates to the investment of trust funds by corporate
trustees or by individual trustees, the term "authorized securities" whenever used in the statutes
and laws of this state shall be understood as referring to the following described securities in
which the directors of any savings bank shall invest the money deposited therein and which at the
time of the purchase thereof are included in one or more of the following classes.
    Subd. 2. Class one. Class one shall be:
(a) the bonds or other interest bearing obligations of the United States, or in securities for the
payment of which and interest thereon the faith of the government is pledged;
(b) shares of an investment company registered under the Investment Company Act of 1940,
whose shares are registered under the Securities Act of 1933, provided that the only investments of
that company are in obligations of the United States government, in obligations fully guaranteed
by the United States government, or in obligations of instrumentalities of the United States
government such as the Federal National Mortgage Association, the Federal Home Loan Banks,
the Federal Land Banks, the Federal Intermediate Credit Banks, or the Banks for Cooperatives;
(c) the bonds or other interest bearing securities of the Dominion of Canada, provided
that the full faith and credit of the Dominion of Canada is pledged for the payment thereof and
provided further that they are payable in United States dollars within the United States.
    Subd. 3. Class two. Class two shall be the bonds or notes of any state which has not defaulted
in the payment of any bonded debt within ten years prior to the making of such investment; and
in the highway revenue bonds or certificates of such states payable out of irrevocably pledged
special revenues to be derived from gasoline or other motor fuel taxes or motor vehicle license
fees, provided that such revenues during the most recent fiscal year of such state (next preceding
the date of such investment) were equal to at least 1-1/4 times the interest, principal, and sinking
fund requirements of such revenue bonds or certificates during such fiscal year.
    Subd. 4. Class three. Class three shall be:
(a) the bonds, certificates of indebtedness, or other interest bearing obligations, payable out
of a levy of ad valorem taxes, of any county, city, town, or any school district, drainage district, or
other district, or of any board of any municipality, or of any public authority, created pursuant
to law for public purposes in Minnesota, without regard to any debt limits other than those in
section 475.53;
(b) the bonds, certificates of indebtedness or other interest-bearing obligations, payable out
of a levy of ad valorem taxes, of any county, city, town, or school, drainage or other district, or
public authority, created pursuant to law for public purposes in any state of the United States
other than Minnesota, provided that the total bonded indebtedness of the county, municipality,
district or authority, after deducting the amount of all sinking funds and of all revenue bonds or
certificates (including among revenue bonds and certificates those which pledge the full faith and
credit of the issuer, if the net revenues applicable to the payment of the bonds or certificates
during the three fiscal years immediately preceding the date of purchase exceeded by at least five
percent the amount required to pay principal and interest on those bonds or certificates during that
period), shall not exceed ten percent of its assessed value; and provided further that if the county,
municipality, district or authority is of any state other than Iowa, Wisconsin, North Dakota, or
South Dakota, it contains at least 3,500 inhabitants;
(c) the bonds, certificates or other interest-bearing obligations, payable out of special
revenues, of any county, city, town, or school, drainage, or other district, or public authority,
created pursuant to law for public purposes in any state of the United States, provided that:
(1) if the county, municipality, district or authority is of any state other than Minnesota, it
contains at least 3,500 inhabitants;
(2) the obligations were issued to finance the purpose of construction of or addition to
a public enterprise furnishing water, sewer, lighting, power, gas, or road facilities, from which
revenue is to be derived;
(3) the governing body or other legally constituted authority has covenanted or is required
by law to establish and maintain rates to yield sufficient revenue for the payment of operating
expenses, maintenance expenses, and principal and interest on the revenue obligations and to
pledge that revenue irrevocably for those purposes;
(4) at the date of investment the public enterprise has been in operation for at least three
years; and
(5) during the preceding three fiscal years its annual net earnings, after payment of operating
expenses and maintenance expenses, have been on the average at least 1-1/4 times the average
annual interest, principal, and sinking fund requirements on the revenue obligations during the
period from the end of its most recent fiscal year to the final maturity of the obligations; and
(d) the bonds or other interest-bearing obligations, payable from revenues other than ad
valorem taxes as contemplated in clause (a), validly issued by any state or insular possession of
the United States, or by any agency, instrumentality, municipality, or governmental or public
subdivision, district, corporation, commission, board, council, or authority of whatsoever kind,
created for public purposes by or pursuant to the laws of any state, provided that the bonds or
other interest-bearing obligations are at the time of purchase rated among the highest three quality
categories, not applicable to bonds or other interest-bearing obligations in default as to principal,
used by a nationally recognized rating agency for rating the quality of similar bonds or other
interest-bearing obligations, and are not rated lower by any other such agency.
    Subd. 5. Class four. (1) Class four shall be:
(a) notes or bonds secured by mortgages or trust deeds on unencumbered real estate, whether
in fee or in a leasehold of a duration not less than ten years beyond the maturity of the loan, in any
state of the United States, worth at least the amount loaned thereon;
(b) notes or bonds secured by mortgages or trust deeds on unencumbered real estate in
clause (1)(a) where the notes or bonds do not exceed 80 percent of the appraised value of the
security for the same, provided that the notes or bonds are payable in installments aggregating not
less than five percent of the original principal a year in addition to the interest; or, are payable
on a regular amortization basis in equal installments, including principal and interest, these
installments to be payable monthly in amounts that the debt will be fully paid in not to exceed 30
years if the security is nonagricultural real estate, and these installments to be payable annually or
semiannually in amounts that the debt will be fully paid in not to exceed 25 years if the security is
agricultural real estate. A construction loan is deemed amortized as required by this clause if the
first installment thereon is payable not later than 18 months after the date of the first advance in
the case of residential construction or not later than 36 months after the date of the first advance in
the case of nonresidential construction; and
(c) notes or bonds secured by mortgages or trust deeds on unencumbered real estate in
clause (1)(a) which are in an original principal amount of $100,000 or more and which do not
exceed 95 percent of the appraised value of the security for the same which may be payable in
the manner as the directors of the savings bank prescribe, provided that construction loans made
by a savings bank pursuant to this clause (1)(c) do not exceed in the aggregate five percent
of the assets of the savings bank.
(2) Class four investments shall be made only on report of a committee directed to investigate
the same and report its value, according to the judgment of its members, and its report shall be
preserved among the bank's records.
(3) Notwithstanding anything to the contrary in clause (1)(b), a savings bank organized
under the laws of this state may invest in notes or bonds secured by mortgages or trust deed where
the notes or bonds do not exceed 95 percent of the appraised value of the security for the same.
Except as modified herein, the other provisions of clause (1)(b) apply.
(4) For purposes of this subdivision, real estate is deemed unencumbered if the only existing
mortgage or lien against the real estate is a first mortgage lien in favor of the savings bank making
a second mortgage loan or if the total unpaid aggregate of all outstanding liens against the same
real estate does not exceed 80 percent of its appraised value.
(5) Renegotiable rate notes or bonds secured by mortgages or trust deeds where the notes or
bonds do not exceed 95 percent of the appraised value of the security for the same.
For the purposes of this clause, a renegotiable rate mortgage loan is a loan issued for a
term of three years to five years, secured by a mortgage maturing in not to exceed 30 years, and
automatically renewable at equal intervals after the original loan term which may be up to six
months shorter or longer than subsequent terms. The loan must be repayable in equal monthly
installments of principal and interest during the loan term, in an amount at least sufficient to
amortize a loan with the same principal and at the same interest rate over the remaining life
of the mortgage.
In the mortgage documents, the savings bank must grant to the borrower an option to renew
the loan for a new term, but not beyond the maturity date of the mortgage, at a new interest rate
which shall be the savings bank's current market rate of interest on similar loans determined 60
days before the due date of the loan: provided, that the maximum interest rate increase shall be
equal to one-half of one percent per year multiplied by the number of years in the loan term with a
maximum net increase of five percent over the life of the mortgage. Interest rate increases are
optional with the savings bank; net decreases from the previous loan term are mandatory.
The borrower may not be charged costs connected with the renewal of the loan.
Sixty days before the due date of the loan, the savings bank shall send a written notification
to the borrower containing the following information: (i) The date on which the entire balance of
borrower's loan is due and payable; (ii) a statement that the loan will be renewed automatically
by the savings bank at the rate specified in the notice unless the borrower pays the loan by
the due date; (iii) the amount of the monthly payment, calculated according to the new rate
determined at the time of notice; (iv) a statement that the borrower may prepay the loan without
penalty at any time after the original loan becomes due and payable; and (v) the name and phone
number of a savings bank employee who will answer the borrowers' questions concerning the
information in the notice.
An applicant for a renegotiable rate mortgage loan must be given, at the time an application
is requested, written disclosure materials prepared in reasonably simple terms that contain at
least the following information: (i) An explanation of how a renegotiable rate mortgage differs
from a standard fixed rate mortgage; (ii) an example of a renegotiable rate mortgage indicating
the maximum possible interest rate increase and monthly payment calculated on that rate at
the time of the first renewal; and (iii) an explanation of how the savings bank determines what
the rate will be at the end of each loan term.
(6) An investment in notes or bonds secured by mortgages or trust deeds on real estate in fee
or in a leasehold may exceed the 80 percent requirement in paragraph (1), clause (b), and the 95
percent requirement in paragraph (2), if the amount of the loan in excess of those limits is insured
or guaranteed by a private mortgage insurer that the Federal Home Loan Mortgage Corporation or
the Federal National Mortgage Association has determined to be a qualified private insurer.
    Subd. 6. Class five. Class five shall be notes secured by such bonds or mortgages, as the
bank under this section is authorized to invest in, but no such bond or mortgage shall be taken as
collateral security for more than its par value, nor shall the aggregate amount of securities taken
be less than the full amount loaned thereon, and no such loan shall be made for a longer time than
one year, nor to a greater amount to any one person than three percent of the total deposits of
the bank. No such bank shall loan in the aggregate, on the security specified in this paragraph,
more than one-fourth of its deposits.
    Subd. 7. Class six. Class six shall be the "eligible obligations" of "qualifying railroad
corporations," both as hereinafter defined.
(a) A "qualifying railroad corporation" shall be one which at the time of investment
(1) Shall have been incorporated under the laws of the United States or of any state thereof
or of the District of Columbia, and
(2) Shall own or operate within the United States not less than 500 miles of standard gauge
railroad lines exclusive of sidings, or shall have had, for its five preceding fiscal years, average
gross railway operating revenues of at least $10,000,000 annually, or shall own or operate railroad
terminal property located in a city within the United States having at least 200,000 population, and
(3) Shall not have been in default in the payment of any part of the principal or interest owing
by it upon any part of its funded indebtedness, at any times during its current fiscal year and its
five consecutive fiscal years immediately prior thereto, except that if the corporation shall have
been reorganized in receivership or bankruptcy within such period such corporation shall not have
been in such default since the effective date of reorganization, and
(4) Shall not have fixed interest obligations in excess of 60 percent of the total sum of (a)
its fixed interest obligations, (b) obligations, if any, bearing interest on a contingent basis, (c)
preferred stock, if any, at par or stated value, (d) common stock at par or stated value and (e)
earned surplus, and
(5) Shall have had net earnings (a) in its five fiscal years immediately preceding time of
purchase, of an average annual amount not less than 1-1/2 times the fixed charges of the year
immediately preceding time of purchase, and (b) in four of its five fiscal years immediately
preceding time of purchase and in its fiscal year immediately preceding time of purchase, not less
than the fixed charges of those respective years, except that if the corporation shall have been
reorganized in receivership or bankruptcy within such period, its net earnings for each year
shall have been not less than the fixed charges of the reorganized company. As used herein "net
earnings" shall be defined as gross operating and nonoperating income of a railroad corporation or
its predecessor corporation, minus traffic and transportation expenses, maintenance, depreciation,
rent of equipment and joint facilities, and other operating expenses, and taxes excluding income
and profits taxes. As used herein "fixed charges" shall be defined as interest on debt on which
there is an unqualified obligation to pay interests, leased line rentals and amortization of debt
discount and expense, except that if a corporation has been reorganized in receivership or
bankruptcy within five years prior to time of purchase "fixed charges" shall be the fixed charges of
the reorganized company.
(b) "Eligible obligations" shall be bonds, notes or other obligations which
(1) Shall have been issued by a qualifying railroad corporation, or shall have been assumed
or guaranteed as to principal and interest by a qualifying railroad corporation, and
(2) Shall bear interest at a fixed rate, and
(3) Shall have a definite maturity date, and
(4) Shall be secured by either (a) a lien upon railroad lines which shall be a first lien upon at
least two-thirds of the total mileage covered by such lien and upon at least 100 miles of main
lines or (b) a first mortgage or lien on railroad terminal property and assumed or guaranteed as to
principal and interest by two or more qualifying railroad corporations.
(c) No savings bank shall invest in securities of class six to an amount exceeding in the
aggregate 15 percent of its deposits; nor in securities of class six secured by lien upon railroad
lines, issued, guaranteed, or assumed by any one railroad corporation to an amount exceeding two
percent of its deposits; nor in securities of class six secured by lien upon any one railroad terminal
property to an amount exceeding one percent of its deposits.
The requirements set forth herein governing investments in securities under this subdivision
shall affect only those securities acquired after the effective date of Laws 1945, chapter 140.
    Subd. 8. Class seven. Class seven shall be farm loan bonds issued by any federal land bank,
or by a joint stock land bank in the Federal Reserve district in which Minnesota is situated, in
accordance with the provisions of an act of Congress of the United States of July 17, 1916, known
and designated as "The Federal Farm Loan Act," and acts amendatory thereto; stocks, bonds, and
obligations of the Federal Home Loan Banks established by act of Congress known as the Federal
Home Loan Bank Act approved July 22, 1932, and acts amendatory thereto; and bonds issued
by the federal land banks, federal intermediate credit banks, and the banks for cooperatives in
accordance with the provisions of an act of Congress of the United States known as the Farm
Credit Act of 1971, and acts amendatory thereto.
    Subd. 9. Class eight. Class eight shall be bankers' acceptances of the kind and character
following:
(a) Bankers acceptances of the kind and maturities made eligible by law for rediscount with
or purchase by Federal Reserve banks, providing the same are accepted or endorsed by a bank, or
trust company incorporated under the laws of this state; or by any bank or trust company in the
United States which is a member of the Federal Reserve System.
(b) Not more than 20 percent of the assets of any savings bank shall be invested in such
acceptances. Not more than seven percent of the aggregate amount credited to the depositors of
any savings bank shall be invested in the acceptances of or deposited with a trust and banking
company or with a national bank of which a trustee of such savings bank is a director.
    Subd. 10. Class nine. Class nine shall be railroad equipment trust obligations, comprising
bonds, notes or certificates, which when issued are secured by new standard gauge rolling stock
purchased or leased by any railroad incorporated in the United States or in Canada, or by the
receiver or trustee of any such railroad, or by any corporation engaged in the business of leasing
or furnishing railroad rolling stock, provided, that the entire issue of such obligations:
(a) Is required to be paid, in United States dollars within the United States, within 15 years
from date of issue in approximately equal annual or semiannual installments commencing not
later than three years after the date of issue, and
(b) Is of an aggregate amount not exceeding 80 percent of the cost of the equipment securing
such issue; but if issued originally in an amount which exceeded such 80 percent, then investment
in the obligations of such issue shall nevertheless be authorized as soon as or at any time after
all the unpaid obligations of such issue are reduced to or are less than 50 percent of the cost of
the equipment securing such issue.
    Subd. 11. Class ten. Class ten shall be the bonds of any corporation which at the time of
such investment is incorporated under the laws of the United States or any state thereof, or the
District of Columbia, and transacting the business of supplying electrical energy, or artificial gas,
or natural gas purchased from another corporation and supplied in substitution for or in mixture
with artificial gas, for light, heat, power and other purposes, or transacting any or all of such
business, provided that at least 75 percent of the gross operating revenues of any such corporation
are derived from such business and that not more than 15 percent of the gross operating revenues
are derived from any one kind of business other than supplying electricity or gas or electricity
and gas, and provided further that such corporation, if operating outside of Minnesota, is subject
to regulation by a public utilities commission or public utility commissioner or other similar
regulatory body duly established by the laws of the United States or the states or state in which
such corporation operates, subject to the following conditions:
(a) Such corporation shall have all franchises necessary to operate in the territory in which
at least 75 percent of its gross income is earned, which franchises either shall be indeterminate
permits or agreements with, or subject to the jurisdiction of, a public utilities commission or other
duly constituted regulatory body, or shall extend at least five years beyond the maturity of such
bonds, and such corporation shall file with the commissioner of commerce or make public each
year a statement and a report giving the income account covering the previous fiscal year and the
balance sheet showing in reasonable detail the assets and liabilities at the end of such fiscal year.
(b) The book value of the outstanding capital stock of such corporation shall at the time of
such investment be equal to at least two-thirds of its total funded debt.
(c) Such corporation shall have been in existence for a period of not less than eight fiscal
years and at no time within such period of eight fiscal years next preceding the date of such
investment shall said corporation have failed to pay promptly and regularly the matured principal
and interest of all its indebtedness direct, assumed or guaranteed, but the period of life of the
corporation, together with the period of life of any predecessor corporation or corporations from
which a substantial portion of its property was acquired by consolidation, merger, purchase, or as
a successor corporation, shall be considered together in determining the required period.
(d) For a period of five fiscal years next preceding the date of such investment the net
earnings of such corporation shall have been each year not less than twice the annual interest
charges on its total funded debt applicable to that period, and for such period the gross operating
revenues of any such corporation shall have averaged per year not less than $1,000,000.
(e) In determining the qualifications of any bond under this subdivision where a corporation
shall have acquired its property or any substantial portion thereof within five years immediately
preceding the date of such investment by consolidation, merger, purchase or as a successor
corporation, the gross operating revenues, net earnings and interest charges of the predecessor
or constituent corporations shall be consolidated and adjusted so as to ascertain whether the
requirements of paragraph (d) have been complied with.
(f) The gross operating revenues and expenses of a corporation for the purpose of this
subdivision shall be respectively the total amount earned from the operation of, and the total
expense of maintaining and operating, all property owned and operated or leased and operated
by such corporation, as determined by the system of accounts prescribed by the public utility
commission or other similar regulatory body having jurisdiction in the matter. The gross operating
revenues and expenses, as defined above, of subsidiary companies must be included, provided that
all the mortgage bonds and a controlling interest in stock or stocks of such subsidiary companies
are pledged as part security for the mortgage debt of the principal corporation.
(g) The net earnings of a corporation for the purpose of this subdivision shall be the balance
obtained by deducting from its gross operating revenues its operating and maintenance expenses,
taxes other than federal and state income taxes, rentals, depreciation and provision for renewals
and retirements of the physical assets of the corporation, and by adding to said balance its income
from securities and miscellaneous sources, but not, however, to exceed 15 percent of said balance.
The term "funded debt" shall be construed to mean all interest-bearing debt excepting therefrom
unsecured obligations maturing within one year of date of issue.
(h) Such bonds must be part of an original issue of not less than $1,000,000 and must be
mortgage bonds secured by a first or refunding mortgage secured by property owned and operated
by the corporation issuing or assuming them, or must be underlying mortgage bonds secured by
property owned and operated by the corporation issuing or assuming them, provided that such
bonds are to be refunded by a junior mortgage providing for their retirement and provided further
that the bonds under such junior mortgage comply with the requirements of this subdivision and
that such underlying mortgage either is a closed mortgage or remains open solely for the issuance
of additional bonds which are to be pledged under such junior mortgage. The aggregate principal
amount of bonds secured by such first or refunding mortgage plus the principal amount of all the
underlying outstanding bonds shall not exceed 60 percent of the value of the physical property
owned as shown by the books of the corporation and subject to the lien of such mortgage or
mortgages securing the total mortgage debt, provided that if a refunding mortgage, it must provide
for the retirement on or before the date of their maturity of all bonds secured by prior liens on the
property. No such savings bank shall loan upon or invest in bonds of such public utility companies
in an amount exceeding in the aggregate ten percent of its deposits and surplus, nor exceeding five
percent thereof in the bonds of any one public utility company.
    Subd. 12. Class eleven. Class eleven shall be the bonds of any corporation which at the time
of such investment is incorporated under the laws of the United States or any state thereof, or
the District of Columbia, and authorized to engage, and engaging, in the business of furnishing
telephone service in the United States, provided that such corporation is subject to regulation by
a public utility commission or similar federal or state regulatory body duly established by the
laws of the United States or the states or state in which such corporation operates, subject to
the following conditions:
(a) Such corporation shall have been in existence for a period of not less than eight fiscal
years and at no time within such period of eight fiscal years next preceding the date of such
investment shall said corporation have failed to pay promptly and regularly the matured principal
and interest of all its indebtedness direct, assumed or guaranteed, but the period of life of the
corporation, together with the period of life of any predecessor corporation or corporations from
which a substantial portion of its property was acquired by consolidation, merger, purchase or as a
successor corporation, shall be considered together in determining the required period; and such
corporation shall file with the commissioner of commerce or make public in each year a statement
and a report giving the income account covering the previous fiscal year and the balance sheet
showing in reasonable detail the assets and liabilities at the end of such fiscal year.
(b) The book value of the outstanding capital stock of such corporation shall at the time of
such investment be equal to at least two-thirds of its total funded debt.
(c) For a period of five fiscal years next preceding the date of such investment the net
earnings of such corporation shall have been each year not less than twice the annual interest
charges on its total funded debt applicable to that period, and for such period, the gross operating
revenues of any such corporation shall have averaged per year not less than $5,000,000.
(d) In determining the qualifications of any bond under this subdivision where a corporation
shall have acquired its property or any substantial portion thereof within five years immediately
preceding the date of such investment by consolidation, merger, purchase or as a successor
corporation, the gross operating revenues, net earnings and interest charges of the predecessor
or constituent corporations shall be consolidated and adjusted so as to ascertain whether the
requirements of paragraph (c) have been complied with.
(e) The gross operating revenues and expenses of a corporation for the purpose of this
subdivision shall be respectively the total amount earned from the operation of, and the total
expense of maintaining and operating, all property owned and operated or leased and operated
by such corporation, as determined by the system of accounts prescribed by the public utility
commission or similar federal or state regulatory body having jurisdiction in the matter.
(f) The net earnings of a corporation for the purpose of this subdivision shall be the balance
obtained by deducting from its gross operating revenues its operating and maintenance expenses,
taxes, other than federal and state income taxes, rentals, depreciation and provision, for renewals
and retirements of the physical assets of the corporation, and by adding to said balance its income
from securities and miscellaneous sources, but not, however, to exceed 15 percent of said balance.
The term "funded debt" shall be construed to mean all interest-bearing debt excepting therefrom
unsecured obligations maturing within one year of date of issue.
(g) Such bonds must be a part of an original issue or of a subsequent series of bonds of the
aggregate amount of not less than $5,000,000, both the original issue and the subsequent series
being protected by the same mortgage provisions, and must be secured by a first or refunding
mortgage, and the aggregate principal amount of bonds secured by such first or refunding
mortgage plus the principal amount of all the underlying outstanding bonds shall not exceed 60
percent of the value of the property, real and personal, owned absolutely as shown by the books of
the corporation and subject to the lien of such mortgage, provided that if a refunding mortgage,
it must provide for the retirement of all bonds secured by prior liens on the property. Not more
than 33-1/3 percent of the property constituting the specific security for such bonds may consist
of stock or unsecured obligations of affiliated or other telephone companies, or both. No such
savings banks shall loan upon or invest in bonds of such telephone companies in an amount
exceeding in the aggregate ten percent of its deposits and surplus, nor exceeding five percent
thereof in the bonds of any one telephone company.
    Subd. 13. Class twelve. Class twelve shall be: (a) bonds and obligations of the Federal
Home Loan Banks established by Act of Congress known as the Federal Home Loan Bank Act,
approved July 23, 1932, and Acts amendatory thereto, and in bonds and obligations of the Home
Owners' Loan Corporation established by Act of Congress known as the Home Owners' Loan
Act of 1933, and Acts amendatory thereto;
(b) certificates of deposits of any bank or trust company, however organized, the deposits of
which are insured in whole or in part by the Federal Deposit Insurance Corporation, to the extent
that such certificates of deposit are fully insured;
(c) loans secured by its own passbooks or other evidences of indebtedness;
(d) shares, accounts, or certificates of any savings association, however organized, the
accounts of which are insured in whole or in part by the federal savings and loan insurance
corporation, to the extent that such shares, accounts, or certificates are fully insured.
    Subd. 14. Trust or estate assets. (a) The district court, upon petition of a trustee under a will
or other instrument may, if the trust does not otherwise provide, authorize the trustee to invest
the income or principal of the trust fund in policies of life or endowment insurance or annuity
contracts issued by a life insurance company duly authorized to transact business in the state, on
the life of any beneficiary of the trust or on the life of any person in whose life such beneficiary
has an insurable interest.
(b) The district court, upon the application of a guardian, may authorize the guardian to invest
income or principal of the estate of the ward in policies of life or endowment insurance or annuity
contracts, issued by a life insurance company duly authorized to transact business in the state, on
the life of the ward or on the life of a person in whose life the ward has an insurable interest.
    Subd. 15. Class thirteen. Class thirteen shall be obligations payable in United States dollars
issued or fully guaranteed by International Bank for Reconstruction and Development.
    Subd. 16. Class fourteen. Class fourteen shall be obligations payable in United States
dollars issued or fully guaranteed by the Asian Development Bank.
    Subd. 17. Class fifteen. Class fifteen shall be obligations payable in United States dollars
issued or fully guaranteed by the Inter-American Development Bank.
    Subd. 18. Class sixteen. Class sixteen shall be obligations payable in United States dollars
issued or fully guaranteed by the African Development Bank.
History: (7714) RL s 3022; 1907 c 468 s 7,8; 1913 c 124 s 1; 1913 c 506 s 1; 1917 c 88 s 1;
1919 c 181 s 1; 1923 c 421 s 1; 1927 c 368 s 1; 1927 c 422 s 1; 1931 c 296 s 1; 1933 c 256 s 1,2;
1933 c 307 s 1; 1933 c 368 s 1; Ex1934 c 50 s 1; 1939 c 105 s 1; 1939 c 141 s 1; 1939 c 409 s 1;
1941 c 380 s 1-3; 1943 c 197 s 1; 1943 c 635 s 6; 1945 c 140 s 1; 1951 c 344 s 1; 1953 c 261 s
1; 1953 c 496 s 1; 1957 c 601 s 22; 1959 c 88 s 15; 1959 c 601 s 1; 1961 c 298 s 5,6; 1963 c
153 s 10; 1965 c 46 s 2; 1965 c 315 s 1; 1969 c 51 s 1; 1973 c 123 art 5 s 7; 1973 c 426 s 1;
1973 c 497 s 2; 1974 c 27 s 1; 1974 c 64 s 1-3; 1976 c 2 s 33; 1977 c 5 s 1; 1978 c 674 s 11;
1980 c 524 s 1; 1980 c 551 s 1; 1980 c 599 s 2; 1980 c 614 s 123; 1980 c 618 s 12; 1Sp1981 c 4
art 2 s 6; 1983 c 289 s 114 subd 1; 1984 c 382 s 2; 1984 c 655 art 1 s 92; 1986 c 444; 1988 c
719 art 5 s 84; 1989 c 329 art 13 s 20; 1990 c 480 art 9 s 2; 1995 c 171 s 41-44; 1995 c 189
s 8; 1995 c 202 art 1 s 25; 1996 c 277 s 1; 2003 c 2 art 4 s 1

50.145 AUTHORIZED INVESTMENTS.
Any savings bank subject to the supervision of the commissioner of commerce of the state of
Minnesota shall in addition to other investments authorized by law have the power to purchase
and hold as investments such bonds and securities as are legal investments for state banks and
trust companies in Minnesota, but subject however to any limitation in such power that may be
imposed by the commissioner of commerce, and the total amount of the investments made by any
bank pursuant to this section and held at any one time shall not exceed 20 percent of the deposit
liability of such bank, and not to exceed three-fourths of one percent of the deposit liability of
such bank may be invested pursuant hereto in the securities or obligations of any one obligor.
History: 1947 c 78 s 1; 1959 c 88 s 16; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92;
1995 c 171 s 45

50.146 AUTHORIZED INVESTMENTS; CORPORATIONS.
    Subdivision 1. General authority. In addition to other investments authorized by law,
a savings bank may invest in the following:
(a) The preferred stocks of any corporation organized under the laws of the United States
or of any state, except banks, bank holding companies and trust companies, provided the net
earnings of such corporation available for its fixed charges for five fiscal years next preceding the
date of investment shall have averaged per year not less than 1-1/2 times the sum of its annual
fixed interest charges, if any, its annual maximum contingent interest, if any, and its annual
preferred dividend requirements; and during either of the last two years of such period, such net
earnings shall have been not less than 1-1/2 times the sum of its fixed interest charges, if any,
contingent interest, if any, and preferred dividend requirements for such year.
(b) The common stocks of any corporation organized under the laws of the United States
or of any state, except banks, bank holding companies and trust companies, provided such
stocks are registered on a national securities exchange, and such corporation shall have earned
and paid cash dividends on its common stocks in each year for a period of ten fiscal years next
preceding the date of investment.
(c) The stocks and bonds, notes, debentures or any other obligation of any corporation
organized under the laws of the United States or of any state, except the stock of banks, bank
holding companies and trust companies located in the Ninth Federal Reserve District, provided
such investment shall be made with such prudence, discretion, and intelligence as will protect the
safety of the principal of such investment as well as the income to be derived therefrom.
    Subd. 2. General limitations. No investment shall be made by a savings bank pursuant to
subdivision 1 in any corporation if the total amounts so invested by it exceeds an amount equal to
15 percent of its assets, or if the total investment in any one corporation exceeds (1) in amount,
one-half of one percent of the assets of the savings bank, or (2) in number of shares, one percent
of the total issued and outstanding shares of stock of such corporation, or if the total investment
pursuant to the provisions of paragraph (c) of subdivision 1 exceeds an amount equal to three
percent of the assets of the savings bank, nor shall any investment be made in any corporation
with assets of less than ten million dollars.
    Subd. 3. Specific limitation; domestic savings banks. Investments made pursuant to
subdivision 1 shall be limited to savings banks organized under the laws of this state.
History: 1959 c 120 s 1-3; 1965 c 46 s 1; 1969 c 51 s 2,3; 1995 c 171 s 46

50.1465 AUTHORIZED INVESTMENTS; SERVICE CORPORATIONS.
    Subdivision 1. Generally. In addition to other investments authorized by law, a savings bank
may invest in the capital stock, obligations, or other securities of any corporation organized under
the laws of this state if all or a majority of the capital stock of the corporation is owned by the
savings bank, and if substantially all of the activity of the corporation consists of:
(1) activities in which the savings bank could engage directly;
(2) activities in which a state bank or national bank, or a subsidiary of a state bank or national
bank, is authorized to engage as of August 1, 1995; and
(3) activities in which any state bank or national bank becomes authorized to engage after
August 1, 1995, which are authorized by the commissioner.
    Subd. 2. Restriction. No savings bank may make any investment under subdivision 1 in
a subsidiary that engages primarily in activities in which the savings bank could not engage
directly if its aggregate outstanding investment under this section in all subsidiaries that engage in
activities in which the savings bank could not engage directly exceeds 25 percent of the capital
stock and surplus of the savings bank.
History: 1979 c 321 s 2; 1995 c 171 s 47

50.147 AUTHORIZED INVESTMENTS; STUDENT LOANS.
In addition to other investments authorized by law, a savings bank organized under the laws
of this state may make student loans. Such loans may be secured or unsecured, and the lender may
require a comaker or guaranty under a governmental student loan guarantee plan, or both. The
borrower shall certify to the lender that the proceeds of the loan are to be used by a student solely
for the payment of expenses of college, university or vocational education.
History: 1969 c 658 s 1

50.148 AUTHORIZED INVESTMENTS; MANUFACTURED HOME LOANS.
In addition to other investments authorized by law, a savings bank organized and operated
pursuant to this chapter, may make loans upon the security of manufactured homes, and any
equipment installed or to be installed therein, in an amount not exceeding $30,000 repayable in
installments, and the installment payments shall not exceed 15 years and 32 days from the date of
the loan, notwithstanding that such loan is required to be repaid in installments or that the loan is
secured by mortgage, pledge, or other collateral. Section 50.1485, subdivision 2, applies to all
manufactured home loans made pursuant to the authority granted by this section. The authority
granted by this section shall not extend to loans which finance the acquisition of inventory by
a manufactured home dealer. A savings bank may purchase or invest in notes, bonds and retail
installment sales contracts secured by or constituting first liens upon manufactured homes.
History: 1973 c 426 s 2; 1977 c 5 s 2; 1981 c 365 s 9; 1995 c 171 s 48

50.1485 LENDING AUTHORITY.
    Subdivision 1. Generally. In addition to other investments authorized by law, a savings bank
may make, purchase, or invest in:
(a) loans secured by the pledge of policies of life insurance, the assignment of which is
properly acknowledged by the insurer;
(b) consumer loans, which may be unsecured or secured by personal or real property.
Consumer loans include, but are not limited to, closed-end installment loans, single payment
loans, nonamortizing loans, open-end revolving line of credit loans, credit card loans and
extensions of credit, and overdraft protection loans. For the purpose of this paragraph, "consumer
loan" means a loan made by the savings bank in which: (1) the debtor is a person other than an
organization; (2) the debt is incurred primarily for personal, family, or household purpose; and (3)
the debt is payable in installments or a finance charge is made;
(c) secured and unsecured loans to organizations and natural persons for business or
commercial purposes. For the purpose of this paragraph, "organization" means a corporation,
government or governmental subdivision, or agency, trust, estate, partnership, limited liability
partnership, limited liability company, joint venture, cooperative, or association. "Business or
commercial purpose" means a purpose other than personal, family, household, or agricultural
purpose;
(d) secured and unsecured loans for agricultural purposes. For the purpose of this paragraph,
"agricultural purpose" means a purpose relating to the production, harvest, exhibition, marketing,
transportation, processing, or manufacture of agricultural products. "Agricultural products"
includes agricultural, horticultural, viticultural, and dairy products, livestock, wildlife, poultry,
bees, and forest products, and products raised or produced on farms, including processed or
manufactured products;
(e) credit sale contracts, which means a sale of goods, services, or an interest in land in which
credit is granted by a seller who regularly engages as a seller in credit transactions of the same
kind, and the debt is payable in installments or a finance charge is made;
(f) loans on the security of deposit accounts;
(g) real estate loans, subject to the conditions applicable to savings associations under section
51A.38 and Minnesota Statutes 1994, section 51A.385. "Real estate loans" which include a loan
or other obligation secured by a first lien on real estate in fee or in a leasehold extending or
renewable automatically for a period of at least ten years beyond the date scheduled for the final
principal payment of the loan or obligation, or a transaction out of which a first lien or claim is
created against the real estate, including the purchase of the real estate in fee by a savings bank
and the concurrent or immediate sale of it on installment contract;
(h) secured or unsecured loans for the purpose of repair, improvement, rehabilitation,
or furnishing of real estate;
(i) loans for the purpose of financing or refinancing an ownership interest in certificates
of stock, certificates of beneficial interest, or other evidence of an ownership interest in, or a
proprietary lease from, a corporation, limited liability company, trust, limited liability partnership,
or partnership formed for the purpose of the cooperative ownership of real estate, secured by the
assignment or transfer of certificates or other evidence of ownership of the borrower;
(j) loans guaranteed or insured, in whole or in part, by the United States or any of its
instrumentalities;
(k) issuance of letters of credit or other similar arrangements; and
(l) any other type of loan authorized by rules adopted by the commissioner.
    Subd. 2. Loans and extensions of credit. (a) A savings bank may extend credit and make
loans under section 47.59 on the same terms and subject to the same conditions as apply to other
lenders under that chapter. A person may enter into a credit sale or service contract for sale to a
savings bank, and a savings bank may purchase and enforce the contract, under the terms and
conditions set forth in section 47.59, subdivisions 1 and 4 to 14.
(b) A savings bank may make or purchase extensions of credit authorized by sections
47.20, subdivision 1, 3, or 4a; 47.204; 47.21; 47.60; 48.153 to 48.155; 48.185; 48.195; 53C.01
to 53C.14; 59A.15; 334.01; 334.011; 334.012, and any other applicable law. The extensions of
credit or purchases of extensions of credit may, but need not, be made under those sections in
lieu of the authority set forth in this subdivision, and if so, are subject to those sections, and not
this subdivision. A savings bank may also charge an organization any 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 the savings bank elects
to make under section 334.01, subdivision 2, 334.011, or 334.012, chapter 334 does not apply to
extensions of credit made pursuant to this section or the sections mentioned in this subdivision.
    Subd. 3. Limit on total liabilities. The total liabilities to a savings bank, as principal,
guarantor, or endorser of an individual, including the liabilities of a corporation which the
individual owns or controls a majority interest in, a partnership, limited liability partnership,
limited liability company, or unincorporated association, and in case of a corporation, of all
subsidiaries of it in which the corporation owns or controls a majority interest, shall never exceed
the limit provided for state banks under section 48.24.
    Subd. 4. Real estate loans. In the case of any investment made by a savings bank in a loan
secured by a mortgage on real property, including a real estate loan, in the event the ownership
of the real estate security or any part of it becomes vested in a person other than the party or
parties originally executing the security instruments, and provided there is not an agreement in
writing to the contrary, a savings bank may, without notice to the other party or parties, deal with
the successor or successors in interest with reference to the mortgage and the debt secured in the
same manner as with the party or parties, and may forbear to sue or may extend time for payment
of or otherwise modify the terms of the debt secured, without discharging or in any way affecting
the original liability of the party or parties upon the debt secured.
    Subd. 5. Leases of personal property. A savings bank may acquire and lease or participate
in the acquisition and leasing of personal property to customers, and may incur additional
obligations incidental to becoming an owner and lessor of the property to the same extent, and
subject to the same conditions, as state banks under section 48.152.
History: 1995 c 171 s 49,69; 1996 c 414 art 1 s 19; 1997 c 157 s 67; 1998 c 260 s 1;
2005 c 19 s 1

50.15 [Repealed, 1995 c 171 s 70]

50.153 [Repealed, 1969 c 51 s 4]

50.155 PURCHASE OF CERTAIN MORTGAGE LOANS.
Savings banks that are subject to the supervision of the commissioner of commerce are
authorized to make or purchase loans secured by real estate mortgage the payment of which is
guaranteed in whole or in part by the United States or any instrumentality thereof under the
Servicemen's Readjustment Act of 1944 and amendments thereof provided that the unguaranteed
portion of such loan does not exceed 70 percent of the appraised value of the security.
History: 1945 c 236 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1995 c 171 s 50

50.157 [Repealed, 1982 c 473 s 30]

50.16 [Repealed, 1995 c 171 s 70]

50.161 [Repealed, 1976 c 196 s 8]

50.162 [Repealed, 1976 c 196 s 8]

50.163 [Repealed, 1976 c 196 s 8]

50.164 [Repealed, 1976 c 196 s 8]

50.165 [Repealed, 1976 c 196 s 8]

50.17 DEPOSITS, DIVIDENDS, INTEREST, BONUS, BENEFITS.
    Subdivision 1. Deposit accounts. A deposit account with a savings bank is subject to a lien
for the payment of charges that may accrue on the account under this chapter. A deposit account is
subject to a debt offset for the debts of the deposit account holder to the savings bank. Deposit
accounts may not be assessed for any debts or losses of the savings bank.
    Subd. 2. Interest. The savings bank shall determine the rate and amount of interest, if
any, to be paid on or credited to deposit accounts. The savings bank may establish reasonable
classifications of accounts based on the types of accounts, the length of time accounts are
continued in effect, the size of initial deposits into accounts, the minimum balances of accounts
required for payment of interest, the frequency and extent of the activity on accounts, or location
of the account, or on other classifications the savings bank considers appropriate.
    Subd. 3. Deposit accounts. Deposit accounts must be represented only by the account of
each deposit account holder on the books of the savings bank, and the accounts or any interest is
transferable only on the books of the savings bank and upon proper written application by the
transferee. The savings bank may treat the holder of record of a deposit account as the owner of
it for all purposes without being affected by any notice to the contrary unless the savings bank
has acknowledged in writing notice of a pledge of the deposit account. A savings bank may
also offer negotiable time deposits.
    Subd. 4. Deposit accounts for minors. A savings bank may issue deposit accounts to or
in the name of a minor, which shall be held for the exclusive right and benefit of the minor,
free from the control or lien of all other persons, except creditors, and, together with interest or
dividends, shall be paid to the minor. The minor's receipt, draft, negotiable order of withdrawal, or
acquittance in any form, is sufficient release and discharge of the savings bank for withdrawal,
until a guardian appointed in this state for the minor has delivered a certificate of appointment
to the savings bank.
    Subd. 5. School or institution thrift savings plan. A savings bank may contract with the
proper authorities of any public or nonpublic elementary or secondary school or institution of
higher learning, or any public or charitable institution caring for minors, for the participation
and implementation by the savings bank in any school or institution thrift or savings plan, and
it may accept savings accounts at the school or institution, either by its own collector or by
any representative of the school or institution which becomes the agent of the association for
this purpose.
    Subd. 6. P.O.D. deposits. When a deposit is made in the names of two or more persons
jointly, or by a person payable on death (P.O.D.) to another, or by a person in trust for another, the
rights of the parties and the savings bank are determined by sections 524.6-201 to 524.6-214.
    Subd. 7. Deposit accounts in joint tenancy. The pledge or hypothecation to a savings bank
of all or part of a deposit account in joint tenancy signed by a tenant or tenants whether minor
or adult, upon whose signature or signatures withdrawals may be made from the account must,
unless the terms of the deposit account provide specifically to the contrary, be a valid pledge and
transfer to the savings bank of that part of the account pledged or hypothecated, and must not
operate to sever or terminate the joint and survivorship ownership of all or any part of the account.
    Subd. 8. Fiduciary deposits. A savings bank may accept deposits in the name of any
administrator, executor, custodian, conservator, guardian, trustee, or other fiduciary for a named
beneficiary or beneficiaries. The fiduciary may open, make additions to, and withdraw the account
in whole or in part. The withdrawal value of the account, and interest, or other rights relating to it
may be paid or delivered, in whole or in part, to the fiduciary without regard to any notice to the
contrary as long as the fiduciary is living. The payment or delivery to the fiduciary or a receipt or
acquittance signed by the fiduciary to whom the payment or any delivery of rights is made is a
valid and sufficient release and discharge of a savings bank for the payment or delivery so made.
Whenever a person holding an account in a fiduciary capacity dies and no written notice of the
revocation or termination of the fiduciary relationship has been given to a savings bank and the
savings bank has no written notice of any other disposition of the beneficial estate, the withdrawal
value of the account, and interest or dividends, or other rights relating to it may, at the option
of a savings bank, be paid or delivered, in whole or in part, to the beneficiary or beneficiaries.
The payment or delivery to the beneficiary, beneficiaries, or designated person, or a receipt or
acquittance signed by the beneficiary, beneficiaries, or designated person, for the payment or
delivery is a valid and sufficient release and discharge of a savings bank for the payment or
delivery. This section does not apply to P.O.D. accounts under sections 524.6-201 to 524.6-214.
    Subd. 9. Payments to guardian. When a deposit account is held in a savings bank by a
person who becomes incompetent and an adjudication of incompetency has been made by a court
of competent jurisdiction, the savings bank may pay or deliver the withdrawal value of the deposit
account and any earnings that may have accrued on it to the guardian for the person upon proof of
appointment and qualification. If the savings bank has received no written notice and is not on
actual notice that the deposit account holder has been adjudicated incompetent, it may pay or
deliver the funds to the holder in accordance with the provisions of the deposit account contract,
and the receipt or acquittance of the holder is a valid and sufficient release and discharge of the
savings bank for the payment or delivery so made.
    Subd. 10. Investment by certain entities. Administrators, executors, custodians,
conservators, guardians, trustees, and other fiduciaries of every kind and nature, insurance
companies, business and manufacturing companies, banks, trust companies, credit unions,
and other types of similar financial organizations, charitable, educational, eleemosynary, and
public corporations authorized by law, funds, and organizations, are specifically authorized and
empowered to invest funds held by them, without any order of any court, in deposit accounts of a
savings bank, and the investments are considered legal investments for the funds.
    Subd. 11. Service charges. A savings bank may contract with depositors for service charges
in connection with the opening and maintaining of deposit accounts and for providing services
ancillary to the opening and maintaining of deposit accounts. The service charges are a matter of
contract between the savings bank and the depositor, and the contract will be fully enforceable
in accordance with its stated terms.
History: (7717) RL s 3025; 1907 c 468 s 9; 1951 c 411 s 1; 1953 c 82 s 1; 1957 c 601
s 23; 1986 c 444; 1995 c 171 s 51

50.171 TREASURY TAX AND LOAN ACCOUNTS OF THE UNITED STATES.
A savings bank shall have the power and authority to accept and maintain treasury tax
and loan accounts of the United States and to pledge collateral to secure the treasury tax or
loan accounts, in accordance with the regulations of the Department of the Treasury of the
United States.
History: 1978 c 747 s 1

50.175 NEGOTIABLE ORDER OF WITHDRAWAL ACCOUNT.
    Subdivision 1. Authorization. Any savings bank organized and operating pursuant to this
chapter, may establish negotiable order of withdrawal accounts on which it may or may not pay
interest or dividends. Withdrawals from the accounts are subject to the right of the savings bank to
require the depositor or account holder to give notice of an intended withdrawal not less than 14
days before the withdrawal is made, even though in practice the notice is not regularly required
and the depositor or account holder is allowed to make withdrawals by negotiable or transferable
instruments for the purpose of making payments to third persons or otherwise.
    Subd. 2. Reserves. A savings bank shall maintain reserves in the form of liquid assets at
a level reasonably necessary to meet anticipated withdrawals, commitments, and loan demand.
Reserves shall be in cash, cash items in process of collection, short term obligations of or demand
balances with other insured financial institutions in the United States and its territories, or short
term, direct obligations of or guaranteed by the United States government. Obligations must
mature within one year to be considered short term. The commissioner may prescribe the required
amount of reserves in relation to liabilities for any individual savings bank from time to time
based upon examination findings or other reports relating to the savings bank that are available to
the commissioner. Reserves for an individual savings bank as prescribed by the commissioner
pursuant to this section shall be enforced in accordance with sections 46.24 and 46.30 to 46.33.
History: 1977 c 104 s 1; 1981 c 182 s 3; 1982 c 424 s 130; 1995 c 171 s 52; 1997 c 187 art
3 s 9

50.18 METHOD OF DETERMINING SURPLUS.
In determining the percent of surplus held by any such bank, its interest paying stock, notes,
and bonds shall be estimated at their market value; notes and bonds having not more than six
months' unpaid interest at their face, and real estate not above cost. As to stocks, bonds, and notes
having more than six months accrued and unpaid interest, and all other investments not herein
enumerated, their value shall be determined by the commissioner of commerce, who may change
their valuation from time to time.
History: (7718) RL s 3026; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92

50.19 REPORTS TO THE COMMISSIONER.
Each savings bank shall submit the reports required of state banks pursuant to section 48.48
and such other information as the commissioner of commerce may require.
History: (7719) RL s 3027; 1907 c 468 s 10; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s
92; 1995 c 171 s 53

50.20 REPORT TO SHOW LIABILITIES.
This report shall also state all its liabilities on the morning of January first, and show:
(1) the amount due the depositors, including any dividend to be credited to them for the
half-year ending on that day; and
(2) all other debts or claims against it which are or may be a charge upon its assets.
It shall also state the amount deposited during the previous year and the amounts withdrawn
during the same period; the whole amount of interest or profits received or earned and the amount
of dividends or interest credited to depositors; the number of accounts opened or reopened; the
number of accounts closed during the year; and the number of open accounts at the end of the
year; and such other information as may be required by the commissioner of commerce.
History: (7720) RL s 3028; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92

50.21 [Repealed, 1995 c 171 s 70]

50.212 SAVINGS BANK REGULATION.
    Subdivision 1. Commerce Department to control. The commissioner of commerce shall
have charge of the execution of all laws relating to the savings banks chartered under the laws of
Minnesota and relating to the business of those savings banks.
    Subd. 2. Commissioner supervision. The commissioner shall supervise the books, records,
and affairs of all savings banks doing business in the state as provided in section 46.04.
    Subd. 3. Official communications referred to directors. Each official communication from
the commissioner to a savings bank relating to any examination conducted by the commissioner
or containing suggestions and recommendations as to the conduct of business of the savings bank,
shall be submitted by the officer receiving it to the board of directors at the next meeting of
the board and noted in the meeting minutes.
History: 1995 c 171 s 55

50.22 [Repealed, 1995 c 171 s 70]

50.23 [Repealed, 1997 c 157 s 72]

50.24 EXISTING BANKS CONFORMED; EXCEPTIONS.
The powers, privileges, and duties conferred and imposed on any savings corporation
heretofore organized by its charter or act of incorporation, are hereby abridged, enlarged, or
modified, as each case may require, so that each such charter or act shall be conformed to the
provisions hereof; and every such savings corporation shall possess the powers and privileges,
and be subject to the duties, liabilities, and restrictions herein prescribed; but investments
heretofore lawfully made shall be unaffected by this section, if the same be conformed to the
provisions of this chapter as rapidly as may be, in the ordinary course of business, without loss or
embarrassment to the bank and its patrons; provided, that savings banks organized and existing
prior to the passage of Laws 1879, chapter 109, may continue under the laws then in force
applicable thereto and amendatory thereof until they reorganize hereunder, unaffected by any
provision in Revised Laws 1905, repealing the same, expressly or by implication.
History: (7724) RL s 3032

50.245 BRANCHES; ACQUISITIONS.
    Subdivision 1. Authority for branch offices. A savings bank may establish any number of
detached facilities as may be approved by the commissioner of commerce pursuant to sections
47.51 to 47.57. The savings bank shall not change the location of a detached facility without
prior written approval of the commissioner of commerce. A savings bank may establish a loan
production office, without restriction as to geographical location, upon written notice to the
commissioner of commerce.
    Subd. 2. Authority for branch offices in other states. The authorization contained in
subdivision 1 is in addition to the authority granted savings banks in section 47.52. A savings
bank chartered in this state, whether or not the subsidiary of a savings bank holding company, has
the same authority as a bank to conduct interstate mergers affecting interstate branching under
section 49.411. The merger may be between banks and with other banks or savings banks.
    Subd. 3. Interstate acquisitions. A savings bank chartered in this state and a savings
bank holding company with its principal offices in this state may acquire control of a financial
institution chartered in any other state or a financial institution holding company with principal
offices in any other state. A savings bank chartered in any other state and a savings bank holding
company with principal offices in any other state may acquire control of a savings bank chartered
in this state or a savings bank holding company with principal offices in this state.
    Subd. 4. Procedural requirements. Procedural requirements contained in sections 48.90 to
48.99 apply to interstate acquisitions by savings banks and savings bank holding companies.
    Subd. 5. Definitions. For the purpose of this section, the terms defined in this subdivision
have the meanings given them.
(a) "Financial institution" means a bank, savings bank, savings association, or trust company,
whether chartered under the laws of this state, another state or territory, or under the laws of the
United States.
(b) "Loan production office" means a place of business at which a savings bank provides
lending if the loans are approved at the main office or detached facility of the savings bank, but at
which a savings bank may not accept deposits except through a remote service unit.
(c) "Remote service unit" means an electronic financial terminal as defined in section 47.61.
    Subd. 6.[Repealed by amendment, 1997 c 157 s 34]
History: 1980 c 514 s 1; 1995 c 171 s 58; 1996 c 414 art 1 s 20; art 3 s 8; 1997 c 157 s 34

50.25 BANKS ORGANIZED UNDER THE LAWS OF MINNESOTA; CAPITAL STOCK;
AMENDMENT OF ARTICLES.
A corporation which was incorporated and organized under the laws of Minnesota for the
purpose of doing a savings bank business, may have capital stock of $100 per share, par value;
provided, the minimum required capital shall not be less than $500,000. The capital funds of
a proposed savings bank shall be in such greater amount which the commissioner considers
necessary, having in mind the deposit potential for such a proposed bank and current industry
standards of capital adequacy.
History: (7725) 1911 c 332 s 1; 1982 c 473 s 15; 1983 c 289 s 114 subd 1; 1984 c 655
art 1 s 92; 1995 c 171 s 59

50.28 DECLARATORY JUDGMENTS.
At any time after a controversy has arisen between the commissioner of commerce and a
savings bank with respect to a question of law or rule or with respect to a question involving
immeasurable or irreparable damage to the savings bank, and before an administrative or judicial
hearing, the savings bank or the commissioner may apply to a court of competent jurisdiction in
the county in which the home office of the savings bank is located for a declaratory judgment as
to the question.
History: 1995 c 171 s 60