47.60 CONSUMER SMALL LOANS.
Subdivision 1. Definitions.
For purposes of this section, the terms defined have the meanings
(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
person registered with the commissioner and engaged in the business of making consumer small
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
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
604.113, subdivision 2
(a). The civil penalty provisions of section
604.113, subdivision 2
, paragraph (b), may not be
demanded or assessed against the borrower.
(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
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
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
History: 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;
2000 c 427 s 6; 2007 c 44 s 3; 2007 c 57 art 3 s 9