Skip to main content Skip to office menu Skip to footer
Minnesota Legislature

Office of the Revisor of Statutes

Chapter 51A

Section 51A.02

Topics

Recent History

51A.02 DEFINITIONS.
    Subdivision 1. Scope. When used in sections 51A.01 to 51A.57, the words and phrases
defined in this section have the meanings given them, except to the extent that any such word or
phrase specifically is qualified by its context.
    Subd. 2.MS 1986 [Renumbered subd 7]
    Subd. 2. Affiliate. "Affiliate" means a person or organization controlled by, controlling, or
under common control with another person or organization.
    Subd. 2a.MS 1986 [Renumbered subd 10]
    Subd. 3.MS 1986 [Renumbered subd 13]
    Subd. 3. Agreement. "Agreement" means the bargain of the parties in fact as found in their
contract language or by implication from other circumstances including course of dealings, usage
of trade, or course of performance.
    Subd. 4.MS 1986 [Repealed by amendment, 1988 c 666 s 2]
    Subd. 4. Agricultural purpose. "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, forest products, fish and shellfish, and their
products, including processed and manufactured products, and products raised or produced on
farms, including processed or manufactured products.
    Subd. 4a.MS 1986 [Repealed by amendment, 1988 c 666 s 2]
    Subd. 5.MS 1986 [Renumbered subd 23]
    Subd. 5. Amount financed. "Amount financed" has the meaning given the term in the
Code of Federal Regulations, title 12, part 226.
    Subd. 6.MS 1986 [Renumbered subd 24]
    Subd. 6. Annual percentage rate. "Annual percentage rate" has the meaning given the
term in the Code of Federal Regulations, title 12, part 226, but using the definition of "finance
charge" used in this section.
    Subd. 7. Association. "Association" means a mutual or capital stock savings association or
savings association chartered under the provisions of sections 51A.01 to 51A.57.
    Subd. 8. Branch office. "Branch office" means an office other than the home office at which
deposit accounts are opened and loans are made.
    Subd. 9.MS 1986 [Renumbered subd 30]
    Subd. 9. Business purpose. "Business purpose" means a purpose other than personal, family,
household, or agricultural purpose.
    Subd. 10.MS 1986 [Renumbered subd 31]
    Subd. 10. Capital stock. "Capital stock" means the aggregate of shares of nonwithdrawable
capital issued by a capital stock association, but does not include nonwithdrawable capital
represented by capital certificates.
    Subd. 11.MS 1986 [Renumbered subd 32]
    Subd. 11. Card issuer. "Card issuer" means a person who provides credit by issuing a
credit card.
    Subd. 12.MS 1986 [Renumbered subd 34]
    Subd. 12. Cardholder. "Cardholder" means a person to whom a credit card is issued or
who has agreed with the card issuer to pay obligations arising from the issuance to or use of
the card by another person.
    Subd. 13.MS 1986 [Renumbered subd 36]
    Subd. 13. Commissioner. "Commissioner" means the commissioner of commerce of the
state of Minnesota.
    Subd. 14.MS 1986 [Renumbered subd 38]
    Subd. 14. Conditional sale contract. "Conditional sale contract" or "credit sale contract"
means a contract evidencing a sale on credit.
    Subd. 15. Conspicuous. "Conspicuous" means, in reference to a term or clause, that it is
written so that a reasonable person against whom it is to operate ought to have noticed it.
    Subd. 16.MS 1986 [Repealed by amendment, 1988 c 666 s 2]
    Subd. 16. Consumer. "Consumer" means the debtor to whom credit is granted in a consumer
loan.
    Subd. 17.MS 1986 [Renumbered subd 46]
    Subd. 17. Consumer loan. "Consumer loan" means a loan made by an association in which:
(1) the debtor is a person other than an organization;
(2) the debt is incurred primarily for a personal, family, household, or agricultural purpose;
and
(3) the debt is payable in installments or a finance charge is made.
    Subd. 18.MS 1986 [Renumbered subd 47]
    Subd. 18. Credit. "Credit" means the right granted by an association to a borrower to
defer payment of debt, to incur debt and defer its payment, or to purchase property or services
and defer payment.
    Subd. 19.MS 1986 [Renumbered subd 48]
    Subd. 19. Credit card. "Credit card" means a card or device issued under an arrangement
pursuant to which a card issuer gives to a cardholder the privilege of obtaining credit from the
card issuer or other person in purchasing or leasing property or services, obtaining loans, or
otherwise. A transaction is "pursuant to a credit card" only if credit is obtained according to the
terms of the arrangement by transmitting information contained on the card or device orally,
in writing, by mechanical or electronic methods, or in any other manner. A transaction is not
"pursuant to a credit card" if the card or device is used solely in that transaction to:
(1) identify the cardholder or evidence the cardholder's creditworthiness and credit is not
obtained according to the terms of the arrangement;
(2) obtain a guarantee of payment from the cardholder's deposit account, whether or not the
payment results in a credit extension to the cardholder by the card issuer; or
(3) effect an immediate transfer of funds from the cardholder's deposit account by electronic
or other means, whether or not the transfer results in a credit extension to the cardholder by
the card issuer.
    Subd. 20.MS 1986 [Renumbered subd 49]
    Subd. 20. Credit sale. "Credit sale" means a sale of goods, services, or an interest in land
in which:
(1) credit is granted by a seller who regularly engages as a seller in credit transactions
of the same kind; and
(2) the debt is payable in installments or a finance charge is made.
    Subd. 21.MS 1986 [Renumbered subd 50]
    Subd. 21. Demand deposit account. "Demand deposit account" has the meaning given the
term in the Code of Federal Regulations, title 12, part 204.
    Subd. 22.MS 1986 [Renumbered subd 51]
    Subd. 22. Deposit account. "Deposit account" means funds deposited with an association in
the form of a savings account, time deposit account, NOW account, demand deposit account, or
treasury and tax loan account.
    Subd. 22a.MS 1986 [Renumbered subd 52]
    Subd. 22b.MS 1986 [Renumbered subd 53]
    Subd. 23.MS 1986 [Renumbered subd 54]
    Subd. 23. Dwelling unit. "Dwelling unit" means a single, unified combination of rooms
designed for residential use by one family in a multiple dwelling unit structure, and which is
not "home property."
    Subd. 24.MS 1986 [Repealed by amendment, 1988 c 666 s 2]
    Subd. 24. Earnings. "Earnings" means that part of the sources available for payment of
earnings of an association which is declared payable on savings accounts from time to time by
the board of directors, and is the cost of savings money to the association. Earnings also may be
referred to as "interest" or "dividends."
    Subd. 25.MS 1986 [Renumbered subd 56]
    Subd. 25. Federal association. "Federal association" means an association or savings bank
with its home office in this state and chartered under the federal Home Owners' Loan Act of 1933,
United States Code, title 12, sections 1461 to 1470.
    Subd. 26. Finance charge. "Finance charge" has the meaning given the term in the Code
of Federal Regulations, title 12, part 226, except that the following will not in any event be
considered a finance charge:
(1) a charge as a result of default or delinquency under section 47.59 if made for actual
unanticipated late payment, delinquency, default, or other similar occurrence, and a charge for
an extension or deferment under section 47.59, unless the parties agree that these charges are
finance charges;
(2) any additional charge under section 47.59, subdivision 6; or
(3) a discount, if an association purchases a contract evidencing a credit sale or loan at
less than the face amount of the obligation or purchases or satisfies obligations of a cardholder
pursuant to a credit card and the purchase or satisfaction is made at less than the face amount of
the obligation.
    Subd. 27. Financial institution. "Financial institution" means a savings association,
commercial bank, trust company, credit union, or industrial loan and thrift company.
    Subd. 28. Home office. "Home office" means the office of the association designated by it
as its principal office.
    Subd. 29. Home property. "Home property" means real estate on which there is located,
or will be located pursuant to a real estate loan, either a structure designed for residential use
by one family or a unit in a residential common interest community, including all elements
pertinent thereto, designed for residential use by one family in a multiple dwelling unit structure
or complex, and includes fixtures, furnishings and equipment.
    Subd. 30. Impaired condition. "Impaired condition" means a condition in which, based
upon accepted examination practices, the assets of an association do not have an aggregate
value equal to the aggregate amount of liabilities of the association to its creditors, including
its members and all other persons.
    Subd. 31. Improved real estate. "Improved real estate" means real estate on which there is a
structure or an enclosure, or which is reclaimed, prepared as building lots or sites, or otherwise
occupied, made better, more useful, or of greater value by care so as to provide an enjoyment
thereof.
    Subd. 32. Insured association. "Insured association" means an association the deposit
accounts of which are insured wholly or in part in accordance with the provisions of sections
51A.01 to 51A.57.
    Subd. 33. Lender credit card. "Lender credit card" means a credit card issued by an
association or federal association.
    Subd. 34. Liquid assets. "Liquid assets" means cash on hand; cash on deposit in federal
home loan banks, state banks performing similar reserve functions, commercial banks, or insured
associations or federal associations, which is withdrawable upon not more than 30 days' notice
and which is not pledged as security for indebtedness, except that any deposits in a bank under the
control or in the possession of any supervisory authority shall not be considered as liquid assets;
and obligations of the United States, or such government guaranteed obligations as are approved
by the Federal Savings and Loan Insurance Corporation.
    Subd. 35. Loan. (a) Except as provided in paragraph (b), "loan" includes:
(1) the creation of debt by the association's or federal association's payment of or agreement
to pay money to the borrower or to a third person for the account of the borrower;
(2) the creation of debt pursuant to a lender credit card in any manner, including a cash
advance or the card issuer's honoring a draft or similar order for the payment of money drawn or
accepted by the borrower, paying or agreeing to pay the borrower's obligation, or purchasing or
otherwise acquiring the borrower's obligation from the obligee or the borrower's assignee;
(3) the creation of debt by a cash advance to a borrower pursuant to an overdraft line of
credit arrangement;
(4) the creation of debt by a credit to an account with the lender upon which the borrower is
entitled to draw immediately;
(5) the forbearance of debt arising from a loan; and
(6) the creation of debt pursuant to open-end credit.
(b) "Loan" does not include the forbearance of debt arising from a sale or lease.
    Subd. 36. Member. "Member" means a person holding a deposit account of a mutual
association, and a person borrowing from or assuming or obligated upon a loan or interest therein
held by a mutual association, or purchasing property securing a loan or interest held by a mutual
association, and any other person obligated to a mutual association. A joint and survivorship
relationship, whether of savers or borrowers, constitutes a single membership.
    Subd. 37. Money market deposit account. "Money market deposit account" has the
meaning given the term in the Code of Federal Regulations, title 12, part 561.
    Subd. 38. Net income. "Net income" means gross revenues for an accounting period less all
expenses paid or incurred, taxes, and losses sustained as shall not have been charged to reserves
pursuant to the provisions of sections 51A.01 to 51A.57.
    Subd. 39. NOW account. "NOW account" has the meaning given the term in the Code of
Federal Regulations, title 12, part 561.
    Subd. 40. Official fees. "Official fees" means:
(1) fees and charges which actually are or will be paid to public officials for determining the
existence of or for perfecting, releasing, terminating, or satisfying a security interest or mortgage
related to a loan or credit sale, and any separate fees or charges that actually are or will be paid to
public officials for recording a notice described in section 580.032, subdivision 1; and
(2) premiums payable for insurance in lieu of perfecting a security interest or mortgage
otherwise required by an association in connection with a loan or credit sale, if the premium does
not exceed the fees and charges described in clause (1) which would otherwise be payable.
    Subd. 41. One borrower. "One borrower" means (1) any person or entity which is, or
which upon the making of a loan will become, obligor on a real estate loan, (2) nominees of such
obligor, (3) all persons, trusts, partnerships, syndicates, and corporations of which such obligor
is a nominee or a beneficiary, partner, member, or record or beneficial stockholder owning ten
percent or more of the capital stock, and (4) if such obligor is a trust, partnership, syndicate,
or corporation, all trusts, partnerships, syndicates, and corporations of which any beneficiary,
partner, member, or record or beneficial stockholder owning ten percent or more of the capital
stock, is also a beneficiary, partner, member, or record or beneficial stockholder owning ten
percent or more of the capital stock of such obligor.
    Subd. 42. Open-end credit. "Open-end credit" means an arrangement pursuant to which:
(1) an association may permit a borrower, from time to time, to obtain loans, including but
not limited to an overdraft checking line of credit arrangement, a secured or unsecured line of
credit agreement, or a credit card line of credit;
(2) the amounts financed and the finance and other appropriate charges are debited to an
account; and
(3) the finance charge, if made, is computed on the account periodically.
    Subd. 43. Organization. "Organization" means a corporation, government or governmental
subdivision or agency, trust, estate, partnership, joint venture, cooperative, limited liability
company, or association.
    Subd. 44. Payable in installments. "Payable in installments" means that payment is required
or permitted by agreement to be made in more than four periodic payments. If any periodic
payment under an agreement requiring or permitting two or more periodic payments is more than
twice the amount of any other periodic payment, a loan is "payable in installments."
    Subd. 45. Person. "Person" means a natural person or an organization.
    Subd. 46. Primary lending area. "Primary lending area" means the state of Minnesota.
    Subd. 47. Real estate loan. "Real estate loan" means any loan or other obligation secured by
a first lien on real estate held 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 such
loan or obligation, or any transaction out of which a first lien or claim is created against such
real estate, including inter alia the purchase of such real estate in fee by an association and the
concurrent or immediate sale thereof on installment contract.
    Subd. 48. Savings account. "Savings account" means any deposit account other than a time
deposit account, a NOW account, a demand deposit account, or a treasury tax and loan account.
Savings accounts include but are not limited to money market deposit accounts.
    Subd. 49. Savings liability. "Savings liability" means the aggregate amount of savings
accounts, including earnings credited to such accounts, less redemptions and withdrawals.
    Subd. 50. Service organization. "Service organization" means an affiliate organization
substantially all the activities of which consist of activities as the commissioner may approve.
    Subd. 51. Sources available for payment of earnings. "Sources available for payment of
earnings" means net income for an accounting period less amounts transferred to reserves as
provided in or permitted by sections 51A.01 to 51A.57, plus any balance of undivided profits
whether same are designated as such or by other language from preceding accounting periods.
    Subd. 52. Stockholder. "Stockholder" means the holder of one or more shares of any class of
capital stock of a capital stock association organized and operating pursuant to the provisions
of Laws 1981, chapter 276.
    Subd. 53. Surplus. "Surplus" means the aggregate amount of the undistributed net income
for an association held as undivided profits or unallocated reserves for general corporate purposes,
and any paid-in surplus held by an association.
    Subd. 54. Thrift institution. "Thrift institution" means an association, a mutual savings
bank, a cooperative bank, a homestead association, a savings association, a federal association,
and a supervised thrift and residential financing institution of a substantially similar nature.
    Subd. 55. Time deposit. "Time deposit" has the meaning given the term in the Code of
Federal Regulations, title 12, part 204.
    Subd. 56. Withdrawal value. "Withdrawal value" means the amount credited to a deposit
account of a member, less lawful deduction therefrom, as shown by the records of the association.
History: 1969 c 490 s 2; 1971 c 387 s 1; 1980 c 524 s 2-4; 1980 c 618 s 12; 1981 c 276 s
1-5; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 1986 c 444; 1988 c 666 s 2; 1989 c 217 s 2;
1993 c 137 s 4; 1993 c 257 s 29; 1995 c 171 s 61-63; 1995 c 202 art 1 s 25; art 3 s 4-6; 1996 c
414 art 1 s 44; 1997 c 157 s 67; 1998 c 260 s 1; 1999 c 11 art 3 s 2