<div class="xtend">
         <div class="xtend_ce"><a id="pl.1.1"></a><var>1.1</var>A bill for an act<br />
            		
         </div><a id="pl.1.2"></a><var>1.2</var>relating to commerce; regulating payday lending; amending Minnesota Statutes <br />
         		<a id="pl.1.3"></a><var>1.3</var>2012, section 47.601, subdivisions 1, 2, 3.<br />
         		<a id="pl.1.4"></a><var>1.4</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br />
         		<br />
         		<a id="bill.0.1.0"></a><a id="pl.1.5"></a><var>1.5</var>&nbsp;&nbsp;&nbsp;&nbsp;Section 1. Minnesota Statutes 2012, section 47.601, subdivision 1, is amended to read:<br />
         		<a id="pl.1.6"></a><var>1.6</var>&nbsp;&nbsp;&nbsp;&nbsp;Subdivision 1. <b>Definitions.</b> (a) For the purposes of this section, the terms defined in <br />
         		<a id="pl.1.7"></a><var>1.7</var>this subdivision have the meanings given.<br />
         		<a id="pl.1.8"></a><var>1.8</var>(b) "Borrower" means an individual who obtains a consumer short-term loan <br />
         		<a id="pl.1.9"></a><var>1.9</var>primarily for personal, family, or household purposes.<br />
         		<a id="pl.1.10"></a><var>1.10</var>(c) "Commissioner" means the commissioner of commerce.<br />
         		<a id="pl.1.11"></a><var>1.11</var>(d) "Consumer short-term loan" means a loan to a borrower which has a principal <br />
         		<a id="pl.1.12"></a><var>1.12</var>amount, or an advance on a credit limit, of $1,000 or less and requires a minimum <br />
         		<a id="pl.1.13"></a><var>1.13</var>payment within 60 days of loan origination or credit advance of more than 25 percent of <br />
         		<a id="pl.1.14"></a><var>1.14</var>the principal balance or credit advance. For the purposes of this section, each new advance <br />
         		<a id="pl.1.15"></a><var>1.15</var>of ~~money~~ credit to a borrower under a consumer short-term loan agreement constitutes <br />
         		<a id="pl.1.16"></a><var>1.16</var>a new consumer short-term loan. A "consumer short-term loan" does not include any <br />
         		<a id="pl.1.17"></a><var>1.17</var>transaction made under chapter 325J or a loan made by a consumer short-term lender <br />
         		<a id="pl.1.18"></a><var>1.18</var>where, in the event of default on the loan, the sole recourse for recovery of the amount <br />
         		<a id="pl.1.19"></a><var>1.19</var>owed, other than a lawsuit for damages for the debt, is to proceed against physical goods <br />
         		<a id="pl.1.20"></a><var>1.20</var>pledged by the borrower as collateral for the loan.<br />
         		<a id="pl.1.21"></a><var>1.21</var>(e) "Consumer short-term lender" means an individual or entity engaged in the <br />
         		<a id="pl.1.22"></a><var>1.22</var>business of making, offering, or arranging consumer short-term loans, other than a state or <br />
         		<a id="pl.1.23"></a><var>1.23</var>federally chartered bank, savings bank, or credit union.<br />
         		<br />
         		<a id="bill.0.2.0"></a><a id="pl.2.1"></a><var>2.1</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 2. Minnesota Statutes 2012, section 47.601, subdivision 2, is amended to read:<br />
         		<a id="pl.2.2"></a><var>2.2</var>&nbsp;&nbsp;&nbsp;&nbsp;Subd. 2. <b>Consumer short-term loan contract.</b> (a) No contract or agreement <br />
         		<a id="pl.2.3"></a><var>2.3</var>between a consumer short-term loan lender and a borrower residing in Minnesota may <br />
         		<a id="pl.2.4"></a><var>2.4</var>contain the following:<br />
         		<a id="pl.2.5"></a><var>2.5</var>(1) a provision selecting a law other than Minnesota law under which the contract <br />
         		<a id="pl.2.6"></a><var>2.6</var>is construed or enforced;<br />
         		<a id="pl.2.7"></a><var>2.7</var>(2) a provision choosing a forum for dispute resolution other than the state of <br />
         		<a id="pl.2.8"></a><var>2.8</var>Minnesota; or<br />
         		<a id="pl.2.9"></a><var>2.9</var>(3) a provision limiting class actions against a consumer short-term lender for <br />
         		<a id="pl.2.10"></a><var>2.10</var>violations of subdivision 3 or for making consumer short-term loans:<br />
         		<a id="pl.2.11"></a><var>2.11</var>(i) without a required license issued by, or a required registration with, the <br />
         		<a id="pl.2.12"></a><var>2.12</var>commissioner; or<br />
         		<a id="pl.2.13"></a><var>2.13</var>(ii) in which interest rates, fees, charges, or loan amounts exceed those allowable <br />
         		<a id="pl.2.14"></a><var>2.14</var>under section 
         <statute_ref>47.59, subdivision 6</statute_ref>, or 
         <statute_ref>47.60, subdivision 2</statute_ref>, other than by de minimis <br />
         		<a id="pl.2.15"></a><var>2.15</var>amounts if no pattern or practice exists.<br />
         		<a id="pl.2.16"></a><var>2.16</var>(b) Any provision prohibited by paragraph (a) is void and unenforceable.<br />
         		<a id="pl.2.17"></a><var>2.17</var>(c) A consumer short-term loan lender must furnish a copy of the written loan <br />
         		<a id="pl.2.18"></a><var>2.18</var>contract to each borrower. The contract and disclosures must be written in the language in <br />
         		<a id="pl.2.19"></a><var>2.19</var>which the loan was negotiated with the borrower and must contain:<br />
         		<a id="pl.2.20"></a><var>2.20</var>(1) the name; address, which may not be a post office box; and telephone number of <br />
         		<a id="pl.2.21"></a><var>2.21</var>the lender making the consumer short-term loan;<br />
         		<a id="pl.2.22"></a><var>2.22</var>(2) the name and title of the individual employee or representative who signs the <br />
         		<a id="pl.2.23"></a><var>2.23</var>contract on behalf of the lender;<br />
         		<a id="pl.2.24"></a><var>2.24</var>(3) an itemization of the fees and interest charges to be paid by the borrower;<br />
         		<a id="pl.2.25"></a><var>2.25</var>(4) in bold, 24-point type, the annual percentage rate as computed under United <br />
         		<a id="pl.2.26"></a><var>2.26</var>States Code, chapter 15, section 1606; and<br />
         		<a id="pl.2.27"></a><var>2.27</var>(5) a description of the borrower's payment obligations under the loan.<br />
         		<a id="pl.2.28"></a><var>2.28</var>(d) The holder or assignee of a check or other instrument evidencing an obligation of <br />
         		<a id="pl.2.29"></a><var>2.29</var>a borrower in connection with a consumer short-term loan takes the instrument subject to <br />
         		<a id="pl.2.30"></a><var>2.30</var>all claims by and defenses of the borrower against the consumer short-term lender.<br />
         		<br />
         		<a id="bill.0.3.0"></a><a id="pl.2.31"></a><var>2.31</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 3. Minnesota Statutes 2012, section 47.601, subdivision 3, is amended to read:<br />
         		<a id="pl.2.32"></a><var>2.32</var>&nbsp;&nbsp;&nbsp;&nbsp;Subd. 3. ~~<b>Debt collection</b>~~<b> Requirements; prohibitions</b><b>.</b> (a) A consumer short-term <br />
         		<a id="pl.2.33"></a><var>2.33</var>lender collecting or attempting to collect on an indebtedness in connection with a <br />
         		<a id="pl.2.34"></a><var>2.34</var>consumer short-term loan must not engage in the prohibited debt collection practices <br />
         		<a id="pl.2.35"></a><var>2.35</var>referenced in section 
         <statute_ref>332.37</statute_ref>.<br />
         		<a id="pl.3.1"></a><var>3.1</var>(b) A consumer short-term lender may not make a consumer short-term loan to <br />
         		<a id="pl.3.2"></a><var>3.2</var>a borrower who is presently indebted to the consumer short-term lender or any other <br />
         		<a id="pl.3.3"></a><var>3.3</var>consumer short-term lender.<br />
         		<a id="pl.3.4"></a><var>3.4</var>(c) Subject to paragraphs (b) and (d), a consumer short-term lender may not make <br />
         		<a id="pl.3.5"></a><var>3.5</var>a consumer short-term loan to a borrower that will cause a borrower to have, as of the <br />
         		<a id="pl.3.6"></a><var>3.6</var>date of the loan and within the immediately preceding 12 months, more than ten consumer <br />
         		<a id="pl.3.7"></a><var>3.7</var>short-term loans. A consumer short-term lender may not make a consumer short-term loan <br />
         		<a id="pl.3.8"></a><var>3.8</var>to a borrower if the lender is unable to verify the number of consumer short-term loans, <br />
         		<a id="pl.3.9"></a><var>3.9</var>in total from all consumer short-term lenders, that the borrower has taken within the <br />
         		<a id="pl.3.10"></a><var>3.10</var>immediately preceding 12 months.<br />
         		<a id="pl.3.11"></a><var>3.11</var>(d) A consumer short-term lender may not make a consumer short-term loan unless <br />
         		<a id="pl.3.12"></a><var>3.12</var>45 days has elapsed from satisfaction of the fourth and seventh consumer short-term loan <br />
         		<a id="pl.3.13"></a><var>3.13</var>within the preceding 12 months.<br />
         		<a id="pl.3.14"></a><var>3.14</var>(e) A consumer short-term lender must independently verify whether making a <br />
         		<a id="pl.3.15"></a><var>3.15</var>consumer short-term loan would violate paragraphs (b), (c), and (d). Verification must <br />
         		<a id="pl.3.16"></a><var>3.16</var>include:<br />
         		<a id="pl.3.17"></a><var>3.17</var>(1) examination of the consumer short-term lender's own records, including records <br />
         		<a id="pl.3.18"></a><var>3.18</var>maintained at the location at which the borrower is applying for the transaction and <br />
         		<a id="pl.3.19"></a><var>3.19</var>records maintained at other locations within the state that are owned and operated by the <br />
         		<a id="pl.3.20"></a><var>3.20</var>consumer short-term lender; and<br />
         		<a id="pl.3.21"></a><var>3.21</var>(2) utilization of a consumer reporting service.<br />
         		<a id="pl.3.22"></a><var>3.22</var>For purposes of this subdivision, a "consumer reporting service" means a real-time, <br />
         		<a id="pl.3.23"></a><var>3.23</var>electronically accessible service that the commissioner determines is capable of providing <br />
         		<a id="pl.3.24"></a><var>3.24</var>the consumer short-term lender with adequate verification information to ensure <br />
         		<a id="pl.3.25"></a><var>3.25</var>compliance with this paragraph.<br />
         		<a id="pl.3.26"></a><var>3.26</var>The commissioner shall make the determination by evaluating:<br />
         		<a id="pl.3.27"></a><var>3.27</var>(1) lenders' ease of electronically communicating with the consumer reporting <br />
         		<a id="pl.3.28"></a><var>3.28</var>service;<br />
         		<a id="pl.3.29"></a><var>3.29</var>(2) the cost per communication;<br />
         		<a id="pl.3.30"></a><var>3.30</var>(3) the technological capability of the consumer reporting service;<br />
         		<a id="pl.3.31"></a><var>3.31</var>(4) the service's ability to generate reports to the commissioner; and<br />
         		<a id="pl.3.32"></a><var>3.32</var>(5) the protocols in place to protect information reported by the consumer short-term <br />
         		<a id="pl.3.33"></a><var>3.33</var>lenders.<br />
         		<a id="pl.3.34"></a><var>3.34</var>(f) A consumer short-term lender shall have a duty to promptly report each consumer <br />
         		<a id="pl.3.35"></a><var>3.35</var>short-term loan transaction to the consumer reporting service.<br />
         		<a id="pl.4.1"></a><var>4.1</var>(g) A consumer short-term lender shall have a duty to verify whether the borrower is a <br />
         		<a id="pl.4.2"></a><var>4.2</var>covered borrower, as defined in Code of Federal Regulations, title 32, section 232.3(c). No <br />
         		<a id="pl.4.3"></a><var>4.3</var>consumer short-term lender may make a consumer short-term loan to a covered borrower:<br />
         		<a id="pl.4.4"></a><var>4.4</var>(1) without first providing the disclosures required under Code of Federal <br />
         		<a id="pl.4.5"></a><var>4.5</var>Regulations, title 32, section 232.5; or<br />
         		<a id="pl.4.6"></a><var>4.6</var>(2) which violates any of the terms and conditions set forth in Code of Federal <br />
         		<a id="pl.4.7"></a><var>4.7</var>Regulations, title 32, section 232.4, for the issuance of consumer credit, as defined in <br />
         		<a id="pl.4.8"></a><var>4.8</var>Code of Federal Regulations, title 32, section 232.3(b), except that for purposes of this <br />
         		<a id="pl.4.9"></a><var>4.9</var>subdivision, "consumer credit" includes open-end credit.<br />
         		<br />
         		<a id="bill.0.4.0"></a><a id="pl.4.10"></a><var>4.10</var>&nbsp;&nbsp;&nbsp;&nbsp;Sec. 4. <b>EFFECTIVE DATE.</b><br />
         		<a id="pl.4.11"></a><var>4.11</var>Sections 1 and 2 are effective August 1, 2014.<br />
         		<a id="pl.4.12"></a><var>4.12</var>Section 3 is effective October 1, 2014, and applies to consumer short-term loans <br />
         		<a id="pl.4.13"></a><var>4.13</var>made on or after that date.<br />
         		
      </div>