1.1                          A bill for an act 
  1.2             relating to financial institutions; regulating fees, 
  1.3             charges, investments, and time periods; regulating 
  1.4             mortgage insurance and loans; modifying the 
  1.5             application requirements for credit unions; making 
  1.6             corrections and conforming changes; regulating deposit 
  1.7             and investment of local public funds; modifying a 
  1.8             definition; authorizing a detached facility in Chisago 
  1.9             Lakes Township; amending Minnesota Statutes 1998, 
  1.10            sections 46.041, subdivisions 1 and 3; 46.048, 
  1.11            subdivisions 1 and 2b; 46.131, subdivision 10; 
  1.12            47.0156; 47.101, subdivision 3; 47.20, subdivision 6b; 
  1.13            47.203; 47.204, subdivision 1; 47.27, subdivision 3; 
  1.14            47.54, subdivisions 2 and 3; 47.59, subdivision 12; 
  1.15            47.60, subdivision 3; 48.15, subdivisions 2a and 3; 
  1.16            48.24, subdivision 7, and by adding a subdivision; 
  1.17            48A.15, subdivision 1; 49.36, subdivision 1; 52.01; 
  1.18            52.05, subdivision 2; 53.03, subdivisions 1, 6, and 7; 
  1.19            55.04, subdivision 2; 56.02; 56.131, subdivision 1; 
  1.20            58.06, subdivision 2; 58.08, subdivision 1; 59A.03, 
  1.21            subdivision 2; 118A.01, subdivision 2; 168.67; 168.71; 
  1.22            303.25, subdivision 5; 332.15, subdivisions 2 and 3; 
  1.23            332.17; and 332.30; proposing coding for new law in 
  1.24            Minnesota Statutes, chapters 47; and 334; repealing 
  1.25            Minnesota Statutes 1998, sections 47.20, subdivision 
  1.26            14; and 58.07. 
  1.27  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.28     Section 1.  Minnesota Statutes 1998, section 46.041, 
  1.29  subdivision 1, is amended to read: 
  1.30     Subdivision 1.  [FILING; FEE; PUBLIC INSPECTION.] The 
  1.31  incorporators of a bank proposed to be organized under the laws 
  1.32  of this state shall execute and acknowledge a written 
  1.33  application in the form prescribed by the commissioner of 
  1.34  commerce.  The application must be signed by two or more of the 
  1.35  incorporators and request a certificate authorizing the proposed 
  1.36  bank to transact business at the place and in the name stated in 
  2.1   the application.  The applicant shall file the application with 
  2.2   the department with a $1,000 an $8,000 filing fee and a $500 
  2.3   investigation fee.  The commissioner may waive the fee for a 
  2.4   bank to be located in a low- or moderate-income area as defined 
  2.5   in Code of Federal Regulations, title 12, part 25(1), (n)(1) and 
  2.6   (n)(2) and where no other depository institution operates an 
  2.7   office.  If the proposed bank is being organized in connection 
  2.8   with a reorganization or merger of an existing bank, the filing 
  2.9   fee is $2,000.  The fees must be turned over by the commissioner 
  2.10  to the state treasurer and credited to the general fund.  The 
  2.11  application file must be public, with the exception of financial 
  2.12  data on individuals which is private under the Minnesota 
  2.13  Government Data Practices Act and data defined as trade secret 
  2.14  information under section 13.37, subdivision 1, paragraph (b), 
  2.15  which must be given nonpublic classification upon written 
  2.16  request by the applicant. 
  2.17     Sec. 2.  Minnesota Statutes 1998, section 46.041, 
  2.18  subdivision 3, is amended to read: 
  2.19     Subd. 3.  [COMMENTS, REQUESTS FOR HEARING.] Within 21 15 
  2.20  days after the notice of application has been published, any 
  2.21  person may submit to the commissioner either or both written 
  2.22  comments on an application and a written request for a hearing 
  2.23  on the application.  The request must state the nature of the 
  2.24  issues or facts to be presented and the reasons why written 
  2.25  submissions would be insufficient to make an adequate 
  2.26  presentation to the commissioner.  Comments challenging the 
  2.27  legality of an application should be submitted separately in 
  2.28  writing.  
  2.29     Written requests for hearing must be evaluated by the 
  2.30  commissioner who may grant or deny the request.  A hearing must 
  2.31  generally be granted only if it is determined that written 
  2.32  submissions would be inadequate or that a hearing would 
  2.33  otherwise be beneficial to the decision-making process.  A 
  2.34  hearing may be limited to issues considered material by the 
  2.35  commissioner.  
  2.36     If a request for a hearing has been denied, the 
  3.1   commissioner shall notify the applicant and all interested 
  3.2   persons stating the reasons for denial.  Interested parties may 
  3.3   submit to the commissioner with simultaneous copies to the 
  3.4   applicant additional written comments on the application within 
  3.5   14 days after the date of the notice of denial.  The applicant 
  3.6   shall be provided an additional seven days after the 14-day 
  3.7   deadline has expired within which to respond to any comments 
  3.8   submitted within the 14-day period.  A copy of any response 
  3.9   submitted by the applicant shall also be mailed simultaneously 
  3.10  by the applicant to the interested parties.  The commissioner 
  3.11  may waive the additional seven-day comment period if so 
  3.12  requested by the applicant. 
  3.13     Sec. 3.  Minnesota Statutes 1998, section 46.048, 
  3.14  subdivision 1, is amended to read: 
  3.15     Subdivision 1.  [REQUIREMENT.] Whenever a change in the 
  3.16  outstanding voting stock of a banking institution will result in 
  3.17  control or in a change in the control of the banking 
  3.18  institution, the person acquiring control of the banking 
  3.19  institution, including an out-of-state bank holding company, 
  3.20  shall file notice of the proposed acquisition of control with 
  3.21  the commissioner of commerce at least 60 days before the actual 
  3.22  effective date of the change, except that the commissioner may 
  3.23  extend the 60-day period an additional 30 days if in the 
  3.24  commissioner's judgment any material information submitted is 
  3.25  substantially inaccurate or the acquiring party has not 
  3.26  furnished all the information required.  The notice must be 
  3.27  accompanied by a filing fee of $3,000 payable to the 
  3.28  commissioner of commerce, unless the person filing the notice 
  3.29  has been associated with the banking institution as an officer 
  3.30  or director for at least three years, in which case the filing 
  3.31  fee is $1,000.  No filing fee is required of a person required 
  3.32  to file a notice because of a stock redemption or other 
  3.33  transaction by others that caused the change in control.  As 
  3.34  used in this section, the term "control" means the power to 
  3.35  directly or indirectly direct or cause the direction of the 
  3.36  management or policies of the banking institution.  A change in 
  4.1   ownership of capital stock that would result in direct or 
  4.2   indirect ownership by a stockholder or an affiliated group of 
  4.3   stockholders of less than 25 percent of the outstanding capital 
  4.4   stock is not considered a change of control.  If there is any 
  4.5   doubt as to whether a change in the outstanding voting stock is 
  4.6   sufficient to result in control or to effect a change in the 
  4.7   control, the doubt shall be resolved in favor of reporting the 
  4.8   facts to the commissioner.  The commissioner shall use the 
  4.9   criteria established by the Financial Institution Regulatory and 
  4.10  Interest Rate Control Act of 1978, United States Code, title 12, 
  4.11  section 1817(j), and the regulations adopted under it, when 
  4.12  reviewing the acquisition and determining if the acquisition 
  4.13  should or should not be disapproved.  Within three days after 
  4.14  making the decision to disapprove a proposed acquisition, the 
  4.15  commissioner shall notify the acquiring party in writing of the 
  4.16  disapproval.  The notice must provide a statement of the basis 
  4.17  for the disapproval. 
  4.18     Sec. 4.  Minnesota Statutes 1998, section 46.048, 
  4.19  subdivision 2b, is amended to read: 
  4.20     Subd. 2b.  [NOTICE.] Upon the filing of a notice: 
  4.21     (1) an acquiring party shall publish once in a newspaper of 
  4.22  general circulation notice of the proposed acquisition in a form 
  4.23  acceptable to the commissioner; and 
  4.24     (2) the commissioner shall accept public comment on a 
  4.25  notice for a period of not less than 30 21 days from the date of 
  4.26  the publication required by clause (1). 
  4.27     Sec. 5.  Minnesota Statutes 1998, section 46.131, 
  4.28  subdivision 10, is amended to read: 
  4.29     Subd. 10.  Each financial institution described in 
  4.30  subdivision 2 shall pay a fee of $25 $50 to the commissioner of 
  4.31  commerce upon application to the commissioner for approval of a 
  4.32  change in its certificate, charter, articles of incorporation, 
  4.33  bylaws, powers or license.  Money collected by the commissioner 
  4.34  under this subdivision shall be deposited in the general fund. 
  4.35     Sec. 6.  Minnesota Statutes 1998, section 47.0156, is 
  4.36  amended to read: 
  5.1      47.0156 [CLOSING EFFECTING A PERMANENT CESSATION OF 
  5.2   BUSINESS.] 
  5.3      The permanent closing of a financial institution as defined 
  5.4   in section 47.015 or 47.0151 for purposes, or with a result, 
  5.5   other than authorized in sections 47.015 to 47.0155 is unlawful 
  5.6   unless at least 90 60 days' written notice is given to the 
  5.7   commissioner. 
  5.8      Sec. 7.  Minnesota Statutes 1998, section 47.101, 
  5.9   subdivision 3, is amended to read: 
  5.10     Subd. 3.  [APPLICATIONS TO DEPARTMENT OF COMMERCE.] An 
  5.11  application by a banking institution to relocate its main office 
  5.12  other than those provided for in subdivision 2 shall 
  5.13  be accompanied by a filing fee of $3,000 payable to the 
  5.14  commissioner of commerce and approved or disapproved by the 
  5.15  commissioner of commerce as provided for in sections 46.041 and 
  5.16  46.044. 
  5.17     Sec. 8.  Minnesota Statutes 1998, section 47.20, 
  5.18  subdivision 6b, is amended to read: 
  5.19     Subd. 6b.  [DELINQUENCY OR LATE PAYMENT FEES.] Charges or 
  5.20  fees for late payments on conventional loans shall be governed 
  5.21  by chapter 51A for all lenders.  A lender making a conventional 
  5.22  loan may assess and collect fees for late payments according to 
  5.23  the provision of section 47.59. 
  5.24     Sec. 9.  Minnesota Statutes 1998, section 47.203, is 
  5.25  amended to read: 
  5.26     47.203 [FEDERAL PREEMPTION OVERRIDE.] 
  5.27     The provisions of Public Law Number 96-221, title V, part 
  5.28  A, section 501(a)(1) (United States Code, title 12, section 
  5.29  1735f-7a), do not apply with respect to a loan, mortgage, credit 
  5.30  sale or advance made in this state after June 2, 1981, nor with 
  5.31  respect to a loan, mortgage, credit sale or advance secured by 
  5.32  real property located in this state and made after June 2, 1981. 
  5.33     Sec. 10.  Minnesota Statutes 1998, section 47.204, 
  5.34  subdivision 1, is amended to read: 
  5.35     Subdivision 1.  [NO USURY LIMITS.] Notwithstanding any law 
  5.36  to the contrary, no limitation on the rate or amount of 
  6.1   interest, discount points, finance charges, or other charges 
  6.2   shall apply to a loan, mortgage, credit sale, or advance which 
  6.3   would have been exempt from the laws of this state pursuant to 
  6.4   Public Law Number 96-221, title V, part A, section 501 (United 
  6.5   States Code, title 12, section 1735f-7a), as amended as of June 
  6.6   2, 1981, but for section 47.203 and which is made in this state 
  6.7   after June 2, 1981. 
  6.8      Sec. 11.  [47.207] [PRIVATE MORTGAGE INSURANCE.] 
  6.9      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
  6.10  section, the following terms have the meanings given: 
  6.11     (a) "Current fair market value" means the value of the 
  6.12  mortgagor's property determined by an appraisal conducted within 
  6.13  90 days of a mortgagor's written request for cancellation of 
  6.14  private mortgage insurance.  The appraisal shall be conducted by 
  6.15  a real estate appraiser, licensed or certified by a state or 
  6.16  federal agency, who is reasonably acceptable to the servicer.  
  6.17  The appraisal may be conducted at either the request of the 
  6.18  lender, mortgagor, or servicer.  The mortgagor is responsible 
  6.19  for the cost of the appraisal. 
  6.20     (b) "Lender" means a person who makes or holds a 
  6.21  residential mortgage loan. 
  6.22     (c) "Private mortgage insurance" means insurance paid for 
  6.23  by the mortgagor, including any mortgage guaranty insurance, 
  6.24  against the nonpayment of, or default on, a residential mortgage 
  6.25  loan, other than mortgage insurance made available under the 
  6.26  federal National Housing Act, United States Code, title 38, or 
  6.27  title V of the federal Housing Act of 1949.  "Private mortgage 
  6.28  insurance" does not mean lender-paid mortgage insurance. 
  6.29     (d) "Residential mortgage loan" means a loan secured by 
  6.30  either:  (1) a mortgage on residential real property; or (2) by 
  6.31  certificates of stock or other evidence of ownership interest in 
  6.32  and proprietary lease from corporations, partnerships, or other 
  6.33  forms of business organizations formed for the purpose of 
  6.34  cooperative ownership of residential real property. 
  6.35     (e) "Servicer" means a person who, through any medium or 
  6.36  mode of communication, engages in the collection or remittance 
  7.1   for, or the right or obligation to collect or remit for, a 
  7.2   lender, mortgagee, note owner, noteholder, or for a person's own 
  7.3   account, of payments, interest, principal, and escrow items such 
  7.4   as insurance and taxes for property subject to a residential 
  7.5   mortgage loan. 
  7.6      Subd. 2.  [RIGHT TO CANCEL PRIVATE MORTGAGE 
  7.7   INSURANCE.] With respect to an existing or future residential 
  7.8   mortgage loan, a mortgagor shall have the right to elect, in 
  7.9   writing, to cancel private mortgage insurance in connection with 
  7.10  a residential mortgage loan if all of the following terms and 
  7.11  conditions have been met: 
  7.12     (1) the current unpaid principal balance of the mortgage is 
  7.13  80 percent or less of the current fair market value of the 
  7.14  property; 
  7.15     (2) the mortgagor has not: 
  7.16     (i) been 60 days or longer past due on a mortgage payment 
  7.17  during the 12-month period beginning 24 months before the date 
  7.18  on which the servicer receives the mortgagor's written request 
  7.19  for cancellation; or 
  7.20     (ii) been 30 days or longer past due on a mortgage payment 
  7.21  during the 12 months preceding the date on which the servicer 
  7.22  receives the mortgagor's written request for cancellation; 
  7.23     (3) the mortgage was made at least 24 months prior to the 
  7.24  receipt of a request for cancellation; 
  7.25     (4) the property securing the mortgage loan is 
  7.26  owner-occupied; and 
  7.27     (5) the mortgage has not been pooled with other mortgages 
  7.28  in order to constitute, in whole or in part, collateral for 
  7.29  bonds issued by the state of Minnesota or any political 
  7.30  subdivision of the state of Minnesota or of any agency of any 
  7.31  political subdivision of the state of Minnesota. 
  7.32     Subd. 3.  [NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE 
  7.33  INSURANCE.] (a) With respect to each existing or future 
  7.34  residential mortgage loan, a servicer must provide an annual 
  7.35  written notice to the mortgagor currently paying premiums for 
  7.36  private mortgage insurance.  The notice must be in 12-point type 
  8.1   or greater and appear substantially as follows: 
  8.2      NOTICE OF RIGHT TO CANCEL PRIVATE MORTGAGE INSURANCE 
  8.3      
  8.4      If you currently pay private mortgage insurance premiums, 
  8.5      you may have the right under federal law or Minnesota law 
  8.6      to cancel the insurance and stop paying premiums.  This 
  8.7      would <h>reduce your total monthly payment</h>. 
  8.8      
  8.9      You may have the right to cancel private mortgage insurance 
  8.10     if the principal balance of your loan is 80 percent or less 
  8.11     of the current market value of your home.  Under Minnesota 
  8.12     law, the value of your property can be determined by a 
  8.13     professional appraisal.  You need to pay for this 
  8.14     appraisal, but in most cases you will be able to recover 
  8.15     this cost in less than a year if your mortgage insurance is 
  8.16     canceled. 
  8.17     
  8.18     If you wish to learn whether you are eligible to cancel 
  8.19     this insurance, please contact us at (enter address and 
  8.20     phone number of servicer). 
  8.21     (b) The notice required by this subdivision must be on its 
  8.22  own page, but a disclosure notice concerning private mortgage 
  8.23  insurance required by federal law may be included on the same 
  8.24  page as the disclosure notice required by this subdivision.  The 
  8.25  page containing the notice required by this subdivision may be 
  8.26  included with other disclosures or notices required by federal 
  8.27  law that are sent to the mortgagor. 
  8.28     (c) If the mortgage has been pooled with other mortgages in 
  8.29  order to constitute, in whole or in part, collateral for bonds 
  8.30  issued by the state of Minnesota or any political subdivision of 
  8.31  the state of Minnesota or of any agency of any political 
  8.32  subdivision of the state of Minnesota and notice of right to 
  8.33  cancel private mortgage insurance is required under federal law, 
  8.34  no notice under this subdivision is required. 
  8.35     Subd. 4.  [SERVICER RESPONSE TO CANCELLATION REQUEST.] (a) 
  8.36  Within 30 days of receipt of a mortgagor's written request to 
  9.1   cancel private mortgage insurance, a servicer shall: 
  9.2      (1) provide a written notice to the insurer to cancel the 
  9.3   private mortgage insurance and written notice to the mortgagor 
  9.4   that a request for cancellation has been sent to the insurer if 
  9.5   the servicer determines that the private mortgage insurance 
  9.6   should be canceled; 
  9.7      (2) provide a written response to the mortgagor identifying 
  9.8   all additional information needed from the mortgagor if the 
  9.9   servicer reasonably needs more information from the mortgagor to 
  9.10  determine whether the mortgagor is eligible for cancellation of 
  9.11  private mortgage insurance; or 
  9.12     (3) provide a written notice to the mortgagor of the 
  9.13  reasons for the servicer's refusal to cancel the private 
  9.14  mortgage insurance if the servicer determines that the mortgagor 
  9.15  does not meet the requirements for cancellation of private 
  9.16  mortgage insurance. 
  9.17     (b) If a lender, or any other person involved in the 
  9.18  mortgage transaction, receives a written request for 
  9.19  cancellation of private mortgage insurance, the lender or other 
  9.20  person shall promptly forward the mortgagor's request for 
  9.21  cancellation to the servicer, if the servicer is known to the 
  9.22  lender or other person.  If the servicer is not known to the 
  9.23  lender or other person, the lender or other person shall advise 
  9.24  the mortgagor to contact the company to which the mortgagor 
  9.25  sends the monthly payment. 
  9.26     Subd. 5.  [LENDER CHARGES; RETURN OF UNEARNED PREMIUM.] (a) 
  9.27  A lender requiring or offering private mortgage insurance shall 
  9.28  make available to the borrower or other person paying the 
  9.29  insurance premium the same premium payment plans as are 
  9.30  available to the lender in paying the private mortgage insurance 
  9.31  premium. 
  9.32     (b) Any refund or rebate for unearned private mortgage 
  9.33  insurance premiums shall be paid to the mortgagor or other 
  9.34  person actually providing the funds for payment of the premium. 
  9.35     (c) A lender or servicer shall not charge the mortgagor a 
  9.36  fee or other consideration for cancellation of the private 
 10.1   mortgage insurance or for any of the acts required by this 
 10.2   section, except that the lender or servicer shall have the right 
 10.3   to recover the cost of an appraisal if the mortgagor elects to 
 10.4   have the lender or servicer perform or arrange for the appraisal.
 10.5      Subd. 6.  [INTERPRETATION.] Nothing in this section shall 
 10.6   be deemed to be inconsistent with the federal Homeowner's 
 10.7   Protection Act of 1998, codified at United States Code, title 
 10.8   12, sections 4901 to 4910, within the meaning of "inconsistent" 
 10.9   as used in section 9 of that act, codified at United States 
 10.10  Code, title 12, section 4908. 
 10.11     Sec. 12.  Minnesota Statutes 1998, section 47.27, 
 10.12  subdivision 3, is amended to read: 
 10.13     Subd. 3.  "Savings association" shall have the meaning set 
 10.14  forth in section 51.01 51A.02, subdivision 2 7.  
 10.15     Sec. 13.  Minnesota Statutes 1998, section 47.54, 
 10.16  subdivision 2, is amended to read: 
 10.17     Subd. 2.  [APPROVAL ORDER.] If no objection is received by 
 10.18  the commissioner within 21 15 days after the publication and 
 10.19  mailing of the notices, the commissioner shall issue an order 
 10.20  approving the application without a hearing if it is found that 
 10.21  (a) the applicant bank meets current industry standards of 
 10.22  capital adequacy, management quality, and asset condition, (b) 
 10.23  the establishment of the proposed detached facility will improve 
 10.24  the quality or increase the availability of banking services in 
 10.25  the community to be served, and (c) the establishment of the 
 10.26  proposed detached facility will not have an undue adverse effect 
 10.27  upon the solvency of existing financial institutions in the 
 10.28  community to be served.  Otherwise, the commissioner shall deny 
 10.29  the application.  Any proceedings for judicial review of an 
 10.30  order of the commissioner issued under this subdivision without 
 10.31  a contested case hearing shall be conducted pursuant to the 
 10.32  provisions of the Administrative Procedure Act relating to 
 10.33  judicial review of agency decisions, sections 14.63 to 14.69, 
 10.34  and the scope of judicial review in such proceedings shall be as 
 10.35  provided therein.  Nothing herein shall be construed as 
 10.36  requiring the commissioner to conduct a contested case hearing 
 11.1   if no written objection is timely received by the commissioner 
 11.2   from a bank within three miles of the proposed location of the 
 11.3   detached facility.  
 11.4      Sec. 14.  Minnesota Statutes 1998, section 47.54, 
 11.5   subdivision 3, is amended to read: 
 11.6      Subd. 3.  [OBJECTIONS; HEARING.] If any bank within three 
 11.7   miles of the proposed location of the detached facility objects 
 11.8   in writing within 21 15 days, the commissioner shall consider 
 11.9   the objection.  If the objection also requests a hearing, the 
 11.10  objector must include the nature of the issues or facts to be 
 11.11  presented and the reasons why written submissions would be 
 11.12  insufficient to make an adequate presentation to the 
 11.13  commissioner.  Comments challenging the legality of an 
 11.14  application should be submitted separately in writing. 
 11.15     Written requests for hearing must be evaluated by the 
 11.16  commissioner who may grant or deny the request.  A hearing must 
 11.17  generally be granted only if it is determined that written 
 11.18  submissions would be inadequate or that a hearing would 
 11.19  otherwise be beneficial to the decision-making process.  A 
 11.20  hearing may be limited to issues considered material by the 
 11.21  commissioner. 
 11.22     If a request for a hearing has been denied, the 
 11.23  commissioner shall notify the applicant and all interested 
 11.24  persons stating the reasons for denial.  Interested parties may 
 11.25  submit to the commissioner with simultaneous copies to the 
 11.26  applicant additional written comments on the application within 
 11.27  14 days after the date of the notice of denial.  The applicant 
 11.28  shall be provided an additional seven days after the 14-day 
 11.29  deadline has expired within which to respond to any comments 
 11.30  submitted within the 14-day period.  A copy of any response 
 11.31  submitted by the applicant shall also be mailed simultaneously 
 11.32  by the applicant to the interested parties.  The commissioner 
 11.33  may waive the additional seven-day comment period if so 
 11.34  requested by the applicant. 
 11.35     Sec. 15.  Minnesota Statutes 1998, section 47.59, 
 11.36  subdivision 12, is amended to read: 
 12.1      Subd. 12.  [CONSUMER PROTECTIONS.] (a) Financial 
 12.2   institutions shall comply with the requirements of the federal 
 12.3   Truth in Lending Act, United States Code, title 15, sections 
 12.4   1601 to 1693, as the same may be amended from time to time, in 
 12.5   connection with a consumer loan or credit sale for a consumer 
 12.6   purpose where the federal Truth in Lending Act is applicable.  A 
 12.7   financial institution shall give the following disclosure to the 
 12.8   borrower in writing at the time an open-end credit account is 
 12.9   established if the financial institution imposes a loan fee, 
 12.10  points, or similar charge that relates to the opening of the 
 12.11  account which is not included in the annual percentage rate 
 12.12  given pursuant to the federal Truth in Lending Act:  "YOU HAVE 
 12.13  BEEN ASSESSED FINANCE CHARGES, OR POINTS, WHICH ARE NOT INCLUDED 
 12.14  IN THE ANNUAL PERCENTAGE RATE.  THESE CHARGES MAY BE REFUNDED, 
 12.15  IN WHOLE OR IN PART, IF YOU DO NOT USE YOUR LINE OF CREDIT OR IF 
 12.16  YOU REPAY YOUR LINE OF CREDIT EARLY.  THESE CHARGES INCREASE THE 
 12.17  COST OF YOUR CREDIT." 
 12.18     (b) Financial institutions shall comply with the following 
 12.19  consumer protection provisions in connection with a consumer 
 12.20  loan or credit sale for a consumer purpose:  sections 325G.02 to 
 12.21  325G.05; 325G.06 to 325G.11; 325G.15 to 325G.22; and 325G.29 to 
 12.22  325G.36, and Code of Federal Regulations, title 12, part 535, 
 12.23  where those statutes or regulations are applicable.  
 12.24     (c) An assignment of a consumer's earnings by the consumer 
 12.25  to a financial institution as payment or as security for payment 
 12.26  of a debt arising out of a consumer loan or consumer credit sale 
 12.27  is unenforceable by the financial institution except where the 
 12.28  assignment:  (1) by its terms is revocable at the will of the 
 12.29  consumer; (2) is a payroll deduction plan or preauthorized 
 12.30  payment plan, beginning at the time of the transaction, in which 
 12.31  the consumer authorizes a series of wage deductions as a method 
 12.32  of making each payment; or (3) applies only to wages or other 
 12.33  earnings already earned at the time of the assignment. 
 12.34     Sec. 16.  Minnesota Statutes 1998, section 47.60, 
 12.35  subdivision 3, is amended to read: 
 12.36     Subd. 3.  [FILING.] Before a person other than a financial 
 13.1   institution as defined by section 47.59 engages in the business 
 13.2   of making consumer small loans, the person shall file with the 
 13.3   commissioner as a consumer small loan lender.  The filing must 
 13.4   be on a form prescribed by the commissioner together with a fee 
 13.5   of $150 $250 for each place of business and contain the 
 13.6   following information in addition to the information required by 
 13.7   the commissioner:  
 13.8      (1) evidence that the filer has available for the operation 
 13.9   of the business at the location specified, liquid assets of at 
 13.10  least $50,000; and 
 13.11     (2) a biographical statement on the principal person 
 13.12  responsible for the operation and management of the business to 
 13.13  be certified.  
 13.14     Revocation of the filing and the right to engage in the 
 13.15  business of a consumer small loan lender is the same as in the 
 13.16  case of a regulated lender license in section 56.09.  
 13.17     Sec. 17.  Minnesota Statutes 1998, section 48.15, 
 13.18  subdivision 2a, is amended to read: 
 13.19     Subd. 2a.  [AUTHORIZED ACTIVITIES.] The commissioner may 
 13.20  authorize a state bank to undertake any activities, exercise any 
 13.21  powers, or make any investments that are authorized activities, 
 13.22  powers, or investments by chapter 50, as of August 1, 1995, for 
 13.23  any state savings bank doing business in this state, or that 
 13.24  become authorized activities, powers, or investments by chapter 
 13.25  50, for state savings banks after August 1, 1995.  The 
 13.26  commissioner may not authorize state banks to engage in any 
 13.27  banking activity prohibited by the laws of this state. 
 13.28     Sec. 18.  Minnesota Statutes 1998, section 48.15, 
 13.29  subdivision 3, is amended to read: 
 13.30     Subd. 3.  [LIMITS ON AUTHORITY TO ACT AS PAYING AGENT FOR 
 13.31  PUBLIC ISSUERS.] No such bank shall act as paying agent of any 
 13.32  municipality or other public issuer of obligations, other than 
 13.33  an issuer within whose corporate limits the principal office of 
 13.34  the bank is situated, unless the bank is authorized to execute 
 13.35  the powers conferred in section 48.38 48A.07. 
 13.36     Sec. 19.  Minnesota Statutes 1998, section 48.24, 
 14.1   subdivision 7, is amended to read: 
 14.2      Subd. 7.  Obligations of any person, copartnership, limited 
 14.3   liability company, association, or corporation individual or 
 14.4   organization, however organized, in the form of notes or drafts 
 14.5   secured by shipping documents or instruments transferring or 
 14.6   securing title covering feeder livestock which is free from all 
 14.7   other encumbrances, when the market value of the livestock 
 14.8   securing the obligation at the time of the making of the loan is 
 14.9   not less than 115 percentum of the face amount of the notes 
 14.10  covered by such documents, shall be subject under this 
 14.11  subdivision to a limitation of 20 percent of capital and surplus 
 14.12  in addition to 20 percent of capital and surplus as included in 
 14.13  provisions of subdivision 1.  Feeder livestock loans as referred 
 14.14  to in this subdivision is defined to include only obligations 
 14.15  secured by liens or giving title to cattle, sheep, goats, hogs 
 14.16  or poultry being fattened for market, but excluding dairy 
 14.17  cattle, milk goats, poultry used for production of eggs, or 
 14.18  barnyard or work animals. 
 14.19     Sec. 20.  Minnesota Statutes 1998, section 48.24, is 
 14.20  amended by adding a subdivision to read: 
 14.21     Subd. 10.  [GRAIN FORWARD SALE CONTRACTS; LENDING 
 14.22  LIMITS.] Obligations of any individual or organization, however 
 14.23  organized, where the note is secured by a perfected first lien 
 14.24  on stored grain and a perfected assignment of the proceeds of a 
 14.25  forward contract for sale of the grain (1) with a recognized 
 14.26  commodity buyer or broker, reasonably satisfactory to the bank, 
 14.27  (2) where the delivery of grain under the contract will occur 
 14.28  within 270 days, (3) where the grain is insured for full value 
 14.29  against loss by fire or other casualty, and (4) where the value 
 14.30  of the forward contract exceeds 115 percent of the face amount 
 14.31  of the secured note, is subject under this subdivision to a 
 14.32  limitation of ten percent of capital and surplus in addition to 
 14.33  the 20 percent of capital and surplus as included in subdivision 
 14.34  1. 
 14.35     Sec. 21.  Minnesota Statutes 1998, section 48A.15, 
 14.36  subdivision 1, is amended to read: 
 15.1      Subdivision 1.  [AUTHORIZATION.] A trust company organized 
 15.2   under the laws of this state or a state bank and trust may, 
 15.3   after completing the notification procedure required by this 
 15.4   subdivision, establish and maintain a trust service office at 
 15.5   any office in this state or of any other state or national 
 15.6   bank.  A state bank may, after completing the notification 
 15.7   procedure required by this subdivision, permit a trust company 
 15.8   organized under the laws of this state or a state bank and trust 
 15.9   or a national bank in this state that is authorized to exercise 
 15.10  trust powers to establish and maintain a trust service office at 
 15.11  any of its banking offices. 
 15.12     The trust company or state bank and trust and a state bank 
 15.13  at which a trust service office is to be established according 
 15.14  to this section shall jointly file, on forms provided by the 
 15.15  commissioner, a notification of intent to establish a trust 
 15.16  service office.  The notification must be accompanied by a 
 15.17  filing fee of $100 payable to the commissioner, to be deposited 
 15.18  in the general fund of the state.  No trust service office shall 
 15.19  be established according to this section if disallowed by order 
 15.20  of the commissioner within 45 30 days of the filing of a 
 15.21  complete and acceptable notification of intent to establish a 
 15.22  trust service office.  An order of the commissioner to disallow 
 15.23  the establishment of a trust service office under this section 
 15.24  is subject to judicial review under sections 14.63 to 14.69. 
 15.25     Sec. 22.  Minnesota Statutes 1998, section 49.36, 
 15.26  subdivision 1, is amended to read: 
 15.27     Subdivision 1.  [REQUIREMENTS.] This consolidation or 
 15.28  merger agreement and certified copy of the proceedings of the 
 15.29  meetings of the respective boards of directors, at which the 
 15.30  making of the agreement was authorized, must be submitted to the 
 15.31  commissioner of commerce for approval with a fee of $250 $2,000 
 15.32  payable to the commissioner of commerce.  The agreement shall 
 15.33  not be effective until so approved by the commissioner.  The 
 15.34  commissioner shall take action after the documents are 
 15.35  submitted, and is entitled to further information from any party 
 15.36  to the transaction as may be requested by the commissioner, or 
 16.1   as may be obtained upon a hearing directed by the commissioner. 
 16.2      Sec. 23.  Minnesota Statutes 1998, section 52.01, is 
 16.3   amended to read: 
 16.4      52.01 [ORGANIZATION.] 
 16.5      Any seven residents of the state may apply to the 
 16.6   commissioner of commerce for permission to organize a credit 
 16.7   union. 
 16.8      A credit union is a cooperative society, incorporated for 
 16.9   the twofold purpose of promoting thrift among its members and 
 16.10  creating a source of credit for them at legitimate rates of 
 16.11  interest for provident purposes. 
 16.12     A credit union is organized in the following manner: 
 16.13     (1) The applicants execute, in duplicate, a certificate of 
 16.14  organization by the terms of which they agree to be bound, which 
 16.15  shall state: 
 16.16     (a) the name and location of the proposed credit union; 
 16.17     (b) the names and addresses of the subscribers to the 
 16.18  certificate and the number of shares subscribed by each; 
 16.19     (2) The applicants submit the following in the form 
 16.20  prescribed by the commissioner of commerce:  
 16.21     (a) a statement of the common bond of the proposed credit 
 16.22  union; 
 16.23     (b) the number of potential members; 
 16.24     (c) the geographic dispersion of the potential members; 
 16.25     (d) evidence of interest, including willingness of 
 16.26  potential members to assume responsibility for leadership and 
 16.27  service; 
 16.28     (e) a two-year forecast of probable levels of assets, 
 16.29  shares and deposits, and income and expense; 
 16.30     (f) the availability of other credit union services to the 
 16.31  potential members; 
 16.32     (g) other information the commissioner requires; 
 16.33     (3) They next prepare and adopt bylaws for the general 
 16.34  governance of the credit union consistent with the provisions of 
 16.35  this chapter, and execute them in duplicate; 
 16.36     (4) The certificate and the bylaws, both executed in 
 17.1   duplicate, are forwarded to the commissioner of commerce with a 
 17.2   $100 application fee $1,000 application fee, which may be waived 
 17.3   by the commissioner for a credit union to be located in a low- 
 17.4   or moderate-income area as defined in Code of Federal 
 17.5   Regulations, title 12, part 25(1), (n)(1) and (n)(2) and where 
 17.6   no other depository institution operates an office; 
 17.7      (5) The commissioner of commerce shall, within 60 days of 
 17.8   the receipt of the certificate, the information required by 
 17.9   paragraph (2), and the bylaws determine whether they comply with 
 17.10  the provisions of this chapter, and whether or not the 
 17.11  organization of the credit union in question would benefit its 
 17.12  members, be economically feasible, and be consistent with the 
 17.13  purposes of this chapter; 
 17.14     (6) Thereupon the commissioner of commerce shall notify the 
 17.15  applicants of the decision.  If it is favorable, the 
 17.16  commissioner shall upon receipt of a commitment for insurance of 
 17.17  accounts as required by section 52.24, subdivision 2, issue a 
 17.18  certificate of approval, attached to the duplicate certificate 
 17.19  of organization, and return them with the duplicate bylaws to 
 17.20  the applicants.  If it is unfavorable, the applicants may, 
 17.21  within 60 days after the decision, appeal for a review in a 
 17.22  court of competent jurisdiction; 
 17.23     (7) The applicants shall thereupon file the duplicate of 
 17.24  the certificate of organization, with the certificate of 
 17.25  approval attached thereto, with the secretary of state, who 
 17.26  shall make a record of the certificate and return it, with a 
 17.27  certificate of record attached thereto, to the commissioner of 
 17.28  commerce for permanent records; and 
 17.29     (8) Thereupon the applicants shall be a credit union 
 17.30  incorporated in accordance with the provisions of this chapter. 
 17.31     In order to simplify the organization of credit unions, the 
 17.32  commissioner of commerce shall prepare approved forms of 
 17.33  certificate of organization and bylaws, consistent with this 
 17.34  chapter, which may be used by credit union incorporators for 
 17.35  their guidance, and on written application of seven residents of 
 17.36  the state, shall supply them without charge with a blank 
 18.1   certificate of organization and a copy of the form of suggested 
 18.2   bylaws. 
 18.3      Sec. 24.  Minnesota Statutes 1998, section 52.05, 
 18.4   subdivision 2, is amended to read: 
 18.5      Subd. 2.  [APPLICATION.] Any 25 15 persons representing a 
 18.6   group may apply to the commissioner, advising the commissioner 
 18.7   of the common bond of the group and its number of potential 
 18.8   members, for a determination whether it is feasible for the 
 18.9   group to form a credit union.  Upon a determination that it is 
 18.10  not feasible to organize because the number of potential members 
 18.11  is too small, the applicants will be certified by the 
 18.12  commissioner as eligible to petition for membership in an 
 18.13  existing credit union capable of serving the group.  If the 
 18.14  credit union so petitioned resolves to accept the group into 
 18.15  membership, it shall follow the bylaw amendment and approval 
 18.16  procedure set forth in section 52.02.  
 18.17     The commissioner shall adopt rules to implement this 
 18.18  subdivision.  These rules must provide that: 
 18.19     (1) for the purpose of this subdivision, groups with a 
 18.20  potential membership of less than 1,500 will be considered too 
 18.21  small to be feasible as a separate credit union, unless there 
 18.22  are compelling reasons to the contrary, relevant to the 
 18.23  objectives of this subdivision; 
 18.24     (2) groups with a potential membership in excess of 1,500 
 18.25  will be considered in light of all circumstances relevant to the 
 18.26  objectives of this subdivision; and 
 18.27     (3) all group applications, except for applications from 
 18.28  groups made up of members of existing credit unions or groups 
 18.29  made up of people who have a common employer which qualifies 
 18.30  them for membership in an existing credit union, will be 
 18.31  considered separately from any consideration of the membership 
 18.32  provisions of existing credit unions; except that, groups made 
 18.33  up of members of an existing credit union may be certified under 
 18.34  this subdivision with the agreement of the credit union. 
 18.35     Sec. 25.  Minnesota Statutes 1998, section 53.03, 
 18.36  subdivision 1, is amended to read: 
 19.1      Subdivision 1.  [APPLICATION, FEE, NOTICE.] Any corporation 
 19.2   hereafter organized as an industrial loan and thrift company, 
 19.3   shall, after compliance with the requirements set forth in 
 19.4   sections 53.01 and 53.02, file a written application with the 
 19.5   department of commerce for a certificate of authorization.  A 
 19.6   corporation that will not sell or issue thrift certificates for 
 19.7   investment as permitted by this chapter need not comply with 
 19.8   subdivision 2b.  The application must be in the form prescribed 
 19.9   by the department of commerce.  The application must be made in 
 19.10  the name of the corporation, executed and acknowledged by an 
 19.11  officer designated by the board of directors of the corporation, 
 19.12  requesting a certificate authorizing the corporation to transact 
 19.13  business as an industrial loan and thrift company, at the place 
 19.14  and in the name stated in the application.  At the time of 
 19.15  filing the application the applicant shall pay a $1,000 filing 
 19.16  fee and a $500 investigation fee $1,500 filing fee if the 
 19.17  corporation will not sell or issue thrift certificates for 
 19.18  investment, and a filing fee of $8,000 if the corporation will 
 19.19  sell or issue thrift certificates for investment.  The fees must 
 19.20  be turned over by the commissioner to the state treasurer and 
 19.21  credited to the general fund.  The applicant shall also submit a 
 19.22  copy of the bylaws of the corporation, its articles of 
 19.23  incorporation and all amendments thereto at that time.  An 
 19.24  application for powers under subdivision 2b must also require 
 19.25  that a notice of the filing of the application must be published 
 19.26  once within 30 days of the receipt of the form prescribed by the 
 19.27  department of commerce, at the expense of the applicant, in a 
 19.28  qualified newspaper published in the municipality in which the 
 19.29  proposed industrial loan and thrift company is to be located, 
 19.30  or, if there be none, in a qualified newspaper likely to give 
 19.31  notice in the municipality in which the company is proposed to 
 19.32  be located.  If the department of commerce receives a written 
 19.33  objection to the application from any person within 21 15 days 
 19.34  of the notice having been fully published, the commissioner 
 19.35  shall proceed in the same manner as required under section 
 19.36  46.041, subdivisions 3 and 4, relating to state banks. 
 20.1      Sec. 26.  Minnesota Statutes 1998, section 53.03, 
 20.2   subdivision 6, is amended to read: 
 20.3      Subd. 6.  [AMENDED CERTIFICATES, THRIFT CERTIFICATES FOR 
 20.4   INVESTMENT, APPLICATION, FEE, NOTICE.] Upon approval by the 
 20.5   commissioner of commerce of a commitment for insurance or 
 20.6   guarantee of certificates to be held for investment as required 
 20.7   in section 53.10, subdivision 3, an industrial loan and thrift 
 20.8   company may apply to the department of commerce for an amended 
 20.9   certificate of authorization and consent to sell and issue 
 20.10  thrift certificates for investment.  
 20.11     The application, in triplicate, must be in the form 
 20.12  prescribed by the department of commerce and filed in its 
 20.13  office.  At the time of filing the application, the applicant 
 20.14  shall pay a filing fee of $500 $8,000 and if an application is 
 20.15  contested, 50 percent of an additional fee equal to the actual 
 20.16  costs incurred by the department of commerce in approving or 
 20.17  disapproving the application, payable to the state treasurer and 
 20.18  credited by the treasurer to the general fund, must be paid by 
 20.19  the applicant and 50 percent equally by the intervening 
 20.20  parties.  A notice of the filing of the application must be 
 20.21  published once within 30 days of the receipt of the form 
 20.22  prescribed by the department of commerce, at the expense of the 
 20.23  applicant, in a newspaper published in the municipality in which 
 20.24  the place of business under the application is located, or if 
 20.25  there is none, in a newspaper published at the county seat of 
 20.26  the county in which the place of business is located.  Not more 
 20.27  than one place of business maintained under a certificate of 
 20.28  authorization may be the subject of an application.  
 20.29     Sec. 27.  Minnesota Statutes 1998, section 53.03, 
 20.30  subdivision 7, is amended to read: 
 20.31     Subd. 7.  [OBJECTION TO APPLICATION.] Upon receiving 
 20.32  written objection to the application from any person within 20 
 20.33  15 days of the notice having been fully published, the 
 20.34  department of commerce shall order a contested case hearing to 
 20.35  be conducted on the application.  
 20.36     Sec. 28.  Minnesota Statutes 1998, section 55.04, 
 21.1   subdivision 2, is amended to read: 
 21.2      Subd. 2.  [APPLICATION FOR LICENSE.] Application for 
 21.3   license shall be in writing, under oath, and in the form 
 21.4   prescribed by the commissioner of commerce, and contain the name 
 21.5   and address, both of the residence and place of business, of the 
 21.6   applicant, and if the applicant is a partnership or 
 21.7   unincorporated association, of every member thereof, and if a 
 21.8   corporation, of each officer and director thereof; also the 
 21.9   county and municipality, with street and number, if any, where 
 21.10  the business is to be conducted; and further information the 
 21.11  commissioner of commerce requires.  The applicant at the time of 
 21.12  making application shall pay to the commissioner the sum of $250 
 21.13  as a fee for investigating the application, and the additional 
 21.14  sum of $150 as an annual license fee for a period terminating on 
 21.15  the last day of the current calendar year.  If the application 
 21.16  is filed after June 30 in any year the additional sum shall be 
 21.17  only $75. 
 21.18     Sec. 29.  Minnesota Statutes 1998, section 56.02, is 
 21.19  amended to read: 
 21.20     56.02 [APPLICATION FEE.] 
 21.21     Application for license shall be in writing, under oath, 
 21.22  and in the form prescribed by the commissioner, and contain the 
 21.23  name and the address, both of the residence and place of 
 21.24  business, of the applicant and, if the applicant is a 
 21.25  copartnership or association, of every member thereof, and if a 
 21.26  corporation, of each officer and director thereof; also the 
 21.27  county and municipality, with street and number, if any, where 
 21.28  the business is to be conducted, and such further information as 
 21.29  the commissioner may require.  The applicant at the time of 
 21.30  making application, shall pay to the commissioner the sum of 
 21.31  $250 $500 as a fee for investigating the application, and the 
 21.32  additional sum of $150 $250 as an annual license fee for a 
 21.33  period terminating on the last day of the current calendar year; 
 21.34  provided, that if the application is filed after June 30 in any 
 21.35  year the additional sum shall be only $75.  In addition to the 
 21.36  annual license fee, every licensee hereunder shall pay to the 
 22.1   commissioner the actual costs of each examination, as provided 
 22.2   for in section 56.10.  All moneys collected by the commissioner 
 22.3   under this chapter shall be turned over to the state treasurer 
 22.4   and credited by the treasurer to the general fund of the state. 
 22.5      Every applicant shall also prove, in form satisfactory to 
 22.6   the commissioner, that the applicant has available for the 
 22.7   operation of the business at the location specified in the 
 22.8   application, liquid assets of at least $50,000. 
 22.9      Sec. 30.  Minnesota Statutes 1998, section 56.131, 
 22.10  subdivision 1, is amended to read: 
 22.11     Subdivision 1.  [INTEREST RATES AND CHARGES.] (a) On any 
 22.12  loan in a principal amount not exceeding $100,000 or 15 percent 
 22.13  of a Minnesota corporate licensee's capital stock and surplus as 
 22.14  defined in section 53.015, if greater, a licensee may contract 
 22.15  for and receive interest, finance charges, and other charges as 
 22.16  provided in section 47.59. 
 22.17     (b) Loans may be interest-bearing or precomputed. 
 22.18     (c) Notwithstanding section 47.59 to the contrary, to 
 22.19  compute time on interest-bearing and precomputed loans, 
 22.20  including, but not limited to the calculation of interest, a day 
 22.21  is considered 1/30 of a month when calculation is made for a 
 22.22  fraction of a calendar month.  A year is 12 calendar months.  A 
 22.23  calendar month is that period from a given date in one month to 
 22.24  the same numbered date in the following month, and if there is 
 22.25  no same numbered date, to the last day of the following month.  
 22.26  When a period of time includes a whole month and a fraction of a 
 22.27  month, the fraction of a month is considered to follow the whole 
 22.28  month.  
 22.29     In the alternative, for interest-bearing loans, a licensee 
 22.30  may charge interest at the rate of 1/365 of the agreed annual 
 22.31  rate for each actual day elapsed.  
 22.32     (d) With respect to interest-bearing loans and 
 22.33  notwithstanding section 47.59: 
 22.34     (1) Interest must be computed on unpaid principal balances 
 22.35  outstanding from time to time, for the time outstanding.  Each 
 22.36  payment must be applied first to the accumulated interest and 
 23.1   the remainder of the payment applied to the unpaid principal 
 23.2   balance; provided however, that if the amount of the payment is 
 23.3   insufficient to pay the accumulated interest, the unpaid 
 23.4   interest continues to accumulate to be paid from the proceeds of 
 23.5   subsequent payments and is not added to the principal balance. 
 23.6      (2) Interest must not be payable in advance or compounded.  
 23.7   However, if part or all of the consideration for a new loan 
 23.8   contract is the unpaid principal balance of a prior loan, then 
 23.9   the principal amount payable under the new loan contract may 
 23.10  include any unpaid interest which has accrued.  The unpaid 
 23.11  principal balance of a precomputed loan is the balance due after 
 23.12  refund or credit of unearned interest as provided in paragraph 
 23.13  (e), clause (3).  The resulting loan contract is deemed a new 
 23.14  and separate loan transaction for all purposes. 
 23.15     (e) With respect to precomputed loans and notwithstanding 
 23.16  section 47.59 to the contrary: 
 23.17     (1) Loans must be repayable in substantially equal and 
 23.18  consecutive monthly installments of principal and interest 
 23.19  combined, except that the first installment period may be more 
 23.20  or less than one month by not more than 15 days, and the first 
 23.21  installment payment amount may be larger than the remaining 
 23.22  payments by the amount of interest charged for the extra days 
 23.23  and must be reduced by the amount of interest for the number of 
 23.24  days less than one month to the first installment payment; and 
 23.25  monthly installment payment dates may be omitted to accommodate 
 23.26  borrowers with seasonal income. 
 23.27     (2) Payments may be applied to the combined total of 
 23.28  principal and precomputed interest until the loan is fully 
 23.29  paid.  Payments must be applied in the order in which they 
 23.30  become due. 
 23.31     (3) If the maturity of the loan is accelerated for any 
 23.32  reason and judgment is entered, the licensee shall credit the 
 23.33  borrower with the same refund as if prepayment in full had been 
 23.34  made on the date the judgment is entered. 
 23.35     (4) Following the final installment as originally scheduled 
 23.36  or deferred, the licensee, for any loan contract which has not 
 24.1   previously been converted to interest-bearing under clause 
 24.2   (7) paragraph (g), may charge interest on any balance remaining 
 24.3   unpaid, including unpaid default or deferment charges, at the 
 24.4   single annual percentage rate permitted by this subdivision 
 24.5   until fully paid.  
 24.6      (5) With respect to a loan secured by an interest in real 
 24.7   estate, and having a maturity of more than 60 months, the 
 24.8   original schedule of installment payments must fully amortize 
 24.9   the principal and interest on the loan.  The original schedule 
 24.10  of installment payments for any other loan secured by an 
 24.11  interest in real estate must provide for payment amounts that 
 24.12  are sufficient to pay all interest scheduled to be due on the 
 24.13  loan. 
 24.14     (6) (f) A licensee may contract for and collect a 
 24.15  delinquency charge as provided for in section 47.59, subdivision 
 24.16  6, paragraph (a), clause (4). 
 24.17     (7) (g) A licensee may grant extensions, deferments, or 
 24.18  conversions to interest-bearing as provided in section 47.59, 
 24.19  subdivision 5. 
 24.20     Sec. 31.  Minnesota Statutes 1998, section 58.06, 
 24.21  subdivision 2, is amended to read: 
 24.22     Subd. 2.  [APPLICATION CONTENTS.] The application must 
 24.23  contain the name and complete business address or addresses of 
 24.24  the license applicant.  If the license applicant is a 
 24.25  partnership, limited liability partnership, association, limited 
 24.26  liability company, corporation, or other form of business 
 24.27  organization, the application must contain the names and 
 24.28  complete business addresses of each partner, member, director, 
 24.29  and principal officer.  The application must also include a 
 24.30  description of the activities of the license applicant, in the 
 24.31  detail and for the periods the commissioner may require.  The 
 24.32  application must also include all of the following: 
 24.33     (a) an affirmation under oath that the applicant: 
 24.34     (1) will maintain competent staff and adequate staffing 
 24.35  levels, through direct employees or otherwise, to meet the 
 24.36  requirements of this chapter; 
 25.1      (2) will advise the commissioner of any material changes to 
 25.2   the information submitted in the most recent application within 
 25.3   ten days of the change; 
 25.4      (3) will advise the commissioner in writing immediately of 
 25.5   any bankruptcy petitions filed against or by the applicant or 
 25.6   licensee; 
 25.7      (4) is financially solvent and in compliance with net worth 
 25.8   requirements; 
 25.9      (5) complies with federal and state tax laws; 
 25.10     (6) complies with sections 345.31 to 345.60, the Minnesota 
 25.11  unclaimed property law; and 
 25.12     (7) is, or that a person in control of the license 
 25.13  applicant is, at least 18 years of age; 
 25.14     (b) information as to the mortgage lending, servicing, or 
 25.15  brokering experience of the applicant and persons in control of 
 25.16  the applicant; 
 25.17     (c) information as to criminal convictions, excluding 
 25.18  traffic violations, of persons in control of the license 
 25.19  applicant; 
 25.20     (d) whether a court of competent jurisdiction has found 
 25.21  that the applicant or persons in control of the applicant have 
 25.22  engaged in conduct evidencing gross negligence, fraud, 
 25.23  misrepresentation, or deceit in performing an act for which a 
 25.24  license is required under this chapter; 
 25.25     (e) whether the applicant or persons in control of the 
 25.26  applicant have been the subject of:  an order of suspension or 
 25.27  revocation, cease and desist order, or injunctive order, or 
 25.28  order barring involvement in an industry or profession issued by 
 25.29  this or another state or federal regulatory agency or by the 
 25.30  Secretary of Housing and Urban Development within the ten-year 
 25.31  period immediately preceding submission of the application; and 
 25.32     (f) other information required by the commissioner. 
 25.33     Sec. 32.  Minnesota Statutes 1998, section 58.08, 
 25.34  subdivision 1, is amended to read: 
 25.35     Subdivision 1.  [REQUIREMENT OF RESIDENTIAL MORTGAGE 
 25.36  ORIGINATORS.] A residential mortgage originator 
 26.1   licensee engaging in servicing a residential mortgage loan shall 
 26.2   continuously maintain a surety bond or irrevocable letter of 
 26.3   credit in an amount not less than $50,000 in a form approved by 
 26.4   the commissioner, issued by an insurance company or bank 
 26.5   authorized to do so in this state.  The bond must be available 
 26.6   for the recovery of expenses, fines, and fees levied by the 
 26.7   commissioner under this chapter relating to servicing, and for 
 26.8   losses or damages incurred by borrowers as the result of a 
 26.9   licensee's servicing-related noncompliance with the requirements 
 26.10  of this chapter, sections 325D.43 to 325D.48, and 325F.67 to 
 26.11  325F.69, or breach of contract. 
 26.12     The bond or irrevocable letter of credit must be submitted 
 26.13  with the originator's license application, and evidence of 
 26.14  continued coverage must be submitted with each renewal.  Any 
 26.15  change in the bond or letter of credit must be submitted for 
 26.16  approval by the commissioner, within ten days of its execution. 
 26.17     Sec. 33.  Minnesota Statutes 1998, section 59A.03, 
 26.18  subdivision 2, is amended to read: 
 26.19     Subd. 2.  The applicant at the time of making application, 
 26.20  shall pay to the commissioner the sum of $250 as a fee for 
 26.21  investigating the application, and the additional sum 
 26.22  of $100 $200 as an annual licensee fee for a period terminating 
 26.23  on May 31 of each year.  In addition to the annual license fee, 
 26.24  every licensee shall pay to the commissioner the actual costs of 
 26.25  each examination as may be required to be conducted under the 
 26.26  terms of sections 59A.01 to 59A.15. 
 26.27     Sec. 34.  Minnesota Statutes 1998, section 118A.01, 
 26.28  subdivision 2, is amended to read: 
 26.29     Subd. 2.  [GOVERNMENT ENTITY.] "Government entity" means a 
 26.30  county, city, town, school district, hospital district, public 
 26.31  authority, public corporation, public commission, special 
 26.32  district, any other political subdivision, except an entity 
 26.33  whose investment authority is specified under chapter 11A or 
 26.34  356A. 
 26.35     For the purposes of sections 118A.02 and 118A.03 only, the 
 26.36  term includes an American Indian tribal government entity 
 27.1   located within a federally recognized American Indian 
 27.2   reservation. 
 27.3      Sec. 35.  Minnesota Statutes 1998, section 168.67, is 
 27.4   amended to read: 
 27.5      168.67 [SALES FINANCE COMPANY; LICENSE, FEES, REFUND.] 
 27.6      (a) No person shall engage in the business of a sales 
 27.7   finance company in this state without a license therefor as 
 27.8   provided in sections 168.66 to 168.77 provided, however, that no 
 27.9   bank, trust company, savings bank, savings association, or 
 27.10  credit union, whether state or federally chartered, industrial 
 27.11  loan and thrift company, or licensee under the Minnesota 
 27.12  Regulated Loan Act authorized to do business in this state shall 
 27.13  be required to obtain a license under sections 168.66 to 168.77. 
 27.14     (b) The application for a license shall be in writing, 
 27.15  under oath and in the form prescribed by the administrator.  The 
 27.16  application shall contain the name of the applicant; date of 
 27.17  incorporation, if incorporated; the address where the business 
 27.18  is or is to be conducted and similar information as to any 
 27.19  branch office of the applicant; the name and resident address of 
 27.20  the owner or partners, or, if a corporation or association, of 
 27.21  the directors, trustees and principal officers, and other 
 27.22  pertinent information the administrator requires. 
 27.23     (c) The licensee fee for the fiscal year beginning July 1 
 27.24  and ending June 30 of the following year, or any part thereof 
 27.25  shall be the sum of $150 $250 for the principal place of 
 27.26  business of the licensee, and the sum of $75 $125 for each 
 27.27  branch of the licensee, maintained in this state.  Any licensee 
 27.28  who proves to the satisfaction of the administrator, by 
 27.29  affidavit or other proof satisfactory to the administrator, that 
 27.30  during the 12 calendar months of the immediately preceding 
 27.31  fiscal year, for which the license has been paid that the 
 27.32  licensee has not held retail installment contracts exceeding 
 27.33  $15,000 in amount, shall be entitled to a refund of that portion 
 27.34  of each license fee paid in excess of $25.  The administrator 
 27.35  shall certify to the commissioner of finance that the licensee 
 27.36  is entitled to a refund, and payment thereof shall be made by 
 28.1   the state treasurer.  The amount necessary to pay for the 
 28.2   refundment of the license fee is appropriated out of the general 
 28.3   fund.  All license fees received by the administrator under 
 28.4   sections 168.66 to 168.77 shall be deposited with the state 
 28.5   treasurer. 
 28.6      (d) Each license shall specify the location of the office 
 28.7   or branch and must be conspicuously displayed there.  In case 
 28.8   the location be changed, the administrator shall endorse the 
 28.9   change of location on the license. 
 28.10     (e) Upon the filing of such application, and the payment of 
 28.11  the fee, the administrator shall issue a license to the 
 28.12  applicant to engage in the business of a sales finance company 
 28.13  under and in accordance with the provisions of sections 168.66 
 28.14  to 168.77 for a period which shall expire the last day of June 
 28.15  next following the date of its issuance.  The license shall not 
 28.16  be transferable or assignable.  No licensee shall transact any 
 28.17  business provided for by sections 168.66 to 168.77 under any 
 28.18  other name.  
 28.19     Sec. 36.  Minnesota Statutes 1998, section 168.71, is 
 28.20  amended to read: 
 28.21     168.71 [MOTOR VEHICLE RETAIL INSTALLMENT CONTRACT.] 
 28.22     (a)(1) Every retail installment contract shall be in 
 28.23  writing, shall contain all the agreements of the parties, shall 
 28.24  be signed by the retail buyer and seller, and a copy signed by 
 28.25  the retail buyer shall be furnished to such retail buyer at the 
 28.26  time the retail buyer executes the contract.  The copy signed by 
 28.27  both the retail buyer and retail seller shall be provided to the 
 28.28  retail buyer within seven days after delivery of the vehicle.  
 28.29  With respect to any contract executed prior to August 1, 1996, 
 28.30  which has not been paid in full by the retail buyer, the retail 
 28.31  seller shall provide such retail buyer a copy signed by both the 
 28.32  retail buyer and retail seller within 120 days after August 1, 
 28.33  1996. 
 28.34     (2) No provisions for confession of judgment or power of 
 28.35  attorney therefor contained in any retail installment contract 
 28.36  or contained in a separate agreement relating thereto, shall be 
 29.1   valid or enforceable.  
 29.2      (3) The holder of a precomputed retail installment contract 
 29.3   may, if the contract so provides, collect a delinquency and 
 29.4   collection charge on each installment in arrears for a period 
 29.5   not less than ten days in an amount not in excess of five 
 29.6   percent of each installment or $5, whichever is greater.  In 
 29.7   addition to such delinquency and collection charge, the retail 
 29.8   installment contract, whether interest-bearing or precomputed, 
 29.9   may provide for the payment of attorneys' fees not exceeding 15 
 29.10  percent of the amount due and payable under such contract where 
 29.11  such contract is referred to an attorney not a salaried employee 
 29.12  of the holder of the contract for collection plus the court 
 29.13  costs.  
 29.14     (4) Unless written notice has been given to the retail 
 29.15  buyer of actual or intended assignment of a retail installment 
 29.16  contract, payment thereunder or tender thereof made by the 
 29.17  retail buyer to the last known holder of such contract shall be 
 29.18  binding upon all subsequent holders or assignees.  
 29.19     (5) Upon written request from the retail buyer, the holder 
 29.20  of the retail installment contract shall give or forward to the 
 29.21  retail buyer a written statement of the dates and amounts of 
 29.22  payments and the total amount unpaid under such contract.  A 
 29.23  retail buyer shall be given a written receipt for any payment 
 29.24  when made in cash.  
 29.25     (b) The retail installment contract shall contain the 
 29.26  following items: 
 29.27     (1) the cash sale price of the motor vehicle which is the 
 29.28  subject matter of the retail installment contract; 
 29.29     (2) the total amount of the retail buyer's down payment, 
 29.30  whether made in money or goods, or partly in money or partly in 
 29.31  goods; 
 29.32     (3) the difference between items one and two; 
 29.33     (4) the charge, if any, included in the transaction to pay 
 29.34  the balance of an existing purchase money motor vehicle lien 
 29.35  which exceeds the value of the trade-in amount, or for any 
 29.36  insurance and other benefits not included in clause (1), 
 30.1   specifying the types of coverage and taxes, fees, and charges 
 30.2   that actually are or will be paid to public officials or 
 30.3   government agencies, including those for perfecting, releasing, 
 30.4   or satisfying a security interest if such taxes, fees, or 
 30.5   charges are not included in clause (1); 
 30.6      (5) principal balance, which is the sum of items three and 
 30.7   four; 
 30.8      (6) the amount of the finance charge; 
 30.9      (7) the total of payments payable by the retail buyer to 
 30.10  the retail seller and the number of installment payments 
 30.11  required and the amount of each installment expressed in dollars 
 30.12  or percentages, and date of each payment necessary finally to 
 30.13  pay the total of payments which is the sum of item five and item 
 30.14  six.  
 30.15     Provided, however, that said items one to seven inclusive 
 30.16  need not be stated in the terms, sequence or order set forth 
 30.17  above.  Provided further, that clauses (6) and (7) may be 
 30.18  disclosed on the assumption that all scheduled payments under 
 30.19  the contract will be made when due. 
 30.20     In lieu of the above clauses, the retail seller may give 
 30.21  the retail buyer disclosures which satisfy the requirements of 
 30.22  the Federal Truth-In-Lending Act in effect as of the time of the 
 30.23  contract, notwithstanding whether or not that act applies to the 
 30.24  transaction. 
 30.25     (c) Every retail seller or sales finance company, if a 
 30.26  charge for insurance on the motor vehicle is included in a 
 30.27  retail installment contract shall within 30 days after execution 
 30.28  of the retail installment contract send or cause to be sent to 
 30.29  the retail buyer a policy or policies or certificate of 
 30.30  insurance, which insurance shall be written by a company 
 30.31  authorized to do business in this state, clearly setting forth 
 30.32  the amount of the premium, the kind or kinds of insurance and 
 30.33  the scope of the coverage and all the terms, exceptions, 
 30.34  limitations, restrictions and conditions of the contract or 
 30.35  contracts of the insurance.  The buyer of a motor vehicle under 
 30.36  a retail installment contract shall have the privilege of 
 31.1   purchasing such insurance from an agent or broker of the buyer's 
 31.2   own selection and selecting an insurance company mutually 
 31.3   acceptable to the seller and the buyer; provided, however, that 
 31.4   the inclusion of the cost of the insurance premium in the retail 
 31.5   installment contract when the buyer selects the agent, broker or 
 31.6   company, shall be optional with the seller. 
 31.7      (d) Any sales finance company hereunder may purchase or 
 31.8   acquire from any retail seller any retail installment contract 
 31.9   on such terms and conditions as may be mutually agreed upon 
 31.10  between them.  
 31.11     (e) An acknowledgment by the retail buyer of the delivery 
 31.12  of any such copy or notice as required in subsection (a) 
 31.13  contained in the body of the statement or contract shall be 
 31.14  conclusive proof of delivery in any action or proceeding by or 
 31.15  against any assignee of a retail installment contract. 
 31.16     Sec. 37.  Minnesota Statutes 1998, section 303.25, 
 31.17  subdivision 5, is amended to read: 
 31.18     Subd. 5.  [SOLICITATION OF BUSINESS.] A foreign trust 
 31.19  association may not maintain an office within this state, but it 
 31.20  may solicit business within this state if banking or trust 
 31.21  associations or corporations organized under the laws of this 
 31.22  state or national banking associations maintaining their 
 31.23  principal offices in this state may solicit business in the 
 31.24  state in which the foreign trust association maintains its 
 31.25  principal office.  For purposes of this subdivision, 
 31.26  solicitation of business includes the activities authorized for 
 31.27  state or national banking associations exercising fiduciary 
 31.28  powers maintaining their principal offices in this state 
 31.29  considered a representative trust office established under 
 31.30  section 48.476 48A.14.  A foreign trust association must follow 
 31.31  the procedures in section 48A.18 to establish a trust office and 
 31.32  the procedures in section 48A.19 to establish a representative 
 31.33  trust office. 
 31.34     Sec. 38.  Minnesota Statutes 1998, section 332.15, 
 31.35  subdivision 2, is amended to read: 
 31.36     Subd. 2.  [LICENSE FOR EACH LOCATION.] Each person 
 32.1   operating a debt prorating service shall obtain a license for 
 32.2   each location and place of business, including each branch 
 32.3   office.  Such person shall submit a separate application for 
 32.4   each place of business.  The full license fee shall be payable 
 32.5   only for one such place of business.  For each additional place 
 32.6   of business the license fee shall be $25 $100.  
 32.7      Sec. 39.  Minnesota Statutes 1998, section 332.15, 
 32.8   subdivision 3, is amended to read: 
 32.9      Subd. 3.  [FEES.] Each applicant, at the time of making 
 32.10  such application, shall pay to the commissioner the sum of $50 
 32.11  $100 as a fee for investigation of the applicant, and the 
 32.12  additional sum of $100 $250 as a license fee.  If the 
 32.13  application is denied, said license fee shall be returned to the 
 32.14  applicant.  
 32.15     Sec. 40.  Minnesota Statutes 1998, section 332.17, is 
 32.16  amended to read: 
 32.17     332.17 [RENEWAL OF LICENSE.] 
 32.18     Each licensee under the provisions of sections 332.12 to 
 32.19  332.29 shall, not more than 60 nor less than 30 days before its 
 32.20  license is to expire, make application to the commissioner for 
 32.21  renewal of its license.  Such application for renewal shall be 
 32.22  on a form prescribed by the commissioner and shall be 
 32.23  accompanied by payment of the sum of $25 as a fee for 
 32.24  investigation of the renewal applicant, the additional sum of 
 32.25  $100 $250 as a license fee, and a bond as required in the case 
 32.26  of an original application.  The commissioner may investigate 
 32.27  the licensee and determine its continued fitness as in the case 
 32.28  of an original application.  If the commissioner shall renew the 
 32.29  license, said renewal shall be effective for one year from the 
 32.30  date on which the previous license expired. 
 32.31     Sec. 41.  Minnesota Statutes 1998, section 332.30, is 
 32.32  amended to read: 
 32.33     332.30 [ACCELERATED MORTGAGE PAYMENT PROVIDER; BOND 
 32.34  REQUIREMENTS.] 
 32.35     (a) Before beginning business in this state, an accelerated 
 32.36  mortgage payment provider, as defined in section 332.13, 
 33.1   subdivision 2, clause (10), shall submit to the commissioner of 
 33.2   commerce an authorization fee of $250 and either: 
 33.3      (1) a surety bond in which the accelerated mortgage payment 
 33.4   provider is the obligor, in an amount determined by the 
 33.5   commissioner; or 
 33.6      (2) if the commissioner agrees to accept it, a deposit: 
 33.7      (i) in cash in an amount equivalent to the bond amount; or 
 33.8      (ii) of authorized securities, as defined in section 50.14, 
 33.9   with an aggregate market value equal to the bond amount.  The 
 33.10  cash or securities must be deposited with the state treasurer. 
 33.11     (b) The amount of the bond required by the commissioner 
 33.12  shall vary with the amount of Minnesota client funds held or to 
 33.13  be held by the obligor.  For new businesses, the bond must be no 
 33.14  less than $100,000, except as provided in section 332.301.  The 
 33.15  commissioner may increase the required bond amount upon 30 days' 
 33.16  notice to the accelerated mortgage payment provider.  
 33.17     (c) If a bond is submitted, it must name as surety an 
 33.18  insurance company authorized to transact fidelity and surety 
 33.19  business in this state.  The bond must run to the state of 
 33.20  Minnesota for the use of the state and of any person who may 
 33.21  have a claim against the obligor arising out of the obligor's 
 33.22  activities as an accelerated mortgage payment provider.  The 
 33.23  bond must be conditioned that the obligor will not commit any 
 33.24  fraudulent act and will faithfully conform to and abide by the 
 33.25  provisions of accelerated mortgage payment agreements with 
 33.26  Minnesota residents.  
 33.27     If an accelerated mortgage payment provider has failed to 
 33.28  account to a mortgagor or distribute funds to the mortgagee as 
 33.29  required by an accelerated mortgage payment agreement, the 
 33.30  mortgagor or the mortgagor's legal representative or receiver or 
 33.31  the commissioner shall have, in addition to any other legal 
 33.32  remedies, a right of action in the name of the debtor on the 
 33.33  bond or the security given pursuant to this section. 
 33.34     Sec. 42.  [334.21] [MOTOR VEHICLE LEASE AGREEMENTS.] 
 33.35     A motor vehicle lease agreement may include the outstanding 
 33.36  balance from a prior motor vehicle loan or lease. 
 34.1      Sec. 43.  [CHISAGO LAKES TOWNSHIP; DETACHED BANKING 
 34.2   FACILITY.] 
 34.3      With the prior approval of the commissioner of commerce, a 
 34.4   bank operating its principal office in Marine on St. Croix may 
 34.5   establish and maintain not more than one detached facility in 
 34.6   Chisago Lakes township.  A bank desiring to establish such a 
 34.7   detached facility must follow the approval procedure prescribed 
 34.8   in Minnesota Statutes, section 47.54.  The establishment of a 
 34.9   detached facility under this section is subject to Minnesota 
 34.10  Statutes, sections 47.51 to 47.57, except to the extent those 
 34.11  sections are inconsistent with this section. 
 34.12     Sec. 44.  [REPEALER.] 
 34.13     (a) Minnesota Statutes 1998, section 47.20, subdivision 14, 
 34.14  is repealed. 
 34.15     (b) Minnesota Statutes 1998, section 58.07, is repealed. 
 34.16     Sec. 45.  [EFFECTIVE DATE.] 
 34.17     Sections 1 to 7, 12 to 14, 16, 18, 21 to 23, 25 to 29, 33, 
 34.18  35, and 37 to 41 are effective July 1, 1999.  Sections 11 and 
 34.19  44, paragraph (a), are effective July 29, 1999.  Section 43 
 34.20  takes effect the day after compliance by the governing body of 
 34.21  Chisago Lakes township with Minnesota Statutes, section 645.021, 
 34.22  subdivision 3.  Sections 8 to 10, 12, 15, 17, 31, 32, and 44, 
 34.23  paragraph (b), are effective the day following final enactment.