1.1 	A bill for an act
1.2 	relating to commerce; regulating the investment
1.3 	authority of, and annual reporting required for,
1.4 	certain financial institutions; removing obsolete
1.5 	references to the credit union advisory task force;
1.6 	regulating residential mortgage originators; providing
1.7 	for insurance license renewals; regulating for the
1.8 	voluntary dissolution of fraternal benefit societies;
1.9 	amending Minnesota Statutes 2004, sections 47.10,
1.10 	subdivision 1; 48.10; 52.062, subdivision 2; 60A.13,
1.11 	subdivision 5; 64B.30, by adding a subdivision;
1.12 	proposing coding for new law in Minnesota Statutes,
1.13 	chapter 58; repealing Minnesota Statutes 2004,
1.14 	sections 52.062, subdivision 3; Minnesota Rules, part
1.15 	2675.2610, subpart 5.
1.16 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.17 	Section 1. Minnesota Statutes 2004, section 47.10,
1.18 	subdivision 1, is amended to read:
1.19 		Subdivision 1.Authority, approval, limitations.  (a)
1.20 	Except as otherwise specially provided, the net book value of
1.21 	land and buildings for the transaction of the business of the
1.22 	corporation, including parking lots and premises leased to
1.23 	others, shall not be more than as follows:
1.24 	(1) for a bank, trust company, savings bank, or stock
1.25 	savings association, if investment is for acquisition and
1.26 	improvements to establish a new bank banking office, or is for
1.27 	improvements to existing property or acquisition and
1.28 	improvements to adjacent property, approval by the commissioner
1.29 	of commerce is not required if the total investment does not
1.30 	exceed 50 percent of its existing capital stock and paid-in
2.1 	surplus.  Upon written prior approval of the commissioner of
2.2 	commerce, a bank, trust company, savings bank, or stock savings
2.3 	association may invest in the property and improvements in
2.4 	clause (1) or for acquisition of nonadjacent property for
2.5 	expansion or future use, if the aggregate of all such
2.6 	investments does not exceed 100 percent of its existing capital
2.7 	stock and paid-in surplus;
2.8 	(2) for a mutual savings association, five percent of its
2.9 	net assets.
2.10 	(b) For purposes of this subdivision, an intervening
2.11 	highway, street, road, alley, other public thoroughfare, or
2.12 	easement of any kind does not cause two parcels of real property
2.13 	to be nonadjacent.

2.14 	Sec. 2. Minnesota Statutes 2004, section 48.10, is amended
2.15 	to read:
2.16 	48.10 ANNUAL AUDIT; REPORT.
2.17 	The board of directors of a bank, bank and trust, or trust
2.18 	company shall annually examine its books, either in person, or
2.19 	by appointing an examining committee, or an auditor, who may be
2.20 	an independent auditor or accountant.  The examining committee
2.21 	or auditor shall be solely responsible to the directors.  A
2.22 	report shall be made to the directors as to the scope of the
2.23 	examination or audit, and also to show those assets, excluding
2.24 	marketable securities and fixed assets, which are carried on the
2.25 	books for more than actual value.  This report shall be retained
2.26 	as a permanent record or incorporated in the minutes of the
2.27 	meeting, and a copy of the report shall be sent to the
2.28 	commissioner of commerce.

2.29 	Sec. 3. Minnesota Statutes 2004, section 52.062,
2.30 	subdivision 2, is amended to read:
2.31 		Subd. 2.Suspension.  The commissioner of commerce may
2.32 	suspend the operation of the credit union by giving notice to
2.33 	its board of directors by certified mail with a copy to the
2.34 	advisory council.  Said notice shall include a list of reasons
2.35 	for said suspension and a list of any specific violations of
2.36 	law, bylaw, or rule, and shall specify which operations of the
3.1 	credit union may be continued during the period of suspension.
3.2 	The notice shall also fix a time and place for a hearing before
3.3 	the commissioner of commerce or such person or persons as the
3.4 	commissioner of commerce may designate.  The hearing shall be
3.5 	held within 60 days of the notice of suspension, and the
3.6 	advisory council shall sit at such hearing for the purpose of
3.7 	providing advice and counsel to the commissioner of commerce or
3.8 	a representative.  Evidence may be produced at said hearing by
3.9 	any party thereto, and the commissioner of commerce shall base
3.10 	the decision as to the continued suspension of operation of the
3.11 	credit union upon said evidence.  If the commissioner of
3.12 	commerce decides to continue the suspension, the commissioner
3.13 	shall give notice of the decision to the board of directors of
3.14 	the credit union.

3.15 	Sec. 4. [58.125] PROHIBITION ON SERVICE AS A RESIDENTIAL
3.16 	MORTGAGE ORIGINATOR.
3.17 		Subdivision 1.Definitions. (a) "Dishonesty" means
3.18 	directly or indirectly to cheat or defraud; to cheat or defraud
3.19 	for monetary gain or its equivalent; or to wrongfully take
3.20 	property belonging to another in violation of any criminal
3.21 	statute.  Dishonesty includes acts involving want of integrity,
3.22 	lack of probity, or a disposition to distort, cheat, or act
3.23 	deceitfully or fraudulently, and may include crimes which
3.24 	federal, state, or local laws define as dishonest.
3.25 	(b) "Breach of trust" means a wrongful act, use,
3.26 	misappropriation, or omission with respect to any property or
3.27 	fund which has been committed to a person in a fiduciary or
3.28 	official capacity, or the misuse of one's official or fiduciary
3.29 	position to engage in a wrongful act, use, misappropriation, or
3.30 	omission.
3.31 		Subd. 2.Generally. Except with the prior written
3.32 	consent of the commissioner under subdivision 4, any individual,
3.33 	who has been convicted of a criminal offense involving
3.34 	dishonesty or a breach of trust or money laundering, or has
3.35 	agreed to or entered into a pretrial diversion or similar
3.36 	program in connection with a prosecution for such offense, may
4.1 	not serve as a residential mortgage originator or be employed in
4.2 	that capacity by a person licensed as a mortgage originator.
4.3 		Subd. 3.De minimis offenses. Approval is automatically
4.4 	granted and an application will not be required if the covered
4.5 	offense is considered de minimis because it meets all of the
4.6 	following criteria:
4.7 	(1) there is only one conviction or program entry of record
4.8 	for a covered offense;
4.9 	(2) the offense was punishable by imprisonment for a term
4.10 	of less than one year and/or a fine of less than $1,000, and the
4.11 	individual did not serve time in jail;
4.12 	(3) the conviction or program was entered at least five
4.13 	years before the date an application would otherwise be
4.14 	required; and 
4.15 	(4) the offense did not involve a financial institution or
4.16 	residential mortgage loans.
4.17 		Subd. 4.Prior consent. An application for prior consent
4.18 	of the commissioner under this section must be in writing, under
4.19 	oath, and on a form obtained from and prescribed by the
4.20 	commissioner.  The following factors must be considered by the
4.21 	commissioner when reviewing an application:
4.22 	(1) the specific nature of the offense and the
4.23 	circumstances surrounding the offense;
4.24 	(2) evidence of rehabilitation since the offense;
4.25 	(3) the age of the person at the time of conviction; and 
4.26 	(4) whether or not restitution has been made.

4.27 	Sec. 5. Minnesota Statutes 2004, section 60A.13,
4.28 	subdivision 5, is amended to read:
4.29 		Subd. 5.Renewal license based on approved statement.
 4.30 	Upon the approval of the statement the commissioner shall issue
4.31 	a renewal license for the succeeding year beginning June first.
4.32 	Any license to a company or its agent, issued after the approval
4.33 	of the statement, shall expire May 31 of the year
4.34 	following.The license issued by the commissioner is perpetual
4.35 	and is considered renewed annually on June 1 upon payment of the
4.36 	renewal license fee, the annual filing fee, and all other fees
5.1 	required by section 60A.14.

5.2 	Sec. 6. Minnesota Statutes 2004, section 64B.30, is
5.3 	amended by adding a subdivision to read:
5.4 		Subd. 3.Voluntary dissolution. Upon application to the
5.5 	commissioner, a domestic society may request that it be
5.6 	dissolved and that its existence be terminated.  Such
5.7 	application shall demonstrate that the applicant has satisfied
5.8 	its members' policy obligations or that it has transferred such
5.9 	obligations to another society, domestic or foreign, by means of
5.10 	assumption or bulk reinsurance or otherwise, that the
5.11 	applicant's supreme governing body has approved such termination
5.12 	and dissolution and that the application includes such other
5.13 	information that the commissioner requires.  Any limitation in
5.14 	section 64B.13 related to reinsurance by a domestic society with
5.15 	another society shall not apply to reinsurance entered into in
5.16 	conjunction with the transfer of member policy obligations as a
5.17 	part of a voluntary dissolution.  Upon the approval of the
5.18 	application by the commissioner, the society shall be deemed
5.19 	dissolved and its existence terminated upon the date set forth
5.20 	in the application.

5.21 	Sec. 7. REPEALER.
 5.22 	(a) Minnesota Statutes 2004, section 52.062, subdivision 3,
5.23 	is repealed.
5.24 	(b) Minnesota Rules, part 2675.2610, subpart 5, is repealed.

5.25 	Sec. 8. EFFECTIVE DATE.
 5.26 	Section 4 is effective January 1, 2006.