Consumer Law
CONSUMER LAW
Prepared by:
Ron Elwood, Supervising Attorney
Legal Services Advocacy Project
651-842-6909
relwood@mnlsap.org
I. AUTO TITLE LENDING
Chapter 40 (HF 648)
Adds Minn. Stat. § 47.602
Effective August 1, 2013, and applies to credit extended on or after that date
A. Requirements
Requires a lender operating under Chapter 53 (Industrial Loan and Thrifts) or Chapter 56 (Regulated Lender) that offers loans where the collateral is the title to the borrower's automobile to lend under the rates, terms, and conditions specified in the section of statutes governing auto title lending (Minn. Stat. §§ 325J.07 and 325J.095).
Adds Minn. Stat. § 47.602, subd. 2
B. Exemptions
Exempts banks, credit unions, automobile dealers, and Motor Vehicle Retail Installment Sales Act (Chapter 53C) transactions.
Adds Minn. Stat. § 47.602, subd. 3
Note: This bill closes a loophole allowing payday lenders with Chapter 53 or other licenses to evade the requirements of auto title lending found in the Pawnbroker statutes and otherwise applicable.
II. CONTRACTS FOR DEED
Chapter 85, Article 6, Sections 6, 7, 8, 9, and 13 (HF 729)
Amends Minn. Stat. §§ 507.235, subd. 2; and 559.211, subd. 2
Adds Minn. Stat. §§ 559.201; and 559.202
Repeals Minn. Stat. § 507.235, subd. 4
Various Effective Dates
A. Provisions Affecting All Contracts for Deed
1. Penalties for Failure to Record
a. Civil Fine
Absolves a vendee from liability for a civil fine for failure to record a contract for deed if the vendee does not receive a copy of the contract in recordable form, as required under Minn. Stat. § 507.235, subd. 1.
Amends Minn. Stat. § 507.235, subd. 2
Effective August 1, 2013
b. Criminal Penalty
Abolishes any criminal liability for failure to record a contract for deed within the time provided under Minn. Stat. § 507.235, subd. 1.
Repeals Minn. Stat. § 507.235, subd. 4
Effective August 1, 2013
2. Availability of Action
Grants the court the authority to hear claims and grant relief for actions taken after the expiration of the contract for deed cancellation period provided under Minn. Stat. § 559.21.
Amends Minn. Stat. § 559.211, subd. 2
Effective August 1, 2013
B. Provisions Affecting Certain Contracts for Deed
1. Key New Definition
Defines "multiple seller" as a seller in four or more contracts for deed involving residential real property during the 12-month period that precedes either: (1) the date on which the purchaser executes a purchase agreement; or (2) if there is no purchase agreement, the date on which the purchaser executes a contract for deed.
Adds Minn. Stat. § 559.201, subd. 4
Effective August 1, 2013
2. Required Disclosures
a. Who Must Give Disclosure
Limits the requirement to give the disclosure to multiple sellers.
Adds Minn. Stat. § 559.201, subd. 1(a)
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract
for deed, if any, were both executed on or after that date
b. Exemptions
Exempts multiple sellers from the disclosure requirements if the purchaser is represented by: (1) an attorney licensed in Minnesota; or (2) a real estate broker or salesperson, provided that the representation does not create a dual agency.
Adds Minn. Stat. § 559.201, subd. 2
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract
for deed, if any, were both executed on or after that date
c. Disclosure Requirements
Requires the disclosure to the prospective purchaser be: (1) in writing; (2) signed and dated by the purchaser; and (3) affixed to the purchase agreement, or, if there is no purchase agreement, provided in a document separate from any other document.
Adds Minn. Stat. § 559.201, subd. 1(d) (writing, signature, date)
Adds Minn. Stat. § 559.201, subd. 1(b) (if purchase agreement)
Adds Minn. Stat. § 559.201, subd. 1(c) (no purchase agreement)
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract
for deed, if any, were both executed on or after that date
d. Contents of the Disclosure
Requires a verbatim disclosure: (1) providing information for the prospective purchaser about risks and obligations of contracts for deed; and (2) offering advice about consumer protection actions recommended to be taken prior to entering into a contract for deed.
Informs the prospective purchaser, among other things: (1) that rental and foreclosure protections do not apply; (2) whether the
Adds Minn. Stat. § 559.201, subd. 3
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract
Recommends that, before entering into a contract for deed, a purchaser: (1) seek advice from a lawyer or the Minnesota Home
Adds Minn. Stat. § 559.201, subd. 3
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for
e. Resolution of Disputes Regarding Delivery of Disclosure
Establishes a rebuttable presumption that the disclosure was not provided unless the original executed contract for deed contains a verbatim statement, initialed by the purchaser, acknowledging receipt of the disclosure.
Adds Minn. Stat. § 559.201, subd. 1(e)
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract
for deed, if any, were both executed on or after that date
3. Waiting Period
Prohibits multiple sellers and purchasers from executing a contract for deed sooner than five business days: (1) following execution of a purchase agreement, and delivery of the notice; or (2) if there is no purchase agreement, after the delivery of the notice.
Adds Minn. Stat. § 559.201, subd. 1(b) (if a purchase agreement)
Adds Minn. Stat. § 559.201, subd. 1(c) (if no purchase agreement)
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for deed, if any, were both executed on or after that date
4. Right to Cancel
Gives a prospective purchaser the right to cancel purchase agreement without penalty within five business days after actually receiving the disclosure if the multiple seller fails to timely deliver the disclosure. Requires the multiple seller to promptly refund any payments upon cancellation. Extinguishes the right to cancel once a contract for deed is executed.
Adds Minn. Stat. § 559.201, subd. 4
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for deed, if any, were both executed on or after that date
5. Remedies for Failure to Timely Deliver Disclosure
Provides that a purchaser has a private right of action against a multiple seller for failure to timely provide the disclosure. Makes the violator liable for: (1) the greater of actual damages or statutory damages of $2,500; and (2) reasonable attorney fees and court costs. Provides for treble damages for a knowing violation. Makes the remedies cumulative. Provides that a violation has no effect on the validity of the contract.
Adds Minn. Stat. § 559.201, subd. 5 (remedies)
Adds Minn. Stat. § 559.201, subd. 6 (effect of violation on contract)
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for deed, if any, were both executed on or after that date
6. Duty to Account
Requires the seller, upon reasonable request of the purchaser, to provide no more than once a year an accounting of the: (1) payments made to date; (2) interest paid to date; and (3) balance remaining.
Adds Minn. Stat. § 559.201, subd. 7
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for deed, if any, were both executed on or after that date
7. No Waiver Provision
Prohibits waiver of any rights provided under the new provisions.
Adds Minn. Stat. § 559.201, subd. 7
Effective August 1, 2013, and applies to transactions in which the contract for deed and the purchase agreement for the contract for deed, if any, were both executed on or after that date
III. DEBT BUYERS: REQUIREMENTS FOR DEFAULT JUDGMENTS
Chapter 104 (HF 80)
Adds Minn. Stat. § 548.101
Effective September 1, 2013, and applies to requests, applications, and motions for default judgments and conciliation court cases filed on or after that date
A. Applicability
Applies to parties seeking default judgments in district or conciliation court on assigned and defaulted debt incurred primarily for personal, family, or household purposes.
Adds Minn. Stat. § 548.101(a)
B. Pre-Filing Notice
Requires a party intending to seek a default judgment on an assigned debt to send a statutory, verbatim notice to the debtor at the debtor's last known address at least 14 days prior to the request, application, or motion for judgment informing the debtor of the intent to seek the judgment.
Adds Minn. Stat. § 548.101(a)(7)
C. Proofs
Requires parties seeking default judgments on assigned debt to offer specific proofs.
Requires admissible evidence establishing: (1) that the defendant owes the debt; (2) that the amount claimed to be owed is accurate; and (3) a valid and complete chain of assignment of the debt from the original creditor to the party requesting judgment.
Requires plaintiffs to produce a copy of the original written contract or, if no written contract exists, other admissible evidence establishing the contract terms.
Requires plaintiffs to provide, if known, the last four numbers of the debtor's Social Security number.
4. Proof of Service and Failure to Answer
Requires plaintiffs to show that: (1) the summons and complaint were properly served; and (2) the debtor failed to timely answer or, in conciliation court cases, the party seeking the judgment used reasonable efforts to provide the court administrator with the debtor's correct address.
Requires plaintiffs seeking judgment in district court, to prove that the notice of intent to seek a judgment was mailed.
Adds Minn. Stat. § 548.101 (a)(1) - (7)
D. Adjudication
Except in conciliation court cases or if a hearing is required under court rules, permits the court to either: (1) hold a hearing before entry of a default judgment; or (2) enter an administrative default judgment without a hearing if the court determines that the evidence submitted satisfies the evidentiary requirements of the statute.
Adds Minn. Stat. § 548.101(c)
IV. DEBT COLLECTION
Chapter 104 (HF 80)
Amends Minn. Stat. §§ 491A.02, subd. 9; 550.011; and 588.04
Adds Minn. Stat. § 541.053
Effective August 1, 2013
A. Statute of Limitation for Actions on Debts
Establishes a six-year statute of limitations for commencement of an action to collect a consumer debt incurred primarily for personal, family, or household purposes.
Adds Minn. Stat. § 541.053
B. Revival of Debt
Prohibits the revival of a consumer debt incurred primarily for personal, family, or household purposes once the six-year statute of limitations has expired by: (1) the collection of a payment on an account; (2) a discharge in a bankruptcy proceeding; or (3) an oral or written reaffirmation of the debt.
Adds Minn. Stat. § 541.053
C. Bail for Contempt for Failure to Complete Judgment Debtor Disclosure Form
1. Amount
Set bail at $50 when: (1) the underlying case involves a consumer debt incurred primarily for personal, family, or household purposes; and (2) the contempt is a failure to comply with judgment debtor disclosure requirements. Provides that bail for any subsequent contempt for a failure to disclose in the same action must be set by the court after considering aggravating and mitigating factors.
Amends Minn. Stat. § 588.04 by adding paragraph (b)
2. Return of Bail
Provides that, upon cure, bail must be returned to the debtor.
Amends Minn. Stat. § 588.04 by adding paragraph (b)
V. DEBT MANAGEMENT
Chapter 91 (HF 694)
Amends Minn. Stat. § 332A.02, subd. 8
Adds Minn. Stat. § 332A.02, subd. 10a
Effective August 1, 2013
Limits exemption for attorneys to only an "exempt attorney at law." Creates new definition of "exempt attorney at law" to mean an attorney licensed or authorized to practice law in Minnesota: (1) whose exclusive or principal practice does not involve the provision of debt management services; and (2) who does not have a business relationship with a debt management services provider that involves the provision of debt management services.
Amends Minn. Stat. § 332A.02, subd. 8 (limiting exemption)
Adds Minn. Stat. § 332A.02, subd. 10a (adding definition of "exempt attorney at law")
VI. DEBT SETTLEMENT
Chapter 91 (HF 694)
Amends Minn. Stat. §§ 332B.02, subd. 13; 332B.06, subds. 1 and 4; and 332B.09, subds. 2 and 3
Adds Minn. Stat. §§ 332A.02, subd. 13a
Various Effective Dates
A. Attorney Exemption
Limits exemption for attorneys to only an "exempt attorney at law."
Amends Minn. Stat. § 332B.02, subd. 13
Effective August 1, 2013
B. Defining "Exempt Attorney at Law"
Creates new definition of "exempt attorney at law" to mean an attorney licensed or authorized to practice law in Minnesota: (1) whose exclusive or principal practice does not involve the provision of debt settlement services; and (2) who does not have a business relationship with a debt settlement services provider that involves the provision of debt settlement services.
Adds Minn. Stat. § 332B.02, subd. 13a
Effective August 1, 2013
C. Fees
Eliminates the current fee structure. Prohibits a debt settlement services provider from collecting any payment before the full performance of: (1) the contracted debt settlement services; and (2) any additional promised services.
Amends Minn. Stat. § 332B.09, subd. 3
Effective for debt settlement service agreements entered into on or after August 1, 2013
D. Contract/Disclosures in Other Languages
Requires the mandated written contract and the mandatory disclosures be provided to the consumer in the language in which the agreement was negotiated.
Amends Minn. Stat. § 332B.06, subd. 1 (contract)
Amends Minn. Stat. § 332B.06, subd. 4 (disclosures)
Effective for debt settlement service agreements entered into on or after August 1, 2013
VII. FORECLOSURE ADVICE NOTICE
Chapter 115, Section 2 (SF 1276)
Amends Minn. Stat. § 580.041, subd. 1b
Effective August 1, 2013
Reduces the obligation of a foreclosing party to provide the statutory foreclosure advice notice by requiring delivery only up to the day of the foreclosure sale.
Note: Current law requires delivery up to the day the redemption period expires.
VIII. FORECLOSURE RELIEF
Chapter 115, Sections 1, 3, 4, and 5 (SF 1276)
Amends Minn. Stat. §§ 580.02; 582.25; and 582.27
Adds Minn. Stat. § 582.043
Various Effective Dates
A. Applicability
1. Limitations
Limits applicability of new provisions to first lien mortgages that: (1) are governed by either foreclosures by action (judicial) or foreclosures by advertisement (nonjudicial) statutes (Chapter 580 and 581); (2) are secured by one-to-four-family residential real property that is the principal residence of the owner; and (3) do not secure a loan for business, commercial, or agricultural purposes.
Adds Minn. Stat. § 582.043, subd. 2
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
2. Exemptions for "Small Servicers"
a. Time Limited Exemption
Until August 1, 2014, exempts a servicer that has conducted 125 or fewer foreclosure sales during the preceding 12 months.
Adds Minn. Stat. § 582.043, subd. 1(f)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
b. Permanent Exemption
Exempts a servicer that either: (1) is a small servicer as defined in proposed rules of the Consumer Financial Protection Bureau (i.e., services 5,000 or fewer mortgage loans in which the servicer or an affiliate is the creditor or assignee; or (2) is a Housing Finance Agency as defined in federal regulations.
Adds Minn. Stat. § 582.043, subd. 1(f)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
B. New Key Definitions
1. "Foreclosure Sale Date"
"Foreclosure sale date" defined to mean the later of either the date: (1) contained in the notice of foreclosure that has been served or published; or (2) to which the sale has been postponed, as is provided under Minn. Stat. § 580.07, subd. 2.
Adds Minn. Stat. § 582.043, subd. 1(b)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
2. "Loss Mitigation Option"
Defines "loss mitigation option" to mean "a temporary or permanent loan modification, a forbearance agreement, a repayment agreement, a principal reduction, capitalizing arrears, or any other relief, intended to allow a mortgagor to retain ownership of the property."
Adds Minn. Stat. § 582.043, subd. 1(c)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
C. Loss Mitigation Requirements
Requires servicers to: (1) notify the homeowner in writing of available loss mitigation options offered by the servicer prior to referral to foreclosure; (2) exercise reasonable diligence to facilitate submission and review of loss mitigation applications and supporting documents; (3) provide a reasonable amount of time for submission of documents; (4) evaluate the homeowner for eligibility for a loss mitigation option prior to referral to foreclosure if the servicer has timely received a loss mitigation application; (5) timely offer the homeowner a loan modification or other loss mitigation option for which the homeowner is eligible; and (6) comply with any applicable appeal period and procedures.
Adds Minn. Stat. § 582.043, subd. 5
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
D. Procedures to Avoid Dual Tracking
Note: "Dual Tracking" is the practice of simultaneously proceeding with a foreclosure and considering an application for a loan modification or other option to avert foreclosure.
1. Prohibitions
a. Prior to Referral to Foreclosure
Prohibits a servicer from initially referring a mortgage loan for foreclosure if the servicer has received a loss mitigation application that has not yet been acted upon.
Adds Minn. Stat. § 582.043, subd. 6(a)
Effective October 31, 2013
b. After Referral to Foreclosure but Before Sale Scheduled
Prohibits a servicer from conducting a foreclosure sale or seeking a judgment of foreclosure if the servicer has received a loss mitigation application that has not yet been acted upon.
Adds Minn. Stat. § 582.043, subd. 6(b)
Effective October 31, 2013
c. After Foreclosure Sale Scheduled but Before Sale Held
Prohibits a servicer from conducting - and requires a servicer to halt -- a foreclosure sale or seeking a judgment of foreclosure if the servicer has received a loss mitigation application by midnight of the seventh business day prior to the foreclosure sale date.
Adds Minn. Stat. § 582.043, subd. 6(c)
Effective October 31, 2013
Permits a servicer to proceed with the foreclosure action if the homeowner: (1) is provided written notification of the ineligibility for a loss mitigation option and any appeal period has expired; (2) fails to accept a written loss mitigation offer where written offer is applicable and acceptance is required; or (3) declines, in writing, a loss mitigation offer.
Adds Minn. Stat. § 582.043, subd. 6(a), (b), and (c)
Effective October 31, 2013
E. New Requisite to Foreclosure by Advertisement
Adds a fifth requisite to foreclose by advertisement: compliance with new provisions concerning loss mitigation and dual tracking.
Amends Minn. Stat. § 580.02
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
F. Enforcement
1. Right to Bring an Action
Provides a homeowner with a cause of action for violations of the loss mitigation and dual tracking provisions to halt or set aside a foreclosure sale and provides for attorney fees and costs.
Adds Minn. Stat. § 582.043, subd. 7(a)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
2. Qualifications on Bringing an Action
a. Time Limit to Bring Action
Requires a claim to be brought before the end of the applicable redemption period.
Amends Minn. Stat. § 582.25 (validating foreclosure sales)
Amends Minn. Stat. § 582.27, subd. 1 (curative provisions)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013.
b. Recordation of Lis Pendens
Requires that a lis pendens must be recorded prior to the end of the redemption period in order for a claim to be brought. Establishes a conclusive presumption that the servicer has complied with the new provisions if the lis pendens is not timely recorded.
Adds Minn. Stat. § 582.043, subd. 7(b)
Effective August 1, 2013 for foreclosures with a notice of pendency under Minn. Stat. § 580.032, or a lis pendens for a foreclosure under Minn. Stat., Ch. 581, recorded on or after August 1, 2013
IX. GARNISHMENT EXEMPTIONS: UPDATE OF DOLLAR AMOUNTS
Chapter 135, Article 2, Sections 9 - 15 (HF 1221)
Amends Minn. Stat. § 550.37, subds. 4, 4a, 6, 10, 12a, 23, and 24
Effective May 25, 2013
Adjusts dollar amount limits for property exempt from attachment, garnishment, or sale. Key items include:
| Itemof Property | Statute |
Updated
amount exempt
|
Previous
Amount Exempt
|
| Employee Benefits | Minn. Stat. § 550.37, subd. 24 | $69,000 | $30,000 |
|
Household Goods
(Furniture, radio, TV,
Phonographs)
|
Minn. Stat. § 550.37, subd. 4(b) | $10,350 | $4,500 |
|
Insurance Proceeds
For each dependent of
surviving spouse or child
|
Minn. Stat. § 550.37, subd. 10 |
$46,000 $11,500 |
$20,000 $5,000 |
| Life Insurance Interest | Minn. Stat. § 550.37, subd. 23 | $9,200 | $4,000 |
|
Motor Vehicles
If modified to
accommodate a physical
disability
|
Minn. Stat. § 550.37, subd. 12a |
$4,600 $46,000 |
$2,000 $20,000 |
| Tools of the Trade | Minn. Stat. § 550.37, subd. 6 | $11,500 | $5,000 |
| Wedding Rings | Minn. Stat. § 550.37, subd. 4(c) | $2,817.50 | $1,225 |
X. LOAN MODIFICATIONS
Chapter 17 (HF 129)
Amends Minn. Stat. § 325N.01(a)(8)
Effective August 1, 2013
XI. MONEY TRANSMITTERS
Chapter 50 (HF 194)
Adds Minn. Stat. §§ 53B.27, subds. 3 - 7
Effective January 1, 2014, and applies to money transfers initiated on or
after that date
and
Chapter 103 (HF 527)
Amends Minn. Stat. § 53B.27, subds. 1
Effective May 25, 2013
A. No Transmit List
Directs the Department of Commerce to create and maintain an electronic list of individuals who are prohibited from making or receiving money transmissions. Permits the following persons and entities to add names to the list: (1) senders; (2) recipients; (3) legally authorized agents of senders or recipients; and (4) law enforcement agencies. Requires money transmitters to convey names of individuals to be added to the list who: (1) have requested inclusion; and (2) the transmitters have detected are victims and perpetrators of money transmission fraud. Provides that an individual may request removal from the list after one year.
Adds Minn. Stat. § 53B.27, subd. 3
Effective January 1, 2014, and applies to money transfers initiated on or after that date.
B. Numerous Incidences
Authorizes the Department of Commerce to recommend a ceiling on a per-transmission amount of money that may be sent to countries associated with high incidence of schemes to defraud consumers.
Adds Minn. Stat. § 53B.27, subd. 5
Effective January 1, 2014, and applies to money transfers initiated on or after that date.
C. Preventing Fraud
1. Clarification of Applicability of Fraud Prevention Measures
Limits the provision of the required consumer fraud warning on transmittal forms to only transmissions to individuals.
Amends Minn. Stat. § 53B.27, subds. 1
Effective May 25, 2013
2. Prohibition on Transmission
Prohibits a money transmitter from authorizing receipt of the transfer at any physical location not specified in writing by the sender at the time of the transmission.
Adds Minn. Stat. § 53B.27, subd. 6
Effective January 1, 2014, and applies to money transfers initiated on or after that date.
3. Verifying Recipient Name and Location
Requires a money transmitter - if requested by a sender or the sender's authorized agent - to verify the physical location where the transfer was received and the name of the recipient.
Adds Minn. Stat. § 53B.27, subd. 7
Effective January 1, 2014, and applies to money transfers initiated on or after that date.
4. Alerting Consumers of Possible Fraud
Requires transmitter - if requested by a sender or the sender's authorized agent - to notify the sender if the transmitter has notice that the funds are received in a country or other physical location different from the country or location specified by the sender.
Adds Minn. Stat. § 53B.27, subd. 6
Effective January 1, 2014, and applies to money transfers initiated on or after that date.
XII. NEGLIGENCE WAIVER
Chapter 118 (HF 792)
Adds Minn. Stat. § 604.055
Effective August 1, 2013, and applies to agreements signed or accepted on or after that date
Declares void and unenforceable agreements between parties for a consumer service that purport to release, limit, or waive liability of one a party for damage, injuries, or death resulting from conduct that constitutes greater than ordinary negligence. Makes the agreement severable from the waiver for: (1) damage, injuries, or death resulting from conduct that constitutes ordinary negligence; or (2) risks that are inherent in a particular activity. Grants the court the authority to an agreement is void and unenforceable as against public policy on other grounds or under other law. Exempts tort claims against: (1) the state; and (2) a municipality.
XIII. UPDATE OF DOLLAR AMOUNTS THRESHOLDS INVOLVING FINANCIAL TRANSACTIONS
Chapter 135, Article 2, Sections 1 - 8 (HF 1221)
Amends Minn. Stat. §§ 47.59, subds. 3 and 6; 56.12; 56.125, subds. 2; 56.131, subd. 2 and 6; and 325G.22, subd. 1
Effective May 25, 2013
Note: A number of statutory dollar amounts are changed in this bill, however only a few are highlighted here.
A. Changes to Chapter 47 (Financial Corporations)
1. Finance Charges for Certain Credit
Increases to $1,125 (from $750) the unpaid principal on which various interest rates apply, as follows:
• 33% APR on the part of the unpaid principal amount up to $1,125; and
• 19% APR on the part of the unpaid principal amount exceeding $1,125.
Amends Minn. Stat. § 47.59, subd. 3(a)
Increases to a maximum of $7.80 (from $5.20) the allowable delinquency charge on a missed payment, including the minimum payment due in connection with open-end credit.
b. Amount Subject to Administrative Charge for Certain Credit
Increases to $6,480 or less (from $4,320 or less) the cap on the original principal amount loaned in connection with closed-end credit on which a onetime loan administrative fee not exceeding $25 may be imposed and included in the principal balance upon which the finance charge is computed.
Amends Minn. Stat. § 47.59, subd. 6(d)
B. Changes to Chapter 56 (Regulated Loans)
1. Security for Real Estate Loans
Increases the maximum principal amount to $6,480 (from $4,320) which subjects a loan made by a regulated lender to a security lien on real property.
Amends Minn. Stat. § 56.12
2. Security for Open-End Real Estate Loans
Increases to $6,480 (from $4,320) the outstanding balance on an open-end loan that, once exceeded, subjects the loan to a lien on real estate taken by a regulated lender.
Amends Minn. Stat. § 56.125, subd. 2
3. Maximum Rates and Charges
a. Closing Costs
Increases to the greater of 1% of the principal amount or $600 (from $400) the allowable cap on closing costs on a loan secured by real estate offered by a regulated lender.
Amends Minn. Stat. § 56.131, subd. 2
b. Discount Points
Increases to $18,000 (from $12,000) the minimum principal on a loan that triggers the ability of a regulated lender to charge discount points.
Amends Minn. Stat. § 56.131, subd. 6
C. Deficiency on Loans for Personal Property
Increases to $6,900 (from $3,000) the maximum amount of a loan below which exempts a consumer from a deficiency where a securitized item of personal property is repossessed or voluntarily surrendered.
Amends Minn. Stat. § 325G.22, subd. 1