CHAPTER 48. Banks, trust companies

     48.01 Definitions. 

    Subdivision 1.    Words, terms, and phrases.  Unless the 
 language or context clearly indicates that a different meaning 
 is intended, the term defined in subdivision 2, for the purposes 
 of sections 48.38, 48.56 to 48.59, and 48.84, has that meaning; 
 and the term defined in subdivision 3, for the purposes of this 
 chapter, has that meaning. 

    Subd. 2.    Banking institution.  The term "banking 
 institution" means any bank, trust company, bank and trust 
 company, or savings bank which is now or may hereafter be 
 organized under the laws of this state.  For purposes of 
 sections 48.38, 48.84, and 501B.151, subdivision 11, and to the 
 extent permitted by federal law, "banking institution" includes 
 any national banking association or affiliate exercising trust 
 powers in this state. 

    Subd. 3.    Commissioner.  "Commissioner" means the 
 commissioner of commerce of the state of Minnesota.  

    HIST: (7658-6) 1935 c 319 s 1; 1982 c 473 s 9; 1983 c 289 s 
 114 subd 1; 1984 c 655 art 1 s 92; 1992 c 473 s 1,2; 1995 c 171 
 s 29; 1997 c 157 s 20 

     48.02 Capital and surplus; prepayment of capital. 

    The capital and surplus of every state bank hereafter 
 organized shall be at least $250,000.  In addition thereto 
 undivided profits shall be provided for in such an amount as the 
 commissioner shall determine to be adequate under the 
 circumstances to avoid any possible impairment of capital and 
 surplus.  The total of these outlays shall be known as capital 
 funds, and payment thereof shall be made in full, in cash or 
 authorized securities, deposited in an approved custodial bank, 
 and certified to the commissioner, under oath of the president, 
 and cashier or other chief financial officer, as well as the 
 custodial bank, before the proposed state bank shall be 
 authorized to commence business.  The capital funds of a 
 proposed bank shall not be less than a total amount which the 
 commissioner considers necessary, having in mind the deposit 
 potential for such a proposed bank and current banking industry 
 standards of capital adequacy. 

    HIST: (7659) RL s 2983; 1965 c 171 s 5; 1977 c 272 s 7; 1992 c 
 587 art 1 s 14 

     48.03 Stock list; stockholders' liability. 

    Subdivision 1.  The president and cashier of any bank of 
 discount and deposit shall at all times keep an accurate 
 verified list of all its stockholders, with the amount of stock 
 held by each, the dates of all transfers and names of 
 transferees, and shall annually file a copy of such list as it 
 appears on the date of the annual stockholders meeting with the 
 commissioner.  

    Subd. 2.  Except as provided in section 300.27, no 
 stockholder in any bank of discount and deposit or in any 
 banking or trust corporation or association shall be personally 
 liable for debts of such bank, corporation or association.  
 Except that the president and cashier of any bank of discount 
 and deposit not insured by the Federal Deposit Insurance 
 Corporation shall keep at all times an accurate list of all its 
 stockholders, with the amount of stock held by each, the dates 
 of all transfers and names of transferees, and on May first, 
 annually, file a copy thereof with the county recorder in the 
 county where said bank is located.  

    Subd. 3.  The stockholders in each bank of discount and 
 deposit whose deposits are not insured by the federal deposit 
 insurance corporation shall be individually liable in an amount 
 equal to the amount of stock owned by them for all the debts of 
 the bank and for all transactions prior to any transfer thereof. 

    Subd. 4. Repealed, 1992 c 587 art 1 s 31 

    Subd. 5. Repealed, 1992 c 587 art 1 s 31 

    HIST: (7669) RL s 2985; 1907 c 137 s 1; 1955 c 14 s 1,2; 1957 
 c 601 s 5; 1965 c 171 s 6; 1967 c 102 s 4; 1976 c 181 s 2; 1984 
 c 576 s 8 

     48.033 State banks, liability of stockholders.  

    Notwithstanding sections 48.03, 49.24, and 300.27, any 
 stockholder of a state bank whose deposits are not insured by 
 the Federal Deposit Insurance Corporation, shall be personally 
 liable for the debts of said bank to the extent of the par value 
 of the stock held by such stockholder.  

    HIST: 1955 c 335 s 1 

     48.04 Increase and reduction of capital. 

    No increase or reduction of the capital of any banking 
 institution shall be valid until the entire new capital has been 
 paid in cash, and certified to the commissioner under oath of 
 the president, vice-president, or cashier.  The commissioner 
 shall thereupon issue a certificate of that fact and of approval 
 thereof.  No reduction of the surplus of any banking institution 
 shall be valid until such reduction has been approved by the 
 commissioner of commerce.  No reduction shall affect the 
 liability of any stockholder for any indebtedness incurred prior 
 thereto.  

    HIST: (7691) RL s 3003; 1957 c 601 s 6; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92; 1986 c 444; 1993 c 257 s 14 

     48.05 Capital not to be withdrawn; dividends. 

    No portion of the capital or surplus of any banking 
 institution shall ever be withdrawn by any person or in any way, 
 either in dividends or otherwise, except upon reduction as 
 provided by law.  No dividend on common stock shall be made 
 except as provided in section 48.09.  

    HIST: (7681) RL s 2997; 1957 c 601 s 7; 1993 c 257 s 15 

     48.055 Issuance of preferred stock, conditions. 

    Subdivision 1.  Any state bank may issue preferred stock of 
 one or more classes, with or without voting rights, with the 
 approval of the commissioner of commerce and without change of 
 its certificate of incorporation, when its board of directors is 
 so authorized by a majority vote of its stockholders, at a 
 general or special meeting thereof called for such purpose.  
 Provided, however, that in no event shall the amount of 
 preferred stock exceed 50 percent of the total common stock and 
 surplus of such issuing bank.  

    Subd. 2.  Such preferred stock may be issued to any person, 
 firm, or corporation, and the holders thereof shall have such 
 rights as are set forth under the terms of issue of such 
 preferred stock.  No issue of preferred stock shall be valid 
 until the capital stock shall have been fully paid in, and no 
 dividend shall be paid on the common stock of a bank until all 
 terms of the issue of such preferred stock shall have been 
 satisfied.  

    Subd. 3.  The terms of issue of such preferred stock shall 
 set its rank or priority as between other stock issue, provided 
 that such preferred stock shall be subordinated to all claims of 
 depositors or other creditors in case of the insolvency of the 
 issuing bank.  Such preferred stock shall in no case be subject 
 to any assessment, nor shall otherwise be liable for the 
 obligations of the issuing bank.  Before any such preferred 
 stock is retired or paid by the issuing bank, it must first 
 obtain the approval of the commissioner of commerce.  

    Subd. 4.  At the end of each dividend period, after 
 deducting all necessary expenses, losses, amounts receivable 
 more than one year overdue and not well secured, interest, and 
 taxes due or levied, all of the remaining net profits for the 
 period shall be set aside as a surplus fund, if the surplus fund 
 of such bank is not then equal to one-fifth of the capital 
 stock.  If the surplus fund is more than one-fifth of the 
 capital stock, ten percent of the remaining net profits for the 
 period shall be set aside as a surplus fund until it equals 50 
 percent of the total capital stock.  After these provisions are 
 complied with, the bank may, without prior approval of the 
 commissioner, pay dividends as provided under the terms of issue 
 of such preferred stock.  Dividends on preferred stock may be 
 paid out of the undivided profit account without regard to 
 earnings in the last concluded year, if the surplus equals 50 
 percent of the total capital stock and the undivided profit 
 account would not be thereby reduced to less than 25 percent of 
 the total capital stock.  

    Subd. 5.  Any preferred stock issued by a state bank shall 
 be part of its capital stock structure, and the terms "capital 
 stock" or "capital" in any laws of this state pertaining to 
 state banks shall be deemed to also include and apply to 
 preferred stock.  

    Subd. 6.  The commissioner is authorized to issue such 
 rules and orders as may be necessary to administer and carry out 
 the provisions and purposes of this section.  

    HIST: 1957 c 634 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1985 c 248 s 70; 1987 c 349 art 1 s 12 

     48.06 Directors; qualifications. 

    If the number of directors exceeds nine, they may 
 designate, semiannually, by resolution, nine of their number, a 
 majority of whom constitutes a quorum for the transaction of 
 business.  Every director of a bank shall take and subscribe an 
 oath to faithfully perform the official duties of a director, 
 and not knowingly violate, or permit to be violated, any 
 provision of law.  The taking of this oath must be duly 
 certified in the minutes of the records of the bank. 

    HIST: (7670) RL s 2986; 1927 c 260 s 1; 1965 c 171 s 7; 1981 c 
 220 s 9; 1982 c 473 s 10; 1983 c 250 s 5; 1986 c 444 

     48.07 Officers; appointment, removal.  

    The board of directors of a bank or trust company organized 
 under the laws of this state shall have full power and authority 
 at any time to appoint and remove any officer or employee.  

    HIST: (7699-4) 1927 c 259 s 1 

     48.08 Directors and officers, restricted use of bank 
  funds; dealings with bank. 

    No director, officer or employee shall, directly or 
 indirectly, in any manner, use the funds of the bank, or any 
 part thereof, except in its regular business transactions, and 
 every loan made to any of its directors, officers, employees, or 
 agents shall be upon the same security required of others and in 
 strict conformity to its rules and regulations.  Every such 
 loan, or line of credit for a stated amount and not to run for 
 more than one year, shall be authorized in advance by the board 
 and acted upon in the absence of the applicant, except that a 
 loan to a director, officer, or employee for an amount which 
 will not increase such a liability to exceed the greater of (a) 
 $25,000 or (b) five percent of the bank's capital and unimpaired 
 surplus or $500,000, whichever is less, may be made without 
 previous approval but shall be acted upon by the board at the 
 next succeeding regular meeting.  No cashier or other officer or 
 employee of a bank shall sell to the bank, directly or 
 indirectly, any mortgage, bond, note, stock, or other security 
 without the written approval of the board of directors, filed in 
 the office of the bank or embodied in a resolution adopted by 
 the board.  A copy of this written approval or resolution shall 
 immediately be sent to the commissioner of commerce. 

    HIST: (7673) RL s 2989; 1925 c 305 s 1; 1957 c 601 s 8; 1965 c 
 171 s 8; 1980 c 399 s 1; 1984 c 576 s 9 

     48.09 Dividends; surplus. 

    Subdivision 1.    Creation of surplus fund.  At the end 
 of each dividend period, after deducting all necessary expenses, 
 losses, amounts receivable more than one year overdue and not 
 well secured, interest, and taxes due or levied, all of the 
 remaining net profits for the period shall be set aside as a 
 surplus fund, if the surplus fund of the banking institution is 
 not then equal to one-fifth of the capital stock.  If the 
 surplus fund is more than one-fifth of the capital stock, ten 
 percent of the remaining net profits for the period shall be set 
 aside as a surplus fund until it equals 50 percent of the 
 capital stock.  The directors may then declare a dividend of so 
 much of the remainder as they may think expedient, subject to 
 the commissioner's approval.  When in any way impaired the 
 surplus fund shall be raised to this percentage in like manner.  

    Subd. 2.    Undeclared net profits, prior dividend 
 periods.  Any amount of remaining net profits qualifying for 
 dividend declaration in subdivision 1 and not declared at the 
 end of each annual dividend period may be subject to dividend 
 declaration under the requirements of subdivision 1 during any 
 of the three subsequent annual dividend periods. 

    Subd. 3.    Qualified subchapter S subsidiary.  A bank 
 that has met the eligibility requirements under title I, 
 subtitle C of the Small Business Job Protection Act of 1996 or 
 related state of Minnesota tax law may apply to the commissioner 
 for approval of a plan and agreement for a distribution of 
 earnings to the shareholder(s) of the bank on a basis other than 
 a dividend under subdivisions 1 and 2.  Approval of a plan of 
 distribution under this subdivision may be rescinded by the 
 commissioner upon 90-day prior notice to the bank.  Failure to 
 comply with this notice or qualification of a distribution under 
 subdivisions 1 and 2 is considered a violation subject to the 
 commissioner's action under section 45.027 or 46.24. 

    HIST: (7671) RL s 2987; 1939 c 38 s 1; 1957 c 601 s 9; 1993 c 
 257 s 16; 1996 c 414 art 1 s 12; 1997 c 157 s 21 

     48.10 Annual audit; report. 

    The board of directors of a bank, bank and trust, or trust 
 company shall annually examine its books, either in person, or 
 by appointing an examining committee, or an auditor, who may be 
 an independent auditor or accountant.  The examining committee 
 or auditor shall be solely responsible to the directors.  A 
 report shall be made to the directors as to the scope of the 
 examination or audit, and also to show those assets, excluding 
 marketable securities and fixed assets, which are carried on the 
 books for more than actual value.  This report shall be retained 
 as a permanent record or incorporated in the minutes of the 
 meeting, and a copy of the report shall be sent to the 
 commissioner of commerce. 

    HIST: (7672) RL s 2988; 1945 c 94 s 1; 1957 c 601 s 10; 1959 c 
 88 s 5; 1977 c 272 s 8; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1996 c 414 art 1 s 13 

     48.11 Contracts, how made.  

    Every contract made by any bank, except routine business, 
 shall be first duly authorized by resolution of its board of 
 directors, signed by the president or vice-president and by the 
 cashier or some other officer specially designated by the board, 
 and have its corporate seal impressed thereon.  

    HIST: (7678) RL s 2994 

     48.12 Bonds of officers and employees.  

    Every state bank shall be protected against loss by reason 
 of the unlawful act of any of its officers or employees by a 
 surety bond in an amount approved by the board of directors, 
 issued by a solvent corporate surety in good standing authorized 
 to do business in this state, or by a fidelity insurance policy 
 written by a solvent insurance corporation in good standing 
 authorized to do business in this state.  The commissioner of 
 commerce or the board of directors of such bank may require an 
 increase of the amount of such bond whenever either deems it 
 necessary.  This shall not require the bonding or insuring of 
 officers or directors of a bank not having active management or 
 control thereof, or employees of a bank not holding positions of 
 trust.  Any bond given or contract of insurance secured shall be 
 in favor of the bank.  

    HIST: (7699-1) 1925 c 351 s 1; 1945 c 72 s 1; 1983 c 289 s 114 
 subd 1; 1984 c 655 art 1 s 92 

     48.13 Conditions of bonds. 

    Subdivision 1.    Securities.  If a bond is given, it 
 shall be in favor of the bank and shall have one corporate 
 surety, which shall be a solvent insurance corporation in good 
 standing authorized to do business in Minnesota, or at least 
 five individual sureties, not one of whom shall be an officer, 
 director, or stockholder of the bank, and each of whom shall 
 justify in a sum equal to the penalty of the bond and, in 
 addition thereto, each individual surety shall furnish to the 
 bank, in connection with the bond, a verified financial 
 statement showing solvency and responsibility, which statement 
 shall be renewed and revised annually by each surety.  If a 
 contract of insurance is secured, it shall be in favor of the 
 bank and shall be executed by some insurance company possessing 
 the qualifications heretofore specified.  No cancellation or 
 termination at the request of the underwriter of a bond or 
 contract of insurance required by section 48.12 shall be 
 effective unless the underwriter gives in advance at least 60 
 days written notice by registered mail to the commissioner of 
 commerce.  

    Subd. 2.    Securities in lieu of bond.  With the prior 
 written approval of the commissioner and in lieu of the 
 corporate surety or five individual sureties, there may be 
 posted a deposit in securities of a form and amount acceptable 
 to the commissioner.  These funds are under the control of the 
 commissioner for the purposes of section 48.12.  All deposits 
 must remain in the custody of the commissioner of finance and 
 pursuant to section 7.19 may be released only upon order from 
 the commissioner.  These control and custody requirements must 
 not prevent any interest or dividend earnings accruing on the 
 funds posted to be paid over to pledgor. 

    HIST: (7699-2) 1925 c 351 s 2; 1984 c 576 s 10; 1Sp1985 c 13 s 
 182; 1986 c 444; 1987 c 384 art 2 s 10 

     48.14 Examinations, reports to show names of bonded 
  officers and employees. 

    When an examination is made of a bank by the commissioner, 
 or an examiner, the report of the examination made to the 
 commissioner shall state the names of all the officers and 
 employees of the bank so bonded or insured, and the penalty of 
 the bonds or the amount of the insurance covering them.  When 
 blanket coverage is provided, the names of all the officers and 
 employees need not be stated.  When the commissioner, after an 
 investigation, or upon receipt of a notice of cancellation or 
 other termination required by section 48.13, finds as a fact 
 that any bank is not adequately protected against loss by reason 
 of the unlawful act of any officer or employee thereof, whether 
 through the omission to secure any bond or contract of 
 insurance, or through the insufficiency of the sureties or the 
 insurer on the bond or policy given, or otherwise, the 
 commissioner may require, by written order, that such bonds or 
 contracts of insurance in favor of the bank be obtained as in 
 the commissioner's opinion would adequately protect the bank 
 against loss by reason of the unlawful act of any of its 
 officers or employees, and shall thereupon notify the bank, by 
 certified mail, of the order; and, if the same is not complied 
 with within 30 days after the date of the mailing of the order, 
 the bank may be closed and, if closed, shall not be permitted to 
 resume business until the order has been fully complied with.  
 All such bonds or contracts of insurance shall remain in the 
 custody of the bank protected thereby and shall be available for 
 examination and inspection by the commissioner. 

    HIST: (7699-3) 1925 c 351 s 3; 1969 c 772 s 2; 1978 c 674 s 
 60; 1984 c 576 s 11; 1986 c 444 

     48.15 Special powers. 

    Subdivision 1.  In addition to the inherent and granted 
 powers of corporations in general, any such bank shall have 
 power to exercise, by its board of directors, or duly authorized 
 officers and agents, subject to law, all such powers as shall be 
 necessary to carry on the business of banking by discounting 
 bills, notes, and other evidences of debt, by receiving 
 deposits, by buying and selling gold and silver bullion, foreign 
 coin, promissory notes, mortgages, and other evidences of debt 
 legal for investment, and foreign and inland bills of exchange, 
 by lending money on real and personal securities and receiving 
 interest on any of the same in advance, and by exercising all 
 the usual and incidental powers and privileges belonging to the 
 business; but it shall not transact any business, except such as 
 is incidental and necessarily preliminary to its establishment, 
 until authorized by the commissioner to commence business.  

    Subd. 2.  The commissioner of commerce may authorize banks, 
 bank and trust companies, or trust companies organized under the 
 laws of this state to engage in any banking or trust activity in 
 which banks subject to the jurisdiction of the federal 
 government may hereafter be authorized to engage by federal 
 legislation, ruling, or regulation and those activities 
 authorized in section 48.61, subdivision 7, paragraph (a), 
 clause (3).  The commissioner may not authorize state banks as 
 defined by section 48.01, to engage in any activity prohibited 
 by the laws of this state. 

    Subd. 2a.    Authorized activities.  The commissioner 
 may authorize a state bank to undertake any activities, exercise 
 any powers, or make any investments that are authorized 
 activities, powers, or investments as of August 1, 1995, for any 
 state savings bank doing business in this state, or that become 
 authorized activities, powers, or investments for state savings 
 banks after August 1, 1995.  The commissioner may not authorize 
 state banks to engage in any banking activity prohibited by the 
 laws of this state. 

    Subd. 3.  No such bank shall act as paying agent of any 
 municipality or other public issuer of obligations, other than 
 an issuer within whose corporate limits the principal office of 
 the bank is situated, unless the bank is authorized to execute 
 the powers conferred in section 48.38. 

    Subd. 4.    Retirement and medical savings accounts.  A 
 state bank may act as trustee or custodian of a self-employed 
 retirement plan under the Federal Self-Employed Individual Tax 
 Retirement Act of 1962, as amended, of a medical savings account 
 under the Federal Health Insurance Portability and 
 Accountability Act of 1996, as amended, and of an individual 
 retirement account under the Federal Employee Retirement Income 
 Security Act of 1974, as amended, if the bank's duties as 
 trustee or custodian are essentially ministerial or custodial in 
 nature and the funds are invested only (1) in the bank's own 
 savings or time deposits; or (2) in any other assets at the 
 direction of the customer if the bank does not exercise any 
 investment discretion, invest the funds in collective investment 
 funds administered by it, or provide any investment advice with 
 respect to those account assets. 

    Affiliated discount brokers may be utilized by the bank 
 acting as trustee or custodian for self-directed IRAs, if 
 specifically authorized and directed in appropriate documents.  
 The relationship between the affiliated broker and the bank must 
 be fully disclosed.  Brokerage commissions to be charged to the 
 IRA by the affiliated broker should be accurately disclosed.  
 Provisions should be made for disclosure of any changes in 
 commission rates prior to their becoming effective.  The 
 affiliated broker may not provide investment advice to the 
 customer.  All funds held in the fiduciary capacity may be 
 commingled by the financial institution in the conduct of its 
 business, but individual records shall be maintained by the 
 fiduciary for each participant and shall show in detail all 
 transactions engaged under authority of this subdivision.  The 
 authority granted by this section is in addition to, and not 
 limited by, section 47.75. 

    HIST: (7660) RL s 2984; 1965 c 171 s 9; 1969 c 1129 art 4 s 9; 
 1976 c 324 s 25; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 
 1986 c 353 s 1; 1987 c 349 art 1 s 13; 1995 c 171 s 30; 1997 c 
 157 s 22,23 

     48.151 Additional powers. 

    Any bank, savings bank, or trust company organized under 
 the laws of this state, or any national banking association 
 doing business in this state, shall have the power to advertise 
 for sale and sell for a fee money orders, traveler's checks, 
 cashier's checks, drafts, registered checks, and certified 
 checks and no other person, firm, or corporation, either 
 directly or through agents, shall advertise for sale or shall 
 sell for a fee any evidence of indebtedness on which there 
 appears the words, "money order," "traveler's check," "cashier's 
 check," "draft," "registered check," "certified check," or other 
 words or symbols whether of the same or different character 
 which tend to lead the purchaser to believe that such evidence 
 of indebtedness is other than a personal check, unless such 
 evidence of indebtedness is issued by a person, firm or 
 corporation which is a savings association, or telegraph 
 company, or, in the case of cashier's checks, is issued by an 
 industrial loan and thrift company with deposit liabilities, 
 provided that these instruments are issued in conformity with 
 the Uniform Commercial Code, or is issued by a person, firm, or 
 corporation that has on file in the office of the secretary of 
 state a surety bond in the principal sum of $5,000 issued by a 
 bonding or insurance company authorized to do business in this 
 state, which surety bond shall run to the state of Minnesota and 
 shall be for the benefit of any creditor for any liability 
 insured on account of the sale or issuance by it or its agent of 
 any such evidence of indebtedness, or has deposited with the 
 secretary of state securities or cash of the value of $5,000; 
 provided, however, that the aggregate liability of the surety to 
 all such creditors shall, in no event, exceed the sum of such 
 bond or deposit.  Any person, firm or corporation who shall 
 violate any provision of this section shall be guilty of a 
 misdemeanor.  

    HIST: 1955 c 555 s 1; 1959 c 88 s 6; 1Sp1985 c 1 s 1; 1995 c 
 202 art 1 s 25 

     48.152 State bank acquisition and leasing of personal 
  property. 

    Subdivision 1.  A state bank may acquire and lease or 
 participate in the acquisition and leasing of personal property 
 to customers, and may incur such additional obligations as may 
 be incidental to becoming an owner and lessor of such property, 
 subject to the rules of the commissioner and the conditions 
 specified in this section.  

    Subd. 2.  The property must be acquired upon the specific 
 request of and for the use of a customer. 

    Subd. 3.  The lease may not be an operating lease, but must 
 be a "net" lease wherein the bank retains no obligation for 
 maintenance or operation of the property.  

    Subd. 4.  The lease must be a full-payout, noncancelable 
 obligation of the lessee serving the same purpose as other forms 
 of bank financing.  For the purposes of this subdivision a 
 full-payout lease is one in which the lessor will realize from 
 the transaction a return of its full investment in the leased 
 property plus the estimated cost to it of financing the property 
 over the term of the lease in rentals, estimated tax benefits, 
 and the estimated residual value of the property at the 
 expiration of the initial term of the lease.  In all instances 
 where the bank estimates and uses the residual value of leased 
 property to satisfy the requirements of a full-payout lease, the 
 estimated value must be reasonable so that the bank's primary 
 risk in the overall transaction depends on the credit worthiness 
 of the lessee and not market value of the leased item; provided, 
 that in no event shall the estimated residual value exceed 25 
 percent of the original cost of the property to the lessor.  As 
 an alternative to this test, residual values may be set at any 
 level where the bank receives a guarantee of the residual value 
 from the manufacturer, the lessee, or any third party which is 
 not an affiliate of the bank, and where it has determined that 
 the guarantor has the resources to meet the guarantee.  
 Selection of residual values at unreasonable levels shall be 
 considered an unsafe and unsound banking practice if it cannot 
 be shown that, at the time of such selection, the bank made a 
 good faith effort to be accurate and reasonable. 

    For purposes of leasing to government entities 
 "full-payout" calculations may be based on reasonably 
 anticipated future renewals.  

    If, in good faith, the bank believes that there has been a 
 significant unanticipated change in conditions which threatens 
 its financial position by increasing its exposure to loss, and, 
 if its interest in the property is sufficient to justify action, 
 the limitation contained in subdivision 3 shall not prevent the 
 bank from taking any reasonable and appropriate action to 
 salvage or protect the value of the property to prevent loss.  

    Subd. 5.  The terms of the lease shall require periodic 
 rental payments to be made at least annually.  

    Subd. 6.  The terms of the lease shall establish a rental 
 payment schedule by which no individual rental payment shall 
 exceed the average rental payment by more than 50 percent, the 
 average rental payment to be computed by dividing the total 
 dollar amount of rental payments to be made over the term of the 
 lease by the number of payments to be made.  

    Subd. 7.  Except upon the written approval of the 
 commissioner, the term of the lease shall not exceed 12 years, 
 32 days.  

    Subd. 8.  The total amount of unpaid rental obligations of 
 a customer to a bank on personal property, shall constitute a 
 liability of the customer within the meaning of section 48.24, 
 subdivisions 1 and 4. 

    Subd. 9. Repealed, 1983 c 80 s 2 

    Subd. 10.  The acquisition of personal property for leasing 
 to customers under this section not in conformity with 
 subdivision 4 is authorized if the total investment in this 
 personal property does not exceed 200 percent of the sum of the 
 bank's capital actually paid in cash and its actual surplus fund.

    HIST: 1975 c 300 s 1; 1979 c 321 s 1; 1983 c 80 s 1; 1988 c 
 631 s 1 

     48.153 Installment loans; finance charges; minimum 
  charges. 

    Subdivision 1. Repealed, 1982 c 494 s 5 

    Subd. 1a.  A bank organized under the laws of this state, 
 or a national banking association doing business in this state, 
 making a loan of money not exceeding $35,000 repayable in 
 installments, may charge, at the time the loan is made, a rate 
 of interest upon the unpaid principal balance of the amount 
 financed of 12 percent a year, or the rate of interest 
 authorized by section 48.195, whichever is greater.  If the rate 
 of interest charged is permitted by section 48.195 at the time 
 the loan is made, the rate does not later become usurious 
 because of a fluctuation in the federal discount rate. 

    Subd. 2.  Installment payments on loans made pursuant to 
 this section by a bank or national banking association shall not 
 extend beyond a period of 12 years and 32 days from the date of 
 the loan.  The loan may be secured by a mortgage, pledge, or 
 other collateral. 

    Subd. 3. Repealed, 1982 c 494 s 5 

    Subd. 3a.  A savings bank organized under chapter 50 or a 
 savings association chartered under the laws of the United 
 States, that has its principal place of business in this state, 
 may make a loan for consumer purposes to a natural person in an 
 amount not exceeding $25,000 repayable in installments, and may 
 charge a rate of interest upon the unpaid principal balance of 
 the amount financed of 12 percent a year, or the rate of 
 interest authorized by section 48.195, whichever is greater.  If 
 the rate of interest charged is permitted by section 48.195 at 
 the time the loan is made, the rate does not later become 
 usurious because of a fluctuation in the federal discount rate. 

    Subd. 4.  Installment payments on loans made pursuant to 
 this section by a savings bank, a savings association subject to 
 the provisions of sections 51A.01 to 51A.57, or a savings 
 association chartered under the laws of the United States shall 
 not extend beyond a period of 12 years and 32 days from the date 
 of the loan.  The loan may be secured by a mortgage, pledge, or 
 other collateral. 

    Subd. 5.  Charges in reference to installment loans under 
 this section shall be computed and collected only on the unpaid 
 principal balance of the amount financed actually outstanding.  
 One day's finance charge means an amount equal to 1/365 of the 
 per annum rate provided for in an installment loan.  If the 
 total finance charge determined on an installment loan, single 
 payment or demand loan shall be less than $10 the amount charged 
 may nevertheless be $10.  No loan shall be made pursuant to this 
 section if over 50 percent of the proceeds of the loan are used 
 to finance the purchase of a borrower's primary residence other 
 than a manufactured home. 

    HIST: 1945 c 544 s 1; 1947 c 314 s 1; 1955 c 616 s 1; 1957 c 
 916 s 1; 1961 c 298 s 7; 1963 c 577 s 1; 1973 c 511 s 1; 1976 c 
 196 s 2; 1977 c 350 s 2; 1980 c 522 s 1; 1980 c 606 s 1; 1981 c 
 365 s 9; 1982 c 494 s 1,2; 1995 c 202 art 1 s 25; 1996 c 414 art 
 1 s 14 

*   NOTE:  The amendment to subdivision 3a by Laws 1996, 
*chapter 414, article 1, section 14, is effective July 1, 1998.  
*Laws 1996, chapter 414, article 1, section 45.

     48.154 Prepayment, extension of terms. 

    The borrower may repay the entire balance or any portion of 
 the balance of an installment loan in advance without penalty.  
 An installment loan contract may provide that the parties, 
 before or after default, may agree in writing to an extension of 
 all or part of the unpaid installments and collect as an 
 extension fee a finance charge not exceeding that rate agreed to 
 in the original loan contract.  No such extension shall be 
 permitted to cause repayment of a loan to exceed those 
 maturities set down in section 48.153.  One day's finance charge 
 shall mean an amount equal to 1/365 of the per annum rate 
 provided for in an installment loan. 

    HIST: 1945 c 544 s 2; 1965 c 171 s 10; 1976 c 196 s 3 

     48.155 Allowable additional charges. 

    No charge other than those provided for in sections 48.153 
 and 48.154 shall be made directly or indirectly for any such 
 installment loan except that there may be charged to the 
 borrower or included in the amount financed: 

    (a) Any lawful fees paid or to be paid by the lender to any 
 public officer for filing, recording, or releasing in any public 
 office any instrument securing the loan; 

    (b) Any lawful premium or charge for insurance protecting 
 the lender against the risk of loss from not filing or recording 
 a security agreement or financing statement and in lieu of 
 filing thereof.  Such premium or charge shall not exceed the 
 actual premium or charge made by the insurance company to the 
 lender and in no event in excess of the costs if the document 
 were actually filed, recorded, or released in any public office; 

    (c) The premium on any life, property or other insurance 
 taken as security for the loan; provided, that the borrower has 
 acknowledged by signature that the borrower has been notified in 
 writing that the borrower may, at the borrower's own cost, 
 procure and deposit with the lender such insurance if written by 
 a responsible company.  Such premium may be included as part of 
 the loan. 

    HIST: 1945 c 544 s 3; 1963 c 153 s 3; 1971 c 33 s 1; 1976 c 
 196 s 4; 1986 c 444 

     48.156 Loan due on default.  

    Nothing in sections 48.153 to 48.157 shall prohibit the 
 lender from declaring the whole of such loan immediately due and 
 payable upon default if the loan agreement shall so provide.  

    HIST: 1945 c 544 s 4 

     48.157 Copy of note to borrower.  

    At the time of making an installment loan under the 
 provisions of sections 48.153 to 48.157, the borrower shall be 
 furnished a signed copy of the note and also a copy or statement 
 of all charges made by the bank on such loan.  

    HIST: 1945 c 544 s 5; 1986 c 444 

     48.158 Settlement of checks at less than par.  

    No bank or trust company organized under the laws of this 
 state shall settle any check drawn on it otherwise than at par.  
 The provisions of this section shall not apply with respect to 
 the settlement of a check sent to such bank or trust company as 
 a special collection item.  This section is in effect on and 
 after November 1, 1968.  

    HIST: 1967 c 156 s 1 

  48.1585 Repealed, 1995 c 202 art 4 s 25 

  48.159 Repealed, 1982 c 473 s 30 

     48.16 Banks may not pledge assets; exceptions. 

    No bank or trust company shall pledge, hypothecate, assign, 
 transfer, or create a lien upon or charge against any of its 
 assets except as follows:  

    (1) to the state; 

    (2) to secure public deposits; 

    (3) to secure funds of trustees in bankruptcy; 

    (4) to secure money borrowed in good faith from other 
 banks, trust companies, a financial agency created by act of 
 Congress, or the state in programs specifically authorizing 
 state banks to participate as an eligible local lender; 

    (5) to finance the acquisition of real estate to be carried 
 as an asset as provided for in section 47.10; 

    (6) to secure a liability that arises from a transfer of a 
 direct obligation of, or obligations that are fully guaranteed 
 as to principal and interest by, the United States government or 
 an agency thereof that the bank or trust company is obligated to 
 repurchase. 

    This section shall not be construed to permit the use of 
 assets as security for public deposits other than the securities 
 made eligible by law for that purpose. 

    HIST: (7699-14) 1927 c 257 s 1; 1931 c 341; 1933 c 149 s 1; 
 1939 c 46; Ex1967 c 30 s 1; 1982 c 473 s 11; 1995 c 202 art 2 s 
 14 

     48.17 Powers of officers or employees.  

    No officer or employee of a bank or trust company shall 
 have power or authority to borrow money, execute guaranties or 
 endorse, otherwise than without recourse, pledge or hypothecate 
 any note, bond, or other obligation belonging to the bank or 
 trust company unless the power and authority shall have been 
 given the officer or employee by the board of directors and a 
 written record thereof made in the minute book of the bank and a 
 certified copy of the record delivered to the creditor, 
 guarantee, pledgee, or endorsee of the note, bond, guaranty, or 
 other obligation.  

    HIST: (7699-15) 1927 c 257 s 2 

     48.18 Pledges or liens of assets subject to prior liens. 

    No bank or trust company shall pledge or hypothecate or 
 create a lien upon or charge against any of its assets subject 
 to a prior lien, hypothecation, or charge.  

    HIST: (7699-16) 1927 c 257 s 3 

     48.185 Open end loan account arrangements. 

    Subdivision 1.  Any bank organized under the laws of this 
 state, any national banking association doing business in this 
 state, any savings bank organized and operated pursuant to 
 chapter 50, any savings association organized under chapter 51A, 
 and any federally chartered savings association, may extend 
 credit through an open end loan account arrangement with a 
 debtor, pursuant to which the debtor may obtain loans from time 
 to time by cash advances, purchase or satisfaction of the 
 obligations of the debtor incurred pursuant to a credit card 
 plan, or otherwise under a credit card or overdraft checking 
 plan. 

    Subd. 2. Repealed, 1980 c 599 s 9 

    Subd. 3.  A financial institution referred to in 
 subdivision 1, may collect a periodic rate of finance charge in 
 connection with extensions of credit under this section, which 
 finance charge does not exceed the equivalent of an annual 
 percentage rate of 18 percent computed on a 365-day year and in 
 accordance with the Truth in Lending Act, United States Code, 
 title 15, section 1601 et seq., and the Code of Federal 
 Regulations, title 12, part 226 (1985).  

    If credit is extended pursuant to an overdraft checking 
 plan on the day on which an increase in the periodic rate of 
 finance charge is made effective pursuant to this section, the 
 rate in effect prior to the increase shall be the maximum lawful 
 rate chargeable on the amount of credit so extended until that 
 credit is fully repaid according to the terms of the plan. 

    Subd. 3a.  Any periodic statement evidencing an overdraft 
 checking plan loan balance shall clearly state that all or any 
 part of said balance may be prepaid at any time.  

    Subd. 4.  No charges other than those provided for in 
 subdivision 3 shall be made directly or indirectly for any 
 credit extended under the authority of this section, except that 
 there may be charged to the debtor: 

    (a) annual charges, not to exceed $50 per annum, payable in 
 advance, for the privilege of using a bank credit card; 

    (b) charges for premiums on credit life, credit accident 
 and health, and credit involuntary unemployment insurance if: 

    (1) the insurance is not required by the financial 
 institution and this fact is clearly disclosed in writing to the 
 debtor; and 

    (2) the debtor is notified in writing of the cost of the 
 insurance and affirmatively elects, in writing, to purchase the 
 insurance; 

    (c) charges for the use of an automated teller machine when 
 cash advances are obtained pursuant to this section through the 
 use of an automated teller machine; 

    (d) in the case of a financial institution referred to in 
 subdivision 1 that does not charge an annual fee, delinquency 
 and collection charges as follows: 

    (1) on each payment in arrears for a period not less than 
 ten days, in an amount not in excess of the delinquency and 
 collection charge permitted in section 168.71; 

    (2) for any monthly or other periodic payment period where 
 the debtor has exceeded or thereby exceeds the maximum approved 
 credit limit under the open-end loan account arrangement, in an 
 amount not in excess of the service charge limitations in 
 section 332.50; and 

    (3) for any returned check or returned automatic payment 
 withdrawal request, in an amount not in excess of the service 
 charge limitation in section 332.50; and 

    (e) to the extent not otherwise prohibited by law, charges 
 for other goods or services offered by or through a financial 
 institution referred to in subdivision 1 which the debtor elects 
 to purchase, including, but not limited to, charges for check 
 and draft copies and for the replacement of lost or stolen cards.

    Subd. 4a. Repealed, 1986 c 376 s 4 

    Subd. 5.  If the balance in a revolving loan account under 
 a credit card plan is attributable solely to purchases of goods 
 or services charged to the account during one billing cycle, and 
 the account is paid in full before the due date of the first 
 statement issued after the end of that billing cycle, no finance 
 charge shall be charged on that balance. 

    Subd. 6.  This section shall apply to all open end credit 
 transactions of a bank or savings bank in extending credit under 
 an open end loan account or other open end credit arrangement to 
 persons who are residents of this state, if the bank or savings 
 bank induces such persons to enter into such arrangements by a 
 continuous and systematic solicitation either personally or by 
 an agent or by mail, and retail merchants and banks or savings 
 banks within this state are contractually bound to honor credit 
 cards issued by the bank or savings bank, and the goods, 
 services and loans are delivered or furnished in this state and 
 payment is made from this state.  A term of a writing or credit 
 card device executed or signed by a person to evidence an open 
 end credit arrangement specifying: 

    (a) that the law of another state shall apply; 

    (b) that the person consents to the jurisdiction of another 
 state; and 

    (c) which fixes venue; 

    is invalid with respect to open end credit transactions to 
 which this section applies.  An open end credit arrangement made 
 in another state with a person who was a resident of that state 
 when the open end credit arrangement was made is valid and 
 enforceable in this state according to its terms to the extent 
 that it is valid and enforceable under the laws of the state 
 applicable to the transaction. 

    Subd. 7.  Any bank or savings bank extending credit in 
 compliance with the provisions of this section, which is injured 
 competitively by violations of this section by another bank or 
 savings bank, may institute a civil action in the district court 
 of this state against that bank or savings bank for an 
 injunction prohibiting any violation of this section.  The 
 court, upon proper proof that the defendant has engaged in any 
 practice in violation of this section, may enjoin the future 
 commission of that practice.  Proof of monetary damage or loss 
 of profits shall not be required.  Costs and attorneys' fees may 
 be allowed to the plaintiff, unless the court directs 
 otherwise.  The relief provided in this subdivision is in 
 addition to remedies otherwise available against the same 
 conduct under the common law or statutes of this state. 

    Service of process shall be as in any other civil suit, 
 except that if a defendant in the action is a foreign 
 corporation or a national banking association with its principal 
 place of business in another state, service of process may also 
 be made by personal service outside the state, or in the manner 
 provided by section 5.25, or in such manner as the court may 
 direct, or in accordance with section 45.028, subdivision 2.  
 Process is valid if it satisfies the requirements of due process 
 of law, whether or not defendant is doing business in Minnesota 
 regularly or habitually. 

    HIST: 1976 c 196 s 5; 1979 c 101 s 1-3; 1981 c 138 s 1; 1981 c 
 259 s 2; 1986 c 376 s 1-3; 1987 c 341 s 1; 1992 c 564 art 2 s 2; 
 1993 c 343 s 2; 1995 c 128 art 1 s 2; 1995 c 202 art 1 s 25 

  48.19 Repealed, 1Sp1985 c 13 s 376 

     48.194 Installment sales contracts; loans. 

    A person may enter into a credit sale or service contract 
 for sale to a state or national bank doing business in this 
 state, and a bank may purchase and enforce the contract under 
 the terms and conditions set forth in section 47.59, 
 subdivisions 2 and 4 to 14.  A state bank or national bank may 
 extend credit pursuant to the terms and conditions set forth in 
 sections 47.59 and 47.60. 

    HIST: 1988 c 666 s 1; 1993 c 257 s 17; 1995 c 202 art 3 s 3; 
 1996 c 414 art 1 s 15 

*   NOTE:  The amendment to this section by Laws 1996, chapter 
*414, article 1, section 15, is effective July 1, 1998.  Laws 
*1996, chapter 414, article 1, section 45.

     48.195 Interest rates; usury limit for depository 
  institutions. 

    Notwithstanding any law to the contrary, a bank, savings 
 bank, savings association, or credit union organized under the 
 laws of this state, or a national bank or federally chartered 
 savings bank, savings association, or credit union, doing 
 business in this state, may charge on any loan or discount made 
 or upon any note, bill or other evidence of debt, except an 
 extension of credit made pursuant to section 48.185, interest at 
 a rate of not more than 4-1/2 percent in excess of the discount 
 rate, including any surcharge thereon, on 90 day commercial 
 paper in effect at the federal reserve bank located in the Ninth 
 Federal Reserve District.  

    HIST: 1980 c 343 s 1; 1981 c 259 s 1; 2Sp1981 c 4 s 1; 1982 c 
 494 s 3; 1995 c 202 art 1 s 25 

     48.196 Penalty for usurious interest. 

    The taking, receiving, reserving or charging by a lender of 
 a rate of interest greater than is allowed by state law shall be 
 deemed a forfeiture of the entire interest which the note, bill, 
 or other evidence of debt carries with it, or which has been 
 agreed to be paid thereon.  In case the greater rate of interest 
 has been paid, the person paying it, or the person's legal 
 representatives, may recover, in an action in the nature of an 
 action of debt, twice the amount of the interest thus paid from 
 the lender taking or receiving the interest, if the action is 
 commenced within two years from the time the usurious 
 transaction occurred.  For purposes of this section, the term 
 "lender" means a bank or savings bank organized under the laws 
 of this state, a federally chartered savings association, a 
 savings association organized under chapter 51A, a federally 
 chartered credit union, a credit union organized under chapter 
 52, an industrial loan and thrift company organized under 
 chapter 53, a regulated lender licensed under chapter 56, or a 
 mortgagee or lender approved or certified by the secretary of 
 housing and urban development or approved or certified by the 
 administrator of veterans affairs.  

    HIST: 1980 c 606 s 2; 1983 c 252 s 3; 1986 c 444; 1995 c 202 
 art 1 s 25 

     48.20 Unauthorized pledges, notes, liens void.  

    Any note, endorsement, guaranty, pledge, hypothecation, 
 lien or other obligation given contrary to the provisions of 
 sections 48.16 to 48.18 shall be null and void.  

    HIST: (7699-18) 1927 c 257 s 5 

     48.21 Real estate; restrictions on holding. 

    Subdivision 1.  A bank may purchase, carry as an asset, and 
 convey real estate only: 

    (1) As provided for in section 47.10; 

    (2) If acquired through foreclosure of a mortgage given to 
 it in good faith as security for loans made by or money due to 
 it; 

    (3) If conveyed to it in satisfaction of debts previously 
 contracted in good faith in the course of its dealings; 

    (4) If acquired by sale on execution or judgment of a court 
 in its favor; or 

    (5) If reasonably necessary to mitigate or avoid loss on a 
 loan or investment theretofore made.  

    Real estate acquired under clauses (2) to (5) shall be 
 carried as an asset only in accordance with rules the 
 commissioner prescribes. 

    Subd. 2.  Real estate owned by a bank as a result of 
 actions authorized in clauses (2) to (5) of subdivision 1 and 
 subsequently sold to any buyer on a contract for deed may not be 
 considered creating a liability to a bank for purposes of 
 section 48.24.  

    Subd. 3.  Notwithstanding any rules of the commissioner to 
 the contrary, if real estate owned by a bank pursuant to clauses 
 (2) to (5) of subdivision 1 is not sold or otherwise disposed of 
 within the maximum period established by rule by the 
 commissioner, the bank may write off any remaining balance at a 
 rate not less than one-fifth of that balance each subsequent 
 calendar year. 

    HIST: (7679) RL s 2995; 1919 c 85 s 1; 1921 c 258 s 1; 1929 c 
 54 s 1; 1945 c 63 s 1; 1955 c 104 s 2; 1957 c 601 s 12; 1982 c 
 473 s 12; 1987 c 349 art 1 s 14 

  48.22 Repealed, 1981 c 182 s 6 

     48.221 Reserves. 

    A state bank or trust company shall maintain reserves in 
 the form of liquid assets at a level reasonably necessary to 
 meet anticipated withdrawals, commitments, and loan demand.  
 Reserves shall be in cash, cash items in process of collection, 
 short term obligations of or demand balances with other insured 
 financial institutions in the United States and its territories, 
 or short term, direct obligations of or guaranteed by the United 
 States government.  Obligations must mature within one year to 
 be considered short term.  The commissioner may prescribe the 
 required amount of reserves in relation to liabilities for any 
 individual state bank or trust company from time to time based 
 upon examination findings or other reports relating to the bank 
 or trust company that are available to the commissioner.  
 Reserves for an individual state bank or trust company as 
 prescribed by the commissioner pursuant to this section shall be 
 enforced in accordance with sections 46.24 and 46.30 to 46.33.  

    HIST: 1981 c 182 s 2; 1982 c 424 s 130; 1997 c 187 art 3 s 8 

     48.23 Bank not to lend on its own stock or purchase same.

    Any such bank shall make no loan or discount on the 
 security of its own capital stock, nor be the purchaser or 
 holder thereof, unless necessary to prevent loss upon a debt 
 previously contracted in good faith, and all stock so acquired 
 shall be disposed of, at public or private sale, within six 
 months after it is so acquired.  

    HIST: (7676) RL s 2992 

     48.24 Restrictions upon total liabilities to a bank. 

    Subdivision 1.  The total liabilities to any such bank, as 
 principal, guarantor or endorser of any individual, including 
 the liabilities of any corporation or limited liability company 
 which the individual owns or controls a majority interest, any 
 partnership, unincorporated association, limited liability 
 company, or corporation, including the liabilities of the 
 several members of an unincorporated association and including 
 the liabilities of the general partners but not the limited 
 partners of a partnership, and in case of a corporation or 
 limited liability company of all subsidiaries thereof in which 
 such corporation or limited liability company owns or controls a 
 majority interest, shall never exceed 20 percent of its capital 
 actually paid in cash and of its actual surplus fund, except 
 that obligations not to exceed 25 percent of said capital and 
 surplus to any one borrower shall not be included as liabilities 
 for the purposes of this section, but shall be liabilities of 
 the borrowers, provided they are secured by not less than a like 
 amount of any one of the various types of obligations of the 
 United States or which are fully guaranteed as to principal and 
 interest by the United States, and providing that such bonds or 
 obligations have a market value of at least ten percent in 
 excess of the amount loaned thereon at the time each loan is 
 made.  

    For the purpose of this section the members of a family 
 living together in one household, if borrowed funds are to be 
 used in the conduct of a common enterprise, shall be regarded as 
 one person and the total liabilities of the members of the 
 family shall be limited as herein provided.  The endorser or 
 guarantor of any obligation which is exempt from loaning limits 
 according to the provisions of this section shall also be exempt 
 from such loaning limits to the extent of the amount of 
 liability on such obligations for the purposes of this section 
 but shall be liable thereon.  Individual extensions of credit 
 which result in liabilities of individuals, corporations, or 
 limited liability companies exceeding the limitations set forth 
 in this section shall be construed to conform to the provisions 
 of this subdivision upon reduction in an amount sufficient to 
 reduce the total liability to not more than the legal amount, 
 but until paid in full shall not exempt the officer or employee 
 of the bank from being personally liable to the bank for the 
 amount of the original excess portion of the loan as set forth 
 in subdivision 8.  

    Subd. 2.  Loans not exceeding 25 percent of such capital 
 and surplus made upon first mortgage security on improved real 
 estate in any state in which the bank or a branch established 
 under section 49.411 is located, or in any state adjoining a 
 state in which the bank or a branch established under section 
 49.411 is located, shall not constitute a liability of the maker 
 of the notes secured by such mortgages within the meaning of the 
 foregoing provision limiting liability, but shall be an actual 
 liability of the maker.  These mortgage loans shall be limited 
 to, and in no case exceed, 50 percent of the cash value of the 
 security covered by the mortgage, except mortgage loans 
 guaranteed as provided by the Servicemen's Readjustment Act of 
 1944, as now or hereafter amended, or for which there is a 
 commitment to so guarantee or for which a conditional guarantee 
 has been issued, which loans shall in no case exceed 60 percent 
 of the cash value of the security covered by such mortgage.  For 
 the purposes of this subdivision, real estate is improved when 
 substantial and permanent development or construction has 
 contributed substantially to its value, and agricultural land is 
 improved when farm crops are regularly raised on such land 
 without further substantial improvements.  

    Subd. 3.  Conditional sales contracts or other paper 
 evidencing an agreement to purchase or lease personal property 
 owned and guaranteed by the person discounting same, not to 
 exceed 30 percent of the capital stock and surplus, taken from 
 any one person, shall not constitute a liability within the 
 meaning of this section, but the actual liabilities on such 
 agreements are not to be construed as affected by the provisions 
 of this subdivision:  Provided, however, if information as to 
 the financial condition of each purchaser or lessee is 
 reasonably adequate by reason of the bank's own records or 
 actual knowledge of an officer of the bank and, upon written 
 certification by an officer appointed by the bank's board of 
 directors for that purpose, that the responsibility of each 
 purchaser or lessee has been evaluated and the bank is relying 
 primarily upon the purchaser or lessee for the payment of the 
 obligation, the limitations of subdivision 1 as to each 
 purchaser or lessee shall be the sole applicable loan limitation.

    Subd. 4. Repealed, 1993 c 257 s 49 

    Subd. 5.  Loans or obligations shall not be subject under 
 this section to any limitation based upon such capital and 
 surplus to the extent that they are secured or covered by 
 guarantees, or by commitments or agreements to take over or to 
 purchase the same, made by: 

    (1) the commissioner of agriculture on the purchase of 
 agricultural land; 

    (2) any Federal Reserve bank; 

    (3) the United States or any department, bureau, board, 
 commission, or establishment of the United States, including any 
 corporation wholly owned directly or indirectly by the United 
 States; 

    (4) the Minnesota energy and economic development 
 authority; 

    (5) the Minnesota export finance authority; or 

    (6) a municipality or political subdivision within 
 Minnesota to the extent that the guarantee or collateral is a 
 valid and enforceable general obligation of that political body. 

    Subd. 6.  The discount of the following classes of paper 
 shall not be regarded as creating liability within the meaning 
 of this section: 

    (1) Bonds, orders, warrants, or other evidences of 
 indebtedness of the United States, of federal land banks, of 
 this state or of any county, city, town, hospital district, or 
 school district in this state, or of the bonds, representing 
 general obligation of any other state in the United States, or 
 bonds and obligations of the federal home loan banks established 
 by act of Congress known as the Federal Home Loan Bank Act, 
 approved July 23, 1932, and acts amendatory thereto, or 
 debentures and other obligations of the federal intermediate 
 credit banks established by act of Congress known as the Federal 
 Intermediate Credit Banks Act, approved March 4, 1923, and acts 
 amendatory thereto, in obligations issued by the banks for 
 cooperatives or any of them, and in bonds and obligations of the 
 home owners' loan corporation established by act of Congress, 
 known as the Home Owners' Loan Act of 1933, and acts amendatory 
 thereto, in exchange for mortgages on homes, or contracts for 
 deed, or real estate held by it.  

    (2) Bills of exchange drawn in good faith against actually 
 existing values, including bills which are secured by shipping 
 documents conveying or securing title to goods shipped, and 
 which are not to be surrendered until such bills are paid in 
 cash or solvent credits.  This includes bankers' acceptances or 
 participations in bankers' acceptances of the kind and 
 maturities made eligible by law for rediscount with, or purchase 
 by, federal reserve banks, providing the same are accepted or 
 endorsed by a bank or trust company incorporated under the laws 
 of this state; or by any bank or trust company in the United 
 States which is a member of the Federal Reserve system.  

    (3) Paper based upon the collateral security of warehouse 
 receipts covering agricultural or manufactured products stored 
 in elevators or warehouses under the following conditions: 

    First, when the actual market value of the property covered 
 by such receipts at all times exceeds by at least ten percent 
 the amount loaned thereon, and 

    Second, when the full amount of every such loan is at all 
 times covered by fire insurance in duly authorized companies, 
 within the limit of their ability to cover such amounts, and the 
 excess, if any, in companies having sufficient paid-up capital 
 to authorize their admission, and payable, in case of loss, to 
 the bank or holder of the warehouse receipt.  

    (4) Total loans to an obligor secured by either 
 certificates of deposit, or savings certificates or both, of any 
 such bank to the extent of the total of such certificates 
 pledged as security.  

    (5) Debentures issued under the authority of the federal 
 National Mortgage Association.  

    (6) Obligations representing loans from one business day to 
 the next to any state bank or national banking association of 
 excess reserve balances from time to time maintained under the 
 provisions of section 48.221, or of section 19 of the Federal 
 Reserve Act, as amended, United States Code, title 12, sections 
 461 et seq.  

    Subd. 7.  Obligations of any person, copartnership, limited 
 liability company, association, or corporation in the form of 
 notes or drafts secured by shipping documents or instruments 
 transferring or securing title covering feeder livestock which 
 is free from all other encumbrances, when the market value of 
 the livestock securing the obligation at the time of the making 
 of the loan is not less than 115 percentum of the face amount of 
 the notes covered by such documents, shall be subject under this 
 subdivision to a limitation of 20 percent of capital and surplus 
 in addition to 20 percent of capital and surplus as included in 
 provisions of subdivision 1.  Feeder livestock loans as referred 
 to in this subdivision is defined to include only obligations 
 secured by liens or giving title to cattle, sheep, goats, hogs 
 or poultry being fattened for market, but excluding dairy 
 cattle, milk goats, poultry used for production of eggs, or 
 barnyard or work animals. 

    Subd. 7a.  Pursuant to such rules as the commissioner of 
 commerce finds to be necessary and proper, if any, the liability 
 or obligation to a bank of any insurance company admitted and 
 authorized to do business in this state shall not be subject 
 under this section to any limitation based upon such capital and 
 surplus to the extent that such insurance company issues 
 policies or certificates of indemnity of mortgage guaranty 
 insurance. 

    For the purposes of this subdivision "mortgage guaranty 
 insurance" shall mean insurance against financial loss by reason 
 of nonpayment of principal, interest and other sums agreed to be 
 paid under the terms of any note, bond, mortgage, security 
 agreement, or other instrument constituting a first lien, 
 security interest or charge on real property or manufactured 
 homes. 

    Subd. 8.  When a bank shall allow any individual, 
 partnership, limited liability company, unincorporated 
 association, or corporation, or any officer or director of the 
 bank, to become indebted to it, directly or indirectly, in 
 excess of the amount, exclusive of interest permitted by the 
 laws of this state, the officer or employee of the bank 
 willfully permitting or approving the loan shall be guilty of a 
 gross misdemeanor and, in addition thereto, shall be personally 
 liable to the bank for the amount of the loan in excess of the 
 statutory limit. 

    Subd. 9.    Right to act to avoid loss.  This section 
 does not prohibit the bank from advancing funds that may be 
 reasonably necessary to avoid loss on a loan or investment made 
 subject to this section or an obligation created in good faith.  
 The rights under this subdivision are in addition to and not 
 inconsistent with section 48.21. 

    HIST: (7677) RL s 2993; 1907 c 156 s 1; 1911 c 160 s 1; 1919 c 
 103 s 1; 1927 c 258 s 1; 1931 c 9 s 1; Ex1934 c 70 s 1; 1943 c 
 23 s 1; 1945 c 62 s 1; 1947 c 82 s 1; 1957 c 601 s 13-16; 1959 c 
 88 s 8,9,17; 1963 c 153 s 6; 1965 c 171 s 15-17; 1967 c 102 s 
 7,8; 1969 c 438 s 1,2; 1969 c 772 s 3; 1971 c 100 s 1; 1973 c 35 
 s 18; 1973 c 123 art 5 s 7; 1976 c 210 s 11; 1980 c 523 s 1; 
 1981 c 365 s 9; 1983 c 289 s 114 subd 1; 1984 c 576 s 13; 1984 c 
 655 art 1 s 92; 1985 c 248 s 70; 1986 c 353 s 2; 1986 c 444; 
 1987 c 349 art 1 s 15; 1987 c 384 art 2 s 1; 1988 c 631 s 2,3; 
 1993 c 137 s 1-3; 1993 c 257 s 18-20; 1995 c 202 art 2 s 15; 
 1997 c 157 s 24,25 

     48.245 War veteran, minority; contract for loan.  

    The disability of minority of any person otherwise eligible 
 for guaranty or insurance pursuant to the Servicemen's 
 Readjustment Act of 1944, as amended (Public Law Number 346, 
 78th Congress, as amended), the National Housing Act, as amended 
 (Public Law Number 475, 81st Congress), or the Defense Housing 
 and Community Facilities and Services Act of 1951, (Public Law 
 Number 139, 82nd Congress), and of the minor spouse of any 
 eligible veteran irrespective of age, in connection with any 
 transaction entered into pursuant thereto, is hereby removed for 
 all purposes in connection with such transaction, including but 
 not limited to incurring of indebtedness or obligations and 
 acquiring, encumbering, selling, releasing, or conveying 
 property or any interest therein and litigating or settling 
 controversies arising therefrom, if all or part of any 
 obligations incident to such transaction be guaranteed or 
 insured by the administrator of Veterans Affairs pursuant to any 
 act hereinbefore referred to; provided, that this section shall 
 not be construed to impose any other or greater rights or 
 liabilities than would exist if any such person were under no 
 such disability.  

    HIST: 1945 c 177 s 1; 1947 c 178 s 1; 1953 c 699 s 3 

  48.25 Repealed, 1982 c 473 s 30 

  48.26 Repealed, 1994 c 382 s 15 

     48.27 Limitation on amount of deposits.  

    No bank or trust company organized under the laws of this 
 state shall accept deposits in a sum exceeding 30 times the 
 amount of its capital stock and its actual surplus.  

    HIST: (7699-12) 1927 c 325 s 1; 1943 c 342 s 2; 1945 c 73 s 1; 
 1947 c 11 s 1; 1949 c 24 s 1; 1959 c 88 s 11 

     48.28 Liquidation, unless deposits are reduced.  

    If any such bank or trust company shall violate the 
 provisions of Minnesota Statutes 1945, section 48.27, as 
 amended, the commissioner of commerce may take possession 
 thereof and liquidate such corporation in accordance with law, 
 unless said bank or trust company shall within 90 days after 
 notice from the commissioner of commerce reduce its deposits to 
 the amount allowed by law or increase its capital stock 
 accordingly.  

    HIST: (7699-13) 1927 c 325 s 2; 1943 c 342 s 1; 1945 c 73 s 2; 
 1947 c 11 s 2; 1949 c 24 s 2; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92 

  48.29 Repealed, 1965 c 811 art 10 s 336.10-102 

     48.30 Deposits in name of minor. 

    Any deposit made in the name of a minor, shall be held for 
 the exclusive right and benefit of the minor, free from the 
 control or lien of all other persons, except creditors, and, 
 together with the dividends or interest thereon, shall be paid 
 to the minor, and the minor's receipt, check, or acquittance in 
 any form shall be a sufficient release and discharge of the 
 depository for the deposit, or any part thereof, until a 
 conservator or guardian appointed for the minor shall have 
 delivered a certificate of appointment to the depository.  

    HIST: (7711) RL s 3019; 1907 c 468 s 6; 1985 c 292 s 1 

     48.301 Multiparty accounts. 

    When any deposit is made in the names of two or more 
 persons jointly, or by any person payable on death (P.O.D.) to 
 another, or by any person in trust for another, the rights of 
 the parties and the financial institution are determined by 
 chapter 524.  

    HIST: 1985 c 292 s 2; 1996 c 305 art 1 s 15; 1996 c 414 art 1 
 s 16 

     48.31 State banks organized from national banks.  

    When any national bank authorized to dissolve has taken the 
 necessary steps for that purpose, a majority of its directors, 
 upon authority, in writing, of the owners of two-thirds of the 
 capital stock and the approval of the commissioner, may execute 
 a certificate of incorporation under the provisions of this 
 chapter, which, in addition to the other requirements of law, 
 shall state the authority derived from the stockholders of the 
 national bank; and, upon recording and publishing this 
 certificate, as provided by law, it shall become a legal state 
 bank.  Thereupon the assets, real and personal, of the dissolved 
 bank, subject to its liabilities not liquidated under the 
 federal law before this incorporation, shall vest in and become 
 the property of the state bank.  

    HIST: (7695) RL s 3006 

     48.32 State banks or trust companies may be members of 
  federal reserve banks.  

    Any incorporated state bank or trust company may become a 
 member of the federal reserve bank of the federal reserve 
 district in which the bank or trust company is located, and may 
 invest in and hold stock therein.  

    HIST: (7649) 1915 c 28 s 1 

     48.33 Execution of trust.  

    When any state bank shall reorganize as a national bank, 
 this national bank shall be regarded as continuing the existence 
 of the state bank, and any officer of the bank elected to a 
 corresponding office in this national bank shall be regarded as 
 holding over as such state bank officer, for the purpose of 
 carrying out any duty or trust reposed in the person holding 
 such office or a successor in the state bank as executor of a 
 will or trustee of any trust; and successors in office in the 
 national bank shall be regarded as that person's successors in 
 office in such state bank for the purpose of executing such will 
 or performing such trust; and the executor of any will, or any 
 trustee thereunder, who by such will has been directed or 
 recommended to deposit the money of such estate or trust in this 
 state bank, may deposit the same in the national bank under the 
 same conditions as that person might have deposited them in the 
 state bank, and with the same immunity from responsibility for 
 its safety.  

    HIST: (7696) RL s 3007; 1986 c 444 

     48.34 Branch banks prohibited. 

    No bank or trust company organized under the laws of this 
 state shall maintain a branch bank or receive deposits or pay 
 checks within this state, except at its own banking house, and 
 except as authorized by sections 47.51 to 47.57, 47.61 to 47.74, 
 and 49.411.  The commissioner shall take possession of and 
 liquidate the business and affairs of any state bank or trust 
 company violating the provisions of this section, in the manner 
 prescribed by law for the liquidation of insolvent state banks 
 and trust companies. 

    HIST: (7693) 1923 c 170 s 1; 1981 c 220 s 10; 1996 c 414 art 3 
 s 6 

*   NOTE:  The amendment to this section by Laws 1996, chapter 
*414, article 3, section 6, is effective June 1, 1997.  Laws 
*1996, chapter 414, article 3, section 9.

     48.35 Clearing houses.  

    Clearing houses may make and enforce suitable provisions 
 for effecting, at one place, daily exchanges and the settlement 
 and adjustment of accounts between banks in the same locality 
 and, under appropriate rules, may issue clearing house 
 certificates for those purposes only, and may otherwise act in 
 maintaining and enforcing uniformity of methods and harmonious 
 action in banking business.  

    HIST: (7697) RL s 3008; 1985 c 248 s 70 

     48.36 Application. 

    Subdivision 1.  Any state bank having a capital and surplus 
 of not less than $500,000 may exercise the powers and privileges 
 conferred by sections 48.36 to 48.43, in addition to all other 
 powers granted by law, upon complying with the conditions and 
 requirements of those sections, and receiving the approval of 
 the commissioner of commerce, who may grant or reject, in the 
 commissioner's judgment, the application of any bank to acquire 
 trust authority, and in doing so shall take into consideration 
 the following factors: 

    (1) The needs of the community for trust service of the 
 kind applied for and the probable volume of such trust business 
 available to the bank; 

    (2) The general condition of the bank, particularly the 
 adequacy of its net capital and surplus funds in relation to the 
 character and condition of its assets and to its deposit 
 liabilities and other corporate responsibilities, including the 
 proposed exercise of trust powers; 

    (3) The general character and ability of the management of 
 the bank; 

    (4) The nature of the supervision to be given to the 
 proposed trust activities, including the qualifications and 
 experience of the members of the proposed trust investment 
 committee; 

    (5) The qualifications, experience, and character of the 
 proposed executive officer or officers of the trust department; 

    (6) Whether the bank has available competent legal counsel 
 to advise and pass upon trust matters whenever necessary; and 

    (7) Any other facts and circumstances that seem proper. 

    Subd. 2.  The application required under subdivision 1 
 shall be in the form prescribed by the commissioner and shall be 
 accompanied with a $250 filing fee, which shall be deposited 
 into the general fund. 

    HIST: (7662) 1923 c 274 s 2; 1959 c 88 s 12; 1965 c 171 s 18; 
 1977 c 272 s 9; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92; 
 1986 c 444 

     48.37 Certificates from commissioner. 

    In order to exercise the powers herein conferred, any such 
 bank shall invest and keep invested in one or more of the first, 
 second, third, fourth, seventh, and eighth classes of authorized 
 securities, at least 25 percent of its capital, which securities 
 in the amounts above provided shall be duly assigned, 
 transferred to, and deposited with the commissioner, and shall 
 be maintained unimpaired as a guaranty fund for the integrity of 
 its trusts and for the faithful discharge of its duties, in 
 connection therewith, with the right to the bank to collect the 
 income thereof and to substitute other like authorized 
 securities of equal amount and value.  The commissioner shall 
 carefully examine the securities offered for deposit and, if 
 they comply with all the provisions of law applicable thereto, 
 and, if the bank making such deposit shall possess the 
 qualifications stated in section 48.36, shall issue to the bank 
 a certificate stating that it is qualified to exercise the 
 powers herein conferred, and, upon the issuance of this 
 certificate and while the same remains in force, the bank may 
 exercise the powers and privileges conferred by sections 48.36 
 to 48.43. 

    In case of any increase in the capital of any bank which 
 has qualified hereunder, this certificate shall be and become 
 revoked and the bank shall not thereafter exercise the powers 
 herein conferred until it shall have deposited the required 
 proportion of its capital in authorized securities and received 
 a new certificate that it is qualified hereunder. 

    HIST: (7662) 1923 c 274 s 2; 1977 c 272 s 10; 1986 c 444 

     48.38 Powers and duties. 

    Subdivision 1.  Any such bank which has complied with the 
 terms of sections 48.36 to 48.43, and holds a certificate as 
 above provided, may exercise the powers and privileges set forth 
 in this section.  

    Subd. 2.  It may take and hold in trust any real or 
 personal property, wherever situated, by order, judgment, or 
 decree of any court, or by gift, grant, assignment, transfer, 
 devise, legacy, or bequest from, or by lawful contract with, any 
 public or private corporation or any individual or 
 copartnership, and manage the same upon the terms and conditions 
 therein declared or imposed; it may act as agent for the 
 signatures, countersignatures, registration, transfer, or 
 redemption of certificates of stock, bonds, coupons, or other 
 evidences of indebtedness, and as trustee under mortgages in the 
 form of trust deeds, and may otherwise act as general or special 
 agent or attorney in fact in the acquisition, management, sale, 
 assignment, transfer, encumbrance, conveyance, or other 
 disposition of any real or personal property, in the collection 
 of rents, payment of taxes, and generally as the representative 
 of any person, corporation, or copartnership; it may guarantee 
 the title to securities sold and transferred by it.  

    Subd. 3.  It may take and hold on deposit or for 
 safekeeping, money, bonds, stocks, or other securities, or 
 personal property, which any public officer or any trustee or 
 other legal representative or any public or private corporation 
 or any person may desire, or may be authorized, ordered, or 
 otherwise required by law to deposit in a safe depository or to 
 pay into any court of record, and the same may, instead thereof, 
 be deposited with such bank, and where the deposit is made 
 pursuant to order of court in such bank as the court shall 
 designate and depositor takes the receipt of such bank therefor, 
 thereupon the depositor and the depositor's sureties shall be 
 relieved from liability thereafter accruing on account thereof, 
 so long as the deposits continue.  

    Subd. 4.  It may act as assignee under any assignment for 
 the benefit of creditors, or be appointed as a trustee, 
 receiver, guardian, executor, or administrator, and may accept 
 and perform any other lawful trust conferred by any court or by 
 any corporation or individual.  In the acceptance and 
 performance of any such trust no oath or security shall be 
 required.  

    Subd. 5.  When any judge or court having jurisdiction deems 
 it expedient, the judge or court may direct any executor, 
 administrator, guardian, assignee, receiver, or other trustee to 
 deposit with the bank any securities belonging to the trust 
 subject to the order of the trustee when countersigned by the 
 judge of the court, and the court may fix the security to be 
 given by the trustee with reference only to the remainder of the 
 trust estate.  No such securities shall be withdrawn nor any 
 part of the principal or interest thereof collected, except by 
 an officer of the bank, without the order of a judge of the 
 court duly entered and certified, upon satisfactory proof that 
 additional security has been furnished by the trustee or that 
 the estate or fund has been so reduced that the deposit is no 
 longer required.  

    Subd. 6.  It may invest all moneys received by it in trust, 
 in authorized securities, and shall be responsible to the owner 
 or cestui que trust for the validity, regularity, quality, 
 value, and genuineness of these investments and securities at 
 the time made and for the safekeeping of these securities and 
 the evidences thereof.  When special directions are given in any 
 order, judgment, decree, will, or other written instrument as to 
 the particular manner or the particular class or kind of 
 securities or property in which any investment shall be made, it 
 shall follow this direction and, in such case, it shall not be 
 further responsible by reason of the performance of the trust.  

    It may, in its discretion, retain and continue any 
 investment and security or securities coming into its possession 
 in any fiduciary capacity.  For the faithful discharge of its 
 duties and the discharge of its trust, it shall be entitled to 
 reasonable compensation or such amount as has been or may be 
 agreed upon by the parties and all necessary expenses, with 
 legal interest thereon.  

    In the absence of an express prohibition in the trust 
 instrument, the trustee may acquire and retain securities of any 
 open-end or closed-end management type investment company or 
 investment trust registered under the Federal Investment Company 
 Act of 1940.  The fact that the banking institution, or any 
 affiliate of the banking institution, is providing services to 
 the investment company or trust as investment advisor, sponsor, 
 broker, distributor, custodian, transfer agent, registrar, or 
 otherwise, and receiving compensation for the services shall not 
 preclude the trustee from investing in the securities of that 
 investment company or trust.  The banking institution shall 
 disclose to all current income beneficiaries of the trust the 
 rate, formula, and method of the compensation.  This paragraph 
 does not alter the degree of care and judgment required of 
 trustees by section 501B.151. 

    No compensation or commission paid or agreed to be paid to 
 it for the negotiation of any loan or the execution of any trust 
 shall be deemed interest within the meaning of the law, nor 
 shall any excess thereof over the legal rate be deemed usury.  

    Subd. 7.  Except as provided in this subdivision, any 
 amount not less than $500 received by it as representative or 
 trustee or by order of the court, not required for the purposes 
 of the trust and not to be accounted for within one year, it 
 shall invest, as above provided, in authorized securities then 
 held by it or specially procured by it.  Except as may be 
 otherwise provided in the governing will, trust agreement, court 
 order or other instrument, any amount in any one trust account, 
 may be invested in certificates of deposit or savings accounts 
 in the same bank, or any other bank or banks provided such 
 certificates of deposit or savings accounts are fully insured by 
 the federal deposit insurance corporation and receive the 
 prevailing rate of interest on such certificates or savings 
 accounts.  

    Subd. 8.  It may invest its funds in authorized securities, 
 as defined by law, and the provisions of section 48.24 limiting 
 the amount of liability of any person, corporation, or 
 copartnership, with reference to a percentage of the capital and 
 surplus of the bank, shall not apply to its investments in 
 authorized securities.  

    HIST: (7663) 1923 c 274 s 3; 1957 c 601 s 17; 1963 c 153 s 7; 
 1965 c 171 s 19; 1967 c 229 s 1; 1986 c 444; 1992 c 473 s 3; 
 1996 c 314 s 1 

     48.39 Trust accounts recorded.  

    Besides its general books of account, it shall keep 
 separate books of account for all fiduciary accounts.  All funds 
 and property held by it in a fiduciary capacity shall at all 
 times be kept separate from its own funds and property, and all 
 fiduciary funds deposited or held as fiduciary by the bank 
 awaiting investment shall be carried in a separate account, and 
 shall not be used by the bank in the conduct of its business, 
 unless the bank, under authorization by its board of directors, 
 first delivers to the commissioner of commerce, as collateral 
 security:  (1) bonds, notes, bills, certificates of indebtedness 
 or other direct obligations of the United States or its 
 instrumentalities, or obligations fully guaranteed by the United 
 States as to principal and interest; or (2) other readily 
 marketable securities of the classes in which said trust 
 companies or state banks exercising trust powers are authorized 
 or permitted to invest trust funds under the laws of this 
 state.  The securities so deposited as collateral shall be owned 
 by the bank and shall at all times be at least equal in market 
 value to the amount of the trust funds so used in the conduct of 
 the bank's business, and all deposits made by it of such funds 
 in any other banking institutions shall be deposited as 
 fiduciary funds, to its credit as fiduciary, and not otherwise.  
 Every security or property in which the funds held by it as 
 trustee, executor, administrator, guardian, receiver, or 
 assignee, or in any other fiduciary capacity are invested, shall 
 at once upon receipt thereof be immediately entered in the 
 proper books as belonging to the particular fiduciary account 
 whose funds have been invested therein.  Any change in such 
 investment shall be fully specified in and under the account of 
 the particular fiduciary account to which it belongs so that all 
 fiduciary funds and property can be readily identified at any 
 time by any person.  It shall be unlawful for any bank to lend 
 any officer, director or employee any funds held as fiduciary 
 under the powers conferred by sections 48.36 to 48.43.  Any 
 officer, director or employee to whom such a loan is made shall 
 be guilty of theft of the amount of such loan from the time of 
 the making thereof.  Any state bank, when acting in a fiduciary 
 capacity, either alone or jointly with an individual or 
 individuals, may, with the consent of such individual fiduciary 
 or fiduciaries, who are hereby authorized to give such consent, 
 cause any stocks, securities, or other property now held or 
 hereafter acquired in such capacity to be registered and held in 
 the name of a nominee or nominees of such state bank without 
 mention of the fiduciary relationship.  Any such state bank 
 shall be liable for any loss occasioned by the acts of any of 
 its nominees with respect to such stocks, securities or other 
 property so registered.  

    HIST: (7664) 1923 c 274 s 4; 1943 c 338 s 1; 1957 c 311 s 1; 
 1965 c 35 s 2; 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92 

     48.40 Subject to orders of court.  

    Every such bank shall be subject at all times to the orders 
 of any court from which it shall have accepted any trust or 
 appointment and shall render to the court such itemized and 
 verified accounts and reports as may be required by law or the 
 court.  In addition to other reports required by law, it shall 
 render to the commissioner, at such times as the commissioner 
 may direct, full and itemized reports of investments, trust 
 funds, and other business performed under the provisions hereof, 
 and a condensed statement of the report, either separately 
 stated or consolidated with the other reports required of it by 
 law, shall be published as required by law.  

    HIST: (7665) 1923 c 274 s 5; 1986 c 444 

     48.41 Corporate name.  

    Any such bank which has qualified and obtained a 
 certificate, as provided in sections 48.36 to 48.43, may use in 
 its corporate name or title, in addition to the word "bank" or 
 other words now permitted by law, the words "trust" or "trust 
 company," and may display and make use of signs, symbols, 
 tokens, letterheads, cards, circulars and advertisements stating 
 or indicating that it is authorized to transact the business 
 authorized by said sections, and any such bank using the words 
 "trust" or "trust company" is not required to use the word 
 "state" in its corporate name.  

    HIST: (7666) 1923 c 274 s 6 

     48.42 Bank may be designated as savings bank.  

    Any state bank which has qualified under sections 48.36 to 
 48.43 and obtained the certificate therein provided, and which 
 has established and maintains a savings department, may use in 
 its name or title, in addition to other words permitted by law, 
 the words "savings" or "savings bank."  Savings deposits 
 received by any such state bank using the words "savings" or 
 "savings bank" in its corporate name or title, shall be invested 
 only in authorized securities, as defined by law, and the bank 
 shall keep in hand at all times, in addition to the securities 
 required to be deposited under the provisions of section 48.37, 
 such securities as deposits in savings banks may be invested in 
 to an amount at least equal to the savings deposits, and these 
 securities to the amount of these deposits shall be 
 representative of and the fund for and applicable first and 
 exclusively to the payment of the savings deposits.  Deposits 
 received by the bank subject to its right to require notice of 
 withdrawal evidenced by pass books, shall be deemed savings 
 deposits.  

    HIST: (7667) 1923 c 274 s 7 

     48.43 Banks may cease operations; duties of commissioner.

    Any state bank which has qualified hereunder may at any 
 time notify the commissioner, in writing, that it intends to 
 cease to operate under the provisions of sections 48.36 to 
 48.43, and thereupon the certificate issued to it, as provided 
 in sections 48.36 to 48.43, shall be canceled and revoked, and 
 the bank shall thereafter exercise no power or privilege except 
 those permitted to state banks which have not qualified 
 hereunder, and the securities deposited with the commissioner, 
 as provided in section 48.37, shall forthwith be reassigned and 
 returned to the bank; provided, that no part of the deposited 
 securities shall be so returned until the bank shall have 
 eliminated from its corporate name the words "trust," "trust 
 company," or "savings," nor until it has ceased to hold any 
 trust or trust office authorized by sections 48.36 to 48.43, nor 
 until all its accounts in any such trust shall have been settled 
 and allowed and all property held in trust by it delivered to 
 the persons entitled thereto, nor until all liabilities incurred 
 by it as trustee, agent, or otherwise, under the provisions of 
 sections 48.36 to 48.43, and which it could not have incurred 
 unless qualified thereunder, shall have been discharged; 
 provided, further, that if the amount of all these liabilities, 
 or the maximum limit thereof, has been or can be definitely 
 ascertained, the commissioner may retain only such part of the 
 deposited securities as shall be at least equal to and as shall 
 be in the commissioner's opinion sufficient to liquidate the 
 same.  If any such bank so surrendering its powers hereunder 
 shall have heretofore used the word "savings" in its corporate 
 name, the provisions of section 48.42, relating to the 
 investment of savings deposits and the rights of such 
 depositors, shall remain operative as to all savings deposits on 
 hand at the date of surrendering such certificate and until the 
 savings deposits shall have been paid to the persons entitled 
 thereto.  

    HIST: (7668) 1923 c 274 s 8; 1986 c 444 

     48.44 Banks may organize as trust company. 

    Hereafter state banks which may be organized in the manner 
 now provided by law may be organized with the additional 
 authority to exercise the fiduciary powers and privileges set 
 out in section 48.38; provided, that the capital and surplus of 
 any such bank shall not be less than $500,000. 

    HIST: (7661-1) 1931 c 267 s 1; 1969 c 772 s 5; 1977 c 272 s 11 

     48.45 Corporate names.  

    Any such bank may be organized with a corporate name which 
 may include the words "trust" or "trust company," in addition to 
 the word "bank" or other words now permitted by law, and the 
 word "state" shall not be a required part of the corporate name 
 of any such state bank.  

    HIST: (7661-2) 1931 c 267 s 2 

     48.46 Authorized securities purchased.  

    No state bank hereafter organized with authority to 
 exercise fiduciary powers pursuant to the provisions of sections 
 48.44 to 48.46, the corporate name of which contains the words 
 "trust" or "trust company," shall transact any banking or trust 
 company business until it shall have invested in and assigned, 
 transferred to, and deposited with the commissioner the 
 authorized securities described in and required by section 
 48.37, relating to the authorization of existing state banks to 
 exercise such fiduciary powers, and until the commissioner of 
 commerce has issued the certificate provided by section 47.16, 
 and a certificate stating that such bank is qualified to 
 exercise the fiduciary powers set forth in section 48.38.  

    HIST: (7661-3) 1931 c 267 s 3; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92 

     48.47 Banking and trust company business. 

    After the application of the corporation shall have been 
 favorably acted on by the department in compliance with sections 
 46.041 to 46.044, and upon compliance with the terms hereof and 
 the issuance of such certificates, the bank may commence the 
 transaction of banking and trust company business and may 
 exercise, in addition to all the powers and privileges conferred 
 by law on state banks, the powers and privileges set forth in 
 section 48.38, and the bank shall thereafter comply with and be 
 subject to all of the provisions of law relating to state banks 
 exercising such fiduciary powers and privileges.  

    HIST: (7661-4) 1931 c 267 s 4; 1994 c 382 s 6 

     48.475 Trust service offices. 

    Subdivision 1.    Authorization.  Any trust company 
 organized under the laws of this state and any state bank which 
 is permitted to exercise trust powers under the provisions of 
 Minnesota Statutes, sections 48.37 to 48.47 may, after 
 completing the notification procedure required by this 
 subdivision, establish and maintain a trust service office at 
 any office in this state of any other state or national bank. 
 Any state bank may, after completing the notification procedure 
 required by this subdivision, permit any trust company organized 
 under the laws of this state or any state bank which is 
 permitted to exercise trust powers under the provisions of 
 sections 48.37 to 48.47 or any national bank in this state which 
 is authorized to exercise trust powers to establish and maintain 
 a trust service office at any of its banking offices.  

    Any trust company or state bank permitted to exercise trust 
 powers and a state bank at which a trust service office is to be 
 established pursuant to this section shall jointly file, on 
 forms provided by the commissioner, a notification of intent to 
 establish a trust service office.  The notification shall be 
 accompanied by a filing fee of $100 payable to the commissioner, 
 to be deposited in the general fund of the state.  No trust 
 service office shall be established pursuant to this section if 
 disallowed by order of the commissioner within 45 days of the 
 filing of a complete and acceptable notification of intent to 
 establish a trust service office.  Any proceedings for judicial 
 review of an order of the commissioner to disallow the 
 establishment of a trust service office under this section shall 
 be conducted pursuant to the provisions of the administrative 
 procedure act relating to judicial review of agency decisions, 
 sections 14.63 to 14.69, and the scope of judicial review in 
 such proceedings shall be as provided therein.  

    Subd. 2.    Services permitted.  Any trust company or 
 bank which establishes a trust service office under subdivision 
 1 may conduct at the office any trust business and business 
 incidental thereto which it is permitted to conduct at its 
 principal office, but it may not accept deposits except as 
 incidental to trust business.  

    Subd. 3.    General requirements.  If the bank at which 
 a trust service office is to be established has exercised trust 
 powers, then the trust company or bank which is establishing the 
 trust service office shall enter into an agreement respecting 
 those fiduciary powers to which the trust company or bank shall 
 succeed and shall file the agreement with the commissioner.  The 
 trust company or bank which is establishing a trust service 
 office under subdivision 1 shall publish a notice of the filing 
 in the form prescribed by the commissioner in a newspaper 
 published in the municipality in which the trust service office 
 is to be located, and if there is no such newspaper, then in a 
 qualified newspaper likely to give notice in the municipality in 
 which the proposed trust service office is to be located, and 
 proof of publication shall be filed with the commissioner 
 immediately after publication of the notice of filing.  After 
 filing and publication, the trust company or bank establishing 
 the trust service office shall, as of the date the office first 
 opens for business, and without further authorization of any 
 kind, succeed to and be substituted for the bank at which the 
 trust service office is located as to all fiduciary powers, 
 rights, duties, privileges, and liabilities of the bank in its 
 capacity as fiduciary for all estates, trusts, conservatorships, 
 guardianships, and other fiduciary relationships of which the 
 bank is then serving as fiduciary, except as may be otherwise 
 specified in the agreement between the bank and the trust 
 company or bank which has established the trust service office.  
 The trust company or bank which has established the trust 
 service office shall also be deemed named as fiduciary in all 
 writings, including, but not limited to, wills, trusts, court 
 orders, and similar documents and instruments, naming the bank 
 at which the trust service office is located signed before the 
 date the trust service office first opens for business, unless 
 expressly negated by the writing or otherwise specified in the 
 agreement between the trust company or bank and the bank at 
 which the trust service office is located.  On the effective 
 date of the substitution, the bank at which the trust service 
 office has been established shall be released and absolved from 
 all fiduciary duties and obligations under the writings and 
 shall discontinue its exercise of trust powers on all matters 
 not specifically retained by the agreement.  This subdivision 
 does not absolve the bank from liabilities arising out of any 
 breach of fiduciary duty or obligation occurring prior to the 
 date the trust service office first opens for business.  This 
 subdivision does not affect the authority, duties, or 
 obligations of a bank with respect to relationships which may be 
 established without trust powers, whether the relationships 
 arise before or after the establishment of the trust service 
 office.  

    Subd. 4.    Supervision.  Every trust company or state 
 bank permitted to exercise trust powers establishing and 
 operating one or more trust service offices pursuant to this 
 section shall at all times maintain records acceptable to the 
 commissioner regarding transactions originating at such trust 
 service offices and available at its principal office for 
 examination pursuant to sections 46.04 and 46.05.  

    Subd. 5.    National banks; requirements.  If a trust 
 service office is established by a national bank at the banking 
 office of another national bank, then the agreement respecting 
 fiduciary powers required by subdivision 3 shall be filed with 
 the comptroller of the currency of the United States and the 
 notice required by subdivision 3 shall be in the form prescribed 
 by the comptroller of the currency.  

    Subd. 6.    Notice of substitutions; denial of 
 substitution.  Not less than 60 days prior to the effective 
 date of the proposed substitution under subdivision 3 or 5, the 
 parties to the substitution shall send written notice of the 
 proposed substitution to each cofiduciary, each surviving 
 settlor of a trust, each conservatee or ward under a 
 conservatorship or guardianship, each person who alone or in 
 conjunction with others has the power to remove the fiduciary 
 being substituted, and each adult beneficiary currently 
 receiving or entitled to receive a distribution of principal or 
 income from a trust or estate with respect to which the 
 substitution is to be effected.  Intentional failure to send the 
 notice to any party at the party's current address as shown on 
 the fiduciary's records shall render ineffective the 
 substitution of fiduciaries with respect to the fiduciary 
 relationship, but an unintentional failure to give notice shall 
 not impair the validity or effect of any substitution of 
 fiduciaries under subdivision 3 or 5.  A trust company or bank 
 which is substituted or about to be substituted as fiduciary 
 with respect to a trust, estate, conservatorship, or 
 guardianship under subdivision 3 or 5 may be removed as 
 fiduciary, or the substitution may be denied, upon petition by a 
 cofiduciary, by a beneficiary of a trust or estate, by the 
 settlor of a trust or on behalf of a conservatee or ward under a 
 conservatorship or guardianship if the trust company or bank 
 files a written consent to its removal or a written declination 
 to act, or if the court having jurisdiction over the fiduciary 
 relationship, upon notice and hearing, approves the petition as 
 in the best interests of the petitioner and all other parties 
 interested in the trust, estate, conservatorship, or 
 guardianship.  This subdivision applies in addition to any 
 applicable provision for removal of a fiduciary or appointment 
 of a successor fiduciary in any other statute or in the 
 instrument creating the fiduciary relationship. 

    HIST: 1984 c 506 s 1; 1989 c 166 s 6; 1995 c 202 art 1 s 9 

     48.476 Representative trust office. 

    Subdivision 1.    Definitions.  For purposes of this 
 section, the terms in this subdivision have the meanings given. 

    (a) "Representative trust office" means an office at which 
 a trust company or bank with trust powers has been authorized by 
 the commissioner to engage in a trust business other than acting 
 as a fiduciary. 

    (b) "Acting as a fiduciary" means to: 

    (1) accept or execute trusts, including to: 

    (i) act as trustee under a written agreement; 

    (ii) receive money or other property in its capacity as a 
 trustee for investment in real or personal property; 

    (iii) act as trustee and perform the fiduciary duties 
 committed or transferred to it by order of a court of competent 
 jurisdiction; 

    (iv) act as trustee of the estate of a deceased person; or 

    (v) act as trustee for a minor or incapacitated person; 

    (2) administer in any other fiduciary capacity real or 
 personal property; or 

    (3) act according to order of a court of competent 
 jurisdiction as executor or administrator of the estate of a 
 deceased person or as a guardian or conservator for a minor or 
 incapacitated person. 

    Subd. 2.    Authority for representative trust offices; 
 prior written notice.  (a) A state trust institution may 
 establish or acquire and maintain representative trust offices 
 anywhere in this state.  A state trust institution desiring to 
 establish or acquire and maintain such an office shall file a 
 written notice with the commissioner setting forth the name of 
 the state trust institution and the location of the proposed 
 additional office and furnish a copy of the resolution adopted 
 by the board authorizing the additional office. 

    (b) The state trust institution may begin business at the 
 additional office on the 31st day after the date the 
 commissioner receives the notice, unless the commissioner 
 specifies an earlier or later date. 

    (c) The 30-day period of review may be extended by the 
 commissioner on a determination that the written notice raises 
 issues that require additional information or additional time 
 for analysis.  If the period of review is extended, the state 
 trust institution may establish the additional office only on 
 prior written approval by the commissioner. 

    (d) The commissioner may deny approval of the additional 
 office if the commissioner finds that the state trust 
 institution lacks sufficient financial resources to undertake 
 the proposed expansion without adversely affecting its safety or 
 soundness or that the proposed office would be contrary to the 
 public interest. 

    Subd. 3.    Authority for out-of-state trust offices; 
 prior written notice.  (a) A state trust institution may 
 establish and maintain a representative trust office or acquire 
 and maintain an office in a state other than this state.  A 
 state trust institution desiring to establish or acquire and 
 maintain an office in another state under this section shall 
 file a notice on a form prescribed by the commissioner, which 
 shall set forth the name of the state trust institution, the 
 location of the proposed office, and whether the laws of the 
 jurisdiction where the office will be located permit the office 
 to be maintained by the state trust institution; and furnish a 
 copy of the resolution adopted by the board authorizing the 
 out-of-state office. 

    (b) The state trust institution may begin business at the 
 additional office on the 31st day after the date the 
 commissioner receives the notice, unless the commissioner 
 specifies an earlier or later date. 

    (c) The 30-day period of review may be extended by the 
 commissioner on a determination that the written notice raises 
 issues that require additional information or additional time 
 for analysis.  If the period of review is extended, the state 
 trust institution may establish the additional office only on 
 prior written approval by the commissioner. 

    (d) The commissioner may deny approval of the additional 
 office if the commissioner finds that the state trust 
 institution lacks sufficient financial resources to undertake 
 the proposed expansion without adversely affecting its safety or 
 soundness or that the proposed office would be contrary to the 
 public interest.  In acting on the notice, the commissioner 
 shall consider the views of the appropriate bank supervisory 
 agencies. 

    HIST: 1997 c 157 s 26 

     48.48 Reports to commissioner. 

    Subdivision 1.    Submission and publication.  At least 
 four times in each year, and at any other time when so requested 
 by the commissioner, every bank or trust company shall, within 
 30 days of the date of notice, make and transmit to the 
 commissioner or to the commissioner's designee, in a form the 
 commissioner prescribes, a report, attested to in the official 
 minutes of its directors, stating in detail, under appropriate 
 heads, as required by the commissioner, its assets and 
 liabilities at the close of business on the day specified in the 
 request.  The commissioner may accept a report made to a federal 
 authority having supervision of banks or trust companies in 
 fulfilling this requirement.  That portion of the report 
 constituting the statement of assets, liabilities, and capital 
 and statement of income and expenses must be made available to 
 the public within 45 days of the notice at every location of the 
 bank or trust company including detached facilities and trust 
 service offices. 

    Subd. 2.    Penalties for late submission.  For failure 
 to send these reports to the commissioner or to the 
 commissioner's designee in the time specified, a bank or trust 
 company shall forfeit to the state the sum of $25 for each day 
 of delay and shall pay the accumulated sum to the commissioner 
 upon a formal demand for payment by the commissioner.  If it 
 appears that a report was transmitted by a bank or trust company 
 on or before the end of the 30-day period, the commissioner 
 shall waive any forfeit.  In the event it does not appear that a 
 report was timely transmitted, the commissioner may nevertheless 
 waive forfeit upon a showing by the bank or trust company to the 
 satisfaction of the commissioner that failure to send the 
 reports was the result of causes beyond the control of the bank 
 or trust company. 

    HIST: (7674) RL s 2990; 1949 c 35 s 1; 1951 c 65 s 1; 1961 c 
 298 s 3; 1963 c 153 s 8; 1979 c 98 s 1; 1981 c 220 s 11; 1982 c 
 473 s 13; 1984 c 543 s 2; 1984 c 576 s 14,15; 1986 c 444; 1989 c 
 166 s 7; 1995 c 202 art 2 s 16,17 

     48.49 Books to be kept. 

    Every such bank shall open and keep such books and accounts 
 as the commissioner may prescribe, for the purpose of keeping 
 accurate and convenient records of its transactions.  

    HIST: (7675) RL s 2991; 1995 c 202 art 2 s 18 

     48.50 Demand deposits; interest.  

    No bank shall, directly or indirectly, by any device, pay 
 any interest on any deposit which is payable on demand.  

    HIST: (7697-10) 1937 c 403 s 1; 1957 c 601 s 19 

     48.51 Demand deposits defined. 

    For the purpose of this section and section 48.50, all 
 deposits are payable on demand except: 

    (1) Those deposits which are evidenced by a negotiable or 
 nonnegotiable instrument which provides on its face that the 
 amount of the deposit is payable: 

    (a) on a certain date, specified in the instrument, not 
 less than 14 days after the date of the deposit; or (b) at the 
 expiration of a specified period not less than 14 days after the 
 date of the instrument; or (c) upon written notice to be given 
 not less than 14 days before the date of repayment. 

    (2) Those deposits which may not be withdrawn within 14 
 days of the making thereof. 

    (3) Those deposits which may not be withdrawn within 14 
 days of the giving of notice of an intended withdrawal. 

    (4) Those deposits in which the above 14-day minimums are 
 in conflict with federal law or regulations.  

    HIST: (7697-11) 1937 c 403 s 2; 1981 c 220 s 12; 1984 c 576 s 
 16; 1987 c 349 art 1 s 16 

  48.511 Repealed, 1983 c 225 s 11 

     48.512 Procedures for opening checking accounts. 

    Subdivision 1.    Definitions.  For the purpose of this 
 section the following terms have the meanings given:  

    (a) "Financial intermediary" means any person doing 
 business in this state who offers transaction accounts to the 
 public.  

    (b) "Transaction account" means a deposit or account 
 established and maintained by a natural person or persons under 
 an individual or business name for personal, household, or 
 business purposes, on which the depositor or account holder is 
 permitted to make withdrawals by negotiable or transferable 
 instruments, payment orders of withdrawal, or other similar 
 device for the purpose of making payments or transfers to third 
 persons or others, including demand deposits or accounts subject 
 to check, draft, negotiable order of withdrawal, share draft, or 
 other similar item.  A transaction account does not include the 
 deposit or account of a partnership having more than three 
 partners, the personal representative of an estate, the trustee 
 of a trust or a limited partnership.  

    Subd. 2.    Required information.  Before opening or 
 authorizing signatory power over a transaction account, a 
 financial intermediary shall require one applicant to provide 
 the following information on an application document signed by 
 the applicant:  

    (a) full name; 

    (b) birth date; 

    (c) address of residence; 

    (d) address of current employment, if employed; 

    (e) telephone numbers of residence and place of employment, 
 if any; 

    (f) social security number; 

    (g) driver's license or identification card number issued 
 pursuant to section 171.07.  If the applicant does not have a 
 driver's license or identification card, the applicant may 
 provide an identification document number issued for 
 identification purposes by any state, federal, or foreign 
 government if the document includes the applicant's photograph, 
 full name, birth date, and signature.  A valid Wisconsin 
 driver's license without a photograph may be accepted in 
 satisfaction of the requirement of this paragraph until January 
 1, 1985; 

    (h) whether the applicant has had a transaction account at 
 the same or another financial intermediary within 12 months 
 immediately preceding the application, and if so, the name of 
 the financial intermediary; 

    (i) whether the applicant has had a transaction account 
 closed by a financial intermediary without the applicant's 
 consent within 12 months immediately preceding the application, 
 and if so, the reason the account was closed; and 

    (j) whether the applicant has been convicted of a criminal 
 offense because of the use of a check or other similar item 
 within 24 months immediately preceding the application.  

    A financial intermediary may require an applicant to 
 disclose additional information.  

    An applicant who makes a false material statement that the 
 applicant does not believe to be true in an application document 
 with respect to information required to be provided by this 
 subdivision is guilty of perjury.  The financial intermediary 
 shall notify the applicant of the provisions of this paragraph.  

    Subd. 3.    Confirm no involuntary closing.  Before 
 opening or authorizing signatory power over a transaction 
 account, the financial intermediary shall attempt to verify the 
 information disclosed for subdivision 2, clause (i).  Inquiries 
 made to verify this information through persons in the business 
 of providing such information must include an inquiry based on 
 the applicant's identification number provided under subdivision 
 2, clause (g).  The financial intermediary may not open or 
 authorize signatory power over a transaction account if (i) the 
 applicant had a transaction account closed by a financial 
 intermediary without consent because of issuance by the 
 applicant of dishonored checks within 12 months immediately 
 preceding the application, or (ii) the applicant has been 
 convicted of a criminal offense because of the use of a check or 
 other similar item within 24 months immediately preceding the 
 application.  

    If the transaction account is refused pursuant to this 
 subdivision, the reasons for the refusal shall be given to the 
 applicant in writing and the applicant shall be allowed to 
 provide additional information. 

    Subd. 4.    Identification is required.  A financial 
 intermediary shall not open or authorize signatory power over a 
 transaction account if none of the applicants provides a 
 driver's license, identification card, or identification 
 document as required by subdivision 2.  If the applicant 
 provides a driver's license or identification card issued under 
 section 171.07, the financial intermediary must confirm the 
 identification number and name on that card through the records 
 of the department of public safety.  The financial intermediary 
 need not confirm this information if the checking account 
 applicant presents a driver's license impervious to alteration 
 as is reasonably practicable in the design and quality of 
 material and technology.  The financial intermediary need not 
 confirm this information if an employee of the financial 
 intermediary has known the identity of the applicant for at 
 least one year prior to the time of the application, and the 
 employee provides a signed statement confirming that fact.  When 
 a minor is the applicant and the minor does not have a driver's 
 license or identification card issued pursuant to section 
 171.07, the identification requirements of subdivision 2, clause 
 (g), and this subdivision are satisfied if the minor's parent or 
 guardian provides identification of that person's own that meets 
 the identification requirement.  The financial intermediary may 
 waive the identification requirement if the applicant has had 
 another type of account with the financial intermediary for at 
 least one year immediately preceding the time of application. 

    Subd. 4a.    Identification not required for debit card 
 transactions.  The identification requirements of subdivision 
 4 do not apply to a transaction account that is accessible 
 exclusively by debit card.  A debit card activates a transaction 
 account at a financial intermediary by means of an electronic 
 information processing device and contemporaneously completes 
 the debt to the account only on the condition that funds are 
 available and confirmed. 

    Subd. 5.    No liability.  The requirements of this 
 section do not impose any liability on financial intermediaries 
 offering transaction accounts or, except as provided in 
 subdivisions 3 and 4, limit a financial intermediary's 
 discretion as to whether to grant or deny an application subject 
 to this section.  This subdivision does not exempt a financial 
 intermediary from civil penalties imposed under section 45.027. 

    Subd. 6. Repealed, 1995 c 202 art 4 s 25 

    Subd. 7.    Transaction account service charges and 
 charges relating to dishonored checks.  (a) The establishment 
 of transaction account service charges and the amounts of the 
 charges not otherwise limited or prescribed by law or rule is a 
 business decision to be made by each financial intermediary 
 according to sound business judgment and safe, sound financial 
 institution operational standards.  In establishing transaction 
 account service charges, the financial intermediary may 
 consider, but is not limited to considering: 

    (1) costs incurred by the institution, plus a profit 
 margin, in providing the service; 

    (2) the deterrence of misuse by customers of financial 
 institution services; 

    (3) the establishment of the competitive position of the 
 financial institution in accordance with the institution's 
 marketing strategy; and 

    (4) maintenance of the safety and soundness of the 
 institution. 

    (b) Transaction account service charges must be reasonable 
 in relation to these considerations and should be arrived at by 
 each financial intermediary on a competitive basis and not on 
 the basis of any agreement, arrangement, undertaking, or 
 discussion with other financial intermediaries or their officers.

    (c) A financial intermediary may not impose a service 
 charge in excess of $4 for a dishonored check on any person 
 other than the issuer of the check. 

    Subd. 8.    Check labeling.  A person providing printed 
 checks for a transaction account shall print the month and year 
 that the original order was received or the month and year that 
 appears on the facsimile of the check from which the new checks 
 are produced, unless the applicant has an existing account in 
 good standing or a previous account in good standing within the 
 past five years that was voluntarily closed.  This subdivision 
 no longer applies after the account has been open and in good 
 standing for one year. 

    Subd. 9.    Powers affecting checking accounts; other 
 financial information.  The commissioner of commerce may 
 exercise the powers authorized under section 45.027 if the 
 commissioner has reason to believe that a financial intermediary 
 or drawer has failed to: 

    (1) comply with the verification requirements of 
 subdivision 2, 3, or 4; or 

    (2) release information as required under section 609.535, 
 subdivision 7. 

    HIST: 1983 c 225 s 5; 1984 c 436 s 32; 1984 c 576 s 12; 1986 c 
 339 s 3; 1986 c 444; 1989 c 129 s 1; 1991 c 256 s 1-6; 1992 c 
 587 art 1 s 15; 1997 c 157 s 27 

     48.513 Financial intermediary fees. 

    A financial intermediary may charge a fee for the assembly, 
 production, and copying of records requested under chapter 13A, 
 not to exceed the schedule established from time to time by the 
 Federal Reserve System under Regulation S, Code of Federal 
 Regulations, title 12, part 219, except that a fee may not be 
 imposed if the records are requested by a law enforcement agency 
 or prosecuting authority.  This section does not apply to 
 requests made under section 609.535.  For purposes of this 
 section, "financial intermediary" has the meaning given in 
 section 48.512, subdivision 1. 

    HIST: 1991 c 256 s 7 

  48.515 Repealed, 1965 c 811 art 10 s 336.10-102 

  48.518 Repealed, 1965 c 811 art 10 s 336.10-102 

  48.521 Repealed, 1969 c 725 s 32 

  48.522 Repealed, 1969 c 725 s 32 

  48.523 Repealed, 1969 c 725 s 32 

  48.524 Repealed, 1969 c 725 s 32 

  48.525 Repealed, 1969 c 725 s 32 

  48.526 Repealed, 1969 c 725 s 32 

  48.527 Repealed, 1969 c 725 s 32 

  48.528 Repealed, 1969 c 725 s 32 

  48.53 Repealed, 1943 c 620 s 9 

  48.54 Repealed, 1943 c 620 s 9 

  48.55 Repealed, 1943 c 620 s 9 

     48.56 Banking institutions may use federal banking act.  

    Any banking institution now or hereafter organized under 
 the laws of this state is hereby empowered, on the authority of 
 its board of directors, or a majority thereof, to enter into 
 such contracts, incur such obligations and generally to do and 
 perform any and all such acts and things as may be necessary or 
 appropriate in order to take advantage of any and all 
 memberships, loans, subscriptions, contracts, grants, rights, or 
 privileges which may at any time be available or enure to 
 banking institutions or to their depositors, creditors, 
 stockholders, receivers, or liquidators, by virtue of those 
 provisions of Section 8 of the federal "Banking Acts of 1933" 
 (Section 12B of the Federal Reserve Act, as amended (Mason's 
 United States Code Annotated, title 12, s 264)), which establish 
 the Federal Deposit Insurance Corporation and provide for the 
 insurance of deposits, or of any other provisions of that or of 
 any other act or resolution of Congress to aid, regulate, or 
 safeguard banking institutions and their depositors, including 
 any amendments of the same or any substitutions therefor; and to 
 subscribe for and acquire any stock, debentures, bonds, or other 
 types of securities of the Federal Deposit Insurance 
 Corporation, and to comply with the lawful regulations and 
 requirements from time to time issued or made by such 
 corporation.  

    HIST: (7658-7) 1935 c 319 s 2 

  48.57 Repealed, 1Sp1985 c 13 s 376 

  48.58 Repealed, 1Sp1985 c 13 s 376 

     48.59 Commissioner may accept examinations and reports 
  of corporation.  

    Subdivision 1.  The commissioner may accept, in lieu of any 
 examination authorized by the laws of this state to be conducted 
 by the department of a banking institution, the examination that 
 may have been made of same within a reasonable period by the 
 federal deposit insurance corporation, or the federal reserve 
 bank, provided a copy of this examination is furnished to the 
 commissioner.  The commissioner also has the discretionary 
 authority to accept any report relative to the condition of a 
 banking institution which may have been obtained by the 
 corporation within a reasonable period, in lieu of a report 
 authorized by the laws of this state to be required of the 
 institution by the department, provided a copy of this report is 
 furnished to the commissioner. 

    Subd. 2.  The commissioner may furnish to the corporation, 
 or to any official or examiner thereof, a copy or copies of any 
 or all examinations made of any such banking institutions any 
 deposits of which are insured by the corporation and of any or 
 all reports made by same, and shall give access to and disclose 
 to the corporation, or any official or examiner thereof, any and 
 all information possessed by the office of the commissioner with 
 reference to the conditions or affairs of any such insured 
 institution.  

    Subd. 3.  Nothing in this section shall be construed to 
 limit the duty of any banking institution in this state, 
 deposits of which are to any extent insured under the provisions 
 of Section 8 of the "Banking Act of 1933" (Section 12B of the 
 Federal Reserve Act, as amended (Mason's United States Code 
 Annotated, title 12, section 264)), or of any amendment of or 
 substitution for the same, to comply with the provisions of that 
 act, its amendments or substitutions, or requirements of the 
 corporation relative to examinations and reports, nor to limit 
 the powers of the commissioner with reference to examinations 
 and reports under any law of this state.  

    HIST: (7658-9) 1935 c 319 s 4; 1957 c 601 s 20; 1986 c 444 

  48.60 Repealed, 1987 c 349 art 1 s 40 

     48.605 State banks, employee stock option and stock 
  purchase plans. 

    Subdivision 1.  Any state bank may grant options to 
 purchase, sell, or enter into agreements to sell shares of its 
 capital stock to its employees, for a consideration of not less 
 than 100 percent of the fair market value of the shares on the 
 date the option is granted or, if pursuant to a stock purchase 
 plan, 85 percent of the fair market value on the date the 
 purchase price is fixed, pursuant to the terms of an employee 
 restricted stock option plan or employee stock purchase plan 
 which has been adopted by the board of directors of the bank and 
 approved by the holders of at least three-fourths of the 
 outstanding shares of the bank entitled to vote and by the 
 commissioner of commerce.  Stock options issued hereunder shall 
 not extend beyond a period of ten years from date of issuance 
 and shall otherwise qualify as restricted stock options under 
 the Internal Revenue Code, and acts amendatory thereof. 

    Subd. 2.  Employee stock options and stock purchase 
 agreements may provide that options may be exercisable or that 
 shares may be purchased on any business day.  

    Subd. 3.  Any state bank to carry out the provisions of 
 this section, may increase its capital stock as provided by law 
 and upon approval of the commissioner of commerce as provided by 
 Minnesota Statutes 1961, section 48.04, except that the 
 provisions of said section requiring the entire new capital to 
 be immediately paid in cash shall not apply.  Notwithstanding 
 any law to the contrary the bank may hold such authorized but 
 unissued new capital stock but only for the purpose of disposing 
 of the same by the issuing of shares to its employees as 
 authorized by this section.  All proceeds from the issuance and 
 sale of such shares shall be paid into the capital and surplus 
 of the bank.  Stock and options issued pursuant to this section 
 shall not increase the capital or surplus of the bank until the 
 stock is paid for in full in cash and certified to the 
 commissioner.  

    HIST: 1965 c 369 s 1; 1969 c 6 s 8; 1983 c 216 art 1 s 14; 
 1983 c 289 s 114 subd 1; 1984 c 655 art 1 s 92 

     48.61 Authorized investments for state banks and trust 
  companies. 

    Subdivision 1.  Any bank or trust company organized under 
 the laws of this state is authorized to invest not to exceed 20 
 percent of its capital and surplus in the capital stock of any 
 agricultural credit corporation organized under the laws of this 
 state, and entitled to discount privileges with any federal 
 intermediate bank organized under the laws of the United States. 

    Subd. 2.  Any such bank or trust company may invest not to 
 exceed five percent of its capital and surplus in shares of 
 stock in small business investment companies organized under the 
 provisions of the small business investment act of 1958.  

    Subd. 3.  The bank or trust company may invest not to 
 exceed ten percent of its capital and surplus in shares of stock 
 in any banks or bank holding companies wherein the stock of the 
 banks or bank holding companies is (1) owned exclusively by bank 
 holding companies or banks, and (2) at least 51 percent of the 
 voting stock is owned or controlled by bank holding companies or 
 banks authorized to do business in the state of Minnesota. 

    Subd. 4.  Any such bank or trust company may make equity or 
 debt investments in limited partnerships, limited liability 
 companies, corporations, or projects designed primarily to 
 promote community welfare, such as the rehabilitation or 
 development of economically depressed residential, commercial, 
 or industrial areas.  A bank or trust company investment in any 
 one limited partnership, limited liability company, corporation, 
 or project shall not exceed five percent of its capital and 
 surplus and its aggregate investment in all such limited 
 partnerships, limited liability companies, corporations, or 
 projects shall not exceed ten percent of its capital and surplus.

    Subd. 5.  In the absence of an express provision to the 
 contrary, whenever any statute, rule, charter, trust indenture, 
 authorizing resolution, or other instrument governing the 
 investment of funds of a banking institution, as defined in 
 section 48.01, subdivision 2, directs, requires, authorizes, or 
 permits direct investment in certain obligations, investment in 
 these obligations may be made either directly or in the form of 
 securities of, or other interests in, an investment company 
 registered under the Federal Investment Company Act of 1940, 
 whose shares are registered under the Federal Securities Act of 
 1933.  

    Shares of investment companies whose portfolios contain 
 investments which are subject to limits under other state law or 
 rule as direct investments may only be held in an amount not in 
 excess of 20 percent of the banks' capital stock and paid in 
 surplus in each such investment company.  These obligations 
 shall be carried at the lower of cost or market on the banks' 
 books and adjusted to market on a quarterly basis. 

    Subd. 6.  Any bank may invest in the voting stock of the 
 Federal Agricultural Mortgage Corporation created pursuant to 
 the Agricultural Credit Act of 1987, Public Law Number 100-233, 
 in an amount not to exceed the greater of ten percent of the 
 bank's capital and surplus or the amount required by the Federal 
 Agricultural Mortgage Corporation for the bank to qualify for 
 its participation in the corporation's programs. 

    Subd. 7.    Subsidiaries.  (a) A state bank or trust 
 company may organize, acquire, or invest in a subsidiary located 
 in this state for the purposes of engaging in one or more of the 
 following activities, subject to the prior written approval of 
 the commissioner: 

    (1) any activity, not including receiving deposits or 
 paying checks, that a state bank is authorized to engage in 
 under state law or rule or under federal law or regulation 
 unless the activity is prohibited by the laws of this state; 

    (2) any activity that a bank clerical service corporation 
 is authorized to engage in under section 48.89; and 

    (3) any other activity authorized for a national bank, a 
 bank holding company, or a subsidiary of a national bank or bank 
 holding company under federal law or regulation of general 
 applicability, and approved by the commissioner.  

    (b) A bank or trust company subsidiary may engage in an 
 activity under this section only upon application together with 
 a filing fee of $250 and with the prior written approval of the 
 commissioner.  In approving or denying a proposed activity, the 
 commissioner shall consider the financial and management 
 strength of the bank or trust company, the current written 
 operating plan and policies of the proposed subsidiary 
 corporation, the bank or trust company's community reinvestment 
 record, and whether the proposed activity should be conducted 
 through a subsidiary of the bank or trust company. 

    (c) The aggregate amount of funds invested in either an 
 equity or loan capacity in all of the subsidiaries of the bank 
 or trust company authorized under this subdivision shall not 
 exceed 25 percent of the capital stock and paid in surplus of 
 the bank or trust company. 

    (d) A subsidiary organized or acquired under this 
 subdivision is subject to the examination and enforcement 
 authority of the commissioner under chapters 45 and 46 to the 
 same extent as a state bank or trust company. 

    (e) For the purposes of this section, "subsidiary" means a 
 corporation of which more than 50 percent of the voting shares 
 are owned or controlled by the bank or trust company. 

    Subd. 8.    Parity with national banks.  A state bank or 
 trust company may invest in any securities that are authorized 
 investments for national banks on May 27, 1989, subject to the 
 same restrictions as apply to national banks.  The commissioner 
 may authorize a state bank or trust company to invest in any 
 securities that become authorized investments for national banks 
 after May 27, 1989, subject to the same restrictions as apply to 
 national banks.  This authority is in addition to the investment 
 authority granted to state banks under other provisions of state 
 law. 

    Subd. 9.    Merger with subsidiaries; authority.  (a) 
 Notwithstanding any other law to the contrary, a bank may merge 
 a subsidiary authorized and established according to this 
 section into itself if it owns 100 percent of the outstanding 
 voting stock.  

    (b) A merger of a subsidiary authorized by subdivision 1 
 must conform to the procedures in section 302A.621.  

    (c) Before filing the articles of merger with the secretary 
 of state, the merger plan must be filed with and approved in 
 writing by the commissioner who shall determine that:  

    (1) the provisions of section 302A.621 are followed; and 

    (2) the merger will not have an undue adverse effect on the 
 safety and soundness of the bank. 

    Subd. 10.    Subsidiaries organized for purposes of 
 corporate reorganization.  A subsidiary may be organized 
 solely for purposes of liquidating assets in a reorganization 
 subject to the following conditions: 

    (1) the subsidiary must be a bank holding company whose 
 assets and liabilities and subsidiary bank control have been 
 removed; and 

    (2) the operations of the subsidiary must be limited to the 
 time period reasonably related to the completion of the 
 reorganization. 

    HIST: (7677-1) 1935 c 174; 1963 c 153 s 9; 1969 c 772 s 6; 
 1974 c 421 s 1; 1980 c 445 s 1; 1981 c 116 s 1; 1982 c 632 s 2; 
 1985 c 187 s 1; 1985 c 248 s 70; 1987 c 349 art 1 s 17,18; 1988 
 c 631 s 4; 1989 c 129 s 2; 1989 c 341 art 2 s 1; 1993 c 257 s 
 21-23; 1995 c 202 art 1 s 10; art 2 s 19; 1997 c 157 s 28,29 

  48.611 Repealed, 1995 c 202 art 1 s 26 

     48.62 Banks may issue notes or debentures.  

    With the approval of the commissioner any banking 
 institution may, at any time, through action of its board of 
 directors and without requiring any action of its stockholders, 
 issue and sell its capital notes or debentures.  These capital 
 notes or debentures shall be subordinate and subject to the 
 claims of depositors and may be subordinated and subjected to 
 the claims of other creditors.  

    In determining whether the capital of any banking 
 institution is impaired, outstanding capital notes or 
 debentures, legally issued by the institution and sold by it to 
 the reconstruction finance corporation, shall not be considered 
 as liabilities of the institutions, but for all other purposes 
 they shall be, and shall be considered as, liabilities of the 
 institution.  

    No capital notes, or debentures, shall be retired or paid 
 by any such institutions if this retirement or payment would 
 impair the capital of the institution.  

    These capital notes or debentures shall in no case be 
 subject to any assessment.  The holders of the capital notes or 
 debentures shall not be held individually responsible, as 
 holders, for any debts, contracts, or engagements of the 
 institutions, and shall not be held liable for assessments to 
 restore impairments in the capital of the institution.  

    Any required reserve established for the retirement of 
 capital notes or debentures may be considered as surplus, and 
 the term "surplus" in any laws of this state pertaining to state 
 banks shall be deemed to include such reserve, if an agreement 
 is filed with the commissioner to transfer such reserve to 
 surplus upon the request of the commissioner after the capital 
 notes or debentures have matured.  

    HIST: (7697-7) 1935 c 305 s 1; 1967 c 102 s 9 

     48.63 Banks need not give security for deposits.  

    Notwithstanding any provisions of law of this state 
 requiring security for deposits in any bank or trust company in 
 the form of collateral, surety bond or any other form, security 
 for such deposits shall not be required to the extent the 
 deposits are insured under the provisions of Section 12B of the 
 Federal Reserve Act, as amended (Mason's United States Code 
 Annotated, title 12, section 264), or any amendments thereto.  

    HIST: (7697-8) 1935 c 317 s 1 

     48.64 Deposits of trust funds. 

    Any person, firm, or corporation appointed by a court of 
 competent jurisdiction as representative of the estate of a 
 deceased person, or as guardian, or any trustee of a 
 firefighters' relief association, or any referee, receiver, or 
 trustee appointed by a court of record in this state, may 
 deposit funds for safekeeping and disbursing, unless otherwise 
 directed by the court, in any bank, credit union, if the 
 beneficial owner is a member, or trust company, however 
 organized, the deposits of which are insured, in whole or in 
 part, by an agency of the federal government insuring deposits, 
 to the extent that the funds so deposited are fully insured. 

    HIST: (7697-9) 1937 c 318 s 1; 1977 c 429 s 63; 1986 c 444; 
 1993 c 257 s 24 

     48.65 Trust companies to comply with certain laws. 

    No trust company of this state shall conduct a banking 
 business, as defined in section 47.02, exercising deposit taking 
 powers, without fully complying with the provisions of section 
 48.221 relating to the reserve requirements of the state banks.  

    HIST: (7726) 1919 c 117 s 1; 1995 c 202 art 1 s 11; 1996 c 414 
 art 1 s 17 

     48.66 National banks may act as fiduciaries.  

    Any national bank in this state granted a special permit by 
 the federal reserve board to act in a fiduciary capacity under 
 the provisions of subsection K of section 11 of the federal 
 reserve act, as amended by the act of September 26, 1918, may 
 assign, transfer to, and deposit with the commissioner, and 
 procure a certificate therefor, the kinds and amounts of 
 authorized securities required of a trust company in a city 
 wherein the national bank is located, by section 48.67; 
 provided, that such national bank which has a capital of 
 $500,000 or over shall not be required to deposit these 
 securities for more than ten percent of this capital.  The 
 securities so deposited shall be held and maintained as a 
 guaranty fund for the national bank for the performance of its 
 duties in such fiduciary capacity.  

    When such national bank has complied with section 48.67, no 
 oath or security shall be required of it in the acceptance and 
 performance of any such trust, as provided in section 48.79.  

    HIST: (7727) 1921 c 490 s 1; 1973 c 123 art 5 s 7; 1986 c 444 

     48.67 Capital of trust companies. 

    The capital of every trust company hereafter organized 
 shall be not less than $500,000.  There shall also be provided a 
 surplus of at least 20 percent of capital in addition to such 
 capital amounts in each case and neither the capital nor the 
 surplus so provided shall be reduced without the approval of the 
 commissioner of commerce.  No trust company hereafter organized 
 shall transact any business until all of its authorized capital 
 stock and required surplus have been paid in, in cash, and at 
 least 25 percent of the capital has been invested in one or more 
 of the first, second, third, and fourth classes of authorized 
 securities and railroad bonds, as described by that statute, and 
 also in the farm loan bonds issued by the federal land banks, 
 federal intermediate credit banks, and the banks for 
 cooperatives duly assigned and transferred to and deposited with 
 the state treasurer.  The state treasurer shall submit the 
 securities deposited to the commissioner, who shall carefully 
 examine the securities offered for deposit and ascertain that 
 they comply with all the provisions of law applicable thereto.  
 Upon receipt of an order of the commissioner, the state 
 treasurer shall issue a receipt therefor.  This deposit shall be 
 maintained unimpaired as a guaranty fund for depositors and 
 creditors and for the faithful discharge of its duties, with the 
 right to collect the income thereof and to substitute other like 
 authorized securities, of equal amount and value, upon approval 
 and order of the commissioner. 

    If the securities comply with the law, the commissioner 
 shall issue a certificate of authorization for the trust company 
 to commence business. 

    The capital stock of any trust company may be reduced with 
 the approval of the commissioner, but not below the minimum 
 amounts aforesaid, and no assets shall be returned to the 
 stockholders unless its deposits of authorized securities after 
 such return equal one-fourth of the reduced capital, in no event 
 less than $125,000; nor shall the liability of any stockholder 
 upon any existing contract be affected thereby. 

    When two or more trust companies have been or shall 
 hereafter be consolidated under and pursuant to the provisions 
 of sections 49.34 to 49.41, the capital of the consolidated 
 trust company shall be considered as substituted for the capital 
 of the several trust companies entering into the consolidation, 
 and the aggregate of the securities of these trust companies on 
 deposit with the state treasurer, pursuant to the provisions of 
 this section, shall be increased or diminished accordingly; 
 provided, that any company may hereafter be organized, with its 
 principal place of business at any place within the state, with 
 a capital of not less than $10,000, to be paid in cash, of which 
 50 percent shall be invested in authorized securities and 
 deposited with the state treasurer, as provided in this 
 section.  The powers and business of the company so organized 
 shall be to act as assignee under any assignment for the benefit 
 of creditors, or be appointed and act as a trustee or receiver, 
 as a guardian, as executor of any will, or administrator of any 
 estate, and the company so organized may accept and perform any 
 other lawful trust over which any court, either state or 
 federal, has jurisdiction.  This company, before entering upon 
 the duties of its trust, shall give a corporate surety bond in 
 such sum as the court directs, with sufficient surety, 
 conditioned for the faithful performance of its duties.  The 
 business of any company so organized shall be limited to the 
 above matters; provided, that the company so organized with a 
 capital stock of $10,000 shall not use the word "trust" in the 
 title or name of the company. 

    HIST: (7728) RL s 3033; 1907 c 225 s 1; 1911 c 314 s 1; 1927 c 
 323 s 1; 1931 c 375 s 1; 1935 c 339 s 1; 1965 c 171 s 20; 1973 c 
 438 s 1; 1973 c 497 s 1; 1977 c 272 s 12; 1983 c 289 s 114 subd 
 1; 1984 c 655 art 1 s 92; 1986 c 444; 1995 c 171 s 70; 1996 c 
 414 art 1 s 42,43 

     48.68 Directors; qualifications; vacancies, how filled. 

    A majority of the directors of a trust company must be 
 residents of this state.  Each shall take and subscribe an oath 
 to diligently and honestly perform the official duties of a 
 director and not knowingly violate, or permit to be violated, 
 any provision of law relating to trust companies.  The taking of 
 this oath must be noted on the minutes of the records of the 
 corporation and filed with the commissioner.  Failure of any 
 person selected as director to qualify creates a vacancy in the 
 board, and all vacancies in the board must be filled by the 
 qualified members.  However, not more than one-third of the 
 membership of the board may be so filled in any one year. 

    HIST: (7729) RL s 3034; 1919 c 30 s 1; 1965 c 171 s 21; 
 1Sp1981 c 4 art 4 s 62; 1983 c 250 s 7; 1986 c 444 

     48.69 Certain trust companies may assume powers of state 
  banks. 

    Any trust company organized under the laws of this state, 
 and having a capital of not less than $500,000, may exercise the 
 powers and privileges conferred by sections 48.69 to 48.73, in 
 addition to all other powers granted by law, upon complying with 
 the conditions and requirements specified in sections 48.69 to 
 48.73. 

    HIST: (7733-1) 1929 c 90 s 1; 1977 c 272 s 13 

     48.70 Certificates to be amended. 

    In order to exercise such powers as may be granted in 
 sections 48.69 to 48.73, any such trust company may amend its 
 certificate of incorporation so as to assume the additional 
 powers of a state banking corporation.  This amendment may 
 include the change of the corporate name of the trust company.  
 Such trust company shall display in its place of business, the 
 certificate of such authorization issued by the commissioner of 
 commerce.  

    HIST: (7733-2) 1929 c 90 s 2; 1945 c 91 s 1; 1983 c 289 s 114 
 subd 1; 1984 c 655 art 1 s 92; 1994 c 382 s 8 

     48.71 Department to approve certificates.  

    Amendments to the certificate of incorporation shall be 
 made in accordance with section 300.45 and before becoming 
 effective these amendments must be approved by the department 
 and the approval endorsed upon the certificate of amendment.  

    HIST: (7733-3) 1929 c 90 s 3 

     48.72 Application.  

    In considering the application of a trust company to assume 
 the powers of a state bank, the department shall proceed in the 
 same manner and be governed by the same laws which are now 
 applicable to application for charters for new state banks.  

    HIST: (7733-4) 1929 c 90 s 4 

     48.73 Powers and duties of trust companies.  

    Upon complying with the terms of sections 48.69 to 48.73, 
 the trust company shall have all the powers and privileges of a 
 state bank not heretofore granted to trust companies, and shall 
 become subject to and comply with all the provisions of the laws 
 of this state in relation to state banks.  

    HIST: (7733-5) 1929 c 90 s 5 

     48.74 Funds and property held in fiduciary capacity.  

    Besides its general books of account, it shall keep 
 separate books for all fiduciary accounts.  All funds and 
 property held by it in a fiduciary capacity shall at all times 
 be kept separate from its own funds and property, and all 
 fiduciary funds deposited or held as fiduciary by the bank 
 awaiting investment shall be carried in a separate account, and 
 shall not be used by the bank in the conduct of its business, 
 unless the bank, under authorization by its board of directors, 
 first delivers to the commissioner of commerce, as collateral 
 security:  (1) Bonds, notes, bills, certificates of 
 indebtedness, or other direct obligations of the United States 
 or its instrumentalities, or obligations fully guaranteed by the 
 United States as to principal and interest; or (2) other readily 
 marketable securities of the classes in which said trust 
 companies or state banks exercising trust powers are authorized 
 or permitted to invest trust funds under the laws of this 
 state.  Every security or property in which the funds held by it 
 as trustee, executor, administrator, guardian, receiver, or 
 assignee, or in any other fiduciary capacity are invested, shall 
 at once upon receipt thereof be immediately entered in the 
 proper books as belonging to the particular fiduciary account 
 whose funds have been invested therein.  Any change in such 
 investment shall be fully specified in and under the account of 
 the particular fiduciary account to which it belongs, so that 
 all fiduciary funds and property can be readily identified at 
 any time, by any person.  Any trust company incorporated under 
 the laws of this state and any national banking association 
 authorized to act in a fiduciary capacity in this state, when 
 acting in a fiduciary capacity, either alone or jointly with an 
 individual or individuals, may, with the consent of such 
 individual fiduciary or fiduciaries, who are hereby authorized 
 to give such consent, cause any stocks, securities, or other 
 property now held or hereafter acquired in such capacity to be 
 registered and held in the name of a nominee or nominees of such 
 corporate fiduciary without mention of the fiduciary 
 relationship.  Any such corporate fiduciary shall be liable for 
 any loss occasioned by the acts of any of its nominees with 
 respect to such stocks, securities or other property so 
 registered.  

    HIST: (7739) RL s 3044; 1943 c 339 s 1; 1959 c 88 s 14; 1983 c 
 289 s 114 subd 1; 1984 c 655 art 1 s 92 

     48.75 Prohibited dealings and indebtedness.  

    Trust companies shall not engage in any banking, 
 mercantile, manufacturing, or other business, except such as is 
 herein expressly authorized for such a corporation.  It shall 
 not lend its funds, moneys, capital, trust funds, or any other 
 property whatsoever, to any director, officer, agent, or 
 employee, nor shall any such director, officer, agent, or 
 employee become in any manner indebted to it by means of any 
 overdraft, promissory note, account, endorsement, guaranty, or 
 any other contract; and any such director, officer, agent, or 
 employee who shall become so indebted to it shall be guilty of 
 theft of the amount of such indebtedness from the time of its 
 creation.  

    HIST: (7740) RL s 3045; 1965 c 35 s 3 

     48.76 Powers of court; annual report to the court and to 
  the commissioner. 

    Every trust company shall be subject at all times to the 
 further orders, judgments, and decrees of a court of record from 
 which it has accepted a trust, appointment, or commission as to 
 the trust, and shall render to the court itemized and verified 
 accounts, statements, and reports required by law, or as the 
 court orders as to a particular trust.  The trust company shall 
 also be subject to the general jurisdiction and authority of the 
 district court of the county of its principal place of business. 

    HIST: (7741) RL s 3046; 1982 c 473 s 14 

     48.77 Procedure upon violation of law or insolvency.  

    The directors and managing officers of any such 
 corporation, when satisfied that it is, or is about to become, 
 insolvent, shall immediately report that fact to the 
 commissioner; and when the commissioner shall be satisfied from 
 that report, or from any examination made, that it is conducting 
 its business in an unlawful or unsafe manner, or that it is 
 insolvent, the commissioner may at once take possession of its 
 books, records, and assets, which shall not be subject to any 
 levy or attachment, nor shall any application for a receiver be 
 entertained by any court, during such reasonable time as may be 
 necessary for further examination.  If, upon this examination, 
 it shall appear to the commissioner that its business is being 
 conducted in a safe and lawful manner and that all creditors, 
 except those represented by stock, can be paid in full from the 
 assets, the commissioner may relinquish possession of its assets 
 to its directors and officers; otherwise the commissioner shall 
 apply to a court for the appointment of a receiver, who shall 
 take possession of all its books, records, and assets, and close 
 up its affairs under the direction of the court; provided, that 
 if at any stage of the proceedings the directors or stockholders 
 shall satisfy the court that the corporation is able to pay all 
 creditors, other than themselves, if the showing is approved, 
 after investigation by the commissioner, the court may order the 
 return of the assets to the company for liquidation or such 
 other course as the stockholders, in compliance with law, may 
 determine; and in such case the receiver shall be discharged.  

    HIST: (7742) RL s 3047; 1986 c 444 

     48.78 Agent or attorney in fact, acting as.  

    Any trust company may take and hold in trust any real or 
 personal property, wherever situated, by order, judgment, or 
 decree of any court of record, or by gift, grant, assignment, 
 transfer, devise, legacy, or bequest from, or by lawful contract 
 with, any public or private corporation or individual, and 
 manage the same upon the terms, conditions, limitations, and 
 restrictions therein declared or imposed.  The trust company may 
 also act as agent for the signature, countersignature, 
 registration, transfer, or redemption of certificates of stock, 
 bonds, coupons, or other evidences of indebtedness of any such 
 corporation or individual, or otherwise act as general or 
 special agent or attorney in fact in the acquisition, 
 management, sale, assignment, transfer, incumbrance, conveyance, 
 or other disposition of any real or personal property, the 
 collection of rents, payment of taxes, and generally as the 
 representative of any such corporation or individual.  

    HIST: (7731) RL s 3036 

     48.79 Acting as assignee, receiver, or executor.  

    Any trust company may act as assignee under any assignment 
 for the benefit of creditors, or be appointed and act as a 
 trustee or receiver, as a guardian, as executor of any will, or 
 administrator of any estate, and may accept and perform any 
 other lawful trust conferred by any court, or by any corporation 
 or individual.  In the acceptance and performance of any such 
 trust, no oath or security shall be required.  

    HIST: (7733) RL s 3038 

     48.80 Compensation; commission not deemed interest.  

    For the faithful performance of its duties and discharge of 
 its trust, any trust company shall be entitled to reasonable 
 compensation, or such amount as has been or may be agreed upon 
 by the parties, and all necessary expenses, with legal interest 
 thereon, unless otherwise agreed upon.  No compensation or 
 commission paid or agreed to be paid by it for the negotiation 
 of any loan, or the execution of any trust, shall be deemed 
 interest within the meaning of the law, nor shall any excess 
 thereof over the legal rate be deemed usury.  

    HIST: (7737) RL s 3042 

     48.81 Investment powers; limitation.  

    Any trust company may acquire, use, and improve, and for 
 that purpose mortgage, lease, sell, and convey, such real and 
 personal property as may be necessary for the transaction of its 
 business.  Any estate or interest in real estate which it may 
 acquire by virtue of the foreclosure of any mortgage, trust 
 deed, or other security, or by the settlement of any obligation 
 or otherwise, in the course of its legitimate business, it may 
 sell or continue to hold and use as deemed for its interests or 
 those of the estate or trust to which the same belongs, and to 
 that end it may become the purchaser at any foreclosure or 
 judicial sale to which it is a party as trustee or otherwise.  
 It may also accept or make any deed, mortgage, or other 
 instrument necessary for the transaction of its business, may 
 loan money and secure such loans by mortgage, trust deed or 
 pledge, purchase notes, bonds, mortgages, and other evidences of 
 indebtedness, and securities, and sell and assign the same, and 
 convert them into cash or into other authorized securities, or 
 securities and property not herein expressly prohibited, 
 provided that the investment of funds owned by a trust company, 
 as distinguished from funds held by it in trust, shall be 
 restricted to authorized securities.  It may guarantee a title 
 to securities sold and transferred by it; may become sole surety 
 upon any bond provided that, as to trust companies organized 
 after April 10, 1965, such pertain to its own fiduciary 
 activities and may maintain and operate safe deposit vaults.  It 
 shall invest none of its capital or surplus in real estate 
 except as herein authorized, nor any of its deposits, trust 
 funds or property therein except as so authorized, or under or 
 by virtue of an express contract, judgment, or other instrument 
 conferring or imposing special power and authority so to do.  

    HIST: (7730) RL s 3035; 1965 c 171 s 22; 1969 c 772 s 7 

     48.82 Deposits of trust and other funds received.  

    Any trust company may act as a depository or accept for 
 safekeeping money, bonds, stocks, and other securities or 
 personal property which any public officer, or any trustee or 
 other legal representative, or any public or private corporation 
 or person, shall be authorized, ordered, or otherwise required 
 by law to deposit in a bank or other safe depository, or to pay 
 into any court of record; and the same may, instead thereof, be 
 paid into or deposited with any such trust company, and, where 
 such deposit is made pursuant to order of court, in such as the 
 court shall designate, and take the receipt of the trust company 
 therefor; and thereupon the depositor and the depositor's 
 sureties shall be relieved from liability thereafter accruing so 
 long as these deposits continue.  Such deposits shall not 
 include checking or savings accounts, certificates of deposit or 
 other liabilities not relating to its fiduciary activities, 
 except as may be authorized by section 47.23 and sections 48.69 
 to 48.73 inclusive.  

    HIST: (7732) RL s 3037; 1961 c 298 s 4; 1986 c 444 

     48.83 Deposit with trust company instead of a larger 
  bond.  

    When new or additional security shall be required from any 
 executor, administrator, guardian, assignee, receiver, or other 
 trustee, if the judge or court having jurisdiction deems it 
 expedient, because of the magnitude of the estate or fund or 
 otherwise, to require the maximum security prescribed by law, it 
 may direct any securities belonging thereto to be deposited with 
 any trust company, subject to the order of the trustee, when 
 countersigned by the judge, and fix the amount of the security 
 with reference only to the remainder.  No such security shall be 
 withdrawn, nor any part of the principal or interest thereof 
 collected, except by an officer of the company, without the 
 order of the judge duly entered and certified, upon satisfactory 
 proof that additional security has been furnished, or that the 
 estate or fund has been so reduced that the deposit is no longer 
 required.  

    HIST: (7734) RL s 3039 

     48.84 Corporate trustee; trust funds, investment, 
  commingling. 

    Any trust company or state bank which is permitted to 
 exercise trust powers under the provisions of sections 48.37 to 
 48.47 inclusive may invest all moneys received by it in trust in 
 authorized securities, and shall be responsible to the owner or 
 cestui que trust for the validity, regularity, quality, value, 
 and genuineness of these investments and securities so made, and 
 for the safekeeping of the securities and evidences thereof.  In 
 the absence of an express prohibition in the trust instrument, 
 the trustee may acquire and retain securities of any open-end or 
 closed-end management type investment company or investment 
 trust registered under the Federal Investment Company Act of 
 1940.  The fact that the banking institution, or any affiliate 
 of the banking institution, is providing services to the 
 investment company or trust as investment advisor, sponsor, 
 broker, distributor, custodian, transfer agent, registrar, or 
 otherwise, and receiving compensation for the services shall not 
 preclude the trustee from investing in the securities of that 
 investment company or trust.  The banking institution shall 
 disclose to all current income beneficiaries of the trust the 
 rate, formula, and method of the compensation.  This paragraph 
 does not alter the degree of care and judgment required of 
 trustees by section 501B.151.  When special directions are given 
 in any order, judgment, decree, will, or other written 
 instrument as to the particular manner or the particular class 
 or kind of securities or property in which any investment shall 
 be made, it shall follow such directions, and in such case it 
 shall not be further responsible by reason of the performance of 
 such trust.  In all other cases it may invest funds held in any 
 trust capacity in authorized securities using its best judgment 
 in the selection thereof, and shall be responsible for the 
 validity, regularity, quality, and value thereof at the time 
 made, and for their safekeeping.  Whether it be the sole trustee 
 or one of two or more cotrustees, it may invest in fractional 
 parts of, as well as in whole, securities, or may commingle 
 funds for investment.  If it invests in fractional parts of 
 securities or commingles funds for investment, all of the 
 fractional parts of such securities, or the whole of the funds 
 so commingled shall be owned and held by the trust company or 
 state bank in its several trust capacities, and it shall be 
 liable for the administration thereof in all respects as though 
 separately invested; provided, that not more than $100,000, at 
 the cost price of such investments, shall be so invested for any 
 one trust at any one time in fractional parts or as commingled 
 funds for investment by a trust company or state bank having 
 capital and surplus of less than $500,000, unless the authority 
 to invest in fractional parts or as commingled funds be given in 
 the order, judgment, decree, will, or other written instrument 
 governing such trust.  Funds so commingled for investment shall 
 be designated collectively as a common trust fund.  Such trust 
 company or state bank shall maintain such common trust fund in 
 conformity with the rules and regulations prevailing from time 
 to time of that federal governmental agency which regulates the 
 collective investment of trust funds by national banks.  It may, 
 in its discretion, retain and continue any investment and 
 security or securities coming into its possession in any 
 fiduciary capacity.  The foregoing shall apply as well whether a 
 corporate trustee is acting alone or with an individual 
 cotrustee.  

    HIST: (7735) RL s 3040; 1941 c 298 s 1; 1947 c 234 s 1; 1951 c 
 165 s 1; 1965 c 171 s 23; 1992 c 473 s 4; 1996 c 314 s 2 

     48.841 Common trust funds, affiliates.  

    Subdivision 1.  Notwithstanding the provisions of section 
 48.84, any trust company or state bank which is permitted to 
 exercise trust powers under the provisions of sections 48.37 to 
 48.47 inclusive may: 

    (a) Establish and maintain common trust funds for the 
 collective investment of funds held in any fiduciary capacity by 
 it or by another bank or trust company which is owned or 
 controlled by a corporation which owns or controls such bank or 
 trust company; and 

    (b) As a fiduciary or cofiduciary, invest funds which it 
 holds for investment in common trust funds established and 
 maintained pursuant to clause (a) if such investment is not 
 prohibited by the instrument, judgment, decree or order creating 
 such fiduciary relationship.  This subdivision applies to 
 fiduciary relationships now in existence or hereafter created.  

    Subd. 2.  To the extent not inconsistent with the 
 provisions of this section, the provisions of section 48.84 
 relating to common trust funds shall apply to the establishment 
 and maintenance of common trust funds under this section.  

    HIST: 1974 c 6 s 1 

     48.845 Substitution in fiduciary capacities for 
  affiliated or other banks; definitions. 

    Subdivision 1.  For purposes of this section and section 
 48.846, the terms defined in this section have the meanings 
 given them.  

    Subd. 2.  "Bank" means any state bank permitted to exercise 
 trust powers under the provisions of sections 48.37 to 48.47, 
 and any national bank authorized to exercise fiduciary powers 
 under the laws of the United States, including a national bank 
 whose operations are limited to those of a trust company and 
 related activities. 

    Subd. 3.  "Trust company" means any trust company 
 incorporated under the laws of this state which is duly 
 authorized to exercise fiduciary powers.  

    Subd. 4.  "Affiliated bank" with respect to another bank or 
 a trust company means any bank which is owned or controlled by 
 the corporation which owns or controls that other bank or trust 
 company, including a wholly owned subsidiary of the other bank 
 or trust company.  

    Subd. 5.  "Fiduciary capacity" means a capacity resulting 
 from a bank undertaking to act alone or jointly with others 
 primarily for the benefit of another in all matters connected 
 with its undertaking and includes, but is not limited to, the 
 capacities of trustee, including trustee of a common trust fund; 
 executor; administrator; personal representative; registrar or 
 transfer agent with respect to stocks, bonds or other evidences 
 of indebtedness of any corporation, association, municipality, 
 state or public authority; guardian of estates; conservator; 
 receiver; escrow agent; agent for the investment of money; 
 attorney-in-fact; or any other similar capacity.  

    HIST: 1980 c 383 s 1; 1996 c 414 art 1 s 18 

     48.846 Substitution; application; notice; hearing; court 
  order; filing. 

    Subdivision 1.  Any bank or trust company may file an 
 application with the district court in the county in which an 
 affiliated bank or other bank or trust company for which it 
 seeks to be substituted is located requesting that it be 
 substituted, except as may be expressly excluded in the 
 application, in every fiduciary capacity held by the affiliated 
 bank or other bank or trust company for which substitution is 
 sought and which is specified in the application.  The 
 affiliated bank or other bank or trust company for which 
 substitution is sought shall join in the application.  The 
 application need not list the fiduciary capacities in which 
 substitution is requested.  

    Subd. 2.  When the application is filed with the district 
 court, the court shall make an order fixing a date and time for 
 hearing and directing that notice of the hearing be given as 
 provided in this subdivision.  The applicant shall cause a copy 
 of the notice to be published at least once a week for two 
 consecutive weeks in a legal newspaper in the county where the 
 hearing is to be held, the last publication of which is to be at 
 least ten days before the time set for the hearing.  The court 
 may require additional notice as it reasonably deems necessary.  
 No defect in giving notice shall limit or affect the validity of 
 any order entered pursuant to this section.  

    Subd. 3.  Upon finding that the applicant is duly 
 authorized to exercise fiduciary powers, the district court 
 shall enter an order substituting the applicant bank or trust 
 company in every fiduciary capacity held by the affiliated bank 
 or other bank or trust company for which substitution is sought 
 and which joined in the application, except as may be otherwise 
 specified in the application, and except for fiduciary 
 capacities in any account with respect to which a person 
 beneficially interested in the account has filed objection to 
 the substitution and has appeared and been heard in support of 
 the objection.  Upon entry of the order, or at a later date as 
 may be specified in the order, the applicant bank or trust 
 company shall, without further act, and notwithstanding any 
 other law to the contrary, be substituted in every such 
 fiduciary capacity.  The substitution may be made a matter of 
 record in any county of this state by filing a certified copy of 
 the order of substitution in the office of the court 
 administrator of any district, or county court in this state, or 
 by filing a certified copy of the order in the office of the 
 county recorder of any county in this state.  

    Subd. 4.  Each designation in a will or other instrument 
 heretofore or hereafter executed of an affiliated bank as 
 fiduciary shall be deemed a designation of the bank or trust 
 company substituted for the affiliated bank pursuant to this 
 section except where the will or other instrument is executed 
 after the substitution and expressly negates the application of 
 this section.  Except as otherwise provided in this subdivision 
 any grant in any will or other instrument of any discretionary 
 power shall be deemed conferred upon the bank or trust company 
 substituted as the fiduciary pursuant to this section.  

    Subd. 5.  An affiliated bank or other bank or trust 
 company shall account jointly with the substituted bank or trust 
 company for the accounting period during which the substitution 
 occurred.  Upon substitution pursuant to this section, the 
 affiliated bank or other bank or trust company shall deliver to 
 the substituted bank or trust company all assets held by the 
 affiliated bank or other bank or trust company as fiduciary, 
 except assets held for fiduciary accounts with respect to which 
 no substitution occurs pursuant to this section.  Upon 
 substitution all assets become the property of the substituted 
 bank or trust company without the necessity of any instrument of 
 transfer or conveyance.  

    HIST: 1980 c 383 s 2; 1Sp1986 c 3 art 1 s 82; 1995 c 189 s 8; 
 1996 c 277 s 1 

     48.85 Transfer of trusts to company; condition.  

    The trustees of any estate or property may surrender and 
 resign such trust in favor of such trust company which will 
 accept the same, and convey and deliver to it all property and 
 assets of such trust, upon condition that the grantor, cestui 
 que trust, and all parties in any manner interested in the 
 execution and performance of such trust shall execute, 
 acknowledge, and deliver an instrument in writing, whereby they 
 shall consent to such transfer and the release and discharge of 
 the original trustee, and the appointment of such trust company 
 as successor.  If either party to the original trust is dead, or 
 does not join in such written consent, or if such original trust 
 was created under a last will, or an order or decree of a court 
 of record, then such transfer shall not be valid except upon the 
 judgment or decree of such court as would have jurisdiction of 
 an action to remove the acting trustee, and full compliance with 
 the terms and conditions of such judgment or decree.  

    HIST: (7736) RL s 3041; 1986 c 444 

     48.86 Trust funds; investment of accumulations. 

    Any amount not less than $500 received by any trust company 
 as executor, administrator, guardian, or other trustee, or by 
 order of court, not required for the purposes of such trust, or 
 not to be accounted for within one year, it shall invest as soon 
 as practicable in authorized securities either then held by it 
 or specially procured by it; and the income, less its proper 
 charges, shall become part of the trust estate, and the net 
 accumulations thereon shall be likewise invested, accounted for, 
 and allowed in the settlement of such trust.  

    Except as may be otherwise provided in the governing will, 
 trust agreement, court order or other instrument, any amount in 
 a trust account may be invested in certificates of deposit, 
 share certificates, or savings accounts in any bank or banks, or 
 credit union, if the beneficial owner is a member, provided that 
 such certificates of deposit, share certificates, or savings 
 accounts are fully insured by an agency of the federal 
 government insuring deposits and receive the prevailing rate of 
 interest on such certificates or savings accounts. 

    HIST: (7738) RL s 3043; 1957 c 601 s 18; 1965 c 171 s 24; 1967 
 c 102 s 10; 1993 c 257 s 25 

  48.87 Repealed, 1Sp1985 c 13 s 376 

     48.88 Violations; penalties. 

    Subdivision 1.  Any officer or employee of a bank or trust 
 company who violates the provisions of sections 48.15 and 48.16 
 to 48.20, or who consents thereto or connives thereat, shall be 
 guilty of a gross misdemeanor.  

    Subd. 2. Repealed, 1994 c 382 s 15 

    HIST: (7699-13 1/2a, 7699-19) 1927 c 257 s 6; 1929 c 144 s 2; 
 1Sp1981 c 4 art 2 s 5 

     48.89 Clerical service corporation. 

    Subdivision 1.  For the purposes of this section the 
 following terms defined in this subdivision have the meanings 
 given them: 

    (a) The term commissioner means the commissioner of 
 commerce.  

    (b) The term clerical services means services such as check 
 and deposit, sorting and posting, computation and posting of 
 interest and other credits and charges, preparation and mailing 
 of checks, statements, notices, and similar items, or any other 
 clerical, bookkeeping, accounting, statistical, or similar 
 functions performed for a bank.  

    (c) The term clerical service corporation means a 
 corporation organized as a business corporation to perform 
 clerical services for two or more banks, each of which owns part 
 of the capital stock of such corporation.  

    (d) The term invest includes any advance of funds to a 
 clerical service corporation, whether by the purchase of stock, 
 the making of a loan, or otherwise, except a payment for rent 
 earned, goods sold and delivered, or services rendered prior to 
 the making of such payment.  

    (e) The term banks is defined as prescribed in section 
 46.046.  

    Subd. 2.  (a) No limitation or prohibition otherwise 
 imposed by any provision of state law exclusively relating to 
 banks shall prevent any two or more banks from investing not 
 more than ten percent of the paid-in and unimpaired capital and 
 unimpaired surplus of each of them in a clerical service 
 corporation if in stock of such a corporation and 15 percent of 
 unimpaired capital and unimpaired surplus if in the making of a 
 loan or extending credit to such a corporation.  In no event 
 shall the aggregate of the investments in stock and loans exceed 
 15 percent of the unimpaired capital and unimpaired surplus of 
 the investing bank.  

    (b) If stock in a clerical service corporation has been 
 held by two banks, and one of such banks ceases to utilize the 
 services of the corporation and ceases to hold stock in it, and 
 leaves the other as the sole stockholding bank, the corporation 
 may nevertheless continue to function as such and the other bank 
 may continue to hold stock in it. 

    Subd. 3.  Whenever a bank, referred to in this section as 
 an "applying bank," applies for a type of clerical services for 
 itself from a clerical service corporation which supplies the 
 same type of clerical services to another bank, and the applying 
 bank is competitive with any bank, referred to in this section 
 as a "stockholding bank," which holds stock in such corporation, 
 the corporation must offer to supply such services by either: 

    (1) Issuing stock to the applying bank and furnishing 
 clerical services to it on the same basis as to the other banks 
 holding stock in the corporation; or 

    (2) Furnishing clerical services to the applying bank at 
 rates no higher than necessary to fairly reflect the cost of 
 such services, including the reasonable cost of the capital 
 provided to the corporation by its stockholders, 

    at the corporation's option, unless comparable services at 
 competitive overall cost are available to the applying bank from 
 another source, or unless the furnishing of the services sought 
 by the applying bank would be beyond the practical capacity of 
 the corporation. In any action or proceeding to enforce the duty 
 imposed by this section, or for damages for the breach thereof, 
 the burden shall be upon the clerical service corporation to 
 show such availability.  

    Subd. 4.  No clerical service corporation may engage in any 
 activity other than the performance of clerical services for 
 banks.  

    Subd. 5.  No bank may cause to be performed, by contract or 
 otherwise, any clerical services for itself from a clerical 
 service corporation or any other person, whether on or off its 
 premises, unless assurances satisfactory to the commissioner are 
 furnished to the commissioner by both the bank and the party 
 performing such services that the performance thereof will be 
 subject to regulation and examination by the commissioner to the 
 same extent as if such services were being performed by the bank 
 itself on its own premises.  

    Subd. 6.  A clerical service corporation shall not be 
 considered a branch of any bank owning shares in such 
 corporation.  

    HIST: 1963 c 140 s 1; 1983 c 289 s 114 subd 1; 1984 c 655 art 
 1 s 92; 1985 c 248 s 19; 1992 c 587 art 1 s 16 

     48.892 Clerical services offices. 

    A bank may perform clerical services, as defined in section 
 48.89, subdivision 1, for itself at an off-premises data 
 processing and storage center located within the state if the 
 bank furnishes assurances satisfactory to the commissioner that 
 the performances of those services will be subject to regulation 
 and examination by the commissioner to the same extent as if the 
 services were being performed at the bank's main office or 
 detached facility.  A data processing and storage center is not 
 considered a branch or detached facility, as defined in section 
 47.51.  The establishment of a data processing and storage 
 center may include acquiring real and personal property, which 
 shall be subject to section 47.10. 

    HIST: 1989 c 129 s 3 

     48.90 Legislative intent. 

    Subdivision 1.    Severability.  It is the express 
 intention of the Minnesota legislature to act pursuant to the 
 United States Code, title 12, section 1842(d), as amended by 
 title I of the Riegle-Neal Interstate Banking and Branching 
 Efficiency Act of 1994 to provide for interstate banking on a 
 nationwide basis and to preserve certain state law, policy, and 
 practices.  

    Subd. 2.    Nonaffected activities.  Laws 1986, chapter 
 339 should not be construed to limit the power granted to a bank 
 in this state to conduct its business or to limit the conduct of 
 business by any bank holding company in which the operation of 
 its banking subsidiaries are principally conducted in this state.

    Subd. 3.    Prohibited activities.  Laws 1986, chapter 
 339 does not authorize:  

    (1) the establishment in this state of branch offices of a 
 banking subsidiary of any out-of-state bank holding company 
 making an acquisition pursuant to Laws 1986, chapter 339 if the 
 banking subsidiary does not have its principal place of business 
 in this state; or 

    (2) the establishment in this state of branch offices of a 
 bank having its principal place of business in this state unless 
 authorized by sections 47.51 to 47.57. 

    HIST: 1986 c 339 s 4; 1995 c 202 art 4 s 7 

     48.91 Title. 

    Sections 48.90 to 48.99 may be cited as the "interstate 
 banking act."  

    HIST: 1986 c 339 s 5; 1995 c 202 art 4 s 8 

     48.92 Definitions. 

    Subdivision 1.    Terms.  When used in sections 48.90 to 
 48.99, the terms defined in this section have the meanings given 
 them, unless their context requires a different meaning.  

    Subd. 2.    Control.  "Control," with respect to a bank 
 holding company, bank, or bank to be organized pursuant to 
 chapters 46, 47, 48, and 300, means that term as defined in 
 section 46.048, subdivision 1. 

    Subd. 3.    Bank.  "Bank" means any bank, or bank and 
 trust company which is now or may hereafter be organized under 
 the laws of this state that is an insured institution as the 
 term is defined in section 3(h) of the Federal Deposit Insurance 
 Act, United States Code, title 12, section 1813(h), that:  

    (1) accepts deposits that the depositor has a legal right 
 to withdraw on demand; and 

    (2) engages in the business of making commercial loans.  

    Subd. 4.    Commissioner.  "Commissioner" means the 
 commissioner of commerce of the state of Minnesota.  

    Subd. 5.    Department.  "Department" means the 
 department of commerce of the state of Minnesota.  

    Subd. 6.    Home state.  "Home state" means:  (1) with 
 respect to a national bank, the state in which the main office 
 of the bank is located; (2) with respect to a state bank, the 
 state by which the bank is chartered; and (3) with respect to a 
 bank holding company, the state in which the total deposits of 
 all banking subsidiaries of the company are the largest on the 
 later of (i) July 1, 1966, or (ii) the date on which the company 
 becomes a bank holding company under the Bank Holding Company 
 Act of 1956, as amended, United States Code, title 12, section 
 1842. 

    Subd. 7.    Host state.  "Host state" is a state other 
 than the home state of the bank holding company, in which the 
 company controls, or seeks to control, a bank subsidiary. 

    Subd. 8.    Out-of-state bank holding company.  
 "Out-of-state bank holding company" means a bank holding company 
 as defined in the Bank Holding Company Act of 1956, as amended, 
 whose home state is a state other than Minnesota.  

    Subd. 9.    Interstate bank holding company.  
 "Interstate bank holding company" means (a) a bank holding 
 company whose home state is Minnesota and that is engaging in 
 interstate banking, and (b) an out-of-state bank holding company 
 engaged in banking in this state.  

    Subd. 10.    Equity capital.  "Equity capital" means the 
 sum of common stock, preferred stock, paid in surplus, reserves 
 for loss loans and undivided profits. 

    Subd. 11.    Out-of-state bank.  "Out-of-state bank" 
 means a bank whose home state is other than Minnesota. 

    HIST: 1986 c 339 s 6; 1Sp1986 c 3 art 2 s 24; 1987 c 349 art 1 
 s 19; 1988 c 616 s 1; 1990 c 491 art 4 s 1; 1991 c 296 s 1; 1994 
 c 484 s 1; 1995 c 202 art 1 s 12; art 4 s 9-14 

     48.93 Acquisition procedure. 

    Subdivision 1.    Application.  An out-of-state bank 
 holding company may, through a purchase of stock or assets of a 
 bank, or through a purchase of stock or assets of or merger with 
 a bank holding company, acquire control in an existing bank or 
 banks whose home state is Minnesota if it meets the conditions 
 in this section, sections 46.047 and 46.048 and it files an 
 application in writing with the commissioner on forms provided 
 by the department.  The commissioner, upon receipt of the 
 application, shall act upon it in the manner provided for in 
 sections 46.047 and 46.048, except that the commissioner may 
 extend the 60-day period an additional 30 days if in the 
 commissioner's judgment any material information submitted is 
 substantially inaccurate or the acquiring party has not 
 furnished all the information required by statute, rule, or the 
 commissioner.  Within three days after making the decision to 
 disapprove any proposed acquisition, the commissioner shall 
 notify the acquiring party in writing of the disapproval.  The 
 notice must provide a statement of the basis for the disapproval.

    Subd. 2.    Hearings.  Within ten days of receipt of 
 notice of disapproval pursuant to subdivision 1, the acquiring 
 party may request an agency hearing on the proposed 
 acquisition.  At the hearing, all issues must be determined on 
 the record pursuant to chapter 14 and the rules issued by the 
 department.  At the conclusion of the hearing, the commissioner 
 shall by order approve or disapprove the proposed acquisition on 
 the basis of the record made at the hearing. 

    Subd. 3.    Criteria for approval.  Except as otherwise 
 provided by rule of the department, an application filed 
 pursuant to subdivision 1 must contain the information required 
 by sections 46.047 and 46.048. 

    Subd. 4.    Disapproval.  The commissioner shall 
 disapprove any proposed acquisition if:  

    (1) the financial condition of any acquiring person is such 
 as might jeopardize the financial stability of the bank or 
 prejudice the interests of the depositors of the bank; 

    (2) the competence, experience, integrity of any acquiring 
 person or of any of the proposed management personnel indicates 
 that it would not be in the interest of the depositors of the 
 bank, or in the interest of the public to permit the person to 
 control the bank; 

    (3) the acquisition will result in undue concentration of 
 resources or substantial lessening of competition in this state; 

    (4) the application is incomplete or any acquiring party 
 neglects, fails, or refuses to furnish all the information 
 required by the commissioner; 

    (5) a subsidiary of the acquiring bank holding company has 
 failed to meet the requirements set forth in the federal 
 Community Reinvestment Act; or 

    (6) the bank to be acquired has not been in existence for 
 at least five years.  For purposes of this paragraph, a bank 
 that has been chartered solely for the purpose of, and does not 
 open for business before, acquiring control of, or acquiring all 
 or substantially all of the assets of, an existing bank is 
 considered to have been in existence for the same period of time 
 as the bank to be acquired.  For determining the time period of 
 existence of a bank, the time period begins after the issuance 
 of a certificate of authorization and from the date the approved 
 bank actually opens for business. 

    Subd. 5.    Appeals.  The court of appeals of the state 
 of Minnesota will have exclusive original jurisdiction of any 
 judicial review of an order issued under this section.  The bank 
 holding company that is the subject of the order may seek 
 judicial review at any time within 90 days of the date of an 
 order lawfully issued pursuant to this section.  

    HIST: 1986 c 339 s 7; 1986 c 444; 1988 c 616 s 2; 1990 c 491 
 art 1 s 7; 1995 c 202 art 4 s 15-17 

  48.94 Repealed, 1996 c 414 art 1 s 44 

  48.95 Repealed, 1995 c 202 art 4 s 26 

     48.96 Supervision. 

    The department may enter into cooperative and reciprocal 
 agreements with federal or state regulatory authorities 
 responsible for supervision of out-of-state bank holding 
 companies for exchange or acceptance of reports of examination 
 and other records from the authorities in lieu of conducting its 
 own examinations.  The department may enter into joint actions 
 with federal or state regulatory authorities responsible for 
 supervision of out-of-state bank holding companies to carry out 
 its responsibilities and assure compliance with the laws of this 
 state. 

    HIST: 1986 c 339 s 10; 1995 c 202 art 4 s 18 

    48.97 Subdivision 1. Repealed, 1995 c 202 art 4 s 25 

    Subd. 2. Repealed, 1995 c 202 art 1 s 26; art 4 s 25 

    Subd. 3. Repealed, 1995 c 202 art 1 s 26; art 4 s 25 

    Subd. 4. Repealed, 1995 c 202 art 1 s 26; art 4 s 25 

  48.98 Repealed, 1995 c 202 art 4 s 26 

     48.99 Special acquisitions authorized. 

    Subdivision 1.    Application criteria for approval.  
 Pursuant to the present requirement of the United States Code, 
 title 12, section 1842(d) and notwithstanding any other 
 provision of state law, an out-of-state bank holding company, or 
 any subsidiary of a bank holding company, may acquire a bank 
 located in this state where the commissioner has determined that 
 a merger, consolidation, or purchase of assets and assumption of 
 liabilities is necessary and in the public interest to prevent 
 the probable failure of a bank or is made for the incorporation 
 of a new bank in the same locality coincidental with the closing 
 of an existing bank by the commissioner or federal authorities 
 and does not increase the number of banks in the community 
 affected.  The acquisition is subject to the prior written 
 approval of the commissioner of an application submitted under 
 this section and after the following considerations:  

    (1) the financial and managerial resources of the 
 applicant; 

    (2) the future prospects of the applicant and the state 
 bank or its subsidiary whose assets, interest in, or shares it 
 will acquire; 

    (3) the financial history of the applicant; 

    (4) whether the acquisition or holding may result in undue 
 concentration of resources or substantial lessening of 
 competition in this state, but any deposit concentration 
 limitations imposed on the acquisition by Public Law Number 
 103-328, title 1, section 101, (a)(2), may be waived by order of 
 the commissioner; 

    (5) the convenience and needs of the public of this state; 
 and 

    (6) whether the acquisition or holding will strengthen the 
 financial condition of the state bank.  

    Subd. 2.    Intrastate priority.  In determining the 
 priority of applications submitted to seek approval to acquire a 
 bank located in this state which meets the criteria in 
 subdivision 1, the commissioner shall give first consideration 
 to the approval of applications from applicants located in this 
 state, then to reciprocating state bank holding companies.  

    Subd. 3.    Supervision.  The department may enter into 
 cooperative and reciprocal agreements with federal or bank 
 regulatory authorities of other states for exchange or 
 acceptance of reports of examination and other records from the 
 authorities in lieu of conducting its own examinations of 
 acquiring reciprocating state bank holding companies.  The 
 department may enter into joint actions with federal or bank 
 regulatory authorities of other states to carry out its 
 responsibilities under Laws 1986, chapter 339 and assure 
 compliance with the laws of this state. 

    Subd. 4.    Reports.  A reciprocating state bank holding 
 company that directly or indirectly, through any subsidiary, 
 acquires a bank pursuant to Laws 1986, chapter 339 shall file 
 with the commissioner copies of all regular and periodic reports 
 which the bank holding company is required to file under section 
 13 or 15(d) of the Securities and Exchange Act of 1934, as 
 amended, but excluding any portions not available to the public, 
 and such other reports as the commissioner may require by rule.  

    HIST: 1986 c 339 s 13; 1987 c 349 art 1 s 22; 1995 c 202 art 4 
 s 19 

  48.991 Repealed, 1995 c 202 art 4 s 25 

     48.992 Exemption. 

    Subdivision 1.    Resolution.  The board of directors of 
 a bank or a bank holding company located in this state may adopt 
 a resolution before July 1, 1987, to exempt the bank or bank 
 holding company from section 48.93.  If the board of directors 
 adopts the resolution and files a certified copy of it as 
 required by subdivision 2, the bank or bank holding company may 
 not be acquired under section 48.93. 

    Subd. 2.    Filing.  If a resolution is adopted under 
 this section, the board of directors shall file a certified copy 
 of the resolution with the department in person or by certified 
 mail.  The board of directors may revoke the resolution by 
 notifying the department in writing of its decision to revoke 
 the resolution. 

    HIST: 1986 c 339 s 15; 1Sp1986 c 3 art 2 s 26 

     48.993 Reciprocal interstate branching. 

    With the prior approval of the commissioner, a bank doing 
 business in the state of Iowa, North Dakota, South Dakota, or 
 Wisconsin may establish a de novo detached facility in this 
 state not more than 30 miles from its principal office measured 
 in a straight line from the closest points of the closest 
 structures provided further that:  

    (a) There is in effect in the home state a statute, rule, 
 or ruling that permits Minnesota home state banks to establish 
 de novo branches in the state under conditions substantially 
 similar to those imposed by the laws of Minnesota as determined 
 by the commissioner.  

    (b) There is in effect a cooperative agreement between the 
 home state and host state banking regulator to facilitate their 
 respective regulation and supervision of the bank including 
 application and approval process, and the coordination of 
 examinations.  The agreement must at a minimum provide:  

    (1) common form and information requirements to be 
 completed by the applicant bank; 

    (2) common form and procedure required to publish the 
 application in the location of the branch in the host state; 

    (3) a fee for the application to the state of Minnesota, 
 department of commerce, for filing and approval as the host 
 state of the application of $500; 

    (4) the requirements and limitations on the location and 
 operations of an interstate branch must be the same as for host 
 state branches in sections 47.51 to 47.55.  Transfer of location 
 under section 47.56 is limited by this section; 

    (5) the branch is subject to the laws of the host state 
 relating to banking in resolution of conflicts of laws between 
 the home and host state; and 

    (6) the deposits of the bank must be insured by the Federal 
 Deposit Insurance Corporation. 

    (c) The home state banking regulator has granted any and 
 all necessary approvals.  

    (d) Beginning one year following establishment of a 
 detached facility in a host state, the home state bank's level 
 of lending in the host state relative to the deposits from the 
 host state shall not be less than half of the level of the 
 bank's loan to deposit ratio in its home state operations.  The 
 bank shall maintain sufficient records to permit an examination 
 to determine compliance with this requirement by the host state 
 banking regulator.  If the bank is found to be in noncompliance, 
 the home state or host state banking regulator may order that an 
 interstate branch of the bank in the host state be closed. 

    (e) For purposes of this section, "home state" has the 
 meaning given in section 48.92, and "host state" means a state 
 other than the home state. 

    HIST: 1995 c 202 art 4 s 20 

*   NOTE:  This section expires May 31, 1997.  Laws 1995, 
*chapter 202, article 4, section 24.

     48.995 Foreign corporation filing. 

    Subdivision 1.    Trust powers.  A bank that holds trust 
 powers may conduct the activity through a host state branch 
 provided it complies with section 303.25.  

    Subd. 2.    Filing with secretary of state.  
 Notwithstanding section 303.03, the branch in a host state must 
 operate under a certificate of authority filed with the 
 Minnesota secretary of state. 

    Subd. 3.    Definition.  For purposes of this section, 
 "host state" means a state other than the home state, as defined 
 in section 48.92. 

    HIST: 1995 c 202 art 4 s 21 

*   NOTE:  This section expires May 31, 1997.  Laws 1995, 
*chapter 202, article 4, section 24.