Legal Status: Legal
Citation:
Minn. Stat. § 47.60 et seq.
Loan Terms:
Maximum Loan Amount: $350
Loan Term: Max: 30 days
Maximum Finance Rate and Fees: $5.50: $0-$50; 10%+$5: $51-$100; 7% (min. $10) + $5: $101-$250; 6% (min. $17.50) + $5: $251-$350 (After default: 2.75% per month)
Finance Charge for 14-day $100 loan: $15
APR for 14-day $100 loan: 390%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: Not Specified
Rollovers Permitted: None (cannot repay with proceeds of another loan by same lender)
Cooling-off Period:
Repayment Plan:
Collection Limits:
Collection Fees: $30 NSF fee
Criminal Action:
Where to Complain, Get Information:
Regulator: Minnesota Department of Commerce
Address: Division of Financial Examinations, 85 7th Place East, Suite 500 St. Paul MN 55101
Phone: (651) 296-2135
Fax: (651) 296-8591
Applicability: To loan a short term, unsecured loan to be repaid in a single installment not to exceed $350. A consumer small loan lender is a financial institution which includes regulated lenders or a person registered with the commissioner and engaged in the business of making consumer small loans. Otherwise, Regulated Loan Act applies. Minn. Stat. Ann. § 47.59 (33% per year on loans up to $750).
Filing requirements: Must file with the commissioner as a consumer small loan lender. The filing must be on a form prescribed by the commissioner accompanied by a $150 fee. The form must contain information dealing with liquid assets of at least $50,000. Revocation of the filing and the right to engage in the business of making these loans is the same as in the case of a regulated lender under § 56.09.
Permitted charges: In lieu of the interest, finance charges, or fees, a consumer small loan lender may charge the following:
- $0-$50 – $5.50
- $50-$100 – 10% of loan proceeds and $5 administrative fee
- $100-$250 – 7% of loan proceeds with a minimum of $10, plus a $5 administrative fee.
- $250-$350 – 6% of the loan proceeds with a minimum of $17.50, plus a $5 administrative fee.
On a loan transaction in which cash is advanced in exchange for a personal check, a return check may be charged. After maturity, the contract rate can not exceed 2.75% per month of the remaining loan proceeds. After the maturity date, calculated at 1/30 of the monthly rate in the contract for each calendar day that the balance is outstanding. No insurance charges or other charges can be charged, collected, or imposed.
Prohibited acts: Insurance charges or other charges are not permitted. A loan made can not be repaid by the proceeds of another loan made by the same lender. The proceeds from a loan can not be applied to another loan from the same lender. A loan to a single borrower can not be split or divided and a borrower can not have more than one loan outstanding with the result of collecting a higher charge than permitted or in an aggregate amount of principal can not ever exceed $350.
Required disclosures: In addition to disclosures required by TILA, the lender must furnish a copy of the contract of loan to a person obligated on it upon that person’s request. The lender must prominently display a schedule of charges which must be approved by the commissioner. The schedule of charges must include a notice that says: “These loan charges are higher than otherwise permitted under Minnesota law. Minnesota permits these higher charges only because short-term loans might otherwise not be available to consumers. If you have another source of a loan, you may be able to benefit from a lower interest rate and other loan charges.” Upon repayment of the loan in full, lender shall mark it ”paid” or ”cancelled” within 20 days after repayment.
Loan terms: Term of loan cannot be for more than 30 days.
Civil / Criminal Penalties: A person obligated to a lender can file a written complaint with the commissioner. Upon receipt of the complaint, the commissioner may inspect the lender’s accounts and records. Revocation of a license will not affect existing lawful contract between the licensee and any borrower. Violation is also a gross misdemeanor.
Private right of action: If unlicensed, loan is void and debtor may recover all amounts paid if brought within one year. For intentional violations, consumer can recover $100 for each violation as long as no other remedy is available under state and federal law.
