The bill amends Minnesota Statutes regarding consumer loans, specifically addressing the application of interest rates and the authority of financial institutions. It clarifies that financial institutions may choose to operate under various specified sections of the law, but if they do so, they must adhere to the regulations of those sections. Additionally, the bill explicitly states that consumer loans made in Minnesota are subject to state-established interest rates, rejecting certain federal amendments that would preempt state laws. It also defines that a consumer loan is considered made in Minnesota if the borrower is a resident and completes the transaction while physically located in the state.

Furthermore, the bill modifies the finance charge provisions for loans, allowing financial institutions to charge a maximum annual percentage rate of 21.75% or a tiered rate based on the unpaid balance. It introduces a provision that permits out-of-state banks and credit unions to charge rates allowed by their home states if they exceed the 18% cap for credit card loans. The bill also includes a mechanism for adjusting dollar amounts related to finance charges based on changes in the implicit price deflator for the gross domestic product. The effective date for these changes is set for August 1, 2024, applying to loans executed on or after that date.

Statutes affected:
Introduction: 47.59
1st Engrossment: 47.59