The bill amends Minnesota Statutes regarding consumer loans, specifically addressing the authority of financial institutions to set interest rates and the applicability of federal amendments to state law. It inserts new provisions that clarify that financial institutions may choose to operate under specific sections of state law instead of the general provisions outlined in the bill. Additionally, it declares that Minnesota does not accept certain federal amendments that would preempt state interest rates for consumer loans, ensuring that loans made in Minnesota are governed by state-established rates. The bill also specifies 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 new 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 provision for the effective date, stating that the changes will take effect on August 1, 2024, and will apply to loans executed on or after that date.

Statutes affected:
Introduction: 47.59