1.1    .................... moves to amend H. F. No. 2305 as follows:
1.2Page 9, after line 5, insert:

1.3    "Sec. 2. Minnesota Statutes 2006, section 45.011, subdivision 1, is amended to read:
1.4    Subdivision 1. Scope. As used in chapters 45 to 83, 155A, 332, 332A, 345, and
1.5359, and sections 325D.30 to 325D.42, 326.83 to 326.991, and 386.61 to 386.78, unless
1.6the context indicates otherwise, the terms defined in this section have the meanings given
1.7them.
1.8EFFECTIVE DATE.This section is effective January 1, 2008."
1.9Page 9, after line 27, insert:

1.10    "Sec. 3. Minnesota Statutes 2006, section 46.04, subdivision 1, is amended to read:
1.11    Subdivision 1. General. The commissioner of commerce, referred to in chapters
1.1246 to 59A, and sections 332.12 to 332.29 chapter 332A, as the commissioner, is vested
1.13with all the powers, authority, and privileges which, prior to the enactment of Laws 1909,
1.14chapter 201, were conferred by law upon the public examiner, and shall take over all
1.15duties in relation to state banks, savings banks, trust companies, savings associations, and
1.16other financial institutions within the state which, prior to the enactment of chapter 201,
1.17were imposed upon the public examiner. The commissioner of commerce shall exercise
1.18a constant supervision, either personally or through the examiners herein provided for,
1.19over the books and affairs of all state banks, savings banks, trust companies, savings
1.20associations, credit unions, industrial loan and thrift companies, and other financial
1.21institutions doing business within this state; and shall, through examiners, examine each
1.22financial institution at least once every 24 calendar months. In satisfying this examination
1.23requirement, the commissioner may accept reports of examination prepared by a federal
1.24agency having comparable supervisory powers and examination procedures. With the
1.25exception of industrial loan and thrift companies which do not have deposit liabilities
1.26and licensed regulated lenders, it shall be the principal purpose of these examinations to
2.1inspect and verify the assets and liabilities of each and so far investigate the character
2.2and value of the assets of each institution as to determine with reasonable certainty that
2.3the values are correctly carried on its books. Assets and liabilities shall be verified in
2.4accordance with methods of procedure which the commissioner may determine to be
2.5adequate to carry out the intentions of this section. It shall be the further purpose of
2.6these examinations to assess the adequacy of capital protection and the capacity of the
2.7institution to meet usual and reasonably anticipated deposit withdrawals and other cash
2.8commitments without resorting to excessive borrowing or sale of assets at a significant
2.9loss, and to investigate each institution's compliance with applicable laws and rules. Based
2.10on the examination findings, the commissioner shall make a determination as to whether
2.11the institution is being operated in a safe and sound manner. None of the above provisions
2.12limits the commissioner in making additional examinations as deemed necessary or
2.13advisable. The commissioner shall investigate the methods of operation and conduct of
2.14these institutions and their systems of accounting, to ascertain whether these methods and
2.15systems are in accordance with law and sound banking principles. The commissioner may
2.16make requirements as to records as deemed necessary to facilitate the carrying out of the
2.17commissioner's duties and to properly protect the public interest. The commissioner may
2.18examine, or cause to be examined by these examiners, on oath, any officer, director,
2.19trustee, owner, agent, clerk, customer, or depositor of any financial institution touching
2.20the affairs and business thereof, and may issue, or cause to be issued by the examiners,
2.21subpoenas, and administer, or cause to be administered by the examiners, oaths. In
2.22case of any refusal to obey any subpoena issued under the commissioner's direction,
2.23the refusal may at once be reported to the district court of the district in which the bank
2.24or other financial institution is located, and this court shall enforce obedience to these
2.25subpoenas in the manner provided by law for enforcing obedience to subpoenas of the
2.26court. In all matters relating to official duties, the commissioner of commerce has the
2.27power possessed by courts of law to issue subpoenas and cause them to be served and
2.28enforced, and all officers, directors, trustees, and employees of state banks, savings banks,
2.29trust companies, savings associations, and other financial institutions within the state,
2.30and all persons having dealings with or knowledge of the affairs or methods of these
2.31institutions, shall afford reasonable facilities for these examinations, make returns and
2.32reports to the commissioner of commerce as the commissioner may require; attend and
2.33answer, under oath, the commissioner's lawful inquiries; produce and exhibit any books,
2.34accounts, documents, and property as the commissioner may desire to inspect, and in all
2.35things aid the commissioner in the performance of duties.
2.36EFFECTIVE DATE.This section is effective January 1, 2008.

3.1    Sec. 4. Minnesota Statutes 2006, section 46.05, is amended to read:
3.246.05 SUPERVISION OVER FINANCIAL INSTITUTIONS.
3.3    Every state bank, savings bank, trust company, savings association, debt
3.4management services provider, and other financial institutions shall be at all times under
3.5the supervision and subject to the control of the commissioner of commerce. If, and
3.6whenever in the performance of duties, the commissioner finds it necessary to make a
3.7special investigation of any financial institution under the commissioner's supervision,
3.8and other than a complete examination, the commissioner shall make a charge therefor to
3.9include only the necessary costs thereof. Such a fee shall be payable to the commissioner
3.10on the commissioner's making a request for payment.
3.11EFFECTIVE DATE.This section is effective January 1, 2008.

3.12    Sec. 5. Minnesota Statutes 2006, section 46.131, subdivision 2, is amended to read:
3.13    Subd. 2. Assessment authority. Each bank, trust company, savings bank, savings
3.14association, regulated lender, industrial loan and thrift company, credit union, motor
3.15vehicle sales finance company, debt prorating agency management services provider and
3.16insurance premium finance company organized under the laws of this state or required
3.17to be administered by the commissioner of commerce shall pay into the state treasury its
3.18proportionate share of the cost of maintaining the Department of Commerce.
3.19EFFECTIVE DATE.This section is effective January 1, 2008."
3.20Page 33, after line 25, insert:

3.21    "Sec. 41. Minnesota Statutes 2006, section 325E.311, subdivision 6, is amended to
3.22read:
3.23    Subd. 6. Telephone solicitation. "Telephone solicitation" means any voice
3.24communication over a telephone line for the purpose of encouraging the purchase or
3.25rental of, or investment in, property, goods, or services, whether the communication is
3.26made by a live operator, through the use of an automatic dialing-announcing device as
3.27defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation
3.28does not include communications:
3.29    (1) to any residential subscriber with that subscriber's prior express invitation or
3.30permission; or
3.31    (2) by or on behalf of any person or entity with whom a residential subscriber has a
3.32prior or current business or personal relationship.
3.33Telephone solicitation also does not include communications if the caller is identified by a
3.34caller identification service and the call is:
4.1    (i) by or on behalf of an organization that is identified as a nonprofit organization
4.2under state or federal law, unless the organization is a debt management services provider
4.3defined in section 332A.02;
4.4    (ii) by a person soliciting without the intent to complete, and who does not in
4.5fact complete, the sales presentation during the call, but who will complete the sales
4.6presentation at a later face-to-face meeting between the solicitor who makes the call
4.7and the prospective purchaser; or
4.8    (iii) by a political party as defined under section 200.02, subdivision 6.
4.9EFFECTIVE DATE.This section is effective January 1, 2008.

4.10    Sec. 42. Minnesota Statutes 2006, section 325N.01, is amended to read:
4.11325N.01 DEFINITIONS.
4.12    The definitions in paragraphs (a) to (h) apply to sections 325N.01 to 325N.09.
4.13    (a) "Foreclosure consultant" means any person who, directly or indirectly, makes
4.14any solicitation, representation, or offer to any owner to perform for compensation or
4.15who, for compensation, performs any service which the person in any manner represents
4.16will in any manner do any of the following:
4.17    (1) stop or postpone the foreclosure sale;
4.18    (2) obtain any forbearance from any beneficiary or mortgagee;
4.19    (3) assist the owner to exercise the right of reinstatement provided in section 580.30;
4.20    (4) obtain any extension of the period within which the owner may reinstate the
4.21owner's obligation;
4.22    (5) obtain any waiver of an acceleration clause contained in any promissory note or
4.23contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
4.24    (6) assist the owner in foreclosure or loan default to obtain a loan or advance
4.25of funds;
4.26    (7) avoid or ameliorate the impairment of the owner's credit resulting from the
4.27recording of a notice of default or the conduct of a foreclosure sale; or
4.28    (8) save the owner's residence from foreclosure.
4.29    (b) A foreclosure consultant does not include any of the following:
4.30    (1) a person licensed to practice law in this state when the person renders service
4.31in the course of his or her practice as an attorney-at-law;
4.32    (2) a person licensed as a debt prorater under sections 332.12 to 332.29 management
4.33services provider under chapter 332A, when the person is acting as a debt prorater
4.34management services provider as defined in these sections that chapter;
5.1    (3) a person licensed as a real estate broker or salesperson under chapter 82 when the
5.2person engages in acts whose performance requires licensure under that chapter unless the
5.3person is engaged in offering services designed to, or purportedly designed to, enable the
5.4owner to retain possession of the residence in foreclosure;
5.5    (4) a person licensed as an accountant under chapter 326A when the person is acting
5.6in any capacity for which the person is licensed under those provisions;
5.7    (5) a person or the person's authorized agent acting under the express authority
5.8or written approval of the Department of Housing and Urban Development or other
5.9department or agency of the United States or this state to provide services;
5.10    (6) a person who holds or is owed an obligation secured by a lien on any residence
5.11in foreclosure when the person performs services in connection with this obligation or lien
5.12if the obligation or lien did not arise as the result of or as part of a proposed foreclosure
5.13reconveyance;
5.14    (7) any person or entity doing business under any law of this state, or of the United
5.15States relating to banks, trust companies, savings and loan associations, industrial loan and
5.16thrift companies, regulated lenders, credit unions, insurance companies, or a mortgagee
5.17which is a United States Department of Housing and Urban Development approved
5.18mortgagee and any subsidiary or affiliate of these persons or entities, and any agent or
5.19employee of these persons or entities while engaged in the business of these persons
5.20or entities;
5.21    (8) a person licensed as a residential mortgage originator or servicer pursuant to
5.22chapter 58, when acting under the authority of that license or a foreclosure purchaser as
5.23defined in section 325N.10;
5.24    (9) a nonprofit agency or organization that offers counseling or advice to an owner
5.25of a home in foreclosure or loan default if they do not contract for services with for-profit
5.26lenders or foreclosure purchasers; and
5.27    (10) a judgment creditor of the owner, to the extent that the judgment creditor's claim
5.28accrued prior to the personal service of the foreclosure notice required by section 580.03,
5.29but excluding a person who purchased the claim after such personal service.
5.30    (c) "Foreclosure reconveyance" means a transaction involving:
5.31    (1) the transfer of title to real property by a foreclosed homeowner during a
5.32foreclosure proceeding, either by transfer of interest from the foreclosed homeowner or
5.33by creation of a mortgage or other lien or encumbrance during the foreclosure process
5.34that allows the acquirer to obtain title to the property by redeeming the property as
5.35a junior lienholder; and
6.1    (2) the subsequent conveyance, or promise of a subsequent conveyance, of an interest
6.2back to the foreclosed homeowner by the acquirer or a person acting in participation with
6.3the acquirer that allows the foreclosed homeowner to possess the real property following
6.4the completion of the foreclosure proceeding, which interest includes, but is not limited to,
6.5an interest in a contract for deed, purchase agreement, option to purchase, or lease.
6.6    (d) "Person" means any individual, partnership, corporation, limited liability
6.7company, association, or other group, however organized.
6.8    (e) "Service" means and includes, but is not limited to, any of the following:
6.9    (1) debt, budget, or financial counseling of any type;
6.10    (2) receiving money for the purpose of distributing it to creditors in payment or
6.11partial payment of any obligation secured by a lien on a residence in foreclosure;
6.12    (3) contacting creditors on behalf of an owner of a residence in foreclosure;
6.13    (4) arranging or attempting to arrange for an extension of the period within which
6.14the owner of a residence in foreclosure may cure the owner's default and reinstate his or
6.15her obligation pursuant to section 580.30;
6.16    (5) arranging or attempting to arrange for any delay or postponement of the time of
6.17sale of the residence in foreclosure;
6.18    (6) advising the filing of any document or assisting in any manner in the preparation
6.19of any document for filing with any bankruptcy court; or
6.20    (7) giving any advice, explanation, or instruction to an owner of a residence in
6.21foreclosure, which in any manner relates to the cure of a default in or the reinstatement
6.22of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of
6.23that obligation, or the postponement or avoidance of a sale of a residence in foreclosure,
6.24pursuant to a power of sale contained in any mortgage.
6.25    (f) "Residence in foreclosure" means residential real property consisting of one to
6.26four family dwelling units, one of which the owner occupies as his or her principal place
6.27of residence, and against which there is an outstanding notice of pendency of foreclosure,
6.28recorded pursuant to section 580.032, or against which a summons and complaint has
6.29been served under chapter 581.
6.30    (g) "Owner" means the record owner of the residential real property in foreclosure at
6.31the time the notice of pendency was recorded, or the summons and complaint served.
6.32    (h) "Contract" means any agreement, or any term in any agreement, between
6.33a foreclosure consultant and an owner for the rendition of any service as defined in
6.34paragraph (e).
6.35EFFECTIVE DATE.This section is effective January 1, 2008.

7.1    Sec. 43. [332A.02] DEFINITIONS.
7.2    Subdivision 1. Scope. Unless a different meaning is clearly indicated by the context,
7.3for the purposes of this chapter the terms defined in this section have the meanings given
7.4them.
7.5    Subd. 2. Accreditation. "Accreditation" means certification as an accredited
7.6credit counseling provider by the International Standards Organization or the Council on
7.7Accreditation.
7.8    Subd. 3. Attorney general. "Attorney general" means the attorney general of the
7.9state of Minnesota.
7.10    Subd. 4. Commissioner. "Commissioner" means commissioner of commerce.
7.11    Subd. 5. Controlling or affiliated party. "Controlling or affiliated party" means
7.12any person directly or indirectly controlling, controlled by, or under common control
7.13with another person.
7.14    Subd. 6. Debt management services agreement. "Debt management services
7.15agreement" means the written contract between the debt management services provider
7.16and the debtor.
7.17    Subd. 7. Debt management services plan. "Debt management services plan"
7.18means the debtor's individualized package of debt management services set forth in the
7.19debt management services agreement.
7.20    Subd. 8. Debt management services provider. "Debt management services
7.21provider" means any person offering or providing debt management services to a debtor
7.22domiciled in this state, regardless of whether or not a fee is charged for the services and
7.23regardless of whether the person maintains a physical presence in the state. This term does
7.24not include services performed by the following when engaged in the regular course of
7.25their respective businesses and professions:
7.26    (1) attorneys at law, escrow agents, accountants, broker-dealers in securities;
7.27    (2) state or national banks, trust companies, savings associations, title insurance
7.28companies, insurance companies, and all other lending institutions duly authorized to
7.29transact business in Minnesota, provided no fee is charged for the service;
7.30    (3) persons who, as employees on a regular salary or wage of an employer not
7.31engaged in the business of debt management, perform credit services for their employer;
7.32    (4) public officers acting in their official capacities and persons acting as a debt
7.33management services provider pursuant to court order;
8.1    (5) any person while performing services incidental to the dissolution, winding up,
8.2or liquidation of a partnership, corporation, or other business enterprise;
8.3    (6) the state, its political subdivisions, public agencies, and their employees;
8.4    (7) credit unions and collection agencies, provided no fee is charged for the service;
8.5    (8) "qualified organizations" designated as representative payees for purposes of the
8.6Social Security and Supplemental Security Income Representative Payee System and the
8.7federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508; and
8.8    (9) accelerated mortgage payment providers. "Accelerated mortgage payment
8.9providers" are persons who, after satisfying the requirements of sections 332.30 to
8.10332.303, receive funds to make mortgage payments to a lender or lenders, on behalf
8.11of mortgagors, in order to exceed regularly scheduled minimum payment obligations
8.12under the terms of the indebtedness. The term does not include: (i) persons or entities
8.13described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and
8.14thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to
8.15make loans under section 47.20, subdivision 1. For purposes of this clause and sections
8.16332.30 to 332.303, "lender" means the original lender or that lender's assignee, whichever
8.17is the current mortgage holder.
8.18    Subd. 9. Debt management services. "Debt management services" means the
8.19provision of any one or more of the following:
8.20    (1) managing the financial affairs of an individual by distributing income or money
8.21to the individual's creditors;
8.22    (2) receiving funds for the purpose of distributing the funds among creditors in
8.23payment or partial payment of obligations of a debtor; or
8.24    (3) settling, adjusting, prorating, pooling, or liquidating the indebtedness of a debtor.
8.25Any person so engaged or holding out as so engaged is deemed to be engaged in the
8.26provision of debt management services regardless of whether or not a fee is charged for
8.27such services.
8.28    Subd. 10. Debtor. "Debtor" means the person for whom the debt prorating service
8.29is performed.
8.30    Subd. 11. Person. "Person" means any individual, firm, partnership, association,
8.31or corporation.
8.32    Subd. 12. Registrant. "Registrant" means any person registered by the
8.33commissioner pursuant to this chapter and, where used in conjunction with an act or
8.34omission required or prohibited by this chapter, shall mean any person performing debt
8.35management services.
9.1EFFECTIVE DATE.This section is effective January 1, 2008.

9.2    Sec. 44. [332A.03] REQUIREMENT OF REGISTRATION.
9.3    On or after August 1, 2007, it is unlawful for any person, whether or not located in
9.4this state, to operate as a debt management service provider or provide debt management
9.5services, including but not limited to offering, advertising, or executing or causing to
9.6be executed any debt management services or debt management services agreement,
9.7except as authorized by law without first becoming registered as provided in this
9.8chapter. A person who possesses a valid license as a debt prorater that was issued by the
9.9commissioner before August 1, 2007, is deemed to be registered as a debt management
9.10services provider until the date the debt prorater license expires, at which time the licensee
9.11must obtain a renewal as a debt management service provider in compliance with this
9.12chapter. Debt proraters who were not required to be licensed as debt proraters before
9.13August 1, 2007, may continue to provide debt management services without complying
9.14with this chapter to those debtors who entered into a contract to participate in a debt
9.15management plan before August 1, 2007, except that the debt prorater must comply with
9.16section 332A.13, subdivision 2.
9.17EFFECTIVE DATE.This section is effective January 1, 2008.

9.18    Sec. 45. [332A.04] REGISTRATION.
9.19    Subdivision 1. Form. Application for registration to operate as a debt management
9.20services provider in this state must be made in writing to the commissioner, under oath, in
9.21the form prescribed by the commissioner, and must contain:
9.22    (1) the full name of each principal of the entity applying;
9.23    (2) the address, which must not be a post office box, and the telephone number and,
9.24if applicable, e-mail address, of the applicant;
9.25    (3) identification of the trust account required under section 332A.13;
9.26    (4) consent to the jurisdiction of the courts of this state;
9.27    (5) the name and address of the registered agent authorized to accept service of
9.28process on behalf of the applicant or appointment of the commissioner as the applicant's
9.29agent for purposes of accepting service of process;
9.30    (6) disclosure of:
9.31    (i) whether any controlling or affiliated party has ever been convicted of a crime
9.32or found civilly liable for an offense involving moral turpitude, including forgery,
9.33embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to
9.34defraud, or any other similar offense or violation, or any violation of a federal or state law
9.35or regulation in connection with activities relating to the rendition of debt management
10.1services or involving any consumer fraud, false advertising, deceptive trade practices, or
10.2similar consumer protection law;
10.3    (ii) any judgments, private or public litigation, tax liens, written complaints,
10.4administrative actions, or investigations by any government agency against the applicant
10.5or any officer, director, manager, or shareholder owning more than five percent interest
10.6in the applicant, unresolved or otherwise, filed or otherwise commenced within the
10.7preceding ten years;
10.8    (iii) whether the applicant or any person employed by the applicant has had a record
10.9of having defaulted in the payment of money collected for others, including the discharge
10.10of debts through bankruptcy proceedings; and
10.11    (iv) whether the applicant's license or registration to provide debt management
10.12services in any other state has ever been revoked or suspended;
10.13    (7) a copy of the applicant's standard debt management services agreement that the
10.14applicant intends to execute with debtors;
10.15    (8) proof of accreditation of:
10.16    (i) the debt management services provider; and
10.17    (ii) all individuals employed by, under contract with, or otherwise agents of the
10.18provider who offer to provide or provide debt management services; and
10.19    (9) any other information and material as the commissioner may require.
10.20    Subd. 2. Term and scope of registration. The registration must remain in full
10.21force and effect for one calendar year or until it is surrendered by the licensee or revoked
10.22or suspended by the commissioner. The registration is limited solely to the business
10.23of providing debt management services.
10.24    Subd. 3. Fees. The registration application must be accompanied by payment of
10.25$1,000 as a registration fee.
10.26    Subd. 4. Bond. The registration application must be accompanied by payment of
10.27the premium for a surety bond in which the applicant shall be the obligor, in a sum to be
10.28determined by the commissioner but not less than $5,000, and in which an insurance
10.29company, which is duly authorized by the state of Minnesota to transact the business of
10.30fidelity and surety insurance, shall be a surety. However, the commissioner may accept
10.31a deposit in cash, or securities that may legally be purchased by savings banks or for
10.32trust funds of an aggregate market value equal to the bond requirement, in lieu of the
10.33surety bond. The cash or securities must be deposited with the commissioner of finance.
10.34The commissioner may also require a fidelity bond in an appropriate amount covering
10.35employees of any applicant. Each branch office or additional place of business of an
11.1applicant must be bonded as provided in this subdivision. In determining the bond amount
11.2necessary for the maintenance of any office, whether it is a surety bond, fidelity bond, or
11.3both, the commissioner shall consider the financial responsibility, experience, character,
11.4and general fitness of the debt management services provider and its operators and owners;
11.5the volume of business handled or proposed to be handled; the location of the office
11.6and the geographical area served or proposed to be served; and other information the
11.7commissioner may deem pertinent based upon past performance, previous examinations,
11.8annual reports, and manner of business conducted in other states.
11.9    Subd. 5. Condition of bond. The bond must run to the state of Minnesota for the
11.10use of the state and of any person or persons who may have a cause of action against the
11.11obligor arising out of the obligor's activities as a debt management services provider to
11.12a debtor domiciled in this state. The bond must be conditioned that the obligor will not
11.13commit any fraudulent act and will faithfully conform to and abide by the provisions of
11.14this chapter and of all rules lawfully made by the commissioner under this chapter and
11.15pay to the state and to any such person or persons any and all money that may become
11.16due or owing to the state or to such person or persons from the obligor under and by
11.17virtue of this chapter.
11.18    Subd. 6. Right of action on bond. If the registrant has failed to account to a debtor
11.19or distribute to the debtor's creditors the amounts required by this chapter and the debt
11.20management services agreement between the debtor and registrant, the debtor or the
11.21debtor's legal representative or receiver, the commissioner, or the attorney general, shall
11.22have, in addition to all other legal remedies, a right of action in the name of the debtor
11.23on the bond or the security given under this section, for loss suffered by the debtor, not
11.24exceeding the face amount of the bond or security, and without the necessity of joining
11.25the registrant in the suit or action.
11.26    Subd. 7. Registrant list. The commissioner must maintain a list of registered debt
11.27management services providers. The list must be made available to the public in written
11.28form upon request and on the Department of Commerce Web site.
11.29EFFECTIVE DATE.This section is effective January 1, 2008.

11.30    Sec. 46. [332A.05] NONASSIGNMENT OF REGISTRATION.
11.31    A registration must not be transferred or assigned without the consent of the
11.32commissioner.
11.33EFFECTIVE DATE.This section is effective January 1, 2008.

11.34    Sec. 47. [332A.06] RENEWAL OF REGISTRATION.
12.1    Each year, each registrant under the provisions of this chapter must, not more than
12.260 nor less than 30 days before its registration is to expire, apply to the commissioner for
12.3renewal of its registration on a form prescribed by the commissioner. The application must
12.4be signed by the registrant under penalty of perjury, contain current information on all
12.5matters required in the original application, and be accompanied by a payment of $250.
12.6The registrant must maintain a continuous surety bond that satisfies the requirements of
12.7section 332A.04, subdivision 4, provided that the commissioner may require a different
12.8amount that is at least equal to the largest amount that has accrued in the registrant's trust
12.9account during the previous year. The renewal is effective for one year.
12.10EFFECTIVE DATE.This section is effective January 1, 2008.

12.11    Sec. 48. [332A.07] OTHER DUTIES OF REGISTRANT.
12.12    Subdivision 1. Requirement to update information. A registrant must update any
12.13information required by this chapter provided in its original or renewal application not
12.14later than 90 days after the date the events precipitating the update occurred.
12.15    Subd. 2. Inspection of debtor of registration. Each registrant must maintain a
12.16copy of its registration in its files. The registrant must allow a debtor, upon request, to
12.17inspect the registration.
12.18EFFECTIVE DATE.This section is effective January 1, 2008.

12.19    Sec. 49. [332A.08] DENIAL OF REGISTRATION.
12.20    The commissioner, with notice to the applicant by certified mail sent to the address
12.21listed on the application, may deny an application for a registration upon finding that
12.22the applicant:
12.23    (1) has submitted an application required under section 332A.04 that contains
12.24incorrect, misleading, incomplete, or materially untrue information. An application is
12.25incomplete if it does not include all the information required in section 332A.04;
12.26    (2) has failed to pay any fee or pay or maintain any bond required by this chapter,
12.27or failed to comply with any order, decision, or finding of the commissioner made under
12.28and within the authority of this chapter;
12.29    (3) has violated any provision of this chapter or any rule or direction lawfully made
12.30by the commissioner under and within the authority of this chapter;
12.31    (4) or any controlling or affiliated party has ever been convicted of a crime or found
12.32civilly liable for an offense involving moral turpitude, including forgery, embezzlement,
12.33obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any
12.34other similar offense or violation, or any violation of a federal or state law or regulation
13.1in connection with activities relating to the rendition of debt management services or
13.2any consumer fraud, false advertising, deceptive trade practices, or similar consumer
13.3protection law;
13.4    (5) has had a registration or license previously revoked or suspended in this state or
13.5any other state or the applicant or licensee has been permanently or temporarily enjoined
13.6by any court of competent jurisdiction from engaging in or continuing any conduct or
13.7practice involving any aspect of the debt management services provider business; or
13.8any controlling or affiliated party has been an officer, director, manager, or shareholder
13.9owning more than a ten percent interest in a debt management services provider whose
13.10registration has previously been revoked or suspended in this state or any other state, or
13.11who has been permanently or temporarily enjoined by any court of competent jurisdiction
13.12from engaging in or continuing any conduct or practice involving any aspect of the debt
13.13management services provider business;
13.14    (6) has made any false statement or representation to the commissioner;
13.15    (7) is insolvent;
13.16    (8) refuses to fully comply with an investigation or examination of the debt
13.17management services provider by the commissioner;
13.18    (9) has improperly withheld, misappropriated, or converted any money or properties
13.19received in the course of doing business;
13.20    (10) has failed to have a trust account with an actual cash balance equal to or greater
13.21than the sum of the escrow balances of each debtor's account;
13.22    (11) has defaulted in making payments to creditors on behalf of debtors as required
13.23by agreements between the provider and debtor; or
13.24    (12) has used fraudulent, coercive, or dishonest practices, or demonstrated
13.25incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere.
13.26EFFECTIVE DATE.This section is effective January 1, 2008.

13.27    Sec. 50. [332A.09] SUSPENDING, REVOKING, OR REFUSING TO RENEW
13.28REGISTRATION.
13.29    Subdivision 1. Procedure. The commissioner may revoke, suspend, or refuse
13.30to renew any registration issued under this chapter, or may levy a civil penalty under
13.31section 45.027, or any combination of actions, if the debt management services provider
13.32or any controlling or affiliated person has committed any act or omission for which the
13.33commissioner could have refused to issue an initial registration or renew an existing
13.34registration. Revocation of or refusal to renew a registration must be upon notice and
13.35hearing as prescribed in the Administrative Procedure Act, sections 14.57 to 14.69. The
14.1notice must set a time for hearing before the commissioner not less than 20 nor more than
14.230 days after service of the notice, provided the registrant may waive the 20-day minimum.
14.3The commissioner may, in the notice, suspend the registration for a period not to exceed 60
14.4days. Unless the notice states that the registration is suspended, pending the determination
14.5of the main issue, the registrant may continue to transact business until the final decision of
14.6the commissioner. If the registration is suspended, the commissioner shall hold a hearing
14.7and render a final determination within ten days of a request by the registrant. If the
14.8commissioner fails to do so, the suspension shall terminate and be of no force or effect.
14.9    Subd. 2. Notification of interested persons. After the notice and hearing required
14.10in subdivision 1, upon issuing an order suspending or revoking a registration or refusing to
14.11renew a registration, the commissioner may notify all individuals who have contracts with
14.12the affected registrant and all creditors who have agreed to a debt management services
14.13plan that the registration has been revoked and that the order is subject to appeal.
14.14    Subd. 3. Receiver for funds of sanctioned registrant. When an order is issued
14.15revoking or refusing to renew a registration, the commissioner may apply for, and the
14.16district court must appoint, a receiver to temporarily or permanently receive the assets of
14.17the registrant pending a final determination of the validity of the order.
14.18EFFECTIVE DATE.This section is effective January 1, 2008.

14.19    Sec. 51. [332A.10] WRITTEN DEBT MANAGEMENT SERVICES
14.20AGREEMENT.
14.21    Subdivision 1. Written agreement required. A debt management services provider
14.22may not perform any debt management services or receive any money related to a debt
14.23management plan until the provider has obtained a debt management services agreement
14.24that contains all terms of the agreement between the debt management services provider
14.25and the debtor. A debt management services agreement must be in writing, dated, and
14.26signed by the debt management services provider and the debtor. The registrant must
14.27furnish the debtor with a copy of the signed contract upon execution.
14.28    Subd. 2. Actions prior to written agreement. No person may provide debt
14.29management services for a debtor unless the person first has:
14.30    (1) provided the debtor individualized counseling and educational information
14.31that, at a minimum, addresses managing household finances, managing credit and debt,
14.32budgeting, and personal savings strategies;
14.33    (2) prepared in writing and provided to the debtor, in a form that the debtor may
14.34keep, an individualized financial analysis and a proposed debt management plan listing the
14.35debtor's known debts with specific recommendations regarding actions the debtor should
15.1take to reduce or eliminate the amount of the debts, including written disclosure that
15.2debt management services are not suitable for all debtors and that there are other ways,
15.3including bankruptcy, to deal with indebtedness;
15.4    (3) made a determination supported by an individualized financial analysis that the
15.5debtor can reasonably meet the requirements of the proposed debt management plan
15.6and that there is a net tangible benefit to the debtor of entering into the proposed debt
15.7management plan; and
15.8    (4) prepared, in a form the debtor may keep, a written list identifying all known
15.9creditors of the debtor that the provider reasonably expects to participate in the plan
15.10and the creditors, including secured creditors, that the provider reasonably expects not
15.11to participate.
15.12    Subd. 3. Required terms. (a) Each debt management services agreement must
15.13contain the following terms, which must be disclosed prominently and clearly in bold print
15.14on the front page of the agreement, segregated by bold lines from all other information on
15.15the page:
15.16    (1) the fee amount to be paid by the debtor and whether the initial fee amount is
15.17refundable or nonrefundable;
15.18    (2) the monthly fee amount or percentage to be paid by the debtor; and
15.19    (3) the total amount of fees reasonably anticipated to be paid by the debtor over
15.20the term of the agreement.
15.21    (b) Each debt management services agreement must also contain the following:
15.22    (1) a disclosure that if the amount of debt owed is increased by interest, late fees,
15.23over the limit fees, and other amounts imposed by the creditors, the length of the debt
15.24management services agreement will be extended and remain in force and that the total
15.25dollar charges agreed upon may increase at the rate agreed upon in the original contract
15.26agreement;
15.27    (2) a prominent statement describing the terms upon which the debtor may cancel
15.28the contract as set forth in section 332A.11;
15.29    (3) a detailed description of all services to be performed by the debt management
15.30services provider for the debtor;
15.31    (4) the debt management service provider's refund policy; and
15.32    (5) the debt management service provider's principal business address and the name
15.33and address of its agent in this state authorized to receive service of process.
15.34    Subd. 4. Prohibited terms. The following terms shall not be included in the debt
15.35management services agreement:
15.36    (1) a hold harmless clause;
16.1    (2) a confession of judgment, or a power of attorney to confess judgment against the
16.2debtor or appear as the debtor in any judicial proceeding;
16.3    (3) a waiver of the right to a jury trial, if applicable, in any action brought by
16.4or against a debtor;
16.5    (4) an assignment of or an order for payment of wages or other compensation for
16.6services;
16.7    (5) a provision in which the debtor agrees not to assert any claim or defense arising
16.8out of the debt management services agreement;
16.9    (6) a waiver of any provision of this chapter or a release of any obligation required
16.10to be performed on the part of the debt management services provider; or
16.11    (7) a mandatory arbitration clause.
16.12    Subd. 5. New debt management services agreements; modification of existing
16.13agreements. (a) Separate and additional debt management services agreements that
16.14comply with this chapter may be entered into by the debt management services provider
16.15and the debtor provided that no additional initial fee may be charged by the debt
16.16management services provider.
16.17    (b) Any modification of an existing debt management services agreement, including
16.18any increase in the number or amount of debts included in the debt management service,
16.19must be in writing and signed by both parties. No fees, charges, or other consideration
16.20may be demanded from the debtor for the modification, other than an increase in the
16.21amount of the monthly maintenance fee established in the original debt management
16.22services agreement.
16.23EFFECTIVE DATE.This section is effective January 1, 2008.

16.24    Sec. 52. [332A.11] RIGHT TO CANCEL.
16.25    Subdivision 1. Debtor's right to cancel. A debtor has the right to cancel the debt
16.26management services agreement without cause at any time upon ten days' written notice to
16.27the debt management service provider. In the event of cancellation, the debt management
16.28services provider must, within ten days of the cancellation, notify the debtor's creditors of
16.29the cancellation and provide a refund of all unexpended funds paid by or for the debtor
16.30to the debt management service provider.
16.31    Subd. 2. Notice of debtor's right to cancel. A debt management services
16.32agreement must contain, on its face, in an easily readable typeface immediately adjacent
16.33to the space for signature by the debtor, the following notice: "Right To Cancel: You have
16.34the right to cancel this contract at any time on ten days' written notice."
17.1    Subd. 3. Automatic termination. Upon the payment of all listed debts and
17.2fees, the debt management services agreement must automatically terminate, and all
17.3unexpended funds paid by or for the debtor to the debt management service provider
17.4must be immediately returned to the debtor.
17.5    Subd. 4. Debt management services provider's right to cancel. A debt
17.6management services provider may cancel a debt management services agreement
17.7with good cause upon 30 days' written notice to the debtor. Within ten days after the
17.8cancellation, the debt management services provider must: (1) notify the debtor's creditors
17.9of the cancellation; and (2) return to the debtor all unexpended funds paid by or for the
17.10debtor.
17.11EFFECTIVE DATE.This section is effective January 1, 2008.

17.12    Sec. 53. [332A.12] BOOKS, RECORDS, AND INFORMATION.
17.13    Subdivision 1. Records retention. Every registrant must keep, and use in the
17.14registrant's business, such books, accounts, and records, including electronic records, as
17.15will enable the commissioner to determine whether the registrant is complying with this
17.16chapter and of the rules, orders, and directives adopted by the commissioner under this
17.17chapter. Every registrant must preserve such books, accounts, and records for at least six
17.18years after making the final entry on any transaction recorded therein. Examinations of
17.19the books, records, and method of operations conducted under the supervision of the
17.20commissioner shall be done at the cost of the registrant. The cost must be assessed as
17.21determined under section 46.131.
17.22    Subd. 2. Statements to debtors. Each registrant must maintain and must make
17.23available records and accounts that will enable each debtor to ascertain the amounts
17.24paid to the creditors of the debtor. A statement showing amounts received from the
17.25debtor, disbursements to each creditor, amounts which any creditor has agreed to accept
17.26as payment in full for any debt owed the creditor by the debtor, charges deducted by
17.27the registrant, and such other information as the commissioner may prescribe, must be
17.28furnished by the registrant to the debtor at least monthly and, in addition, upon any
17.29cancellation or termination of the contract. In addition to the statements required by this
17.30subdivision, each debtor must have reasonable access, without cost, by electronic or other
17.31means, to information in the registrant's files applicable to the debtor. These statements,
17.32records, and accounts must otherwise remain confidential except for duly authorized state
17.33and government officials, the commissioner, the attorney general, the debtor, and the
17.34debtor's representative and designees. Each registrant must prepare and retain in the file of
18.1each debtor a written analysis of the debtor's income and expenses to substantiate that the
18.2plan of payment is feasible and practicable.
18.3EFFECTIVE DATE.This section is effective January 1, 2008.

18.4    Sec. 54. [332A.13] FEES, PAYMENTS, AND CONSENT OF CREDITORS.
18.5    Subdivision 1. Origination fee; credit background report cost. The registrant
18.6may charge a nonrefundable origination fee of not more than $50, which may be retained
18.7by the registrant from the initial amount paid by the debtor to the registrant.
18.8    Subd. 2. Monthly maintenance fee. The registrant may charge a periodic fee for
18.9account maintenance or other purposes, but only if the fee is reasonable for the services
18.10provided and does exceed the lesser of 15 percent of the monthly payment amount or $75.
18.11    Subd. 3. Additional fees unauthorized. A registrant may not impose any fee or
18.12other charge or receive any funds or other payment other than the initial fee or monthly
18.13maintenance fee authorized by this section.
18.14    Subd. 4. Amount of periodic payments retained. The registrant may retain as
18.15payment for the fees authorized by this section no more than 15 percent of any periodic
18.16payment made to the registrant by the debtor. The remaining 85 percent must be disbursed
18.17to listed creditors under and in accordance with the debt management services agreement.
18.18No fees or charges may be received or retained by the registrant for any handling of
18.19recurring payments. Recurring payments include current rent, mortgage, utility, telephone,
18.20maintenance as defined in section 518.27, child support, insurance premiums, and such
18.21other payments as the commissioner may by rule prescribe.
18.22    Subd. 5. Advance payments. No fees or charges may be received or retained for
18.23any payments by the debtor made more than the following number of days in advance
18.24of the date specified in the debt management services agreement on which they are due:
18.25(1) 42 days in the case of contracts requiring monthly payments; (2) 15 days in the case
18.26of agreements requiring biweekly payments; or (3) seven days in the case of agreements
18.27requiring weekly payments. For those agreements which do not require payments in
18.28specified amounts, a payment is deemed an advance payment to the extent it exceeds
18.29twice the average regular payment previously made by the debtor under that contract. This
18.30subdivision does not apply when the debtor intends to use the advance payments to satisfy
18.31future payment of obligations due within 30 days under the contract. This subdivision
18.32supersedes any inconsistent provision of this chapter.
18.33    Subd. 6. Consent of creditors. A registrant must actively seek to obtain the consent
18.34of all creditors to the debt management services plan set forth in the debt management
19.1services agreement. Consent by a creditor may be express and in writing, or may be
19.2evidenced by acceptance of a payment made under the debt management services plan
19.3set forth in the contract. The registrant must notify the debtor within ten days after any
19.4failure to obtain the required consent and of the debtor's right to cancel without penalty.
19.5The notice must be in a form as the commissioner shall prescribe. Nothing contained in
19.6this section is deemed to require the return of any origination fee and any fees earned by
19.7the registrant prior to cancellation or default.
19.8    Subd. 7. Withdrawal of creditor. Whenever a creditor withdraws from a debt
19.9management services plan, or refuses to participate in a debt management services plan,
19.10the registrant must promptly notify the debtor of the withdrawal or refusal. In no case
19.11may this notice be provided more than 15 days after the debt management services plan
19.12learns of the creditor's decision to withdraw from or refuse to participate in a plan. This
19.13notice must include the identity of the creditor withdrawing from the plan, the amount of
19.14the monthly payment to that creditor, and the right of the debtor to cancel the agreement
19.15under section 332A.11.
19.16    Subd. 8. Payments held in trust. The registrant must maintain a separate trust
19.17account and deposit in the account all payments received from the moment that they are
19.18received, except that the registrant may commingle the payment with the registrant's
19.19own property or funds, but only to the extent necessary to ensure the maintenance of a
19.20minimum balance if the financial institution at which the trust account is held requires
19.21a minimum balance to avoid the assessment of fees or penalties for failure to maintain
19.22a minimum balance. All disbursements, whether to the debtor or to the creditors of the
19.23debtor, or to the registrant, must be made from such account.
19.24    Subd. 9. Timely payment of creditors. The registrant must disburse any funds
19.25paid by or on behalf of a debtor to creditors of the consumer within 42 days after receipt
19.26of the funds, or earlier if necessary to comply with the due date in the contract between
19.27the debtor and the creditor, unless the reasonable payment of one or more of the debtor's
19.28obligations requires that the funds be held for a longer period so as to accumulate a sum
19.29certain, or where the debtor's payment is returned for insufficient funds or other reason
19.30that makes the withholding of such payments in the net interest of the debtor.
19.31EFFECTIVE DATE.This section is effective January 1, 2008.

19.32    Sec. 55. [332A.14] PROHIBITIONS.
19.33    A registrant shall not:
19.34    (1) purchase from a creditor any obligation of a debtor;
20.1    (2) use, threaten to use, seek to have used, or seek to have threatened the use of any
20.2legal process, including but not limited to garnishment and repossession of personal
20.3property, against any debtor while the debt management services agreement between the
20.4registrant and the debtor remains executory;
20.5    (3) advise a debtor to stop paying a creditor until a debt management services plan is
20.6in place;
20.7    (4) require as a condition of performing debt management services the purchase of
20.8any services, stock, insurance, commodity, or other property or any interest therein either
20.9by the debtor or the registrant;
20.10    (5) compromise any debts unless the prior written approval of the debtor has been
20.11obtained to such compromise and unless such compromise inures solely to the benefit
20.12of the debtor;
20.13    (6) receive from any debtor as security or in payment of any fee a promissory note
20.14or other promise to pay or any mortgage or other security, whether as to real or personal
20.15property;
20.16    (7) lend money or provide credit to any debtor if any interest or fee is charged,
20.17or directly or indirectly collect any fee for referring, advising, procuring, arranging, or
20.18assisting a consumer in obtaining any extension of credit or other debtor service from a
20.19lender or service provider;
20.20    (8) structure a debt management services agreement that would result in negative
20.21amortization of any debt in the plan;
20.22    (9) engage in any unfair, deceptive, or unconscionable act or practice in connection
20.23with any service provided to any debtor;
20.24    (10) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or other
20.25compensation to any person for referring any prospective customer to the registrant or for
20.26enrolling a debtor in a debt management services plan, or provide any other incentives
20.27for employees or agents of the debt management services provider to induce debtors to
20.28enter into a debt management plan;
20.29    (11) receive any cash, fee, gift, bonus, premium, reward, or other compensation
20.30from any person other than the debtor or a person on the debtor's behalf in connection
20.31with activities as a registrant, provided that this paragraph does not apply to a registrant
20.32which is a bona fide nonprofit corporation duly organized under chapter 317A or under
20.33the similar laws of another state;
20.34    (12) enter into a contract with a debtor unless a thorough written budget analysis
20.35indicates that the debtor can reasonably meet the requirements of the financial adjustment
20.36plan and will be benefited by the plan;
21.1    (13) in any way charge or purport to charge or provide any debtor credit insurance in
21.2conjunction with any contract or agreement involved in the debt management services
21.3plan;
21.4    (14) operate or employ a person who is an employee or owner of a collection agency
21.5or process-serving business; or
21.6    (15) require or attempt to require payment of a sum that the registrant states,
21.7discloses, or advertises to be a voluntary contribution from the debtor.
21.8EFFECTIVE DATE.This section is effective January 1, 2008.

21.9    Sec. 56. [332A.16] ADVERTISEMENT OF DEBT MANAGEMENT SERVICES
21.10PLANS.
21.11    No debt management services provider may make false, deceptive, misleading
21.12statements, or omissions about the rates, terms, or conditions of an actual or proposed
21.13debt management services plan or its debt management services, or create the likelihood
21.14of consumer confusion or misunderstanding regarding its services, including but not
21.15limited to the following:
21.16    (1) represent that the debt management services provider is a nonprofit, not-for-profit,
21.17or has similar status or characteristics if some or all of the debt management services will
21.18be provided by a for-profit company that is a controlling or affiliated party to the debt
21.19management services provider; or
21.20    (2) make any communication that gives the impression that the debt management
21.21services provider is acting on behalf of a government agency.
21.22EFFECTIVE DATE.This section is effective January 1, 2008.

21.23    Sec. 57. [332A.17] DEBT MANAGEMENT SERVICES AGREEMENT
21.24RESCISSION.
21.25    Any debtor has the right to rescind any debt management services agreement with
21.26a debt management services provider that commits a material violation of this chapter.
21.27On rescission, all fees paid to the debt management services provider or any other person
21.28other than creditors of the debtor must be returned to the debtor entering into the debt
21.29management services agreement within ten days of rescission of the debt management
21.30services agreement.
21.31EFFECTIVE DATE.This section is effective January 1, 2008.

21.32    Sec. 58. [332A.18] ENFORCEMENT; REMEDIES.
21.33    Subdivision 1. Violation a deceptive practice. A violation of any of the provisions
21.34of this chapter is considered an unfair or deceptive trade practice under section 8.31,
22.1subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in
22.2the public interest.
22.3    Subd. 2. Private right of action. (a) A debt management services provider who
22.4fails to comply with any of the provisions of this chapter is liable under this section in
22.5an individual action for the sum of: (i) actual, incidental, and consequential damages
22.6sustained by the debtor as a result of the failure; and (ii) statutory damages of up to $1,000.
22.7    (b) A debt management services provider who fails to comply with any of the
22.8provisions of this chapter is liable under this section in a class action for the sum of: (i) the
22.9amount that each named plaintiff could recover under paragraph (a), clause (i); and (ii)
22.10such amount as the court may allow for all other class members.
22.11    (c) In determining the amount of statutory damages, the court shall consider, among
22.12other relevant factors:
22.13    (1) the frequency, nature, and persistence of noncompliance;
22.14    (2) the extent to which the noncompliance was intentional; and
22.15    (3) in the case of a class action, the number of debtors adversely affected.
22.16    (d) A plaintiff or class successful in a legal or equitable action under this section is
22.17entitled to the costs of the action, plus reasonable attorney fees.
22.18    Subd. 3. Injunctive relief. A debtor may sue a debt management services provider
22.19for temporary or permanent injunctive or other appropriate equitable relief to prevent
22.20violations of any provision of this chapter. A court must grant injunctive relief on a
22.21showing that the debt management services provider has violated any provision of this
22.22chapter, or in the case of a temporary injunction, on a showing that the debtor is likely to
22.23prevail on allegations that the debt management services provider violated any provision
22.24of this chapter.
22.25    Subd. 4. Remedies cumulative. The remedies provided in this section are
22.26cumulative and do not restrict any remedy that is otherwise available. The provisions
22.27of this chapter are not exclusive and are in addition to any other requirements, rights,
22.28remedies, and penalties provided by law.
22.29    Subd. 5. Public enforcement. The attorney general shall enforce this chapter
22.30under section 8.31.
22.31EFFECTIVE DATE.This section is effective January 1, 2008.

22.32    Sec. 59. [332A.19] INVESTIGATION.
22.33    The commissioner may examine the books and records of every registrant and of
22.34any person engaged in the business of providing debt management services as defined in
23.1section 332A.02 at any reasonable time. The commissioner once during any calendar year
23.2may require the submission of an audit prepared by a certified public accountant of the
23.3books and records of each registrant. If the registrant has, within one year previous to the
23.4commissioner's demand, had an audit prepared for some other purpose, this audit may be
23.5submitted to satisfy the requirement of this section. The commissioner may investigate
23.6any complaint concerning violations of this chapter and may require the attendance and
23.7sworn testimony of witnesses and the production of documents.
23.8EFFECTIVE DATE.This section is effective January 1, 2008."
23.9Page 36, line 32, after the period, insert "Minnesota Statutes 2006, sections 332.12;
23.10332.13; 332.14; 332.15; 332.16; 332.17; 332.18; 332.19; 332.20; 332.21; 332.22; 332.23;
23.11332.24; 332.25; 332.26; 332.27; 332.28; and 332.29 are repealed as of January 1, 2008."