SF4164 (Legislative Session 94 (2025-2026))
Various nondepository financial institutions provisions modifications
Related bill: HF3706
AI Generated Summary
Purpose
- Update Minnesota statutes to strengthen oversight and regulation of nondepository financial institutions and related lending activities.
- Introduce and expand licensing and registration requirements for lenders and mortgage-related entities.
- Add rules and reporting for virtual currency activities by Minnesota licensees.
- Clarify and harmonize definitions used in consumer lending laws.
- Repeal certain existing provisions as part of the modernization.
Key changes to regulation of nondepository financial institutions
- Expands the types of institutions and activities the state regulator (the commissioner of commerce) can supervise for loan and credit activities, including banks, trust companies, savings institutions, mortgage originators/servicers, and other related lenders.
- Allows participation in or purchase of federally insured/guaranteed loans (e.g., HUD, VA, Farmers Home Administration) by authorized Minnesota institutions, potentially beyond previous limits.
- Includes authority to engage with federal agencies (e.g., Office of Thrift Supervision/Office of the Comptroller of the Currency) or federally supported mortgage programs in the loan purchase/participation framework.
- Updates and aligns loan-related definitions and rules to reflect modern lending practices and federal-law terminology (e.g., how APR/finance charges are defined and calculated).
Definitions and terminology updates
- Consumer lending terms updated or clarified, including:
- Borrower, consumer loan, credit, credit card, credit sale contract, finance charge, annual percentage rate (APR).
- How finance charges are defined and what is excluded (e.g., certain delinquency or extension charges may be excluded if not agreed to be finance charges).
- Distinctions among loan types (e.g., open-end credit, mortgage loans, consumer short-term loans, consumer small loans).
Consumer lending provisions
- Consumer small loan
- Defined as a short-term unsecured loan repaid in a single installment with the cash advance up to a specified limit (noted as up to 350 in the text).
- APR must be calculated using established methods (actuarial method or United States Rule method) and must include all interest, finance charges, and fees.
- Consumer short-term loan
- Treated under the same licensing/consumer protection framework as other consumer lending provisions.
- Compliance with existing consumer lending chapters
- Loans secured by real estate or other collateral must comply with applicable licensing provisions when required.
- Provisions to harmonize with mortgage-related regulation and national housing program standards.
Virtual currency business activities
- Virtual currency licensees must use virtual currency in calculating tangible net worth only under specific conditions (e.g., presence of corresponding liabilities, unencumbered assets, and currency matching liabilities).
- Five-year recordkeeping requirements for virtual currency activities, including:
- Identity of customers, form and amount of transactions, dates, payment instructions, and related account details.
- Aggregated transaction counts and values, ledgers, business call reports, bank statements, and reconciliation records.
- Documentation of any disputes or incomplete transactions.
- Records must be maintained in a way that the commissioner can verify compliance with the chapter and Minnesota law.
- These provisions apply to licensees engaged in virtual currency activities with or on behalf of a person in Minnesota.
Lender licensing and registration provisions
- Lender licensing and registration (58-series and related sections):
- Beginning January 1, 2025, lenders must register with the commissioner before providing services in Minnesota.
- Registration requirements include basic information about the lender, officers/directors/owners, and other details the commissioner requires; renewals are annual.
- Possible use of the Nationwide Multistate Licensing System and Registry (NMLS) for registration and renewal processes.
- Required to disclose criminal history, certifications of compliance, bankruptcies, past regulatory actions, and other information the commissioner may require.
- Postings and display requirements for licensed entities, including online presence where applicable.
Debt settlement services and credit services regulation
- Debt settlement services and related credit services organizations (CSOs) face new or clarified licensing/registration requirements.
- The bill defines what qualifies as a credit services organization and sets forth exemptions for various regulated entities (banks, credit unions, real estate brokers, collection agencies, licensed attorneys, broker-dealers, etc.).
- New or clarified registration forms and processes for debt settlement providers operating in Minnesota.
Repeals and structural updates
- The bill repeals certain existing provisions (e.g., sections 56.08, 332A.02(2), 332A.04(1), 332B.02(2)). This signals a streamlining or modernization of related regulatory provisions and terminology.
Implications for consumers and businesses
- For consumers:
- Potentially more reliable oversight of credit products, small loans, and virtual currency activities.
- More transparent licensing and regulatory requirements for lenders operating in Minnesota.
- More consistent rules for calculating costs of credit (APR/finance charges) and for loan disclosures.
- For lenders and financial service providers:
- New or expanded licensing/registration obligations, including annual renewals.
- Possible costs associated with surety bonds and regulatory filings.
- Obligations to maintain detailed records for virtual currency activities and to report to the commissioner.
- Eligibility to engage in certain federally supported loan programs remains, but with clarified regulatory pathways.
- For entities dealing with debt settlement or credit services:
- Clearer regulatory framework andDefined exemptions to ensure proper licensing/registration and compliance.
Relevant Notes - This summary focuses on high-level intent and major provisions. If you need specifics for a particular section, I can pull out the exact requirements and language.
Relevant Terms - nondepository financial institutions - lender licensing - mortgage originator - mortgage servicer - consumer loan - consumer small loan - short-term loan - finance charge - annual percentage rate (APR) - actuarial method - United States Rule method - credit card - credit sale contract - tangible net worth - virtual currency - virtual currency business activities - five-year records - general ledger - NMLS (Nationwide Multistate Licensing System and Registry) - registration - lender registration - credit services organization - debt settlement services provider - surety bond - compliance disclosures - regulatory exemptions - repeals (sections being repealed) - residential mortgage originator/servicer - federal housing programs (HUD, VA, Farmers Home Administration) - Office of Thrift Supervision / OCC (as referenced in the bill) - debt collection/assignment provisions
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 05, 2026 | Senate | Action | Introduction and first reading | ||
| March 05, 2026 | Senate | Action | Referred to | Commerce and Consumer Protection |
Citations
[
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends Minn. Stat. 47.20 Subdivision 1 to restate general authority for certain financial institutions to make loans and related credit transactions.",
"modified": [
"Replaces existing text with revised General authority language governing loans and advances of credit for insured/guaranteed loan programs."
]
},
"citation": "47.20",
"subdivision": "Subdivision1"
},
{
"analysis": {
"added": [
"Adds definitions such as actuarial method, annual percentage rate (APR), borrower, consumer loan, credit, credit card, credit sale contract, finance charge, financial institution, loan, etc."
],
"removed": [],
"summary": "Amends Minn. Stat. 47.59 Subdivision 1 to redefine key terms used in consumer lending (definitions for actuarial method, APR, borrower, etc.).",
"modified": [
"Substantively reorganizes and expands definitions used in the statute."
]
},
"citation": "47.59",
"subdivision": "Subdivision1"
},
{
"analysis": {
"added": [
"Defines consumer small loan and related concepts (e.g., term 'consumer small loan lender').",
"Adds or clarifies distinctions between consumer small loans and other loan types."
],
"removed": [],
"summary": "Amends Minn. Stat. 47.60 Subdivision 1 to redefine terms related to consumer loans (consumer small loan).",
"modified": [
"Updates definitions to align with the broader nondepository lending framework."
]
},
"citation": "47.60",
"subdivision": "Subdivision1"
},
{
"analysis": {
"added": [
"Establishes authority to make loans secured or unsecured under the specified chapters and aligns with related sections (e.g., consumer loan provisions)."
],
"removed": [],
"summary": "Amends Minn. Stat. 53.04 Subd.3a (Loans) to describe loans authorized under the chapter and related compliance with other sections.",
"modified": [
"Integrates loan authority with other statutory requirements (e.g., consumer small/short-term loans)."
]
},
"citation": "53.04",
"subdivision": "Subd.3a"
},
{
"analysis": {
"added": [
"Permits virtual currency activity considerations in tangible net worth calculations under certain conditions.",
"Imposes five-year transaction recordkeeping and related reporting requirements.",
"Specifies detailed recordkeeping and disclosure for virtual currency transactions."
],
"removed": [],
"summary": "Adds Virtual Currency Business Activities Additional Requirements.",
"modified": [
"Creates new regulatory requirements for licensees engaged in virtual currency business activities."
]
},
"citation": "53B.74",
"subdivision": ""
},
{
"analysis": {
"added": [
"Permits proceeding under section 47.59 for certain credit sales or third-party arrangements in lieu of prior subparts."
],
"removed": [],
"summary": "Amends Minn. Stat. 53C.09 Subd.4 (Other law may apply) to allow alternative purchasing/collection pathways when dealing with mortgage loans.",
"modified": [
"Reframes cross-references among sections 53C.01, 53C.08, 53C.10, and 53C.11 to accommodate alternative mechanisms for mortgage loan purchases/collections."
]
},
"citation": "53C.09",
"subdivision": "Subd.4"
},
{
"analysis": {
"added": [
"Adds carve-outs for banks, savings institutions, trust companies, mortgage originators/servicers, and certain federal entities from licensing under this chapter when regulated by other law."
],
"removed": [],
"summary": "Amends Minn. Stat. 56.002 (Application) to clarify exemptions and licensing carve-outs for certain federally related lending activities.",
"modified": [
"Clarifies when entities engaged in federally regulated activities are not required to obtain a Minnesota license under this chapter."
]
},
"citation": "56.002",
"subdivision": ""
},
{
"analysis": {
"added": [
"Affirms licensing requirement for consumer lending but includes exceptions for federally regulated entities and specific lenders approved/certified by federal agencies."
],
"removed": [],
"summary": "Amends Minn. Stat. 56.01 (Necessity of License) to reiterate licensing requirements and add federal/agency-based carve-outs.",
"modified": [
"Specifies that certain lenders are not required to be licensed under this chapter when purchasing/receiving assignments of mortgage loans."
]
},
"citation": "56.01",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Amends Minn. Stat. 56.05 (License to be Posted) to specify posting and related display requirements.",
"modified": [
"Maintains standard licensing posting requirements; adds clarity on online display for internet-based licensees."
]
},
"citation": "56.05",
"subdivision": ""
},
{
"analysis": {
"added": [
"Requires surety bond (58.08(1a)), annual affirmation of compliance (58.125), bankruptcy disclosure, and bond amount thresholds.",
"Requires compliance with Minnesota unclaimed property law (345.31 to 345.60) and tax laws."
],
"removed": [],
"summary": "Amends Minn. Stat. 58.06 Subd.2 (Application contents) to require specific disclosures and bonds, and to include references to other statutes.",
"modified": [
"Expands application contents to include criminal history disclosures and control-person information; reinforces compliance obligations."
]
},
"citation": "58.06",
"subdivision": "Subd.2"
},
{
"analysis": {
"added": [
"Requires lender registration with the commissioner prior to offering student loans in Minnesota and annual renewal."
],
"removed": [],
"summary": "Amends Minn. Stat. 58B.051 (Registration for Lenders).",
"modified": [
"Adds use of Nationwide Multistate Licensing System and Registry (NMLS) and related fees."
]
},
"citation": "58B.051",
"subdivision": ""
},
{
"analysis": {
"added": [
"Defines credit services organization and clarifies exemptions, including references to federal law (National Housing Act, FDIC insurance, etc.)."
],
"removed": [],
"summary": "Amends Minn. Stat. 332.52 Subd.3 (Credit services organization).",
"modified": [
"Incorporates federal law references (e.g., National Housing Act, FDIC insurance) into the CSS framework."
]
},
"citation": "332.52",
"subdivision": "Subd.3"
},
{
"analysis": {
"added": [
"Outlines registration requirements and renewal procedures for debt-related lending activities."
],
"removed": [],
"summary": "Amends Minn. Stat. 332B.04 Subd.1 (Form) to require lender registration prior to providing services in Minnesota.",
"modified": [
"Aligns form and registration process with other lender-registry provisions and NMLS standards."
]
},
"citation": "332B.04",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [],
"removed": [
"56.08 repealed."
],
"summary": "Repeals Minn. Stat. 56.08.",
"modified": []
},
"citation": "56.08",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [
"Subd.2 of 332A.02 repealed."
],
"summary": "Repeals Minn. Stat. 332A.02 Subd.2 as part of broader changes to debt-related licensing.",
"modified": []
},
"citation": "332A.02",
"subdivision": "Subd.2"
},
{
"analysis": {
"added": [],
"removed": [
"Subd.1 of 332A.04 repealed."
],
"summary": "Repeals Minn. Stat. 332A.04 Subd.1 as part of transitional lender-registration changes.",
"modified": []
},
"citation": "332A.04",
"subdivision": "Subd.1"
},
{
"analysis": {
"added": [],
"removed": [
"Subdivision 2 of 332B.02 repealed."
],
"summary": "Repeals Minn. Stat. 332B.02 Subdivision 2 as part of regulatory consolidations.",
"modified": []
},
"citation": "332B.02",
"subdivision": "Subdivision2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References Minn. Stat. 580.032 Subdivision 1 in the context of licensing and related financial security requirements.",
"modified": []
},
"citation": "580.032",
"subdivision": "Subdivision1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References Minn. Stat. 58.125 in connection with compliance affirmations in license applications.",
"modified": []
},
"citation": "58.125",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates Unclaimed Property Law considerations into license applications and ongoing compliance."
],
"removed": [],
"summary": "References Minn. Stat. 345.31 to 345.60 (Minnesota Unclaimed Property Law) in the context of financial licensee compliance.",
"modified": []
},
"citation": "345.31 to 345.60",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Code of Federal Regulations, Title 12, Part 226 (and Appendix J) for actuarial methods, APR, and finance charges definitions.",
"modified": [
"Uses federal standards for consumer lending disclosures and calculation methods."
]
},
"citation": "12 CFR 226",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites the National Housing Act provisions as they relate to certain mortgage loan activities and CSS operations.",
"modified": []
},
"citation": "12 U.S.C. § 1701 et seq.",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References federal National Housing Act in relation to loan insurance/guarantee provisions accessed via specified lenders.",
"modified": []
},
"citation": "National Housing Act",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References Public Law 87-128 (Consolidated Farm and Rural Development Act) in authority for certain loan guarantees/insurances.",
"modified": []
},
"citation": "Consolidated Farm and Rural Development Act, Public Law 87-128",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites the Servicemen's Readjustment Act of 1944 (GI Bill) as amended in the authority/guarantee framework for certain loans.",
"modified": []
},
"citation": "Servicemen's Readjustment Act of 1944",
"subdivision": ""
}
]Progress through the legislative process
In Committee