1.1    .................... moves to amend H. F. No. 1515 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2006, section 325E.311, subdivision 6, is amended to
1.4read:
1.5    Subd. 6. Telephone solicitation. "Telephone solicitation" means any voice
1.6communication over a telephone line for the purpose of encouraging the purchase or
1.7rental of, or investment in, property, goods, or services, whether the communication is
1.8made by a live operator, through the use of an automatic dialing-announcing device as
1.9defined in section 325E.26, subdivision 2, or by other means. Telephone solicitation
1.10does not include communications:
1.11    (1) to any residential subscriber with that subscriber's prior express invitation or
1.12permission; or
1.13    (2) by or on behalf of any person or entity with whom a residential subscriber has a
1.14prior or current business or personal relationship.
1.15Telephone solicitation also does not include communications if the caller is identified by a
1.16caller identification service and the call is:
1.17    (i) by or on behalf of an organization that is identified as a nonprofit organization
1.18under state or federal law, unless the organization is a debt management services provider
1.19defined in section 332A.02;
1.20    (ii) by a person soliciting without the intent to complete, and who does not in
1.21fact complete, the sales presentation during the call, but who will complete the sales
1.22presentation at a later face-to-face meeting between the solicitor who makes the call
1.23and the prospective purchaser; or
1.24    (iii) by a political party as defined under section 200.02, subdivision 6.

1.25    Sec. 2. [332A.02] DEFINITIONS.
2.1    Subdivision 1. Scope. Unless a different meaning is clearly indicated by the context,
2.2for the purposes of this chapter the terms defined in this section have the meanings given
2.3them.
2.4    Subd. 2. Accreditation. "Accreditation" means certification as an accredited
2.5credit counseling provider by the International Standards Organization or the Council on
2.6Accreditation.
2.7    Subd. 3. Attorney general. "Attorney general" means the attorney general of the
2.8state of Minnesota.
2.9    Subd. 4. Commissioner. "Commissioner" means commissioner of commerce.
2.10    Subd. 5. Controlling or affiliated party. "Controlling or affiliated party" means
2.11any person directly or indirectly controlling, controlled by, or under common control
2.12with another person.
2.13    Subd. 6. Debt management services agreement. "Debt management services
2.14agreement" means the written contract between the debt management services provider
2.15and the debtor.
2.16    Subd. 7. Debt management services plan. "Debt management services plan"
2.17means the debtor's individualized package of debt management services set forth in the
2.18debt management services agreement.
2.19    Subd. 8. Debt management services provider. "Debt management services
2.20provider" means any person offering or providing debt management services to a debtor
2.21domiciled in this state, regardless of whether or not a fee is charged for the services and
2.22regardless of whether the person maintains a physical presence in the state. This term does
2.23not include services performed by the following when engaged in the regular course of
2.24their respective businesses and professions:
2.25    (1) attorneys at law, escrow agents, accountants, broker-dealers in securities;
2.26    (2) banks, state or national, trust companies, savings associations, title insurance
2.27companies, insurance companies, and all other lending institutions duly authorized to
2.28transact business in Minnesota, provided no fee is charged for the service;
2.29    (3) persons who, as employees on a regular salary or wage of an employer not
2.30engaged in the business of debt management, perform credit services for their employer;
2.31    (4) public officers acting in their official capacities and persons acting as a debt
2.32management services provider pursuant to court order;
2.33    (5) any person while performing services incidental to the dissolution, winding up,
2.34or liquidation of a partnership, corporation, or other business enterprise;
3.1    (6) the state, its political subdivisions, public agencies, and their employees;
3.2    (7) credit unions, provided no fee is charged for the service;
3.3    (8) "qualified organizations" designated as representative payees for purposes of the
3.4Social Security and Supplemental Security Income representative payee system and the
3.5federal Omnibus Budget Reconciliation Act of 1990, Public Law 101-508; and
3.6    (9) accelerated mortgage payment providers. "Accelerated mortgage payment
3.7providers" are persons who, after satisfying the requirements of sections 332.30 to
3.8332.303, receive funds to make mortgage payments to a lender or lenders, on behalf
3.9of mortgagors, in order to exceed regularly scheduled minimum payment obligations
3.10under the terms of the indebtedness. The term does not include: (i) persons or entities
3.11described in clauses (1) to (8); (ii) mortgage lenders or servicers, industrial loan and
3.12thrift companies, or regulated lenders under chapter 56; or (iii) persons authorized to
3.13make loans under section 47.20, subdivision 1. For purposes of this clause and sections
3.14332.30 to 332.303, "lender" means the original lender or that lender's assignee, whichever
3.15is the current mortgage holder.
3.16    Subd. 9. Debt management services. "Debt management services" means the
3.17provision of any one or more of the following:
3.18    (a) managing the financial affairs of an individual by distributing income or money
3.19to the individual's creditors;
3.20    (b) receiving funds for the purpose of distributing the funds among creditors in
3.21payment or partial payment of obligations of a debtor; or
3.22    (c) settling, adjusting, prorating, pooling, or liquidating the indebtedness of a debtor.
3.23Any person so engaged or holding out as so engaged is deemed to be engaged in the
3.24provision of debt management services regardless of whether or not a fee is charged for
3.25such services.
3.26    Subd. 10. Debtor. "Debtor" means the person for whom the debt prorating service
3.27is performed.
3.28    Subd. 11. Person. "Person" means any individual, firm, partnership, association,
3.29or corporation.
3.30    Subd. 12. Registrant. "Registrant" means any person registered by the
3.31commissioner pursuant to this chapter and, where used in conjunction with an act or
3.32omission required or prohibited by this chapter, shall mean any person performing debt
3.33prorating services.

3.34    Sec. 3. [332A.03] REQUIREMENT OF REGISTRATION.
4.1    On or after August 1, 2007, it is unlawful for any person, whether or not located in
4.2this state, to operate as a debt management service provider or provide debt management
4.3services, including but not limited to offering, advertising, or executing or causing to
4.4be executed any debt management services or debt management services agreement,
4.5except as authorized by law without first becoming registered as provided in this chapter.
4.6A person who possesses a valid registration as a debt prorater that was issued by the
4.7commissioner before August 1, 2007, is deemed to be registered as a debt management
4.8services provider until the date the debt prorater license expires, at which time the licensee
4.9must obtain a renewal as a debt management service provider in compliance with this
4.10chapter. Debt proraters who were not required to be licensed as debt proraters before
4.11August 1, 2007, may continue to provide debt management services without complying
4.12with this chapter to those debtors who entered into a contract to participate in a debt
4.13management plan before August 1, 2007, except that the debt prorater must comply with
4.14section 332A.13, subdivision 2.

4.15    Sec. 4. [332A.04] REGISTRATION.
4.16    Subdivision 1. Form. Application for registration to operate as a debt management
4.17services provider in this state must be made in writing to the commissioner, under oath, in
4.18the form prescribed by the commissioner, and must contain:
4.19    (1) the full name of each principal of the entity applying;
4.20    (2) the address, which must not be a post office box, and the telephone and, if
4.21applicable, e-mail address, of the applicant;
4.22    (3) identification of the trust account required under section 332A.13;
4.23    (4) consent to the jurisdiction of the courts of this state;
4.24    (5) the name and address of the registered agent authorized to accept service of
4.25process on behalf of the applicant or appointment of the commissioner as the applicant's
4.26agent for purposes of accepting service of process;
4.27    (6) disclosure of:
4.28    (i) whether any controlling or affiliated party has ever been convicted of a crime
4.29or found civilly liable for an offense involving moral turpitude, including forgery,
4.30embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to
4.31defraud, or any other similar offense or violation, or any violation of a federal or state law
4.32or regulation in connection with activities relating to the rendition of debt management
4.33services or involving any consumer fraud, false advertising, deceptive trade practices, or
4.34similar consumer protection law;
4.35    (ii) any judgments, private or public litigation, tax liens, written complaints,
4.36administrative actions, or investigations by any government agency against the applicant
5.1or any officer, director, manager, or shareholder owning more than five percent interest in
5.2the applicant, unresolved or otherwise, filed within the preceding ten years;
5.3    (iii) whether the applicant or any person employed by the applicant has had a record
5.4of having defaulted in the payment of money collected for others, including the discharge
5.5of debts through bankruptcy proceedings; and
5.6    (iv) whether the applicant's license or registration to provide debt management
5.7services in any other state has ever been revoked or suspended;
5.8    (7) a copy of the applicant's standard debt management services agreement that the
5.9applicant intends to execute with debtors;
5.10    (8) proof of accreditation of:
5.11    (i) the debt management services provider; and
5.12    (ii) all individuals employed by, under contract with, or otherwise agents of the
5.13provider who offer to provide or provide debt management services; and
5.14    (9) any other information and material as the commissioner may require.
5.15    Subd. 2. Term and scope of registration. The registration must remain in full
5.16force and effect for one calendar year or until it is surrendered by the licensee or revoked
5.17or suspended by the commissioner. The registration is limited solely to the business
5.18of providing debt management services.
5.19    Subd. 3. Fees. The registration application must be accompanied by payment of
5.20$1,000 as a registration fee.
5.21    Subd. 4. Bond. The registration application must be accompanied by payment of
5.22a surety bond in which the applicant shall be the obligor, in a sum to be determined by
5.23the commissioner but not less than $5,000, and in which an insurance company, which is
5.24duly authorized by the state of Minnesota to transact the business of fidelity and surety
5.25insurance, shall be a surety. However, the commissioner may accept a deposit in cash,
5.26or securities that may legally be purchased by savings banks or for trust funds of an
5.27aggregate market value equal to the bond requirement, in lieu of the surety bond. The
5.28cash or securities must be deposited with the commissioner of finance. The commissioner
5.29may also require a fidelity bond in an appropriate amount covering employees of any
5.30applicant. Each branch office or additional place of business of an applicant must be
5.31bonded as provided in this subdivision. In determining the bond amount necessary
5.32for the maintenance of any office whether it is a surety bond, fidelity bond, or both,
5.33the commissioner shall consider the financial responsibility, experience, character, and
5.34general fitness of the debt management services provider and its operators and owners;
5.35the volume of business handled or proposed to be handled; the location of the office
6.1and the geographical area served or proposed to be served; and other information the
6.2commissioner may deem pertinent based upon past performance, previous examinations,
6.3annual reports, and manner of business conducted in other states.
6.4    Subd. 5. Condition of bond. The applicant shall be the obligor. The bond must
6.5run to the state of Minnesota for the use of the state and of any person or persons who
6.6may have a cause of action against the obligor arising out of the obligor's activities as a
6.7debt management service provider. The bond must be conditioned that the obligor will not
6.8commit any fraudulent act and will faithfully conform to and abide by the provisions of this
6.9chapter and of all rules lawfully made by the commissioner hereunder and pay to the state
6.10and to any such person or persons any and all money that may become due or owing to the
6.11state or to such person or persons from the obligor under and by virtue of this chapter.
6.12    Subd. 6. Right of action on bond. If the registrant has failed to account to a debtor
6.13or distribute to the debtor's creditors the amounts required by this chapter and the debt
6.14management services agreement between the debtor and registrant, the debtor or the
6.15debtor's legal representative or receiver, the commissioner, or the attorney general, shall
6.16have, in addition to all other legal remedies, a right of action in the name of the debtor
6.17on the bond or the security given pursuant to this section, for loss suffered by the debtor,
6.18not exceeding the face of the bond or security, and without the necessity of joining the
6.19registrant in such suit or action.
6.20    Subd. 7. Registrant list. The commissioner must maintain a list of registered debt
6.21management services providers. The list must be made available to the public in written
6.22form upon request and on the Department of Commerce Web site.

6.23    Sec. 5. [332A.05] NONASSIGNMENT OF REGISTRATION.
6.24    A registration must not be transferred or assigned without the consent of the
6.25commissioner.

6.26    Sec. 6. [332A.06] RENEWAL OF REGISTRATION.
6.27    Each year, each registrant under the provisions of this chapter must, not more than
6.2860 nor less than 30 days before its registration is to expire, apply to the commissioner for
6.29renewal of its registration on a form prescribed by the commissioner. The application must
6.30be signed by the registrant under penalty of perjury, contain current information on all
6.31matters required in the original application, and be accompanied by a payment of $250.
6.32The registrant must maintain a continuous surety bond that satisfies the requirements of
6.33section 332A.04, subdivision 4, provided that the commissioner may require a different
6.34amount that is at least equal to the largest amount that has accrued in the trust account
6.35during the previous year. The renewal is effective for one year.

7.1    Sec. 7. [332A.07] OTHER DUTIES OF REGISTRANT.
7.2    Subdivision 1. Requirement to update information. A registrant must update any
7.3information required by this section provided in its original or renewal application not
7.4later than 90 days after the date the events precipitating the update occurred.
7.5    Subd. 2. Inspection of debtor of registration. Each registrant must maintain a
7.6copy of its registration in its files. The registrant must allow a debtor, upon request, to
7.7inspect the registration.

7.8    Sec. 8. [332A.08] DENIAL OF REGISTRATION.
7.9    The commissioner, with notice to the applicant by certified mail sent to the address
7.10listed on the application, may deny an application for a registration upon finding that
7.11applicant:
7.12    (1) has submitted an application required under section 332A.04 that contains
7.13incorrect, misleading, incomplete, or materially untrue information. An application is
7.14incomplete if it does not include all the information required in section 332A.04;
7.15    (2) has failed to pay any fee or pay or maintain any bond required by this chapter, or
7.16failed to comply with any order, decision, or finding of the commissioner made pursuant
7.17to and within the authority of this chapter;
7.18    (3) has violated any provision of this chapter or any rule or direction lawfully made
7.19by the commissioner under and within the authority of this chapter;
7.20    (4) or any controlling or affiliated party has ever been convicted of a crime or found
7.21civilly liable for an offense involving moral turpitude, including forgery, embezzlement,
7.22obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or any
7.23other similar offense or violation, or any violation of a federal or state law or regulation
7.24in connection with activities relating to the rendition of debt management services or
7.25any consumer fraud, false advertising, deceptive trade practices, or similar consumer
7.26protection law;
7.27    (5) has had a registration or license previously revoked or suspended in this state or
7.28any other state or the applicant or licensee has been permanently or temporarily enjoined
7.29by any court of competent jurisdiction from engaging in or continuing any conduct or
7.30practice involving any aspect of the debt management services provider business; or
7.31any controlling or affiliated party has been an officer, director, manager, or shareholder
7.32owning more than a ten percent interest in a debt management services provider whose
7.33registration has previously been revoked or suspended in this state or any other state, or
7.34who has been permanently or temporarily enjoined by any court of competent jurisdiction
7.35from engaging in or continuing any conduct or practice involving any aspect of the debt
7.36management services provider business;
8.1    (6) has made any false statement or representation to the commissioner;
8.2    (7) is insolvent;
8.3    (8) refuses to fully comply with an investigation or examination of the debt
8.4management service provider by the commissioner;
8.5    (9) has improperly withheld, misappropriated, or converted any money or properties
8.6received in the course of doing business;
8.7    (10) has failed to have a trust account with an actual cash balance equal to or greater
8.8than the sum of the escrow balances of each debtor's account;
8.9    (11) has defaulted in making payments to creditors on behalf of debtors as required
8.10by agreements between the provider and debtor; or
8.11    (12) has used fraudulent, coercive, or dishonest practices, or demonstrated
8.12incompetence, untrustworthiness, or financial irresponsibility in this state or elsewhere.

8.13    Sec. 9. [332A.09] SUSPENDING, REVOKING, OR REFUSING TO RENEW
8.14REGISTRATION.
8.15    Subdivision 1. Procedure. The commissioner may revoke, suspend, or refuse to
8.16renew any registration issued hereunder, or may levy a civil penalty under section 45.027,
8.17or any combination of actions, if the debt management service provider or any controlling
8.18or affiliated person has committed any act or omission for which the commissioner could
8.19have refused to issue an initial registration or renew an existing registration. Revocation
8.20of or refusal to renew a registration must be upon notice and hearing as prescribed in the
8.21Administrative Procedure Act, sections 14.57 to 14.69. The notice must set a time for
8.22hearing before the commissioner not less than 20 nor more than 30 days after service of the
8.23notice, provided the registrant may waive the 20-day minimum. The commissioner may,
8.24in the notice, suspend the registration for a period not to exceed 60 days. Unless the notice
8.25states that the registration is suspended, pending the determination of the main issue, the
8.26registrant may continue to transact business until the final decision of the commissioner.
8.27If the registration is suspended, the commissioner shall hold a hearing and render a final
8.28determination within ten days of a request by the registrant. If the commissioner fails to
8.29do so, the suspension shall terminate and be of no force or effect.
8.30    Subd. 2. Notification of interested persons. After the notice and hearing required
8.31in subdivision 1, upon issuing an order suspending or revoking a registration or refusing to
8.32renew a registration, the commissioner may notify all individuals who have contracts with
8.33the affected registrant and all creditors who have agreed to a debt management services
8.34plan that the registration has been revoked and that the order is subject to appeal.
9.1    Subd. 3. Receiver for funds of sanctioned registrant. When an order is issued
9.2revoking or refusing to renew a registration, the commissioner may apply and the district
9.3court must appoint a receiver to temporarily or permanently receive the assets of the
9.4registrant pending a final determination of the validity of the order.

9.5    Sec. 10. [332A.10] WRITTEN DEBT MANAGEMENT SERVICES
9.6AGREEMENT.
9.7    Subdivision 1. Written agreement required. A debt management services provider
9.8may not perform any debt management services or receive any money related to a debt
9.9management plan until the provider has obtained a debt management services agreement
9.10that contains all material terms of the agreement between the debt management services
9.11provider and the debtor. A debt management services agreement must be in writing, dated,
9.12and signed by the debt management services provider and the debtor. The registrant must
9.13furnish the debtor with a copy of the signed contract upon execution.
9.14    Subd. 2. Actions prior to written agreement. No person may provide debt
9.15management services for a debtor unless the person first has:
9.16    (1) provided the debtor individualized counseling and educational information
9.17that, at a minimum, addresses managing household finances, managing credit and debt,
9.18budgeting, and personal savings strategies;
9.19    (2) prepared in writing and provided to the debtor, in a form that the debtor may
9.20keep, an individualized financial analysis and a proposed debt management plan listing the
9.21debtor's known debts with specific recommendations regarding actions the debtor should
9.22take to reduce or eliminate the amount of the debts, including written disclosure that
9.23debt management services are not suitable for all debtors and that there are other ways,
9.24including bankruptcy, to deal with indebtedness;
9.25    (3) made a determination supported by an individualized financial analysis that the
9.26debtor can reasonably meet the requirements of the proposed debt management plan
9.27and that there is a net tangible benefit to the debtor of entering into the proposed debt
9.28management plan; and
9.29    (4) prepared, in a form the debtor may keep, a written list identifying all known
9.30creditors of the debtor that the provider reasonably expects to participate in the plan
9.31and the creditors, including secured creditors, that the provider reasonably expects not
9.32to participate.
9.33    Subd. 3. Required terms. (a) Each debt management services agreement must
9.34contain the following terms, which must be disclosed prominently and clearly in bold
10.1print upon the front page of the agreement, segregated by bold lines from all other
10.2information on the page:
10.3    (1) the fee amount to be paid by the debtor and whether the initial fee amount is
10.4refundable or nonrefundable;
10.5    (2) the monthly fee amount or percentage to be paid by the debtor; and
10.6    (3) the total amount of fees reasonably anticipated to be paid by the debtor over
10.7the term of the agreement.
10.8    (b) Each debt management services agreement must also contain the following:
10.9    (1) a disclosure that if the amount of debt owed is increased by interest, late fees,
10.10over the limit fees, and other amounts imposed by the creditor the length of the debt
10.11management services agreement will be extended and remain in force and that the total
10.12dollar charges agreed upon may increase at the rate agreed upon in the original contract
10.13agreement;
10.14    (2) a prominent statement describing the terms upon which the debtor may cancel
10.15the contract as set forth in section 332A.11;
10.16    (3) a detailed description of all services to be performed by the debt management
10.17services provider for the debtor;
10.18    (4) the debt management service provider's refund policy; and
10.19    (5) the debt management service provider's principal business address and the name
10.20and address of its agent in this state authorized to receive service of process.
10.21    Subd. 4. Prohibited terms. The following terms shall not be included in the debt
10.22management services agreement:
10.23    (1) a hold harmless clause;
10.24    (2) a confession of judgment, or a power of attorney to confess judgment against the
10.25debtor or appear as the debtor in any judicial proceeding;
10.26    (3) a waiver of the right to a jury trial, if applicable, in any action brought by
10.27or against a debtor;
10.28    (4) an assignment of or order for payment of wages or other compensation for
10.29services;
10.30    (5) a provision in which the debtor agrees not to assert any claim or defense arising
10.31out of the debt management services agreement;
10.32    (6) a waiver of any provision of this chapter or a release of any obligation required
10.33to be performed on the part of the debt management services provider; or
10.34    (7) a mandatory arbitration clause.
10.35    Subd. 5. New debt management services agreements; modification of existing
10.36agreements. (a) Separate and additional debt management services agreements that
11.1comply with this chapter may be entered into by the debt management services provider
11.2and the debtor provided that no additional initial fee may be charged by the debt
11.3management services provider.
11.4    (b) Any modification of an existing debt management services agreement, including
11.5any increase in the number or amount of debts included in the debt management service,
11.6must be in writing and signed by both parties. No fees, charges, or other consideration
11.7may be demanded from the debtor for the modification, other than an increase in the
11.8amount of the monthly maintenance fee established in the original debt management
11.9services agreement.

11.10    Sec. 11. [332A.11] RIGHT TO CANCEL.
11.11    Subdivision 1. Debtor's right to cancel. A debtor has the right to cancel the debt
11.12management services agreement without cause at any time upon ten days' written notice to
11.13the debt management service provider. In the event of cancellation, the debt management
11.14service provider must, within ten days of the cancellation, notify the debtor's creditors of
11.15the cancellation and provide a refund of all unexpended funds paid by or for the debtor
11.16to the debt management service provider.
11.17    Subd. 2. Notice of debtor's right to cancel. A debt management services
11.18agreement must contain, on its face, in an easily readable typeface immediately adjacent
11.19to the space for signature by the debtor, the following notice: Right To Cancel: You have
11.20the right to cancel this contract at any time on ten days' written notice.
11.21    Subd. 3. Automatic termination. Upon the payment of all listed debts and
11.22fees, the debt management services agreement must automatically terminate, and all
11.23unexpended funds paid by or for the debtor to the debt management service provider
11.24must be immediately returned to the debtor.
11.25    Subd. 4. Debt management services provider's right to cancel. A debt
11.26management services provider may cancel a debt management services agreement with
11.27good cause upon 30 days' written notice to the debtor. Within ten days of the cancellation,
11.28the debt management services provider must: (1) notify the debtor's creditors of the
11.29cancellation; and (2) return to the debtor all unexpended funds paid by or for the debtor.

11.30    Sec. 12. [332A.12] BOOKS, RECORDS, AND INFORMATION.
11.31    Subdivision 1. Records retention. Every registrant must keep, and use in the
11.32registrant's business, such books, accounts, and records, including electronic records, as
11.33will enable the commissioner to determine whether the registrant is complying with this
11.34chapter and of the rules, orders, and directives adopted by the commissioner pursuant to
11.35this chapter. Every registrant must preserve such books, accounts, and records for at least
12.1six years after making the final entry on any transaction recorded therein. Examinations
12.2of the books, records, and method of operations conducted under the supervision of the
12.3commissioner shall be done at the cost of the registrant. The cost must be assessed as
12.4determined pursuant to section 46.131.
12.5    Subd. 2. Statements to debtors. Each registrant must maintain and must make
12.6available records and accounts that will enable each debtor to ascertain the amounts
12.7paid to the creditors of the debtor. A statement showing amounts received from the
12.8debtor, disbursements to each creditor, amounts which any creditor has agreed to accept
12.9as payment in full for any debt owed the creditor by the debtor, charges deducted by
12.10the registrant, and such other information as the commissioner may prescribe must be
12.11furnished by the registrant to the debtor at least monthly and, in addition, upon any
12.12cancellation or termination of the contract. In addition to the statements required by this
12.13subdivision, each debtor must have reasonable access, without cost, by electronic or other
12.14means, to information in the registrant's files applicable to the debtor. These statements,
12.15records, and accounts must otherwise remain confidential except for duly authorized state
12.16and government officials, the commissioner, the attorney general, the debtor, and the
12.17debtor's representative and designees. Each registrant must prepare and retain in the file of
12.18each debtor a written analysis of the debtor's income and expenses to substantiate that the
12.19plan of payment is feasible and practicable.

12.20    Sec. 13. [332A.13] FEES, PAYMENTS, AND CONSENT OF CREDITORS.
12.21    Subdivision 1. Origination fee; credit background report cost. The registrant
12.22may charge a nonrefundable origination fee of not more than $50, which may be retained
12.23by the registrant from the initial amount paid by the debtor to the registrant.
12.24    Subd. 2. Monthly maintenance fee. The registrant may charge a periodic fee for
12.25account maintenance or other purposes, but only if the fee is reasonable for the service
12.26provider and does exceed the lesser of 15 percent of the monthly payment amount or $75.
12.27    Subd. 3. Additional fees unauthorized. A registrant may not impose any fee or
12.28other charge or receive any funds or other payment other than the initial fee or monthly
12.29maintenance fee authorized by this section.
12.30    Subd. 4. Amount retained of periodic payments. The registrant may retain as
12.31payment for the fees authorized by this section no more than 15 percent of any periodic
12.32payment made to the registrant by the debtor. The remaining 85 percent must be disbursed
12.33to listed creditors pursuant to and in accordance with the debt management services
12.34agreement. No fees or charges may be received or retained by the registrant for any
12.35handling of recurring payments. Recurrent payments include current rent, house, utility,
13.1telephone, maintenance as defined in section 518.27, child support, insurance premiums,
13.2and such other payments as the commissioner may by rule prescribe.
13.3    Subd. 5. Advance payments. No fees or charges may be received or retained for
13.4any payments by the debtor made more than the following number of days in advance
13.5of the date specified in the debt management services agreement on which they are due:
13.6(1) 42 days in the case of contracts requiring monthly payments; (2) 15 days in the case
13.7of agreements requiring biweekly payments; or (3) seven days in the case of agreements
13.8requiring weekly payments. For those agreements which do not require payments in
13.9specified amounts, a payment is deemed an advance payment to the extent it exceeds twice
13.10the average regular payment theretofore made by the debtor pursuant to that contract.
13.11This subdivision does not apply when it is the intention of the debtor to use the advance
13.12payments to satisfy future payment of obligations due within 30 days under the contract.
13.13This subdivision supersedes any inconsistent provision of this chapter.
13.14    Subd. 6. Consent of creditors. A registrant must actively seek to obtain the consent
13.15of all creditors to the debt management services plan set forth in the debt management
13.16services agreement. Consent by a creditor may be express and in writing, or may be
13.17evidenced by acceptance of a payment made pursuant to the debt management services
13.18plan set forth in the contract. The registrant must notify the debtor within ten days of any
13.19failure to obtain the required consent and of the debtor's right to cancel without penalty.
13.20The notice must be in a form as the commissioner shall prescribe. Nothing contained in
13.21this section is deemed to require the return of any origination fee and any fees earned by
13.22the registrant prior to cancellation or default.
13.23    Subd. 7. Withdrawal of creditor. Whenever a creditor withdraws from a debt
13.24management services plan, or refuses to participate in a debt management services plan,
13.25the registrant must promptly notify the debtor of the withdrawal or refusal. In no case
13.26may this notice be provided more than 15 days after the debt management services plan
13.27learns of the creditor's decision to withdraw from or refuse to participate in a plan. This
13.28notice must include the identity of the creditor withdrawing from the plan, the amount of
13.29the monthly payment to that creditor, and the right of the debtor to cancel the agreement
13.30under section 332A.11.
13.31    Subd. 8. Payments held in trust. The registrant must maintain a separate trust
13.32account and deposit in the account all payments received from the moment that are
13.33received, except that the registrant may commingle the payment with the registrant's
13.34own property or funds, but only to the extent necessary to ensure the maintenance of a
13.35minimum balance if the financial institution at which the trust account is held requires
14.1a minimum balance to avoid the assessment of fees or penalties for failure to maintain
14.2a minimum balance. All disbursements, whether to the debtor or to the creditors of the
14.3debtor, or to the registrant, must be made from such account.
14.4    Subd. 9. Timely payment of creditors. The registrant must disburse any funds
14.5paid by or on behalf of a debtor to creditors of the consumer within 42 days after receipt
14.6of the funds, or earlier if necessary to comply with the due date in the contract between
14.7the debtor and the creditor, unless the reasonable payment of one or more of the debtor's
14.8obligations requires that the funds be held for a longer period so as to accumulate a sum
14.9certain or where the debtor's payment is returned for insufficient funds or other reason that
14.10makes the withholding of such payments in the net interest of the debtor.

14.11    Sec. 14. [332A.14] PROHIBITIONS.
14.12    A registrant shall not:
14.13    (1) purchase from a creditor any obligation of a debtor;
14.14    (2) use, threaten to use, seek to have used or seek to have threatened the use of any
14.15legal process, including but not limited to garnishment and repossession of personal
14.16property, against any debtor while the debt management services agreement between the
14.17registrant and the debtor remains executory;
14.18    (3) advise a debtor to stop paying a creditor until a debt management service plan is
14.19in place;
14.20    (4) require as a condition of performing debt management services the purchase of
14.21any services, stock, insurance, commodity, or other property or any interest therein either
14.22by the debtor or the registrant;
14.23    (5) compromise any debts unless the prior written approval of the debtor has been
14.24obtained to such compromise and unless such compromise inures solely to the benefit
14.25of the debtor;
14.26    (6) receive from any debtor as security or in payment of any fee a promissory note
14.27or other promise to pay or any mortgage or other security, whether as to real or personal
14.28property;
14.29    (7) lend money or provide credit to any debtor if any interest or fee is charged,
14.30or directly or indirectly collect any fee for referring, advising, procuring, arranging, or
14.31assisting a consumer in obtaining any extension of credit or other debtor service from a
14.32lender or service provider;
14.33    (8) structure a debt management services agreement that would result in negative
14.34amortization of any debt in the plan;
14.35    (9) engage in any unfair, deceptive, or unconscionable act or practice in connection
14.36with any service provided to any debtor;
15.1    (10) offer, pay, or give any material cash fee, gift, bonus, premium, reward, or other
15.2compensation to any person for referring any prospective customer to the registrant or for
15.3enrolling a debtor in a debt management services plan, or provide any other incentives
15.4for employees or agents of the debt management services provider to induce debtors to
15.5enter into a debt management plan;
15.6    (11) receive any cash, fee, gift, bonus, premium, reward, or other compensation
15.7from any person other than the debtor or a person in the debtor's behalf in connection with
15.8activities as a registrant; provided that this paragraph does not apply to a registrant which
15.9is a bona fide nonprofit corporation duly organized under chapter 317A;
15.10    (12) enter into a contract with a debtor unless a thorough written budget analysis
15.11indicates that the debtor can reasonably meet the requirements of the financial adjustment
15.12plan and will be benefited by the plan;
15.13    (13) in any way charge or purport to charge or provide any debtor credit insurance in
15.14conjunction with any contract or agreement involved in the debt management services
15.15plan;
15.16    (14) operate or employ a person who is an employee or owner of a collection agency
15.17or process-serving business; or
15.18    (15) require or attempt to require payment of a sum that the registrant states,
15.19discloses, or advertises to be a voluntary contribution from the debtor.

15.20    Sec. 15. [332A.15] RULES.
15.21    The commissioner may make and file in accordance with the provisions of chapter
15.2214 such reasonable rules as shall be necessary for the administration of this chapter.

15.23    Sec. 16. [332A.16] ADVERTISEMENT OF DEBT MANAGEMENT SERVICES
15.24PLANS.
15.25    No debt management services provider may make false, deceptive, misleading
15.26statements or omissions about the rates, terms, or conditions of an actual or proposed
15.27debt management services plan or its debt management services, or create the likelihood
15.28of consumer confusion or misunderstanding regarding its services, including but not
15.29limited to the following:
15.30    (1) represent that the debt management services provider is a nonprofit, not-for-profit,
15.31or has similar status or characteristics if some or all of the debt management services will
15.32be provided by a for-profit company that is a controlling or affiliated party to the debt
15.33management service provider; or
15.34    (2) make any communication that gives the impression that the debt management
15.35service provider is acting on behalf of a government agency.

16.1    Sec. 17. [332A.17] DEBT MANAGEMENT SERVICES AGREEMENT VOID.
16.2    Any debtor has the right to rescind any debt management services agreement with a
16.3debt management service provider that commits a material violation of this chapter. On
16.4rescission, all fees paid to the debt management service provider or any other person
16.5other than creditors of the debtor must be returned to the debtor entering into the debt
16.6management services agreement within ten days of rescission of the debt management
16.7services agreement.

16.8    Sec. 18. [332A.18] ENFORCEMENT; REMEDIES.
16.9    Subdivision 1. Violation a deceptive practice. A violation of any of the provisions
16.10of this chapter is considered an unfair or deceptive trade practice under section 8.31,
16.11subdivision 1. A private right of action under section 8.31 by an aggrieved debtor is in
16.12the public interest.
16.13    Subd. 2. Private right of action. (a) A debt management service provider who fails
16.14to comply with any of the provisions of this chapter is liable in an individual action for
16.15the sum of: (i) actual, incidental, and consequential damages sustained by the debtor as a
16.16result of the failure; and (ii) statutory damages of up to $1,000.
16.17    (b) A debt management service provider who fails to comply with any of the
16.18provisions of this chapter is liable in a class action for the sum of: (i) the amount that each
16.19named plaintiff could recover under paragraph (a), clause (i); and (ii) such amount as the
16.20court may allow for all other class members.
16.21    (c) In determining the amount of statutory damages, the court shall consider, among
16.22other relevant factors:
16.23    (1) the frequency, nature, and persistence of noncompliance;
16.24    (2) the extent to which the noncompliance was intentional; and
16.25    (3) in the case of a class action, the number of debtors adversely affected.
16.26    (d) A plaintiff or class successful in a legal or equitable action is entitled to the costs
16.27of the action, plus reasonable attorney fees.
16.28    Subd. 3. Injunctive relief. A debtor may sue a debt management services provider
16.29for temporary or permanent injunctive or other appropriate equitable relief to prevent
16.30violations of any provision of this chapter. A court must grant injunctive relief on a
16.31showing that the debt management services provider has violated any provision of this
16.32chapter, or in the case of a temporary injunction, on a showing that the debtor is likely
16.33to prevail on allegations that the debt management services provider violated with any
16.34provision of this chapter.
17.1    Subd. 4. Remedies cumulative. The remedies provided in this section are
17.2cumulative and do not restrict any remedy that is otherwise available. The provisions
17.3of this chapter are not exclusive and are in addition to any other requirements, rights,
17.4remedies, and penalties provided by law.
17.5    Subd. 5. Public enforcement. The attorney general shall enforce this chapter
17.6under section 8.31.
17.7    Subd. 6. Criminal penalties. Any person willfully violating any of the provisions
17.8of this chapter shall be guilty of a gross misdemeanor.

17.9    Sec. 19. [332A.19] INVESTIGATION.
17.10    The commissioner may examine the books and records of every registrant and of
17.11any person engaged in the business of providing debt management services as defined
17.12in section 332A.02 at any reasonable time. The commissioner once during any calendar
17.13year may require the submission of an audit prepared by a certified public accountant of
17.14the books and records of each registrant hereunder. If the registrant has, within one year
17.15previous to the commissioner's demand, had an audit prepared for some other purpose,
17.16this audit may be submitted to satisfy the requirement of this section. The commissioner
17.17may investigate any complaint concerning violations of this chapter and may require the
17.18attendance and sworn testimony of witnesses and the production of documents.

17.19    Sec. 20. APPROPRIATION.
17.20    $....... is appropriated from the general fund to the commissioner of commerce
17.21for expenses associated with the licensing of debt management service providers. The
17.22appropriation is available until spent.

17.23    Sec. 21. REPEALER.
17.24Minnesota Statutes 2006, sections 332.12; 332.13; 332.14; 332.15; 332.16; 332.17;
17.25332.18; 332.19; 332.20; 332.21; 332.22; 332.23; 332.24; 332.25; 332.26; 332.27; 332.28;
17.26and 332.29, are repealed."
17.27Amend the title accordingly