| 1 | 1 | | 1.1 A bill for an act |
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| 2 | 2 | | 1.2 relating to higher education; requiring minimum standards for certain higher |
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| 3 | 3 | | 1.3 education student banking accounts; proposing coding for new law in Minnesota |
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| 4 | 4 | | 1.4 Statutes, chapter 135A. |
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| 5 | 5 | | 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
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| 6 | 6 | | 1.6 Section 1. [135A.146] REGULATION OF STUDENT BANKING PRACTICES. |
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| 7 | 7 | | 1.7 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have |
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| 8 | 8 | | 1.8the meanings given. |
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| 9 | 9 | | 1.9 (b) "Higher education institution" means a public postsecondary institution, private |
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| 10 | 10 | | 1.10postsecondary institution, or Tribal college that operates in Minnesota. |
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| 11 | 11 | | 1.11 (c) "Financial institution" means a bank, credit union, or other entity offering consumer |
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| 12 | 12 | | 1.12financial services, including checking or savings accounts, debit cards, or other consumer |
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| 13 | 13 | | 1.13financial products. |
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| 14 | 14 | | 1.14 (d) "Student banking service" means a consumer financial product or service other than |
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| 15 | 15 | | 1.15student loans, including checking or deposit accounts, prepaid cards, debit cards, or credit |
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| 16 | 16 | | 1.16cards provided by a financial institution to an individual through a partnership, agreement, |
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| 17 | 17 | | 1.17or contract with a higher education institution where the individual is enrolled as a student. |
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| 18 | 18 | | 1.18 (e) "Tier 1 service" means a student banking service that is used to disburse financial |
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| 19 | 19 | | 1.19aid. |
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| 20 | 20 | | 1.20 (f) "Tier 2 service" means a student banking service that is not used to disburse financial |
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| 21 | 21 | | 1.21aid. |
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| 22 | 22 | | 1Section 1. |
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| 23 | 23 | | 25-04074 as introduced03/12/25 REVISOR VH/VJ |
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| 24 | 24 | | SENATE |
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| 25 | 25 | | STATE OF MINNESOTA |
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| 26 | 26 | | S.F. No. 2739NINETY-FOURTH SESSION |
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| 27 | 27 | | (SENATE AUTHORS: FATEH) |
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| 28 | 28 | | OFFICIAL STATUSD-PGDATE |
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| 29 | 29 | | Introduction and first reading03/20/2025 |
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| 30 | 30 | | Referred to Higher Education 2.1 Subd. 2.Student banking services.A higher education institution must not enter into |
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| 31 | 31 | | 2.2a partnership, agreement, or contract with a financial institution to offer a student banking |
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| 32 | 32 | | 2.3service that does not comply with the requirements of subdivisions 3 to 5. The Board of |
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| 33 | 33 | | 2.4Regents of the University of Minnesota is requested to comply with this section. |
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| 34 | 34 | | 2.5 Subd. 3.Prohibited fees.(a) A higher education institution must not permit a financial |
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| 35 | 35 | | 2.6institution to charge the following fees in connection with a tier 1 or tier 2 service: |
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| 36 | 36 | | 2.7 (1) nonsufficient fund or overdraft fees; |
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| 37 | 37 | | 2.8 (2) monthly, annual, or other maintenance fees; or |
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| 38 | 38 | | 2.9 (3) account closure fees. |
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| 39 | 39 | | 2.10 (b) A higher education institution must not permit a financial institution to charge the |
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| 40 | 40 | | 2.11following fees in connection with a tier 1 service: |
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| 41 | 41 | | 2.12 (1) deposit or withdrawal fees; or |
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| 42 | 42 | | 2.13 (2) dormant account fees. |
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| 43 | 43 | | 2.14 Subd. 4.Transparency.A higher education institution must require a financial institution |
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| 44 | 44 | | 2.15to provide clear, plain-language terms of service for the student banking service to ensure |
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| 45 | 45 | | 2.16that a student fully understands account terms and associated conditions. |
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| 46 | 46 | | 2.17 Subd. 5.Prevailing market terms.A higher education institution must require partner |
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| 47 | 47 | | 2.18financial institutions to offer terms and conditions in connection with student banking |
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| 48 | 48 | | 2.19services that are at least as favorable to the student as prevailing market norms for comparable |
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| 49 | 49 | | 2.20financial services, including by providing competitive interest rates. |
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| 50 | 50 | | 2.21 Subd. 6.Reporting requirements.By January 15 of each year, a higher education |
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| 51 | 51 | | 2.22institution must report to the commissioner the following information related to student |
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| 52 | 52 | | 2.23banking services: |
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| 53 | 53 | | 2.24 (1) the total number of service accounts maintained by students at the higher education |
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| 54 | 54 | | 2.25institution broken out by tier 1 service and tier 2 service accounts; |
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| 55 | 55 | | 2.26 (2) how much money the higher education institution receives from financial institutions |
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| 56 | 56 | | 2.27in connection with student banking service accounts broken out by tier 1 and tier 2 service |
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| 57 | 57 | | 2.28accounts; |
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| 58 | 58 | | 2.29 (3) the identity of partner financial institutions; and |
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| 59 | 59 | | 2Section 1. |
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| 60 | 60 | | 25-04074 as introduced03/12/25 REVISOR VH/VJ 3.1 (4) a summary of terms and conditions offered to students in connection with the tier 1 |
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| 61 | 61 | | 3.2and tier 2 service accounts, including whether such terms and conditions comply with the |
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| 62 | 62 | | 3.3requirements of this section. |
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| 63 | 63 | | 3Section 1. |
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| 64 | 64 | | 25-04074 as introduced03/12/25 REVISOR VH/VJ |
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