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