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SF2296 (Legislative Session 94 (2025-2026))

Federal qualified mortgage points and fees threshold satisfying loans exclusion from the definition of a conventional loan provision

Related bill: HF1865

AI Generated Summary

Purpose of the Bill

The primary aim of this bill is to modify how certain loans are defined within Minnesota's commerce statutes. Specifically, the bill seeks to exclude loans that meet the federal "qualified mortgage points and fees threshold" from being classified as "conventional loans."

Main Provisions

  • Amendment of Definitions: The bill proposes amendments to the existing statute to clearly redefine what constitutes a "conventional loan."
  • Exclusion Criteria: Loans that satisfy specific criteria under federal law – namely, the federal "qualified mortgage points and fees threshold" as outlined in Title 12 of the Code of Federal Regulations – will no longer fall under the category of "conventional loans."

Significant Changes to Existing Law

  • Redefinition of Conventional Loans: By amending the statute to exclude certain federally qualified loans from the "conventional" category, the bill effectively narrows the scope of what can be considered a conventional loan.
  • Impact on Lending Practices: Lenders who provide loans that meet the federal points and fees criteria will no longer classify their loans as conventional loans within the state, potentially affecting how these loans are marketed and regulated.

Relevant Terms

  • Conventional Loan
  • Qualified Mortgage
  • Federal Qualified Mortgage Points and Fees Threshold
  • Code of Federal Regulations Title 12 Section 1026.43
  • Lender
  • Finance Charge
  • Cooperative Apartment Loan

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 09, 2025SenateFloorActionIntroduction and first reading
March 09, 2025SenateFloorActionReferred toCommerce and Consumer Protection

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarifies exclusion of federal qualified mortgage points and fees from 'conventional loan' definition."
      ],
      "removed": [],
      "summary": "This bill amends the definition of 'conventional loan' in section 47.20.",
      "modified": [
        "Amends definitions related to conventional loans and cooperative apartment loans."
      ]
    },
    "citation": "47.20"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced in context of loans or advances of credit.",
      "modified": [
        "Explains exclusions under 'conventional loan' related to section 334.011."
      ]
    },
    "citation": "334.011"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines 'cooperative apartment corporation' in context of securities and cooperative housing.",
      "modified": []
    },
    "citation": "308A"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines 'cooperative apartment corporation' in context of securities and cooperative housing.",
      "modified": []
    },
    "citation": "317A"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced for creation of residential units in existing structures.",
      "modified": []
    },
    "citation": "515B"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Referenced in the computation of loan yield or rate of return on cooperative and conventional loans.",
      "modified": []
    },
    "citation": "226.5"
  }
]

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