SF4655

Purpose

Introduce a required registration system for lenders operating in Minnesota and clarify how student loans are regulated, while updating the statute to remove obsolete dates.

Main Provisions

• Beginning January 1, 2025, any lender must register with the Minnesota commissioner before providing services in the state. A lender cannot offer or make a student loan to a Minnesota resident without first registering.
• Registration must include:
  • lender’s name and address
  • names of all officers, directors, owners, or other persons in control (as defined in statute)
  • any other information the commissioner requires by rule
• Each registration expires December 31 of every year and must be renewed annually.
• The commissioner may establish and enforce registration procedures, which may include:
  • using the Nationwide Multistate Licensing System and Registry (NMLS)
  • nonrefundable registration fees (including fees for using NMLS)
  • procedures and nonrefundable renewal fees (potentially for continued use of NMLS)
  • alternate registration procedures and nonrefundable fees for postsecondary educational institutions that offer student loans

Changes to Existing Law

• Adds explicit requirement that lenders register to operate in Minnesota and before offering student loans.
• Applies annual renewal and annual expiration dates to lender registrations.
• Introduces authority for the commissioner to set up registration processes and fees, including possible use of the NMLS.
• Establishes separate pathways and fees for postsecondary institutions that offer student loans.
• Eliminates obsolete dates in Minnesota Statutes related to this area (reflected in the 58B.051 modification).

Implementation and Compliance

• Registration is mandatory for lenders before providing services in Minnesota and before offering student loans to residents.
• The commissioner can adopt rules to define procedures, eligibility, and fees, and may require use of the NMLS for registration and renewal.
• Fees are nonrefundable and must be paid by the lender; renewal and ongoing registration may involve additional fees.

Practical Effects

• Lenders will need to plan for annual registration and potential ongoing fees.
• Minnesota residents obtaining student loans will be affected indirectly by this oversight and licensing framework.
• The state aims to standardize lender information (owners, officers, controlling persons) and improve regulatory oversight via established licensing systems.

What to Watch

• The exact rules the commissioner adopts for registration procedures and any associated costs.
• How the NMLS is used in practice for registration and renewal.
• Any separate requirements or fees for postsecondary institutions offering student loans.

Relevant Terms lender, registration, commissioner, Minnesota, student loan, registration expires December 31, renewal, Nationwide Multistate Licensing System and Registry (NMLS), fees, nonrefundable, postsecondary education institutions, officers, directors, owners, controlling persons, rulemaking, obsolete dates, 58B.051.