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Minnesota Interest Rate Laws

Minnesota governs interest rates in the state through, Minnesota Statutes under the head Trade Regulations, Consumer Protection, the provisions of Chapter 334 Money, Rates of Interest.  Section 334.01 of the Chapter prescribes the legal rate of interest in the state as six percent (6 %) per annum i.e. at the rate of $6 upon $100 for a year.  Parties can agree upon a higher rate of interest, through a written contract, but not exceeding eight percent (8 %) per annum.

By the authority of Section 334.02, persons who paid usurious interest can recover the full amount of interest or premium so paid, with costs, if action is brought within two years after such payment or delivery.  Usurious contracts for greater rates are void pursuant to Section 334.03.  Pursuant to Section 48.196, banks or savings banks, savings associations, credit unions or similar institutions receiving or charging usurious interest will be subject to forfeiture of such entire amount.  Persons who have already paid such usurious interest are entitled to recover twice the amount of the interest thus paid.

Rate of interest on a judgment or award for recovery of money is computed by the court administrator or arbitrator, determined on or before December 20 of prior year, based on the secondary market yield of one year United States Treasury bills, calculated on a bank discount basis.  This is prescribed in Section 549.09 of the Minnesota Statutes.  Interest is computed as simple interest per annum for a judgment or award of $50,000 or less.  Interest rate will be ten percent (10 %) per year, until paid, for a judgment or award over $50,000.

Pursuant to Section 334.19, interest charged by a broker or dealer registered under the Securities Exchange Act of 1934 is exempted from the usury laws of the state.  Section 334.011 permits interest at a rate of not more than 4-1/2 percent in excess of the discount rate on an amount of less than $100,000 for business or agricultural purposes.  Loans or forbearance of money subject to the provisions of the Employee Retirement Income Security Act of 1974 are exempted from the usury laws of the state.  Similarly loans secured by a savings or time deposit account owned by the borrower are exempt from the limit of interest rate fixed by Section 334.01.

Minn. Stat. § 334.01

RATE OF INTEREST
Subdivision 1. General.
The interest for any legal indebtedness shall be at the rate of $6 upon $100 for a year, unless a different rate is contracted for in writing. No person shall directly or indirectly take or receive in money, goods, or things in action, or in any other way, any greater sum, or any greater value, for the loan or forbearance of money, goods, or things in action, than $8 on $100 for one year.

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Subd. 2. Contracts of $100,000 or more.
Notwithstanding any law to the contrary, except as stated in section 58.137, and with respect to contracts for deed, section 47.20, subdivision 4a, no limitation on the rate or amount of interest, points, finance charges, fees, or other charges applies to a loan, mortgage, credit sale, or advance made under a written contract, signed by the debtor, for the extension of credit to the debtor in the amount of $100,000 or more, or any written extension and other written modification of the written contract. The written contract, written extension, and written modification are exempt from the other provisions of this chapter.
Subd. 3. Contracts under Employee Retirement Income Security Act of 1974.
A contract entered into on or after December 31, 1974, for the loan or forbearance of money, goods, or things in action and any extensions, including extensions of installments and related changes in its terms between a participant, former participant, or beneficiary, and a plan which is subject to the provisions of the Employee Retirement Income Security Act of 1974, United States Code, title 29, chapter 18, as amended through December 31, 1982, is exempt from the provisions of this chapter.

Minn. Stat. § 334.011

RATES OF INTEREST; BUSINESS AND AGRICULTURAL LOANS
Subdivision 1. Permitted rate.
Notwithstanding the provisions of any law to the contrary a person may, in the case of a contract for the loan or forbearance of money, goods, or other things in action in an amount of less than $100,000 for business or agricultural purposes, charge interest at a rate of not more than 4-1/2 percent in excess of the discount rate on 90 day commercial paper in effect at the Federal Reserve Bank in the Federal Reserve District encompassing Minnesota.
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Subd. 2. Violation.
If a greater rate of interest than that permitted by subdivision 1 is charged then the entire interest due on that note, bill or other evidence of debt is forfeited. If the greater rate of interest has been paid, the person who paid it may recover in a civil action an amount equal to twice the amount of interest paid.
Subd. 3. Fluctuation in federal discount rate.
If the rate of interest charged is permitted by this section at the time the loan was made, that rate of interest does not later become usurious because of a fluctuation in the federal discount rate.

Minn. Stat. § 334.02

USURIOUS INTEREST; RECOVERY
Every person who for any such loan or forbearance shall have paid or delivered any greater sum or value than in section 334.01 allowed to be received may, personally or through personal representatives, recover in an action against the person who shall have received the same, or the receiver’s personal representatives, the full amount of interest or premium so paid, with costs, if action is brought within two years after such payment or delivery.

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Minn. Stat. § 334.03

USURIOUS CONTRACTS INVALID; EXCEPTIONS
All bonds, bills, notes, mortgages, and all other contracts and securities, and all deposits of goods, or any other thing, whereupon or whereby there shall be reserved, secured, or taken any greater sum or value for the loan or forbearance of any money, goods, or things in action than prescribed, except such instruments which are taken or received in accordance with and in reliance upon the provisions of any statute, shall be void except as to a holder in due course.

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Minn. Stat. § 334.012

RATES OF INTEREST; LOANS SECURED BY SAVINGS ACCOUNTS
Notwithstanding the provisions of section 334.01, a financial institution may, in the case of a loan or forbearance of money, goods, or things in action, secured by a savings or time deposit account owned by the borrower, charge interest at a rate of not more than the greater of two percent in excess of the rate of interest payable on the savings or time deposit account or the contracted rate authorized in section 334.01, subdivision 1. For purposes of this section, “financial institution” means a bank, savings bank, trust company, mutual savings bank, or savings association organized under the laws of this state or the United States and having its main office in this state.

Minn. Stat. § 334.19

INTEREST RATES ON MARGIN ACCOUNTS
Subject to the provisions of chapter 80A, no law in this state prescribing or limiting interest rates upon loans applies to interest charged by a broker or dealer registered under the Securities Exchange Act of 1934, as amended, for carrying a debit balance including a debit balance arising out of a nonpurpose loan, in an account for a customer if such debit balance is payable on demand and secured by securities or bonds.

Minn. Stat. § 47.204

TEMPORARY REMOVAL OF MORTGAGE USURY LIMITS
Subdivision 1. Limits on interest and other charges.
Notwithstanding any law to the contrary, except as stated in section 58.137, no limitation on the rate or amount of interest, points, finance charges, fees, or other charges applies to a loan, mortgage, credit sale, or advance as described in United States Code, title 12, section 1735f-7a, as amended, which is made in this state after June 2, 1981.
Subd. 2. Enforceable throughout term.
If the rate or amount of interest, discount points, finance charges, or other charges are permitted by this section at the time the loan, mortgage, credit sale or advance is made, the rate or amount of interest, discount points, finance charges or other charges are permitted throughout the original term of the agreement and any extension agreed upon by the borrower and the lender or their respective successors in interest.

Minn. Stat. § 48.196

PENALTY FOR USURIOUS INTEREST
The taking, receiving, reserving or charging by a lender of a rate of interest greater than is allowed by state law shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person paying it, or the person’s legal representatives, may recover, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the lender taking or receiving the interest, if the action is commenced within two years from the time the usurious transaction occurred. For purposes of this section, the term “lender” means a bank or savings bank organized under the laws of this state, a federally chartered savings association, a savings association organized under chapter 51A, a federally chartered credit union, a credit union organized under chapter 52, an industrial loan and thrift company organized under chapter 53, a regulated lender licensed under chapter 56, or a mortgagee or lender approved or certified by the secretary of housing and urban development or approved or certified by the administrator of veterans affairs.

Minn. Stat. § 48.195

INTEREST RATES; USURY LIMIT FOR DEPOSITORY INSTITUTIONS
Notwithstanding any law to the contrary, a bank, savings bank, savings association, or credit union organized under the laws of this state, or a national bank or federally chartered savings bank, savings association, or credit union, doing business in this state, may charge on any loan or discount made or upon any note, bill or other evidence of debt, except an extension of credit made pursuant to section 48.185, interest at a rate of not more than 4-1/2 percent in excess of the discount rate, including any surcharge thereon, on 90-day commercial paper in effect at the Federal Reserve Bank located in the Ninth Federal Reserve District.

Minn. Stat. § 549.09

549.09 INTEREST ON VERDICTS, AWARDS, AND JUDGMENTS
Subdivision 1. When owed; rate.
(a) When a judgment or award is for the recovery of money, including a judgment for the recovery of taxes, interest from the time of the verdict, award, or report until judgment is finally entered shall be computed by the court administrator or arbitrator as provided in paragraph (c) and added to the judgment or award.
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(c)(1) For a judgment or award of $50,000 or less, the interest shall be computed as simple interest per annum. The rate of interest shall be based on the secondary market yield of one year United States Treasury bills, calculated on a bank discount basis as provided in this section.
On or before the 20th day of December of each year the state court administrator shall determine the rate from the one-year constant maturity treasury yield for the most recent calendar month, reported on a monthly basis in the latest statistical release of the board of governors of the Federal Reserve System. This yield, rounded to the nearest one percent, or four percent, whichever is greater, shall be the annual interest rate during the succeeding calendar year. The state court administrator shall communicate the interest rates to the court administrators and sheriffs for use in computing the interest on verdicts and shall make the interest rates available to arbitrators.

(2) For a judgment or award over $50,000, the interest rate shall be ten percent per year until paid.
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Inside Minnesota Interest Rate Laws