Commerce budget focused on consumer protection

The Commerce portion of the Commerce and Energy Budget Omnibus Bill left the Republican-led Senate with very little consumer-protection language but returned from compromise negotiations with the House with several important changes.

Among the most impactful is a new Student Loan Borrowers Bill of Rights, a policy championed by DFLers for several years. The new law will require loan services to obtain a license to lend in Minnesota and imposes several requirements on them, including:

  • Requires timely responses to borrowers’ written communication
    • Requires servicers to apply overpayments as instructed by the borrower
    • Requires servicers to apply partial payments in a way that minimizes late fees and the negative impact on the borrower’s credit history
    • Requires servicers to evaluate borrowers for income-driven repayment program eligibility before placing them in forbearance or default
    • Prohibits servicers from engaging in unfair or deceptive practices; from attempting to mislead a borrower; from knowingly misapplying payments; from providing inaccurate information to a consumer reporting agency
    • Allows the Commerce Commissioner to examine student loan servicers as necessary and take action against a licensee, including barring a person from servicing loans
    • Applied student loan contracts executed on or after Aug. 1, 2021

The bill also provides the Department of Commerce authority to enforce current laws surrounding children’s toys containing toxic chemicals. Currently, the Department receives many complaints about this matter but has no real authority to enforce corrective action. There also will be a new Catalytic Converter Theft Prevention Pilot Program in Minnesota, providing funding to targeted areas to mark cars’ catalytic converters with unique identification numbers to deter thieves.

The bill still contains a problematic new barrier to requiring health insurance companies to cover certain treatments or conditions. However, the agreement no longer contains an expensive, short-sighted reinsurance extension that would have cost taxpayers at least another $150 million without any guarantee of meaningful health care reform. The federal American Rescue Plan will make insurance premiums more affordable for individuals purchasing on the open market this year, and DFLers remain committed to prioritizing long-term health care reforms in the future.

At the time of this writing, the Senate had debated the bill and continues to wait for the House of Representatives to officially send the bill for final passage. It is expected to be signed by the governor once House Republicans allow work to progress. (HF 6/SF 19)

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