Minnesota Senate Bill SF2739

Minnesota 2025-2026 Regular Session

• Introduced: 3/20/25
• Refer: 3/20/25

Caption

Certain higher education student bank account minimum standards requirement provision

Summary

SF2739 would create a new section in Minnesota Statutes chapter 135A governing “student banking services” offered through partnerships between higher education institutions and financial institutions. The bill applies to public postsecondary institutions, private postsecondary institutions, and Tribal colleges operating in Minnesota, and it distinguishes between services used to disburse financial aid (“tier 1”) and other student banking services (“tier 2”). The bill prohibits institutions from entering into agreements for student banking services unless the services meet minimum consumer-protection standards. Those standards include bans on overdraft and nonsufficient-fund fees, maintenance fees, and account-closure fees for all student banking services, plus additional prohibitions on deposit/withdrawal fees and dormant-account fees for financial-aid disbursement accounts. It also requires plain-language disclosures, requires terms at least as favorable as prevailing market norms, and directs institutions to report annually to the commissioner on account counts, revenue received from financial institutions, partner identities, and whether the services comply with the law. The Board of Regents of the University of Minnesota is requested to comply as well.

Impact

If enacted, the bill would add a new regulatory framework to Minnesota higher education law limiting how colleges and universities may structure banking partnerships for students. It would not directly regulate all consumer bank accounts, but it would constrain institutional contracts with banks, credit unions, and other financial service providers when those services are tied to student enrollment or financial aid disbursement. The bill would also create annual reporting obligations for institutions and likely increase oversight by the state commissioner over student banking arrangements.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the measure appears to be framed as a consumer-protection bill aimed at improving fairness and transparency for students. Its requirements suggest a generally protective posture toward students, especially those receiving financial aid through institutional accounts. No opposing or supporting statements are available in the record provided, so there is no documented committee sentiment beyond the bill’s consumer-focused design.

Contention

The main points of potential contention are the restrictions on fees, the requirement that terms be at least as favorable as prevailing market norms, and the reporting obligations imposed on institutions. Higher education institutions and their banking partners may view these provisions as limiting flexibility or reducing revenue from account programs, while supporters would likely argue that students should not be exposed to hidden costs or unfavorable account terms. The bill also implicitly raises questions about how strictly institutions can be held responsible for the practices of partner financial institutions and how “prevailing market norms” would be interpreted and enforced.