In addition to the registration requirements for bullion coin dealers and coin dealer representatives that took effect on July 1, 2014, the new Minnesota bullion coin law requires all bullion coin dealers and coin dealer representatives who do business in Minnesota to maintain certain surety bond requirements in order to continue operations within the state. See Minn. Stat. § 80G.06. All registered bullion coin dealers and coin dealer representatives must also adhere to specific sales practices in order to remain in compliance with the new laws. See Minn. Stat. § 80G.07.
Surety Bond Requirements
Pursuant to Minn. Stat. § 80G.06, any bullion coin dealer operating in Minnesota or buying or selling from a Minnesota resident must maintain a surety bond issued by a reputable surety company admitted to do business in Minnesota. A surety bond is a guarantee issued by a surety agency on behalf of a client. It requires the surety agency to pay a sum of money to a third party in the event the client fails to fulfill certain obligations.
Surety bonds are required to protect consumers from loss caused by bullion coin dealers or coin dealer representatives. Under Minn. Stat. § 80G.06, subd. 2, a consumer injured in money or property by a bullion coin dealer’s or coin dealer representative’s failure to provide bullion coins that the consumer has paid for or failure to remit money or goods owed to the consumer in connection with the consumer’s sale of bullion coins may file a claim with the surety to recover the consumer’s losses. The commissioner or the attorney general may also bring claims on behalf of an injured consumer.
The aggregate amount of transactions by the bullion coin dealer or coin dealer representative during the preceding 12-month period determines the required surety bond amount. Transactions include any retail purchases from or sales to consumers. Minn. Stat. § 80G.06 provides the following surety bond requirements for specific transaction amounts:
Transaction Amount in Preceding 12-month Period Surety Bond Amount Required
$0 to $200,000: $25,000
$200,000.01 to $500,000: $50,000
$500,000.01 to $1,000,000: $100,000
$1,000,000.01 to $2,000,000: $150,000
Over $2,000,000: $200,000
Operating as a Bullion Coin Dealer or Coin Dealer Representative
In addition to maintaining a surety bond, Minnesota bullion coin dealers and coin dealer representatives must avoid certain “prohibited conduct” when dealing with consumers. See Minn. Stat. § 80G.07. Bullion coin dealers and coin dealer representatives must provide consumers with the sale or purchase price and precious metal content of the bullion coins, in writing, prior to or concurrent with the transaction. Additionally, bullion coin dealers and coin dealer representatives must deliver to the consumer any bullion coins sold to the consumer or pay the consumer for any bullion coins purchased by the bullion coin dealer or coin dealer representative within a time agreed upon by the parties. If the parties do not specify a time period for payment, bullion coin dealers or coin dealer representatives must deliver or pay to the consumer within 30 days from the date of sale or purchase. A bullion coin dealer or coin dealer representative’s failure to pay or deliver to the consumer within the mutually agreed upon or statutory time period is a misdemeanor.
Further, Minnesota bullion coin dealers and coin dealer representatives must not contact consumers or sell or provide the consumer’s name to any other dealer after the consumer requests not to be contacted. Finally, bullion coin dealers and coin dealer representatives must deal with consumers in a “reasonable manner”, avoiding misrepresentations and abiding by the terms of any agreements. Acting in a reasonable manner includes avoiding any misrepresentation of any connection between the bullion coin dealer or coin dealer representative and any government agency or mint.
Conclusion
The new Minnesota bullion coin law has added a number of new requirements for bullion coin dealers and coin dealer representatives. In addition to the registration requirement, the surety bond requirement protects consumers from potential misconduct by bullion coin dealers or coin dealer representatives who fail to act in a commercially reasonable manner.
For more information on how these surety bond and consumer protection requirements and other provisions of the new Minnesota bullion coin law affect bullion coin dealers and coin dealer representatives, contact the Minnesota administrative law attorneys of Trepanier MacGillis Battina P.A.
_______________________
Additional Resources:
New Registration Requirements for Minnesota Bullion Coin Dealers and Coin Dealer Representatives Take Effect. This article summarizes new legal requirements that took effect on July 1, 2014 that require all bullion coin dealers and coin dealer representatives who do business in Minnesota to register with the Minnesota Department of Commerce in order to continue operations within the state.