2025 Session
Last amended: 1975 session
§ 334.19 — Interest Rates on Margin Accounts
Plain-Language Summary
Minnesota's interest rate limits do not apply to margin accounts at registered broker-dealers. This means brokers can charge market rates for loans secured by stocks and bonds that customers use to buy securities on margin.
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.
History:
History: History: 1974 c 26 s 1; 1975 c 27 s 1
Practical Notes
If you have a brokerage account and borrow against your securities (margin trading), the interest rate is not capped by Minnesota usury laws. The debit balance must be payable on demand and secured by securities or bonds. This exemption allows securities markets to function with market-based interest rates.