Bill Text: MI HB5594 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Financial institutions; other; monthly account service fees for certain closed-end loans; allow for regulatory loan act licensees. Amends sec. 13 of 1939 PA 21 (MCL 493.13).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-05-22 - Printed Bill Filed 05/22/2014 [HB5594 Detail]
Download: Michigan-2013-HB5594-Introduced.html
HOUSE BILL No. 5594
May 21, 2014, Introduced by Rep. Lyons and referred to the Committee on Financial Services.
A bill to amend 1939 PA 21, entitled
"Regulatory loan act,"
by amending section 13 (MCL 493.13), as amended by 2001 PA 270.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 13. (1) A licensee may lend money and may contract for,
compute, and receive interest charges on the loan at a rate that
does not exceed the rate permitted by the credit reform act, 1995
PA 162, MCL 445.1851 to 445.1864. A loan by a licensee may be 1 of
the following:
(a) A closed-end loan.
(b) Open-end credit consisting of direct advances from the
licensee or checks issued by the licensee. This subdivision does
not apply to open-end credit available through the use of a credit
card or charge card.
(2) A licensee shall not induce a person to become directly
obligated under more than 1 loan contract that is not secured by
personal property at the same time.
(3) Charges on loans made under this act shall not be paid,
deducted,
or received in advance , or
compounded. All charges on
loans made under this act shall be computed on the unpaid principal
balance or portions of the balance, specifically expressed in every
obligation signed by the borrower, and computed on the basis of the
number of days actually elapsed.
(4) In addition to the interest and charges provided for in
this
act, a loan processing fee not to that does not exceed 5% of
the principal, up to $250.00, may be charged for each closed-end
loan made, and may be included in the principal of the loan. The
$250.00 limit on the loan processing fee shall be adjusted every 2
years to reflect the percentage change in the United States
consumer price index for the 2 immediately preceding calendar
years, rounded to the nearest hundred dollars. As used in this
subsection, "United States consumer price index" means the United
States consumer price index for all urban consumers in the United
States city average, as defined and reported by the United States
department of labor, bureau of labor statistics, and after
certification by the commissioner. A licensee may require the
borrower
to pay the late charges permitted by under the credit
reform act, 1995 PA 162, MCL 445.1851 to 445.1864. A licensee shall
not induce or permit a person to become obligated, directly or
contingently, under more than 1 loan contract that is not secured
by personal property at the same time for the purpose or with the
result
of obtaining receiving a loan processing fee that is not
otherwise permitted by this section. No other amount shall be
directly or indirectly charged, contracted for, or received, except
the lawful fees, if any, actually and necessarily paid by the
licensee to a governmental entity for the filing, recording, or
releasing of either of the following:
(a) A financing statement or an instrument securing the loan,
or both.
(b) A record noting or releasing a lien or transferring a
certificate of title under the Michigan vehicle code, 1949 PA 300,
MCL 257.1 to 257.923.
(5) The fees permitted under this section may be collected at
any time on or after the date the loan is made.
(6) A licensee may charge a handling fee for the return of an
unpaid and dishonored check, draft, negotiable order, or similar
instrument given to the licensee in full or partial repayment of a
loan
as authorized by under the credit reform act, 1995 PA 162, MCL
445.1851 to 445.1864.
(7) A licensee may recover from the borrower the costs and
expenses of retaking, holding, repairing, preparing for sale, and
selling any personal property in accordance with sections 9609 and
9615 of the uniform commercial code, 1962 PA 174, MCL 440.9609 and
440.9615.
(8) A licensee may charge a reasonable annual fee for the
privilege of receiving open-end credit from the licensee. A
licensee may charge a monthly account service fee for each
outstanding closed-end loan, in an amount that does not exceed
9.75% of the original principal amount of the loan.
(9) A licensee may charge a reasonable fee per payment if a
borrower makes a payment or payments by authorizing a licensee
verbally or in writing to execute a debit or otherwise process a
payment, through automated clearing procedures, drawn on the
borrower's deposit account. This subsection shall not be construed
to permit the imposition of a fee in cases where the borrower, at
the time of consummation of the loan, authorizes the licensee to
effect all periodic installment payments by way of electronic
automated clearing procedures drawn on the borrower's deposit
account.
(10)
In addition to the penalties provided by under this act,
a violation of this act with respect to a particular regulatory
loan transaction is also subject to the penalty and remedy
provisions of the credit reform act, 1995 PA 162, MCL 445.1851 to
445.1864.
(11) As used in this section, "open-end credit" means credit
that is not secured by an interest in real property and is extended
under a plan in which both of the following apply:
(a) The licensee reasonably contemplates repeated
transactions.
(b) The amount of credit that may be extended to the borrower
during the term of the plan is generally made available to the
extent that any part of the outstanding balance is repaid.
