SB-0719, As Passed House, May 12, 2016
January 26, 2016, Introduced by Senator BOOHER and referred to the Committee on Banking and Financial Institutions.
A bill to amend 2005 PA 244, entitled
"Deferred presentment service transactions act,"
by amending section 35 (MCL 487.2155).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 35. (1) A licensee shall not renew a deferred presentment
service agreement. A licensee may extend a deferred presentment
service agreement only if the licensee does not charge a fee in
connection with the extended transaction. A licensee who extends an
agreement under this subsection shall not create a balance owed
above the amount owed on the original agreement.
(2) If a drawer enters into 8 deferred presentment service
transactions with any licensee in any 12-month period, the licensee
shall provide the drawer an option to repay that eighth transaction
and each additional transaction in that 12-month period pursuant to
a written repayment plan subject to the following terms:
(a) The drawer shall request the repayment plan, either orally
or in writing, within 30 days after the maturity date of the
deferred presentment service transaction.
(b) The drawer shall repay the transaction in 3 equal
installments with 1 installment due on each of the next 3 dates on
which the drawer receives regular wages or compensation from an
employer or other regular source of income, pursuant to a written
repayment plan agreement.
(c) The drawer shall pay a fee to the licensee for
administration of the repayment plan. The initial amount of the fee
is $15.00. Beginning March 1, 2011, and by March 1 of every fifth
year after March 1, 2011, the licensee may adjust the fee by an
amount
determined by the commissioner director
to reflect the
cumulative percentage change in the Detroit consumer price index
over the preceding 5 calendar years. As used in this subsection,
"Detroit consumer price index" means the most comprehensive index
of
consumer prices available for the Detroit area from the bureau
of
labor statistics of the United States department of labor.
Bureau of Labor Statistics of the United States Department of
Labor.
(d) The drawer shall agree not to enter into any additional
deferred presentment transactions during the repayment plan term.
(3) A licensee shall advise a customer of the repayment option
described in subsection (2) at the time he or she is eligible. If a
customer believes he or she has been illegally denied the repayment
option under this section, he or she is entitled to contact the
office
of financial and insurance services department toll-free at
1-877-999-6442. If a customer has entered into 8 deferred
presentment service transactions in any 12-month period, the
database provider shall notify the licensee when the licensee
submits the required customer information to the database for that
customer that the customer is entitled to a repayment plan under
this section. The database provider shall instruct the licensee to
provide the customer with the following notice, in a document
separate from the deferred presentment transaction agreement and in
at least 12-point type:
"If you are unable to pay your deferred presentment service
transaction and have entered into 8 deferred presentment
transactions in any 12-month period, state law entitles you to
request a repayment of that transaction in installments. We are
required to advise you of this option at the time it is available.
If you elect this option, you must notify us, either orally or in
writing, within 30 days after the maturity date of the eighth
deferred presentment transaction in the 12-month period. The notice
must be provided to us at our place of business. You may be charged
an additional fee when the transaction is rescheduled in
installments. You will be ineligible to enter into a deferred
presentment service transaction with any licensee during the term
of the repayment plan. If we refuse to provide this option under
the
stipulations above, you should contact the Office of Financial
and
Insurance Services department
of insurance and financial
services toll-free at 1-877-999-6442.".
(4) During the term of a repayment plan by a drawer under this
section, the database provider shall notify the licensee at the
time the licensee submits the required customer information to the
database for that customer that the customer is presently in a
repayment plan under this section with 1 or more other licensees
and the licensee shall not enter into a deferred presentment
transaction with that individual.
(5) A licensee shall not present a check for payment before
the maturity date or during the term of the repayment plan. In
addition to the remedies and penalties under this act, a licensee
that presents a check for payment before the maturity date or
during the term of the repayment plan is liable for all expenses
and damages caused to the drawer and the drawee as a result of the
violation. If a drawer has not requested a repayment plan on or
before the maturity date, the licensee may redeem, present for
payment, or enter the check into the check-clearing process under
the terms of the original deferred presentment service transaction
agreement.
(6) A drawer satisfies his or her obligation under a deferred
presentment service agreement when the check the licensee is
holding is paid by the drawee or is redeemed by the drawer by
paying to the licensee an amount equal to the full amount of the
check.
(7) Unless the drawer has entered into a written repayment
plan under subsection (2), a licensee shall deposit a check held in
connection with a deferred presentment service transaction on the
maturity date if the check is not redeemed in the manner described
in section 2(1)(c)(i), or exchanged in the manner described in
section 2(1)(c)(ii), on or before the maturity date.
(8) A licensee shall deposit a check held in connection with a
deferred presentment service transaction on any repayment plan
installment date described in subsection (2) if the drawer fails to
make the installment payment.
(9) If the drawer has an outstanding deferred presentment
service transaction in which a check held in connection with the
transaction was deposited and returned unpaid, the licensee may
collect the check by means of 1 or more telephone-initiated entries
if all of the following are met:
(a) The drawer agrees to each telephone-initiated entry.
(b) Each telephone-initiated entry is a single, date-specific
payment and does not authorize more than 1 payment or periodic
payments.
(c) The licensee does not charge the drawer a fee in
connection with the telephone-initiated entry or entries.
(10) If the payment to satisfy an outstanding deferred
presentment transaction obligation is made in person, the licensee
shall immediately return the check held in connection with the
deferred presentment service transaction to the drawer. If the
payment to satisfy the obligation is not made in person, the
licensee shall return the check to the drawer by mailing it to the
address listed on the deferred presentment transaction service
agreement within 1 business day after the licensee obtains evidence
that the drawer has satisfied the obligation.
(11) A licensee shall only accept a payment by debit card to
redeem a check the licensee is holding if the drawer certifies to
the licensee that the debit card draws funds from the same account
on which the check is drawn.
(12) As used in this section, "telephone-initiated entry"
means a debit transaction to a drawer's account that is processed
through an automated clearing house, as that term is defined in
section 1 of 2002 PA 738, MCL 124.301, and initiated pursuant to an
authorization obtained from the drawer orally by telephone.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless Senate Bill No. 607 of the 98th Legislature is enacted into
law.