DEPARTMENT OF
CONSUMER AND INDUSTRY SERVICES DEPARTMENT OF INSURANCE AND FINANCIAL
SERVICES
FINANCIAL
INSTITUTIONS BUREAU
REGULATORY LOAN LICENSEES
Filed with the secretary of state on
These rules take effect immediately upon filing with the secretary of state unless adopted under section 33, 44, or 45a(6) of the administrative procedures act of 1969, 1969 PA 306, MCL 24.233, 24.244, or 24.245a. Rules adopted under these sections become effective 7 days after filing with the secretary of state.
(By authority conferred on the commissioner
director of the financial institutions bureau department
of insurance and financial services by section 21 of the regulatory loan
act, 1939 PA 21, MCL 493.21, and Executive Reorganization Order Nos. 2003-1, 2008-1,
2008-4, 2011-4, and 2013-1, MCL 445.2011, 445.2005, 445.2025, 445.2030, and 550.991
Act No. 21 of the Public Acts of 1939, as amended, being S493.21 of the
Michigan Compiled Laws)
R 493.1 Definitions.
Rule 1. (1) As used in these rules:
(a) "Act" means the
regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24.Act No. 21 of the
Public Acts of 1939, as amended, being S493.1 et seq. of the Michigan
Compiled Laws.
(b) "Bureau" means the
financial institutions bureau.
(c) "Commissioner" means the
commissioner of the financial institutions bureau.
(b) “Department” means the department of insurance and financial services.
(c) “Director” means the director of the department of insurance and financial services.
(2) Terms defined in the act have the same meaning when used in these rules.
R 493.5 Applications. Rescinded.
Rule 5. (1) When a properly completed
application form, together with any required fees, bonds, and
accompanying documents, is received by the bureau, it shall be filed. The
date of the filing shall determine the priority rights of an applicant.
(2) If the application is approved, the
applicant shall be given a specified period of time within which the
office must be established and in operation. The approval and
application shall become void if the applicant does not establish the
office within the specified time, unless the period of time is extended in
writing by the commissioner.
R 493.10 Records; maintenance by means
of data processing equipment permitted; availability. Rescinded.
Rule 10. A licensee may maintain any or
all of the records required by R 493.11 to R 493.13 by means of electronic
data processing equipment. For examination purposes, a licensee shall make available,
at a location in Michigan, all the information contained in these
records written in the English language on paper or, with the approval
of the commissioner, by means of an alternative medium.
R 493.11 Records; daily transactions; borrowers; alphabetical index; judgments.
Rule 11. (1) A licensed office
licensee shall maintain a record of all transactions involving
receipt or disbursement of money funds by that office
each day each office from which the licensee operates. The record shall
must identify each transaction; show separately payments
received on principal and interest charges; show account numbers, names of
borrowers, and all amounts disbursed; and shall be posted and balanced
daily.
(2) A licensee shall maintain, from
the date of loan inception, a record for each borrower which
shall that contains all of the following information:
(a) Borrower's name and address.
(b) Loan number.
(c) Loan amount.
(d) Loan date.
(e) Rate of charge.
(f) Repayment terms.
(g) Description of security.
(h) Names of endorsers, comakers, or sureties.
(i) Amount of filing or discharge fees collected from the borrower.
(j) Marital status only if the loan is secured by household goods.
(k) Any amount received or withheld from the borrower as a premium for insurance in connection with the loan, and the period covered by such insurance policy or policies.
(l) The date and amounts of all principal payments received, interest charges received, and cash disbursements pertaining to the loan, including court costs.
(m) The date to which interest charges are paid and the unpaid balance due on the principal.
(3) A licensee shall maintain an
alphabetical index identifying the name, loan number, and original loan
amount of each borrower, comaker, surety, guarantor, or endorser.
Information concerning a comaker, surety, guarantor, or endorser shall
must be readily identifiable.
(4) When a note is reduced to judgment,
all of the following provisions shall must be complied with:
(a) The loan record maintained pursuant
to subrule (2) of this rule shall must be clearly
designated a judgment account.
(b) Payments received shall must
be identified and applied on the judgment loan record.
(c) The licensee shall retain a
statement signed by a judge or clerk of the court which shall disclose all
of the following information:
(i) Judgment date.
(ii) Name of licensee.
(iii) Judgment debtor's name.
(iv) Date suit was filed.
(v) Nature of the suit.
(vi) Name and location of the court.
(vii) Amount of the judgment, specifying
principal, interest charges, and court costs.
(viii) A judgment of default, consent,
or contested suit.
(ix) Disposition of the case all filings,
judgments, and other documents related to the judgment.
(d) A licensee shall maintain a list of all loans reduced to judgment during the previous 25 months.
(e) A licensee which that charges
a borrower for court costs it incurred on a judgment account shall itemize
the costs on the loan record and retain a receipt or other document
substantiating the costs.
(f) A licensee shall retain a copy of the officer's return of execution issued when property is sold pursuant to a judgment.
(5) When property is taken in accordance
with the terms of a security agreement or by judicial process or
abandonment, the loan record shall must be designated clearly
as a foreclosure repossession account and shall must
state when and how possession of the security was obtained and shall
must identify the proceeds of the sale of the property. The licensee
shall retain all of the following:
(a) A copy of any agreement entered into with the borrower with respect to terms of surrender.
(b) A copy of the notice of sale, together with evidence of mailing or personal delivery.
(c) An inventory of the property taken,
unless it appears in detail on the notice of sale.
(d) A signed statement from the purchasers, or from the auctioneer if the sale was public, describing the collateral purchased and showing the amounts paid.
(e) Evidence that the sale was held on the date set forth in the notice of sale, including a record of any bids received.
(f) A copy of a detailed statement of final accounting sent to the borrower setting forth the disposition of the proceeds of the sale and the principal balance due on the account, if any.
(g) Paid receipts evidencing costs incurred in the repossession and sale of the security which have been charged to the borrower.
(h) A list of all loan accounts foreclosed
where collateral was repossessed each month during the previous 25
months.
(6) When the property is abandoned and the address of the borrower is uncertain or unknown, a notice of sale and statement of final accounting shall be sent to the last known address by registered or certified mail, return receipt requested, and the copies of the notice and statement shall be retained by the licensee.
(7) Within 30 days after consolidation
of 2 or more licensed offices, the records maintained pursuant to R
493.11(2) by each of these offices shall be consolidated and the records
maintained by the offices pursuant to R 493.11(3) shall be consolidated.
R 493.12 Records; assets, liabilities, income, and expenses; temporary entry items.
Rule 12. (1) A licensee shall maintain
records showing the all of its assets, and
liabilities, income, and expenses of each licensed office and records
of the aggregate income and aggregate expenses of all its licensed
Michigan offices.
(2) A licensee shall maintain lists of temporary entry items.
(3) The records required by this
rule shall must be posted not less frequently than
monthly and shall must be available for examination by
the bureau department not later than 25 days after the end of a
month and for 2 years thereafter.
R 493.14 Correspondence; retention by licensed
office licensee.
Rule 14. Each licensed office
licensee shall retain all its written correspondence with the
bureau department.
R 493.15 Insurance certificate or policy; provision to borrower of copy of document evidencing indebtedness or constituting security; consolidation of loans; retention of documents evidencing indebtedness or security.
Rule 15. (1) When a licensee obtains
insurance on behalf of the borrower in connection with a loan, wherein the
premium is paid by the borrower, a properly executed policy or
certificate of insurance shall must be furnished to the
borrower within 15 days of the date of the loan. Such policy or
certificate shall must clearly show all of the following:
(a) The name of the insurance company.
(b) The nature of the insurance.
(c) The extent of the coverage.
(d) The amount of the premium.
(e) The effective date and expiration date of the policy.
(2) A licensee shall furnish to a
borrower, upon request, a copy of any note, assignment, or other document,
which that evidences indebtedness or constitutes security
and which that the borrower is required to sign.
(3) When an additional loan is made
to a borrower who has a loan outstanding, the unpaid balance of the existing
loan and the additional loan shall be consolidated into a new loan.
(43) Each licensed
office licensee shall retain the original or a copy of each
note, security agreement, or other evidence of indebtedness or security which
that has been signed by a borrower in favor of the licensee.
R 493.16 Designated business hours.
Rule 16. A licensed office licensee
shall display conspicuously a sign announcing the hours of each day
during which an employee of the licensee will be present in the office
to accept payments from borrowers prominently display, at each business
location and website, the respective days and times a borrower will be able to
make payments.
R 493.20 Advertising.
Rule 20. (1) A licensee shall maintain
copies of all direct mail advertising material that is mailed
from any location and marketed sent to residents of Michigan.
The date that the direct mail advertising material was used shall
must be indicated on the material. A licensee that operates 2 or
more licensed offices located physical locations or websites, or
both, in Michigan may, upon notice to the commissioner director,
maintain 1 record of the advertising material required by this rule in a
centrally located office in Michigan for all licensed offices. A licensee
that does not have a licensed office located in Michigan shall maintain
the copies required by this rule at its home office. All copies that
are required to be maintained by the this rule shall must
be retained for a minimum of 3 years and shall be made available
for inspection by a representative of the bureau.
(2) An address shall must not
be carried in any advertisement, except for the address of a licensed office
an active location or the home office of the licensee.
(3) A licensee shall not pay any
person for loan applications or recommendations.
R 493.22 Display of license information.
Rule 22. (1) A licensee shall display a copy of its license in a public area at each physical office location within Michigan.
(2) Each website operated by a licensee must display the assigned license number and effective date, identify the department as the licensee’s regulator, and provide the address and telephone number that a person may use to contact the department.
R 493.24 Monthly statements.
Rule 24. A licensee shall provide each borrower listed on a loan document with a monthly statement of account that includes all of the following:
(a) Borrower’s name and address.
(b) Loan number.
(c) Loan amount.
(d) Loan date.
(e) Rate of charge.
(f) Amount of filing or discharge fees collected from the borrower.
(g) Any amount received or withheld from the borrower as a premium for insurance in connection with the loan, and the period covered by such insurance policy or policies.
(h) The date and amounts of all principal payments received, interest charges received, fees received, fees assessed, and cash disbursements pertaining to the loan, including court costs.
(i) The date to which interest charges are current, any unpaid fees, and the balance due on the principal.
R 493.95 Rescission. Rescinded.
Rule 95. R 487.71 to R 487.91 and R 487.205,
appearing on pages 4933 to 4937, 4939, and 4940 of the 1979 Michigan
Administrative Code, are rescinded.