Bill Text: MI HB5354 | 2023-2024 | 102nd Legislature | Introduced

Michigan House Bill 5354

Introduced

Bill Title: Trade: vehicles; motor vehicle sales finance act; modify. Amends title & secs. 2, 4, 5, 6, 6a, 7, 8, 9, 10, 11, 12, 13, 13a, 14, 14a, 15, 16, 16a, 17, 18, 19, 20, 21, 22, 22a, 28, 29, 30, 31 & 34 of 1950 (Ex Sess) PA 27 (MCL 492.102 et seq.); adds secs. 4a, 9a & 37a & repeals secs. 37 & 41 of 1950 (Ex Sess) PA 27 (MCL 492.137 & 492.141). TIE BAR WITH: HB 5355'23, HB 5356'23, HB 5357'23, HB 5358'23, HB 5359'23, HB 5360'23, HB 5361'23, HB 5362'23, HB 5363'23, HB 5364'23, HB 5365'23, HB 5366'23, HB 5367'23

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-05-23 - Referred To Second Reading [HB5354 Detail]

Download: Michigan-2023-HB5354-Introduced.html

HOUSE BILL NO. 5354

November 14, 2023, Introduced by Rep. Skaggs and referred to the Committee on Judiciary.

A bill to amend 1950 (Ex Sess) PA 27, entitled

"Motor vehicle sales finance act,"

by amending the title and sections 2, 4, 5, 6, 6a, 7, 8, 9, 10, 11, 12, 13, 13a, 14, 14a, 15, 16, 16a, 17, 18, 19, 20, 21, 22, 22a, 28, 29, 30, 31, and 34 (MCL 492.102, 492.104, 492.105, 492.106, 492.106a, 492.107, 492.108, 492.109, 492.110, 492.111, 492.112, 492.113, 492.113a, 492.114, 492.114a, 492.115, 492.116, 492.116a, 492.117, 492.118, 492.119, 492.120, 492.121, 492.122, 492.122a, 492.128, 492.129, 492.130, 492.131, and 492.134), section 2 as amended by 2013 PA 16, section 4 as amended and section 6a as added by 2004 PA 283, sections 5, 6, and 7 as amended by 1988 PA 242, section 12 as amended by 1994 PA 2, section 13 as amended by 2009 PA 231, section 13a as added by 2005 PA 319, section 14 as amended by 2000 PA 361, section 14a as amended by 1980 PA 77, section 17 as amended by 2006 PA 302, section 18 as amended by 2002 PA 699, sections 19, 20, 21, and 31 as amended by 1995 PA 166, and section 22a as amended by 1993 PA 107, and by adding sections 4a, 9a, and 37a; and to repeal acts and parts of acts.

the people of the state of michigan enact:

TITLE

An act defining and regulating to define and regulate certain installment sales of motor vehicles; prescribing to prescribe the conditions under which such certain installment sales of motor vehicles may be made and regulating to regulate the financing thereof; regulating and licensing of certain installment sales of motor vehicles; to regulate and require licensing for persons engaged in the business of making or financing such certain sales; prescribing to prescribe the form, contents, and effect of instruments used in connection with such certain sales and the financing thereof; prescribing of certain sales; to prescribe certain rights and obligations of buyers, sellers, persons financing such certain sales, and others; limiting to limit charges in connection with such certain instruments and fixing fix maximum interest rates for delinquencies, extensions, and loans; regulating to regulate insurance in connection with such certain sales; regulating to regulate repossessions, redemptions, resales, and deficiency judgments and the rights of parties with respect thereto; authorizing to repossessions, redemptions, resales, and deficiency judgments; to authorize extensions, loans, and

forbearances related to such certain sales; authorizing to authorize investigations and examinations of persons engaged in the business of making or financing such certain sales; transferring to transfer certain powers and duties with respect to finance companies to the commissioner director of the financial institutions bureau; department of insurance and financial services; to provide for the powers and duties of certain state governmental officers and entities; and to prohibit certain actions and prescribe civil sanctions and prescribing penalties.

Sec. 2. As used in this act:

(a) "Administrator" means the director of the department of insurance and financial services or the designee of the director.

(b) "Cash price" means the price measured in dollars at which a seller of a motor vehicle would in good faith sell to the buyer or to any other buyer under like circumstances, and the buyer would in good faith buy from the seller, the motor vehicle that is the subject matter of an installment sale contract if the sale were a sale for cash instead of an installment sale.

(c) "Collateral security" means security, other than a security interest in a motor vehicle that is the subject of an installment sale contract, that is given to secure performance of an obligation of the buyer, or of any surety or guarantor for the buyer, under an installment sale contract. The term includes the undertakings of any surety or guarantor for the buyer and any interest in, encumbrance on, or pledge of real or personal property other than the motor vehicle that is the subject of the installment sale contract.

(c) (d) "Down payment" means all partial payments, whether made in cash or otherwise, received by or for the benefit of the

seller before or substantially contemporaneous with either the execution of the installment sale contract or the delivery of the motor vehicle sold under that contract, whichever occurs later.

(d) (e) "Finance charge" means that term as defined in section 106 of the truth in lending act, 15 USC 1605.

(e) (f) "Financial institution" means a state or national chartered bank, a state or federal chartered savings and loan association, or a state or federal chartered credit union.

(f) (g) "Holder" means a seller or other person that is currently entitled to the rights of a seller under an installment sale contract.

(g) (h) "Installment buyer" or "buyer" means a person that buys, hires, or leases a motor vehicle while located in this state for personal, family, or household use, and not for commercial, business, or agricultural use, under an installment sale contract or a legal successor in interest to that person.

(h) (i) "Installment sale contract" or "contract" means an agreement for the retail sale of a motor vehicle, or that has a similar purpose or effect, under which part or all of the price is payable in 2 or more scheduled payments subsequent to the making of the agreement or under which the obligor undertakes to make 2 or more scheduled payments or deposits that can be used to pay part or all of the purchase price, whether or not the seller has retained a security interest in the motor vehicle or has taken collateral security for the buyer's obligation, and any extension, deferment, renewal, or other revision of that agreement. The terms Installment sale contract and contract include a loan, mortgage, conditional sale contract, purchase-money chattel mortgage, hire-purchase agreement, or agreement for the bailment or leasing lease of a

motor vehicle under which the hire-purchaser, the bailee, or the lessee agrees to pay as compensation a sum substantially equivalent to or in excess of the value of the motor vehicle, and any other form of agreement that has a similar purpose or effect. The terms Installment sale contract and contract do not include a sale or contract for sale on an open book account in which the seller has not retained or taken a security interest in the motor vehicle sold or collateral security for the buyer's obligation, the buyer is not required to pay any sum other than the cash price of the motor vehicle sold in connection with the sale or extension of credit, and the buyer is obligated to pay for the motor vehicle in full within not later than 90 days after the time the sale or contract for sale was made.

(i) (j) "Installment seller" or "seller" means a person engaged in the business of selling, offering for sale, hiring, or leasing motor vehicles under installment sale contracts or a legal successor in interest to that person. As used in this subdivision, "business" does not include an isolated sale.

(k) "Licensed financial institution" means a financial institution issued a license under this act.

(j) "License" means a license to act as an installment seller or sales finance company that is issued under this act.

(k) (l) "Licensee" means a person issued a license that is licensed or required to be licensed under this act as an installment seller or a sales finance company and whose license has not expired or been surrendered or revoked, as applicable, and in the plural means a person or persons licensed under 1 or both of these 2 classifications. The term includes a licensed financial institution.

(l) (m) "Motor vehicle" means a self-propelled device by which a person or property may be transported upon on a public highway. or, subject to subparagraph (iv), Motor vehicle includes a recreational vehicle . The term that has its own motive power. Motor vehicle does not include any of the following:

(i) A tractor, motorcycle, trailer, semitrailer, or power shovel.

(ii) Road machinery, agricultural machinery, or other machinery not designed primarily for highway transportation but that incidentally transports persons or property on a public highway.

(iii) A device that moves upon on or is guided by a track or travels through the air.

(iv) A recreational vehicle that does not have its own motive power; is sold by a person engaged solely in the business of selling, offering for sale, hiring, or leasing recreational vehicles that do not have their own motive power; and is sold pursuant to a retail installment contract or retail charge agreement that meets the requirements of the retail installment sales act, 1966 PA 224, MCL 445.851 to 455.873.

(m) "NMLS" means the Nationwide Multistate Licensing System and Registry.

(n) "Person" means an individual, partnership, association, corporation, limited liability company, governmental entity, or any other legal entity.

(o) "Principal amount financed" means the unpaid cash price balance after deducting the down payment, adding the cost of any insurance premiums required or obtained as security for or by reason of the sale of a motor vehicle under an installment sale contract, and adding other costs necessary or incidental to the

sale of the motor vehicle under the contract that the seller contracts to pay on behalf of the buyer and for the amount of which the seller agrees to extend credit to the buyer and for which the buyer contracts voluntarily.

(p) "Public sale" means a public sale after advertisement of each motor vehicle in at least 2 successive publications in a newspaper having general circulation in the village, city, or township in which the sale is to be held. The advertisement shall disclose the place where the motor vehicle is stored and may be inspected, the date, time, and place of the sale, and the make, model, and serial number of the vehicle.

(p) (q) "Recreational vehicle" means a recreational vehicle, as that term is defined in section 49a of the Michigan vehicle code, 1949 PA 300, MCL 257.49a, except a park model trailer, as that term is defined in section 38a of the Michigan vehicle code, 1949 PA 300, MCL 257.38a.

(q) (r) "Retail sale" means a sale of a motor vehicle for use by to a buyer or for the benefit or satisfaction that the buyer may derive from the use of the motor vehicle by another.

(r) (s) "Sales finance company" means a person engaged as a principal, agent, or broker in the business of financing or soliciting the financing of installment sale contracts made between other parties, and in the business of acquiring, investing in, or lending money or credit on the security of the retail seller's interest in those contracts whether by discount, purchase, or assignment of those contracts, or otherwise. The term Sales finance company includes a licensee or other person who that as a seller finances installment sale contracts for other sellers or sales finance companies. The term includes a licensed financial

institution. The term Sales finance company does not include any either of the following:

(i) A financial institution.

(ii) A person , financial institution, or sales finance company that takes an assignment of or an interest in an aggregation of installment sale contracts only as security for bona fide commercial loans under which, in the absence of default or other bona fide breach of the loan contract, ownership of the contracts remains vested in the assignor and collection of payments on the contracts is made by the assignor.

(ii) A person who purchases installment sale contracts from a sales finance company or from a licensed financial institution.

(s) (t) "Security interest" means a property right in a motor vehicle that is the subject of an installment sale contract, if the right is retained to secure performance of an obligation of the buyer under that contract. The term Security interest includes a lien or encumbrance against the motor vehicle, a mortgage interest in the motor vehicle, and a reservation of title to the motor vehicle, whether or not expressed to be absolute, if the title is in substance retained only for security.

(t) (u) "Time balance" means the sum of the principal amount financed and the finance charge.

Sec. 4. (1) A person shall file an application for a new or renewal license under this act in writing , under oath, and in the form prescribed by the administrator.

(2) The administrator is authorized to establish relationships or contracts with the NMLS, or any other authorized party, to collect and maintain records and process transaction fees or other fees related to licensed installment sellers or sales finance

companies or other persons subject to this act.

(3) For the purpose of this section, the administrator may use the NMLS for any of the following:

(a) Requesting information from and distributing information to the United States Department of Justice or any governmental agency.

(b) Requesting and distributing information to and from any source as directed by the administrator.

(4) (2) A complete license application shall must contain all of the following:

(a) The name under which the business is conducted.

(b) The address of the principal place of business and of each other place of business, if more than 1.

(i) The date and place of incorporation and the name and address of all officers and directors if the applicant is a corporation.

(ii) The name and residence residential address of the owner if the applicant is an individual owner or operating under an assumed name.

(iii) The name and residence residential address of all owners, partners, or members if the applicant is a partnership, association, or limited liability company.

(d) An appointment under subsection (3), (5), if applicable.

(e) The bond required under section 5, if applicable.

(f) The Any license fee or fees required under section 5.6.

(g) Proof of compliance with section 4a.

(h) (g) Any other information the administrator requires.

(5) (3) If a license applicant does not maintain an office in

this state and does not have a resident agent in this state, the application shall must include a written appointment of a statutory agent upon on whom process, notice, or demand may be served. The statutory agent shall be an individual residing in this state or a corporation whose principal place of business is located in this state. If the identity or address of the statutory agent changes while the application is pending or after a license is issued, the applicant or licensee shall within 3 days file with the department of insurance and financial services a written appointment of the new statutory agent or written notice of the new address, as applicable.

(4) A new or renewal license applicant shall submit a separate application, on the prescribed form, for each place of business conducted by or to be established by the licensee within this state.

(6) (5) An applicant for a renewal license shall submit the application for renewal of the license on or before the June 16 December 1 preceding the renewal period. The administrator shall not renew a license if the applicant fails to pay the fee for the renewal term under section 6.

(7) A licensee whose license renewal fee is not received on or before December 31 is subject to a late fee in the amount of $25.00 for each day that the license renewal fee is late or $1,000.00, whichever is less.

(8) A licensee that has a change to the information on file with the renewal application shall notify the director of the department of insurance and financial services not later than 30 days after the change.

(9) An applicant for an initial license as an installment

seller or an applicant for a renewed license as an installment seller may request an extended licensing period of not more than 4 years. The administrator must deny the extended licensing period if the applicant fails to pay any required fee under section 6 at the time of requesting the extended licensing period.

Sec. 4a. (1) Each control person of a sales finance company applicant or licensee and any individual seeking to become a control person of a sales finance company licensee shall furnish to the administrator through the NMLS all of the following:

(a) The individual's fingerprints for submission to the Federal Bureau of Investigation for purposes of a state and national criminal history background check, unless the control person currently resides outside of the United States and has resided outside the United States for the last 10 years.

(b) Authorization for the administrator to receive the state and national criminal history background checks described in subdivision (a).

(c) The personal history and experience of the individual, in a form prescribed by the administrator, which must include all of the following:

(i) An independent credit report from a consumer reporting agency, unless the control person does not have a Social Security number.

(ii) Information related to any criminal convictions or pending charges against the individual.

(iii) Information related to any regulatory or administrative action or any civil litigation involving claims of fraud, misrepresentation, conversion, mismanagement of funds, breach of fiduciary duty, or breach of contract.

(2) As used in this section, "control person" means an individual that has the power to do any of the following:

(a) Vote, directly or indirectly, at least 10% of the outstanding voting shares or voting interests of a sales finance company applicant or licensee or a person in control of the applicant or licensee.

(b) Elect or appoint executive officers, managers, directors, trustees, or other persons that exercise managerial authority of a person in control of a sales finance company applicant or licensee.

(c) Exercise, directly or indirectly, a controlling influence over the management or policies of a sales finance company applicant or licensee or a person in control of the applicant or licensee.

Sec. 5. (1) (a) Except as provided in subdivision (b), a A bond, in the form prescribed by the administrator, executed by a bonding company or insurance company authorized to transact business in this state and that expires not earlier than the date that the license expires, in the penal sum of $20,000.00, shall must accompany the first application by a person for a license or to renew a license as a sales finance company, and shall apply only to the principal place of business of the licensee. A bond, in the form prescribed by the administrator, in the penal sum of plus an additional $10,000.00 shall accompany each application by a licensee for an for each additional location to transact business as a sales finance company.

(b) Each bond required under subdivision (a) shall be in the penal sum of $5,000.00 if the applicant is licensed under the mortgage brokers, lenders, and servicers licensing act, Act No. 173 of the Public Acts of 1987, being sections 445.1651 to 445.1683 of

the Michigan Compiled Laws, Act No. 125 of the Public Acts of 1981, being sections 493.51 to 493.81 of the Michigan Compiled Laws, or the regulatory loan act of 1963, Act No. 21 of the Public Acts of 1939, being sections 493.1 to 493.26 of the Michigan Compiled Laws.

(2) (c) The bond required under subdivision (a) shall be executed by a surety company authorized by the laws of this state to transact business within this state. A bond accompanying an application for license as a sales finance company, filed by a financial institution located within this state, may be executed by a financial institution on its own behalf, instead of a bond executed by a surety company. The bond shall must be executed to the this state of Michigan and shall must be for the use of the this state and for any person. or persons. The condition of the bond shall be must require that the licensee will comply with and abide by all the provisions of this act, and all the rules and regulations of the administrator lawfully issued, and require that the licensee will pay to the this state, to the administrator, or to any person, or persons, any and all money that may become due to the this state, to the administrator, or to any person or persons from the licensee under the provisions of this act. A person who that is aggrieved by the misconduct of a licensee and who that has recovered a judgment against a licensee, and whose judgment is not satisfied within 30 days after it becomes final, may maintain an action upon on the bond of the licensee in any court having jurisdiction of the amount claimed. Service of process for such an action under this subsection may be served anywhere within in this state.

(d) A new bond or renewal certificate shall accompany every application for renewal license and shall be filed annually at

least 15 days before July 1.

Sec. 6. (a) An application for license shall be accompanied by a license fee in the following amounts:

1. $30.00 for license as an installment seller of motor vehicles, permitting that installment seller to finance installment sales contracts made between the installment seller and an installment buyer.

2. $150.00 for the first license as a sales finance company, except financial institutions, which shall pay a fee of $35.00 for each office licensed as a sales finance office.

(b) A separate license fee of $75.00 shall be paid by each sales finance company, except financial institutions, for each additional place of business conducted by that sales finance company within the state.

(c) An abatement in the amount of the license fee shall not be made if the license is issued for less than 1 year, or if the license is surrendered, canceled, or revoked before the expiration of the license year for which issued.

(1) At the time of making an initial application or renewing a license under this act, a licensee shall pay to the administrator the applicable license fee established by the administrator under subsection (2)(a), (b), (c), or (d). A licensee shall also pay the executed contract fee established by the administrator under subsection (2)(e) at the time and in the form established by the administrator.

(2) The administrator shall annually establish a schedule of fees to be paid by applicants and licensees during the next calendar year. In establishing the fees, the administrator shall consider the amount that is necessary to generate funds sufficient

to pay, but not to exceed, the department's reasonably anticipated costs of administering this act. The administrator shall establish by rule or order the time and method of payment of the fee established under this subsection. The fees must be set as follows:

(a) Except as otherwise provided in subdivision (b), to obtain an initial or to renew an installment seller license, a base fee of not more than $150.00 for the main location and not more than $50.00 for each branch location.

(b) If the extended licensing period is authorized by the administrator under section 4, the fee described in subdivision (a) must be multiplied by the number of years authorized for the extended licensing period.

(c) To obtain an initial or to renew a sales finance company license, a base fee of not more than $500.00 for the main location and not more than $50.00 for each branch location.

(d) To amend an existing license, a fee of not more than $150.00.

(e) For each installment sale contract executed by a licensee, the licensee shall collect and remit a fee in a whole number increment of not less than $2.00 and not more than $5.00, as set by the administrator not later than July 1 of each year, to the secretary of state, and the fee must be deposited in the motor vehicle sales finance act fund created in this section.

(3) (d) Each Except as otherwise provided in section 4, each license issued under this act shall expire expires on July 1 December 31 annually. A Except as otherwise provided in section 4, a renewal license fee in the same amount as that paid for the original license shall must be paid annually for each respective type of the license and for each licensed place of business.

(e) A licensee shall pay an examination fee for any examination of its records conducted by the administrator. The examination fee shall be the lesser of the actual hourly rate or per contract rate as established by this subdivision. An examination fee based on the per contract rate shall not be less than $150.00. Annually, the administrator shall determine and notify all licensees of the hourly rate and per contract rate at which examination fees shall be charged for all examinations conducted pursuant to this act during the calendar year. The hourly rate shall be not less than $20.00 per hour, nor more than $40.00 per hour for each examiner engaged in an examination. The per contract rate shall be not less than $0.08, nor more than $0.20 per installment sales contract. The examination fee shall be invoiced upon the completion of the examination and shall be due and payable upon receipt of the invoice by the licensee. A licensee shall not be required to pay for more than 1 examination in any 1 calendar year. An installment seller shall not be required to pay more than $200.00 for an examination unless the licensee holds its own installment sales contracts.

(f) All fees and expenses provided for in this section and in section 7(c) shall be paid into the state treasury to the credit of the financial institutions bureau, and money in this account shall be used only for the operation of the financial institutions bureau.

(4) The motor vehicle sales finance act fund is created in the state treasury. The state treasurer shall deposit money and other assets received under this act or from any other source in the motor vehicle sales finance act fund. The state treasurer shall direct the investment of money in the motor vehicle sales finance

act fund and credit interest and earnings from the investments to the motor vehicle sales finance act fund. The department of insurance and financial services is the administrator of the motor vehicle sales finance act fund for audits of the fund.

(5) The department of insurance and financial services shall expend money from the motor vehicle sales finance act fund, on appropriation, only to administer and enforce this act and to pay other costs associated with the administrator's regulatory obligations. Money in the motor vehicle sales finance act fund at the close of the fiscal year remains in the motor vehicle sales finance act fund and does not lapse to the general fund.

Sec. 6a. (1) Subject to subsection (3), beginning on the effective date of the amendatory act that added this section, the administrator shall approve or reject deny a new or renewal license application within 90 days after the date a complete application under section 4 is received by the office of financial and insurance services or the date it is received by another agency or department of state government on behalf of the office of financial and insurance services, whichever is earlier.administrator.

(2) If an application described in subsection (1) is considered incomplete by the administrator, the administrator shall must notify the applicant in writing or electronically within not later than 30 days after receipt of the incomplete application, describing the deficiency and requesting the additional information. , the unpaid fee, or the bond. The 90-day time period described in subsection (1) is tolled upon on notification by the administrator of a deficiency until the date the requested information is received by the administrator. The determination of the completeness of an application does not operate as an approval

of the application for the license and does not confer eligibility of an applicant determined otherwise ineligible for issuance of a license. The tolling of the 90-day time period under this subsection does not allow the administrator to otherwise delay the processing of the application, and that application, upon on completion, shall must be placed in sequence with other complete applications received at that same time.

(3) If the administrator fails to issue or deny a license within the time required by this section, the administrator shall must return the license fee. and shall reduce the license fee for the applicant's next renewal application, if any, by 15%. The administrator shall not discriminate against an applicant in the processing of the application based upon the fact that the license fee was refunded or discounted under this subsection.

(4) Beginning October 1, 2005, the The administrator shall submit a report by December 1 of each year to the standing committees of the senate and house of representatives concerned with commerce issues and to the appropriations subcommittees of the senate and house of representatives generally responsible for appropriations to the office of financial and insurance services. department of insurance and financial services. The administrator shall include all of the following information in the report concerning the preceding fiscal year:

(a) The number of initial and renewal applications the administrator received and completed within the 90-day time period described in subsection (1).

(b) The number of applications denied.

(c) The number of applicants not issued a license within the 90-day time period and the amount of money returned to licensees

and registrants under subsection (3).

Sec. 7. (1) (a) Upon On approving a license application, the administrator shall must issue to the applicant a license certificate showing the name of the person authorized to do business under the license and the business address of the licensee. Upon issuance to a licensee, a license certificate shall be posted in a conspicuous place in the place of business of the licensee in full view of the public at all times.The licensee shall at all times conspicuously display the license in the outer office of the licensee or branch office of the licensee, if that office offers in-person services to consumers, and state on an internet website that is available to the public that the licensee is licensed in this state and provide the licensee's license number.

(2) (b) A license shall not be transferable or assignable.A license must not be transferred or assigned without the consent of the administrator. The sale, transfer, assignment, or conveyance of more than 25% of the outstanding voting stock of a licensee that is a corporation, or more than 25% of the interest in a licensee that is a partnership or other unincorporated association, is considered a transfer of the license. The licensee shall pay the amendment fee under section 6 to transfer a license.

(3) (c) A licensee may change his or her its place of business to another location within the same municipality for which the license certificate was issued. A licensee desiring to change the address of his or her its place of business shall give prior written notice to the administrator and shall return the license certificate to the administrator for amendment. The administrator shall amend the license certificate to show the new address and the date of the change. , which shall then be The new address under

this subsection is the authorized address of the licensee. A licensee shall pay a fee of $10.00 the fee under section 6 to amend a license certificate.

(d) Only 1 place of business may be operated under the same license. A licensee may operate more than 1 place of business by filing an application on the prescribed form for each additional place of business and complying with the bond and license fee provisions of this act. For an installment seller only, if every place of business is conducted in 1 city under 1 name and all business records are continuously kept in 1 place, only 1 license shall be required for all places of business conducted in that city.

Sec. 8. (1) (a) The administrator may reject deny any application for license or any application for renewal of a license if he the administrator is not satisfied that the financial responsibility and the general fitness of the applicant, and of the owners, partners, or members thereof, if the of an applicant be that is a partnership or association , and or of the officers and directors , if the of an applicant be that is a corporation, are such as to warrant the belief that the business for which application for license is filed will be operated in accordance with the provisions of this act.

(2) (b) Whenever the administrator rejects denies an application for license, he shall mail the administrator must issue a notice of such action the denial to the applicant and the applicant may, within 30 days of the date of such the notice, appeal from such action the denial to the circuit court in the manner provided for in section 9, subsection (d) of this act.the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(3) (c) Whenever the administrator rejects denies an application for license, he shall the administrator must retain the license fee which that accompanied the application, to defray costs of investigation.

Sec. 9. (1) (a) The administrator, upon on 30 days written notice to the licensee, forwarded by registered mail to the place of business of such the licensee, as shown in the application for license or as amended on the license certificate in case of if there was a change of address subsequent to issuance of the license certificate, may revoke or suspend any a license, order a licensee to cease and desist under section 9a, or assess a civil fine under section 37a(4), as applicable, if he the administrator finds that any of the following apply:

(a) 1. The licensee has made any material misstatement in the application for license. , or that

(b) 2. The licensee has violated any provisions of this act or any other law , or that is applicable to the selling or financing of a motor vehicle.

(c) 3. The licensee refuses or has refused to permit the administrator or his designated representative the administrator's designee to make examinations authorized by this act. , or that

(d) 4. The If the licensee is a sales finance company, the licensee in the case of a sales finance company has failed to maintain in effect the bond required under the provisions of this act. , or that

(e) 5. The licensee has failed to maintain satisfactory records required by this act. , or that

(f) 6. The licensee has falsified any records required by this

act to be maintained in connection with the business contemplated by this act. , or that

(g) 7. The licensee has after proper notice failed to file any report with the administrator within the time stipulated in this act. , or that

(h) 8. The licensee has failed to pay the fine required by this act for failure to file reports to the administrator fee under section 6(2)(e), 4(7), or 11(9) within the time stipulated. , or that

(i) 9. The licensee has defrauded any retail buyer to the buyer's damage or wilfully willfully failed to perform any written agreement with any retail buyer. , or that

(j) 10. Any fact or condition exists or is discovered which, that, if it had existed or had been discovered at the time of filing of the application for such the license, would have warranted the administrator in refusing to issue such the license.

(2) (b) The administrator may revoke or suspend only the particular license with respect to which grounds for revocation may occur or exist, but if he the administrator finds that grounds for revocation are of general application to all places of business or to more than 1 place of business operated by a licensee, he the administrator may revoke all of the licenses issued to such the licensee or those licenses to which grounds for revocation apply. , as the case may be.

(3) (c) Whenever a license has been revoked, the administrator shall not issue another license to the licensee pursuant to the provisions of under this act until the expiration of at least 1 year from the effective date of revocation of said that license.

(4) (d) Appeals may be taken from the action of the

administrator in accordance with procedure prescribed in section 30 of Act No. 319 of the Public Acts of 1969, being section 487.330 of the Compiled Laws of 1948.A proceeding under this act is subject to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

Sec. 9a. (1) If in the opinion of the administrator, a licensee is or has engaged in a practice that poses a threat of financial loss or threat to the public welfare, or is or has violated a law, rule, or order, the administrator may issue and serve on the licensee a cease and desist order under this section.

(2) A cease and desist order issued under this section must contain a statement of the facts constituting the alleged practice or violation and must fix a time and place for a hearing to determine if the administrator should issue an order to cease and desist against the licensee.

(3) A licensee may consent to the issuance of a cease and desist order under this section. If the licensee or a duly authorized representative of the licensee fails to appear at a hearing described in subsection (2), the licensee is considered to have consented to the issuance of a cease and desist order.

(4) If a licensee consents under subsection (3) or if the administrator finds, based on the record made at the hearing under subsection (2), that the practice or violation specified in the order is established, the cease and desist order becomes final. The cease and desist order may require the licensee and its officers, directors, members, partners, trustees, employees, agents, or control persons to cease and desist from the practice or violation and to take affirmative action to correct the conditions resulting from the practice or violation.

(5) Except as otherwise provided in subsection (6), or to the extent the cease and desist order is stayed, modified, terminated, or set aside by the administrator or a court, a cease and desist order is effective on the date of service.

(6) A cease and desist order issued with a licensee's consent is effective at the time specified in the order and remains effective and enforceable as provided in the order.

Sec. 10. (1) (a) The Subject to subsections (2) and (3), the administrator is authorized and empowered to may investigate and examine at any time during reasonably established regular business hours any and all books, accounts, papers, records, documents, and files, to the extent that such the investigation and examination pertain to matters regulated under the provisions of this act, of any licensee and of any person who shall be that is engaged in business contemplated by this act. For this purpose the administrator shall have free access to the offices and places of business and any and all books, accounts, papers, records, documents, and files of all such persons. A person who that is not licensed under this act shall be is presumed to be engaged in business contemplated by this act , if he, the person, as principal, agent, or broker advertises or solicits business for which a license is required by the provisions of under this act, and the administrator, and any person designated by him the administrator, for that the purpose is , in such case, hereby empowered to examine the books, accounts, papers, records, documents, files, safes, and vaults of such persons for the purpose of discovering violations of this act.

(2) If an examination under subsection (1) is a routine examination, the administrator shall do both of the following:

(a) Provide the licensee with not less than 36 hours' written notice of the examination.

(b) Maintain a record of the delivery of the notice described in subdivision (a) in the examination record.

(3) In response to a complaint, the administrator may conduct unannounced, periodic, on-site investigations of a licensee.

(4) (b) The administrator is empowered to may require the attendance and testimony of witnesses and the production of any books, accounts, papers, records, documents, and files relating to such business which that the administrator has authority by under this act to investigate, and for this purpose the administrator or his the administrator's duly authorized representative, may sign subpoenas, administer oaths and affirmations, examine witnesses, and receive evidence. In case of disobedience of any subpoena or the contumacy of any witness appearing before the administrator, the administrator may invoke the aid of the circuit court of Ingham county, County, or any circuit court of the this state. , and such A court under this subsection shall thereupon issue an order requiring the person subpoenaed to obey the subpoena, or to give evidence, or to produce books, accounts, papers, records, documents, and files relative to the matter in question. Any failure to obey such an order of the court under this subsection may be punished by such the court as a contempt. thereof.

(5) Except as otherwise provided in this subsection, the administrator and the department of insurance and financial services shall not disclose information obtained in an examination or investigation. The administrator, each former administrator, and each current and former deputy, agent, and employee of the department of insurance and financial services shall not disclose

any facts and information obtained in the course of their duties, unless that individual is required under law to report on, take official action concerning, or testify in any proceedings regarding a licensee or the activities of a licensee. This subsection does not apply to, and does not prohibit the furnishing of information or documents to, any federal, foreign, or out-of-state regulatory agency with jurisdiction over a licensee and is not applicable to any disclosure made in the public interest by the administrator, at the discretion of the administrator.

(6) (c) The administrator is hereby authorized and empowered to may prescribe the various blank forms to be used by licensees in making reports, and to make rules and regulations relating to the enforcement of this act. A copy of every rule and regulation shall be mailed by the administrator to all licensees under this act at their respective licensed places of business at least 10 days before the effective date thereof.

(7) For purposes of this section, the administrator may do any of the following:

(a) Enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce the regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information, or evidence obtained under this section.

(b) Use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate a licensee or other person subject to this act.

(d) Accept audit reports prepared by an independent certified

public accountant for the licensee or other person subject to this act in the course of that part of the examination covering the same general subject matter as the audit and incorporate the audit report in the report of the examination, report of investigation, or other writing of the administrator.

(8) As used in this section:

(a) "Routine examination" means an examination that is not the result of a complaint or a suspected violation of this act.

(b) "Written notice" includes, but is not limited to, notice by email or text message.

Sec. 11. (a) Every licensee shall maintain, at the place of business designated in the license certificate, such books, accounts and records of the business conducted under the license issued for such place of business as will enable the administrator to determine whether the business of the licensee contemplated by this act is being operated in accordance with the provisions of this act.

(b) A licensee, operating 1 or more licensed places of business in this state, may maintain the general control records of all such offices at any 1 of such offices, or at any other office maintained by such licensee, upon the filing of a written request with the administrator designating therein the office at which such control records are maintained and upon approval of such request by the administrator.

(1) A licensee shall keep and use in the licensee's business the books, accounts, and records the administrator may require to determine whether the licensee is complying with this act and with the rules promulgated by the administrator under this act.

(2) A licensee shall preserve and make accessible to the

administrator the books, accounts, and records described in subsection (1) for at least 2 years after making the final entry in that book, account, or record.

(3) The preservation of records by reproduction under the records reproduction act, 1992 PA 116, MCL 24.401 to 24.406, constitutes compliance with this section.

(4) The books and accounts described in subsection (1) may be kept at a location other than the licensee's principal place of business if the books and accounts are made available to the administrator on request.

(5) If a licensee's principal place of business is not in this state, or the books, accounts, or records described in subsection (1) are not made available in this state, the licensee must pay the reasonable travel, lodging, and meal expenses of any person required to travel to examine the licensee.

(6) (c) All books, accounts, and records of the licensee shall must be maintained in the English language.

(d) All books, accounts and records of licensees, including any cards used in a card system, shall be preserved and available for examination by the administrator for at least 2 years after making the final entry therein.

(7) On or before a date to be determined by the administrator, a licensee shall file with the administrator reports giving information, as required by the administrator, concerning the business and operations of the licensee under this act. The reports required under this subsection must be in the form prescribed by the administrator.

(8) A person who willfully and knowingly subscribes and affirms a false statement in a report required under subsection (7)

is subject to all penalties under this act.

(9) A licensee whose reports are not received on or before the date to be determined by the administrator under subsection (7) is subject to a late fee in the amount of $25.00 for each day that the report is late or $1,000.00, whichever is less.

(10) The administrator shall electronically accept any record or document described in this act, if possible and practical.

Sec. 12. (1) (a) An installment sale contract shall must be in writing, and shall contain all of the agreements between the buyer and the seller relating to the installment sale of the motor vehicle sold, and shall be signed by both the buyer and the seller.

(2) (b) An installment sale contract shall must be completed as to all essential provisions prior to before the signing of the contract by the buyer and contain such other information as the administrator may require.

(3) (c) An exact copy of the installment sale contract shall must be furnished by the seller to the buyer without charge at the time the buyer signs the contract. The buyer's copy of the contract shall must contain the signature of the seller identical with the signature on the original contract.

(4) (d) An installment sale contract shall must contain the following notice printed prominently and in the form indicated in 12-point type or larger directly above the space provided in the contract form for the signature of the buyer:

"Notice to buyer. Do not sign this contract in blank. You are entitled to 1 true copy of the contract you sign without charge. Keep it to protect your legal rights.".

(5) (e) The seller shall obtain from the buyer a written acknowledgment of the delivery of the copy of the contract. The

acknowledgment shall must be printed in 12-point type or larger and, if attached to the contract, it shall must be printed below the buyer's signature to the contract and independently signed.

(6) (f) An installment sale contract shall must provide for weekly, semi-monthly, or monthly payments of the time balance in substantially equal periods and amounts. This subdivision does not apply to installment sale contracts made between an installment seller and an installment buyer who is an employee of the installment seller. This subdivision shall not be construed to prohibit installment sales contracts that extend the time for making installment payments for a period of not to exceed 3 months. This subdivision subsection does not preclude the exceptional installment sale contract provided for in section 22. of this act.

Sec. 13. (1) An installment sale contract shall must include the full legal names and addresses of all the parties to the contract, the date when signed by the buyer, and a description of the motor vehicle sold that is sufficient for accurate identification.

(2) An installment sale contract shall must set forth all of the following separate items in the following order:

(a) The cash price of the motor vehicle. This amount shall must include any taxes, the cash price of agreed upon on accessories and installation of the accessories, the cash price of any extended warranty or service contract, and a documentary preparation fee, and the fee set by the administrator under section 6(2)(e). The documentary preparation fee shall must not exceed 5% of the cash price of the motor vehicle or $160.00, whichever is less. Beginning on January 1, 2005, the administrator shall adjust the maximum amount then in effect for the documentary preparation

fee described in this subdivision every 2 years to reflect the cumulative percentage change in the consumer price index Consumer Price Index for the 2 immediately preceding calendar years, as determined by the administrator. The administrator shall round the adjustment to the nearest $10.00 increment to set the fee every 2 years under this subdivision, but shall carry over and use the absolute value to calculate the next 2-year adjustment. As used in this subdivision, "consumer price index" "Consumer Price Index" means the United States consumer price index for all urban consumers, U.S. city average, as defined and reported by the United States department of labor, bureau of labor statistics.Bureau of Labor Statistics of the United States Department of Labor.

(b) The down payment made by the buyer at the time of or before execution of the contract, indicating whether made in cash, represented by the agreed value of a trade-in motor vehicle or other goods, or both. The amount of cash and the value of any trade-in shall must be stated separately. A description that is sufficient for identification of any trade-in shall must be included.

(c) The unpaid cash price balance, which is the difference between the cash price under subdivision (a) and the down payment under subdivision (b).

(d) The cost of any insurance premium or travel emergency benefits pertaining to the operation of the automobile that the seller agrees to extend credit to the buyer to obtain. The installment sale contract shall must set forth the term of the insurance and a concise description of the terms of the insurance policy and the travel emergency benefits. If the precise cost of the insurance is not available at the time the contract is signed,

an estimated amount, ascertained from the current published applicable manual of a recognized standard insurance rating bureau, may be set forth in the contract. Within Not later than 25 days after making the installment sale contract, the seller shall mail or cause to be mailed to the buyer at his or her the buyer's address as shown on the contract a certificate or policy of insurance and a statement showing the exact cost of the insurance. Each installment sale contract shall must contain the following warning, printed prominently in red ink and in 12-point type or larger, directly preceding the notice provided for in section 12(d), 12(4), enclosed by a continuous heavy line:

	_________________________________________________________
	Warning: The insurance afforded hereunder does not cover
	liability for injury to persons or damage to property of
	others unless so indicated hereon.
	_________________________________________________________

(e) The cost of any guaranteed asset protection waiver that the seller agrees to extend credit to the buyer to obtain. For purposes of this subdivision, all of the following apply:

(i) "Guaranteed asset protection waiver" means that term as defined in section 3 of the guaranteed asset protection waiver act, 2009 PA 229, MCL 492.23.

(ii) A guaranteed asset protection waiver may be included as part of, or as an addendum to, an installment sale contract.

(iii) An installment seller that offers, sells, or provides guaranteed asset protection waivers to installment buyers in this state must comply with the guaranteed asset protection waiver act, 2009 PA 229, MCL 492.21 to 492.33.

(iv) Any cost to an installment buyer for a guaranteed asset

protection waiver entered into in compliance with the truth in lending act, 15 USC 1601 to 1667f, and the regulations promulgated under that act, 12 CFR part 226, must be separately stated and is not considered a finance charge or interest.

(f) Other necessary or incidental costs that the seller contracts to pay on behalf of the buyer and for the amount of which the seller agrees to extend credit to the buyer as authorized under this act. The contract shall must contain an itemization of the nature and amount of the costs.

(g) The principal amount financed, which is the total of the amounts described in subdivisions (c), (d), (e), and (f).

(h) The finance charge, which is the consideration in excess of the total of the cash price under subdivision (a), excluding the amounts described in subdivisions (d), (e), and (f).

(i) The time balance, which is the total of the amounts described in subdivisions (g) and (h) and represents the total obligation of the buyer that he or she the buyer agrees to pay in 2 or more scheduled payments.

(j) The payment schedule, which shall must include the number of payments, the amount of the payments, and the time of the payments required to liquidate the time balance.

(3) An installment sale contract shall state clearly any collateral security given to secure the buyer's obligation under the contract.

(3) (4) An installment sale contract shall must contain a summary notice of the buyer's principal legal rights respecting prepayment of the contract and rebate of the finance charge and reinstatement of the contract in the event of repossession.

(4) (5) An installment sale contract shall must contain

specific provisions concerning the buyer's liability for default charges, repossession, and sale of the motor vehicle in case of default or other breach of contract, and the seller's or holder's rights. concerning any collateral security.

Sec. 13a. (1) A seller in an installment sale transaction may pay on behalf of the buyer and agree to finance in the installment sale contract all or part of the balance of any indebtedness secured by a motor vehicle that the seller takes in trade in the installment sale transaction or all or any part of the balance owed under a lease of a motor vehicle that is terminated in connection with the installment sale transaction.

(2) If subsection (1) applies in an installment sale transaction, then the other necessary or incidental costs included in the installment sale contract under section 13(2)(e) shall 13(2)(f) must include the amount the seller agreed to finance under subsection (1).

Sec. 14. (1) (a) An installment sale contract shall must not be signed by a party to the contract unless it contains all of the information and statements required by under this act.

(2) (b) An installment sale contract shall must not contain an acceleration clause under which any part or all of the time balance represented by payments, not yet matured, may be declared immediately payable because the seller or holder deems itself to be insecure or is unable to assign the installment contract.

(3) (c) An installment sale contract shall must not contain a provision authorizing a person acting on behalf of the seller or holder to enter upon the premises of the buyer unlawfully or to commit a breach of the peace in the repossession of the motor vehicle. or collateral security. A right of repossession of a motor

vehicle provided in an installment sale contract shall must be exercised only in the manner provided in part 6 of article 9 of the uniform commercial code, 1962 PA 174, MCL 440.9601 to 440.9628, concerning taking possession of and disposing of collateral.

(4) (d) An installment sale contract shall must not contain a provision by which the buyer waives a right of action against the seller, holder, or other person acting on behalf of the holder for an illegal act committed in the collection of the payments under the contract or in the repossession of the motor vehicle. or collateral security.

(5) (e) An installment sale contract shall must not contain a provision by which the buyer executes a power of attorney appointing the seller, the holder, or the agent of the licensee as the buyer's agent in collection of the payments under the contract or in repossession of the motor vehicle sold. or collateral security.

(6) (f) An installment sale contract shall must not contain a provision relieving the holder, or other assignee, from liability for legal remedies which that the buyer has against the seller under the contract or under a separate instrument executed in connection with the contract.

Sec. 14a. (a) A person shall not take a negotiable instrument, other than a currently dated check or draft, as evidence of the obligation of the buyer in a retail sale of a motor vehicle.

(1) (b) A holder of an installment sale contract is subject to all the claims and defenses of the buyer arising out of the installment transaction, but the buyer's recovery shall must not exceed the amount paid to the holder thereunder.

(2) (c) An installment sale contract entered into under this

act shall must contain the following provision in at least 10-point boldface type:

Notice

Any holder of this consumer credit contract is subject to all

claims and defenses which the debtor installment buyer could assert against the

seller of goods or services obtained pursuant hereto or with

the proceeds hereof. Recovery hereunder by the debtor installment buyer shall

not exceed amounts paid by the debtor installment buyer hereunder.

(3) (d) This section applies only to sales made pursuant to under an installment sale contract.

(4) (e) In an action by the holder to collect a debt from the buyer, the court, after notice to the buyer and a hearing, may designate a disinterested third party to receive payments from the buyer. If the court finds that the buyer will not be unreasonably burdened nor deprived of adequate transportation by making the payments, an amount up to but not greater that is not more than the amount of each time balance payment due shall must be paid to the disinterested third party as it becomes due during the period of litigation. At the conclusion of the litigation these payments shall must be distributed pursuant to in accordance with the judgment of the court.

Sec. 15. (1) (a) Whenever an installment sale contract is lawfully sold, transferred, or assigned to a person who that is licensed as a sales finance company , pursuant to the provisions of under this act, such the new holder shall furnish to the buyer in such the contract a written notice of such the sale, transfer, or assignment, excepting except when assignment is made only to secure

a bona fide commercial loan. or pursuant to a bulk sale of installment sale contracts. Such notices shall A notice under this subsection must set forth the name and address of the new holder and shall must notify the buyer of the name and address of the person authorized to receive future payments on such the contract. If such the notice under this subsection has not been given, any payment or tender of payment made to and any service of notice on the last known holder by the buyer shall be is binding upon on any subsequent holder. No An installment sales sale contract shall must not be sold to any person doing business in this state who is not licensed or is not exempt from licensure under the provisions of this act.

(2) (b) The provisions of this section shall This section does not apply to an assignment of an aggregation of installment sale contracts , which that is executed by a seller or sales finance company in connection with a bulk sale or as collateral security for a bona fide commercial loan, obtained at lawful rates of interest from a person regularly engaged in the business of lending money on the security of such assigned collateral, and under which, in the absence of default or other bona fide breach of the loan contract, ownership of the assigned contracts remains vested in the assignor and collection of payments on such the assigned contracts is made by the assignor : And provided, That such and the assignment and loan contracts are not for the purpose of evading or circumventing the provisions of this act.

Sec. 16. (1) (a) The buyer of a motor vehicle under an installment sale contract may be required to provide insurance on such the motor vehicle at the buyer's expense for the protection of the seller or subsequent holder. Such insurance shall The insurance

under this subsection must be limited to insurance against substantial risk of damage, destruction, or theft of such the motor vehicle. : Provided, however, That the foregoing shall This subsection does not interfere with the liberty of contract of the buyer and seller to contract for travel emergency benefits pertaining to the operation of the automobile or other or additional insurance as security for or by reason of the obligation of the buyer, and inclusion of including the cost of such the insurance premium and said the travel emergency benefits in the principal amount advanced under the installment sale contract. Such insurance shall, if If possible to obtain, the insurance under this subsection must be written for the dual protection of the buyer and of the seller, or subsequent holder, to the extent of his the buyer's and seller's, or subsequent holder's, interest in the motor vehicle. Such insurance shall The insurance under this subsection must be for an amount, and period of time, and upon on terms and conditions , which that are reasonable and appropriate considering the type and condition of the motor vehicle, the amount of the time balance, and the schedule of payments in the installment sale contract. In the event such insurance If the insurance under this subsection cannot be obtained for the dual protection of the buyer and the seller, or subsequent holder, or if obtained, is cancelled canceled by the insurance company prior to before expiration, the seller, or subsequent holder, may obtain insurance to protect his the seller's, or subsequent holder's, interest in the motor vehicle and the buyer may be required to pay the cost thereof. In such event, of that insurance. If the seller, or subsequent holder, obtains the insurance under this subsection, the seller, or subsequent holder, shall must promptly notify the buyer that such

the insurance cannot be obtained, or is cancelled, canceled, and credit to the buyer the difference between the amount charged by the seller for such the dual protection insurance and the cost to the seller of such the single interest insurance, (less, less, in the event of cancellation, cancelation, the earned premium on the dual interest insurance for the period it is in force): Provided, That whenever such force. If the insurance is written for the protection of the seller, or subsequent holder, only, neither the insurance company issuing the policy nor or any other person shall not be subrogated to the rights of the insured as against the buyer.

(2) (b) The buyer of a motor vehicle under an installment sale contract shall have the privilege of purchasing such may purchase the insurance under this section from any insurance company, agent or broker authorized to do business in Michigan this state other than the installment seller. No An installment seller shall not coerce, threaten, or in any manner influence any installment buyer to purchase insurance from any insurance company, agent or broker designated by such the installment seller. : Provided, however, That the The inclusion of the cost of the insurance premium in the installment sale contract, when the buyer selects the company, agent or broker, shall be is optional with the seller.

(3) (c) Whenever the seller contracts to purchase, at the buyer's expense, such the insurance under this section on a motor vehicle sold under an installment sale contract, such the insurance shall must be purchased through an agent, and/or broker, or other person , that is authorized to conduct business in Michigan, and such this state. The insurance shall must be written by an insurance company qualified to do business in Michigan. this state.

The status of the buyer and seller or holder, as set forth in such the insurance contract, shall must conform to the status of these parties in the installment sale contract. The cost of the premium on such the insurance to the buyer shall must not be in excess of the amount of the premium which that others are required to pay to such the insurance company for similar coverage, and in no event in excess of rates established in the then current published applicable manual of a recognized standard insurance rating bureau, or the rates fixed by authority of the this state. of Michigan.

(4) (d) Whenever the seller contracts to purchase, at the buyer's expense, such the insurance under this section on a motor vehicle sold under an installment sale contract, a certificate of insurance and a statement showing itemized cost of such the insurance shall must be delivered to the buyer within not later than 25 days of after the date of that the buyer's signing of buyer signs the installment sale contract.

(5) (e) The insurance policy or certificate of insurance on the motor vehicle which that is furnished to the buyer, when the insurance is placed by the seller or subsequent holder at the buyer's expense, shall must set forth complete information as to the effective dates , and amounts of premiums and coverage, and shall must contain all the terms of the insurance contract.

(6) (f) When the seller or subsequent holder has placed, at the expense of the buyer, the insurance on a motor vehicle sold under an installment sale contract and the buyer prepays the time balance under the contract prior to before the expiration date of the insurance, such the insurance shall must remain in force unless the buyer requests cancellation thereof. cancelation of the insurance. The seller or holder shall not cancel the insurance

under such circumstances without the buyer's consent. , nor shall the The seller or holder shall not coerce the buyer to cancel the insurance. Unexpired Any unexpired insurance premiums received by the seller or holder, resulting from cancellation cancelation of insurance which that was originally placed at the buyer's expense, shall must be used in procuring comparable insurance as in under subsection (g) of this section provided, and if such (7). If comparable insurance cannot be obtained, shall the unexpired insurance premium must be paid to the buyer or credited to any matured unpaid installments under the contract.

(7) (g) When the seller contracts to purchase insurance at the buyer's expense and such the insurance is cancelled canceled by the insurance company prior to before expiration, the seller or subsequent holder shall attempt to place comparable insurance with another insurance company and furnish or cause to be furnished to the buyer a copy of the insurance policy or certificate of insurance, subject to the same requirements of this act applicable to the original policy. In the event If the holder is unable to obtain such comparable insurance in another insurance company, he the holder shall promptly notify the buyer by registered mail, addressed to the buyer at the address appearing upon on the installment sale contract, unless or, if the seller is in receipt of written notice of a change in the buyer's address, and in such event addressed to the buyer at such changed address. the address provided in the written notice of the change in the buyer's address. The buyer may then obtain such insurance from an insurance company, agent, or broker of his the buyer's own selection. The holder shall also be is liable to the buyer for any loss suffered by the buyer through negligence on the part of the holder in

promptly mailing notice to the buyer of his the holder's inability to obtain replacement insurance.

Sec. 16a. If unexpired insurance premiums received by the seller or holder resulting from the cancellation cancelation of insurance which that was originally placed by the buyer's expense cannot be used in procuring comparable insurance as in under section 16, subsection (g), such 16(7), the unexpired insurance premiums shall must be credited to the last maturing installments under the contract.buyer's account.

Sec. 17. (1) (a) In addition to the cost of insurance premiums and travel emergency benefits authorized in the preceding section of this act, 16, the seller of a motor vehicle under an installment sale contract may require the buyer to pay certain other costs incurred in the sale of a motor vehicle under such the installment sale contract as follows:

(a) 1. Fees, payable to the this state, of Michigan, for filing a lien or encumbrances on the certificate of title to a motor vehicle sold under an installment sale contract. or collateral security thereto.

(b) 2. Fees, payable to a public official, for filing or recording and satisfying or releasing the installment sale contract or instruments securing the buyer's obligation.

(c) 3. Fees for notarization required in connection with the filing and recording or satisfying and releasing a mortgage, judgment lien or encumbrance.

(2) (b) The seller of a motor vehicle under an installment sale contract may also contract with the buyer to pay, on behalf of the buyer, such other costs incidental to the sale of a motor vehicle and contracted for voluntarily by the buyer as follows:

(a) 1. Fees in amounts established by and paid to the this state of Michigan for titling and registration of the motor vehicle and issuance or transfer of registration plates.

(b) 2. If the buyer of a motor vehicle elects to title or register the motor vehicle electronically, fees payable to any third party authorized by the secretary of state and to the seller for electronic titling and registration of the motor vehicle.

(3) (c) The foregoing costs described in subsections (1) and (2) may be charged, contracted for, or collected or received by the seller from the buyer independently of the installment sale contract, or the seller may extend credit to the buyer for the amount of such the costs and include such the amount in the principal amount financed under the installment sale contract.

(4) (d) Such other costs Any other cost paid or payable by the buyer shall must not exceed the amount which that the seller expends, or intends to expend, therefor. or is entitled to retain as authorized by the secretary of state. Any such costs which that the seller has collected from the buyer, or which that have been included in the buyer's obligation under the installment sale contract which that are not disbursed by the seller, as contemplated, shall must be immediately refunded or credited to the buyer.

Sec. 18. (1) A seller licensed under this act may charge the buyer a finance charge on any installment sale contract covering the retail sale of a motor vehicle. in this state. The finance charge shall must not exceed the rate permitted by the credit reform act, 1995 PA 162, MCL 445.1851 to 445.1864.

(2) The seller shall compute the finance charge on the principal amount financed as determined under section

13(2)(f).13(2)(g).

(3) Any charge on an installment sale contract under this act that is made after the effective date of the amendatory act that added section 9a must not be paid, deducted, received in advance, or compounded. Any charge on an installment sale contract made under this act must 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. The seller shall compute the finance charge at the annual rates permitted by under subsection (1) on installment sale contracts that are payable by installment payments. , extending for a period of 1 year. On installment sale contracts providing for installment payments extending for a period that is less than or greater than 1 year, the seller shall compute the finance charge proportionately. If an installment sale contract provides for payment other than in equal successive weekly, semimonthly, or monthly installments, the finance charge may be at a rate that will provide the same annual percentage rate as is permitted on monthly payment contracts considering the schedule of payments in the contract. The seller shall disclose the annual percentage rate of the installment sales sale contract in accordance with disclosure requirements of the truth in lending act, title I of the consumer credit protection act, Public Law 90-321, 15 U.S.C. USC 1601 to 1608, 1610 to 1613, 1615, 1631 to 1635, 1637 to 1648, and 1661 to 1667e, 1667f, and the regulations promulgated under the truth in lending that act.

(4) The seller may compute the finance charge on the basis of a full month for a fractional month period in excess of 10 days.

(4) (5) A seller may charge a minimum finance charge of $15.00

on an installment sale contract in which the finance charge, when computed at the rates indicated, results in a total charge of less than $15.00.

Sec. 19. (1) (a) The Beginning on the effective date of the amendatory act that added section 9a, the holder of an installment sale contract may extend the scheduled due date, defer a payment or payments, or renew the unpaid time balance of the contract.shall not charge a fee for extending the scheduled due date or deferring payments of the installment sale contract.

(2) For installment sale contracts that are entered into before the effective date of the amendatory act that added section 9a and include precomputed interest, all of the following apply:

(a) The seller may compute the finance charge on the basis of a full month for a fractional month period in excess of 10 days.

(b) The holder may contract for, receive, and collect a refinance charge for the extension, deferment, or renewal. The refinance charge shall must not exceed the amount ascertained under the rates allowed by under section 18(a).18(1).

(c) If 1 or more installment payments are extended or deferred, computing the refinance charge on the amount of the installment payment or payments or part of a payment that is refinanced, for the period of time for which each payment or part of a payment is extended or deferred, shall must not exceed rates provided for in under section 18(a).18(1).

The refinance charges may be computed on the basis of a full month for any fractional month period in excess of 10 days.

(d) If the unpaid balance of the contract is refinanced or renewed, a refinance charge may be assessed on the amount obtained by adding to the unpaid time balance of the contract the insurance

cost and other costs incidental to refinancing and the unpaid default charges that may be accrued, and by deducting any rebate that may be due to the buyer for prepayment incidental to refinancing, at the rate of the finance charge provided for in under section 18(a), 18(1), but otherwise subject to the provisions of this act governing computation of the original finance charge. The provisions of this act governing minimum finance charges and minimum prepayment rebate do not apply in calculating refinance charges on the contract renewed under this method of computation.

(e) The holder of an installment sale contract shall not include in any contract for refinancing the contract any cash loan to the buyer, nor any credit extended to the buyer incidental to the purchase of goods or services. A loan under this section does not include, nor does and this act does not prohibit, a rearrangement of payments under the installment sale contract by a refinance transaction involving a restoration of certain installment payments made under the contract, but the refinance charge on the amount restored may must not be more than that specified in section 18(a). 18(1). The holder of the contract may embody in the refinance contract the cost of accessories, equipment, and parts for the motor vehicle sold under the contract, and the cost of repairs and services to the motor vehicle including finance charges on the contract.

Sec. 20. A default charge may be collected on each installment payment of an installment sale contract , including a contract subject to section 41, that is not paid on or before the due date of the payment. The default charge shall must not exceed the rate permitted in under the credit reform act, 1995 PA 162, MCL 445.1851 to 445.1864, on the amount of each payment in arrears. The default

charge may be computed on the basis of a full calendar month for any fractional month period in excess of 10 days. Each default charges charge may be collected, when earned, during the term of the contract, or may be accumulated and collected at final maturity or at the time of final payment under the contract. The default charge shall must not be collected on any payment in default because of an acceleration provision in the contract.

Sec. 21. (1) The buyer, notwithstanding the provisions of any installment sale contract, may prepay at any time all or a part of the unpaid time balance under an installment sale contract.

(2) Except as provided in section 41, when For an installment sale contract that was entered into before the effective date of the amendatory act that added section 9a that included precomputed interest, both of the following apply:

(a) When all of the time balance is liquidated before maturity by prepayment, refinancing, or termination by surrender or repossession and resale of the motor vehicle, the holder of the installment sale contract shall rebate to the buyer immediately the unearned portion of the finance charge. Rebate The rebate may be made in cash or credited to the amount due on the obligation of the buyer.

(b) (3) The unearned portion of the finance charge to be rebated to the buyer shall must be rebated by the actuarial method. The holder is not required to rebate a portion of the unearned finance charge that results in a net minimum finance charge on the contract less than $15.00. The holder is not required to rebate an unearned finance charge when the amount due, computed as set forth in this section, is less than $1.00.

Sec. 22. An installment sale contract may provide for a series

of weekly, semi-monthly or monthly payments in substantially equal periods and amounts, followed by a single larger payment of the unpaid time balance, in which event the installment buyer shall have the right to an option, at the time such the larger payment shall become becomes due, to make such the larger payment or to enter into a second contract , which contract shall conform that conforms to all the provisions of this act except that the refinance finance charge rate provided for in such the second contract shall must not exceed the finance charge rate provided for in the first contract.

Sec. 22a. Compliance with the requirements of the truth in lending act, title I of Public Law 90-321, 15 U.S.C. USC 1601 to 1608, 1610 to 1613, 1615, 1631 to 1635, 1637 to 1638, 1640 to 1647, and 1661 to 1667e 1667f, is compliance with the disclosure provisions of under section 13 13(2) and of section 2 of Act No. 305 of the Public Acts of 1939, being section 566.302 of the Michigan Compiled Laws.1939 PA 305, MCL 566.302.

Sec. 28. (1) (a) At any time after execution of an installment sale contract and within not later than 1 year after termination of such the contract is marked paid and returned, the holder of such the contract shall furnish the buyer, upon on request, with a complete and detailed statement of account showing the following:

(a) 1. All amounts paid by the buyer on account of the obligation, dates of payment and the allocation of such the payments to reduction of the time balance, refinance charges, default charges, court costs, attorney's attorney fees, expenses of retaking, repairing, storing, or otherwise.

(b) 2. All amounts credited to the buyer as rebates for prepayment and from unexpired premiums on insurance

cancelled.canceled or any other ancillary products.

(c) 3. The amount of the installment payments, accrued charges and expenses incurred, if any, which that are due and payable.

(d) 4. The number and amount of installment payments to become due and payable, if any, and the due dates thereof.of the payments.

(2) (b) The holder shall provide the buyer shall be furnished with 1 such statement of account without charge during the term of the contract or within not later than 1 year after termination, and the holder may require payment of a fee of 50 cents for any additional statements.

(3) (c) The holder shall furnish the buyer, upon on request and upon on payment of a fee of 50 cents, with a duplicate copy of the installment sale contract to replace the buyer's copy of such the contract which that is required to be furnished to the buyer without charge at the time of execution of the contract.

Sec. 29. (a) Whenever payment is made on account of any installment sale contract, the person receiving such the payment shall, at the time of receiving such the payment, furnish to the buyer or to the person making the payment on behalf of the buyer, a complete written receipt therefor, if requested. A receipt must be given if payment is made in cash.

(b) Such receipt shall show the date of payment, the amount of the payment, and shall identify the obligation to which such payment is applicable.

(c) When issued for payments made at any office of the holder or mailed to such office, which payments are applied to reduction of the time balance, such receipt shall, if requested by the buyer, also set forth the unpaid time balance remaining due after crediting such payment. If such payment includes default charges

authorized by this act, the amount of such default charges shall be set forth on the receipt independently of the payment applied to reduction of the time balance.

(d) When the buyer elects to make such payments by mail, the holder may require the buyer to supply a self-addressed stamped envelope as a condition for mailing such receipt to him, if he has been previously notified of such condition.plain and complete receipt that shows all of the following:

(a) The date of the payment.

(b) The amount of the payment.

(d) The amount applied to charges.

(e) The amount applied to principal, if any.

(f) The unpaid principal balance.

Sec. 30. (1) (a) Upon On payment in full of the time balance principal amount financed, the earned finance charge, and other amounts lawfully due under an installment sale contract, the holder shall , unless the buyer is otherwise indebted to the holder and has secured such debt by lien upon the motor vehicle:

1. Return to the buyer the original of all instruments evidencing indebtedness or constituting security under an installment sale contract, which were signed by the buyer or his sureties or guarantors in conjunction with such contract, excepting such instruments as are filed or recorded with a public official and retained in the files of such official, and

2. Release all security interest in the motor vehicle or in collateral security to the obligation of the buyer under such contract, and

3. Deliver to the buyer all documents of title obtained from

him.provide to the buyer a copy of the installment contract stamped paid, termination of lien, and a final statement of account showing a zero balance.

(2) (b) When the final payment on an installment sale contract is made in cash, money order, or equivalent tender, by the buyer or his the buyer's authorized representative, at the office of the holder, a legal discharge of this encumbrance , shall must be delivered at the time of such the tender of payment. , if demanded by the buyer; otherwise delivery may be made at a later date in person or by mail as may be arranged between buyer and holder. All other instruments referred to in this section shall must be delivered or mailed to the buyer within not later than 25 days of after the date of final payment.

Sec. 31. (1) (a) A licensee under this act shall not charge, contract for, collect, or receive from the buyer, directly or indirectly, any further or other amount for costs, charges, examination, appraisal, service, brokerage, commission, expense, interest, discount, fees, fines, penalties, or other thing of value in connection with the retail sale of a motor vehicle under an installment sale contract in excess of the cost of insurance premiums, other costs, the finance charges, refinance charges, default charges, recording and satisfaction fees, court costs, attorney's attorney fees, and expenses of retaking, repairing, and storing a repossessed motor vehicle which that are authorized by under this act.

(2) (b) A licensee under this act shall not collect any charge in connection with a contemplated sale of a motor vehicle under an installment sale contract if the contract is not consummated. This subsection does not affect the legal status of a deposit paid by a

prospective buyer to a seller as a binder on the contemplated purchase of a motor vehicle.

(3) (c) An insurance company, agent, or broker shall not pay or cause to be paid, directly or indirectly, to any installment seller, nor shall any and an installment seller must not receive from any insurance company, agent, or broker, any portion of an insurance premium involved in the retail installment sale of a motor vehicle other than for the benefit of the installment buyer, and all payments shall must be held by the installment seller in trust for the benefit of the installment buyer and shall must be paid to the installment buyer within 30 days, unless used in procuring comparable insurance or credited to matured unpaid installments under the contract as provided in section 16(f).16(6).

(4) (d) Whenever in an installment sale contract under this act the seller or any subsequent holder has charged, contracted for, collected, or received from the buyer prohibited costs or charges in connection with the contract, all the costs and charges in connection with the contract, other than for insurance, shall be are void and unenforceable. and any amounts paid by the buyer for such costs and charges, other than insurance, shall be applied on the principal of the contract.

(5) (e) If a motor vehicle is covered by an installment sale contract, the buyer shall not transfer equity in that vehicle to another person without the written consent of the holder of the sale contract. The holder of the sale contract may charge a transfer fee of $25.00.

Sec. 34. (1) (a) The expiration, surrender, or revocation of a license, issued pursuant to under this act, shall not does not impair or affect the obligation of any motor vehicle installment

sale contract entered into lawfully or lawfully acquired by a holder. : Provided, however, That the holder of such contracts shall forfeit the right to charge, contract for, receive or collect refinance charges authorized by this act for renewal of a contract, if the license of such holder expired, was surrendered, or was revoked prior to the date of such renewal.

(2) (b) A licensee whose license has expired, was surrendered, or was revoked may thereafter shall, within 60 days, sell, transfer, or assign contracts entered into or acquired prior thereto before the expiration, surrender, or revocation of the license to any a licensed sales finance company or banking financial institution. , and such A sales finance company or banking financial institution acquiring such contracts under this subsection may renew such the contracts in accordance with the provisions of this act.

(3) (c) A licensee whose license has expired, was surrendered, or was revoked shall not thereafter enter do either of the following after the expiration, surrender, or revocation of the license:

(a) Enter into new contracts for the retail sale f of motor vehicles under installment sale contracts. , and shall not thereafter discount,

(b) Discount, purchase, or otherwise acquire such installment sale contracts.

Sec. 37a. (1) A person that intentionally makes a false statement, misrepresentation, or false certification in a record or document filed or required to be maintained under this act or that intentionally makes a false entry or omits a material entry in a record may be ordered to pay a civil fine of not more than

$15,000.00.

(2) A person that knowingly engages in an activity for which a license is required under this act and is not licensed under this act is guilty of a felony punishable by imprisonment for not more than 3 years or a fine of not more than $15,000.00, or both.

(3) A court shall order a person convicted of violating subsection (2) to pay restitution as provided under section 1a of chapter IX of the code of criminal procedure, 1927 PA 175, MCL 769.1a, and the William Van Regenmorter crime victim's rights act, 1985 PA 87, MCL 780.751 to 780.834.

(4) The administrator may assess a civil fine against a person that violates this act, a rule promulgated under this act, or an order or ruling issued by the administrator under this act, or any other applicable state or federal law in an amount that does not exceed $1,000.00 for each violation, plus this state's costs and expenses for the investigation and prosecution of the matter, including reasonable attorney fees.

Enacting section 1. Sections 37 and 41 of the motor vehicle sales finance act, 1950 (Ex Sess) PA 27, MCL 492.137 and 492.141, are repealed.

Enacting section 2. This amendatory act does not take effect unless all of the following bills of the 102nd Legislature are enacted into law:

(a) Senate Bill No.____ or House Bill No. 5355 (request no. 03158'23 a).

(b) Senate Bill No.____ or House Bill No. 5356 (request no. 03158'23 b).