Bill Text: MI SB0843 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Consumer credit; other; credit services protection act; modify certain definitions. Amends secs. 2 & 3 of 1994 PA 160 (MCL 445.1822 & 445.1823) & adds sec. 3a.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2016-03-03 - Referred To Committee On Banking And Financial Institutions [SB0843 Detail]

Download: Michigan-2015-SB0843-Introduced.html

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SENATE BILL No. 843

 

 

March 3, 2016, Introduced by Senator ROBERTSON and referred to the Committee on Banking and Financial Institutions.

 

 

 

     A bill to amend 1994 PA 160, entitled

 

"Credit services protection act,"

 

by amending sections 2 and 3 (MCL 445.1822 and 445.1823), section 2

 

as amended by 2009 PA 97, and by adding section 3a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. As used in this act:

 

     (a) "Buyer" means a person who that is solicited to purchase

 

or who purchases the services of a credit services organization.

 

     (b) "Credit services organization" means, except as otherwise

 

provided in subdivision (c), a person who, that, in return for

 

consideration, attempts to sell, provide, or perform performs

 

services that do or attempt to do 1 or more of the following:

 

     (i) The improvement of Improve a person's credit record,

 

history, or rating or otherwise enhance a person's

 

creditworthiness.

     (ii) The obtainment of Obtain an extension of credit to a

 

buyer from a third party.

 

     (iii) Advice or assistance Advise or assist a buyer regarding

 

the improvement or repair of a person's credit record, history, or

 

rating.

 

     (iv) Advice or assistance regarding the obtainment of Advise

 

or assist a buyer concerning an extension of credit.

 

     (v) Advice or assistance Advise or assist a buyer regarding

 

foreclosure of a real estate mortgage.

 

     (vi) Serve Authorize the credit services organization to act

 

as an intermediate intermediary between a debtor and a creditor on

 

behalf of the debtor regarding credit that was extended prior to

 

before any agreement to have the credit services organization serve

 

as an intermediate.intermediary.

 

     (c) Credit services organization does not include any of the

 

following:

 

     (i) A person who is licensed in this state or otherwise

 

authorized to make loans or extend credit under any state statute

 

while engaged in the regular course of business under that state

 

statute, other than 1966 PA 326, MCL 438.31 to 438.33.

 

     (i) (ii) A federal or state chartered bank, credit union,

 

savings bank, or savings and loan institution, an entity of the

 

federally chartered farm credit system, Farm Credit System, or any

 

solely wholly owned subsidiary thereof.of that bank, credit union,

 

institution, or entity.

 

     (ii) (iii) A person that is licensed under the occupational

 

code, 1980 PA 299, MCL 339.101 to 339.2919, 339.2677, when engaged

 

in the regular course of business.

 

     (iii) (iv) A person An individual who is licensed to practice

 

law in this state if the person individual renders services within

 

the course of that person's individual's practice as an attorney

 

and does not engage in the business of a credit services

 

organization on a regular and continuing basis.

 

     (iv) (v) A judicial officer or other person that is acting

 

under court order.

 

     (v) (vi) A consumer reporting agency, as defined in section

 

603 of the fair credit reporting act, 15 USC 1681a, while engaged

 

in the regular course of the credit reporting business.

 

     (vi) (vii) A debt management business licensed under the debt

 

management act, 1975 PA 148, MCL 451.411 to 451.437, while engaged

 

in the regular course of business under that act.

 

     (vii) (viii) An investment adviser or broker-dealer registered

 

under the uniform securities act, 1964 PA 265, MCL 451.501 to

 

451.818, or the uniform securities act (2002), 2008 PA 551, MCL

 

451.2101 to 451.2703.

 

     (viii) (ix) A nonprofit corporation that is exempt from

 

taxation under section 501c(3) of the internal revenue code of

 

1986, 26 USC 501c(3).

 

     (ix) (x) A finance subsidiary of a manufacturing corporation.

 

     (d) "Extension of credit" means the right to defer payment of

 

debt or to incur debt.

 

     (e) "Person" means an individual, partnership, corporation,

 

limited liability company, association, or other legal entity.

 

     (f) "Retail seller" means that term as defined in section 2 of

 

the retail installment sales act, 1966 PA 224, MCL 445.852.

 

     Sec. 3. A credit services organization, a salesperson, agent,

 

or representative of a credit services organization, or an

 

independent contractor who that sells or attempts to sell the

 

services of a credit services organization shall not do any of the

 

following:

 

     (a) Charge or receive from a buyer who is seeking a loan or

 

extension of credit any money or other valuable consideration

 

before the closing of the loan or extension of credit.

 

     (b) Charge a buyer or receive from a buyer of services money

 

or other valuable consideration before completing performance of

 

all services the credit services organization has agreed to perform

 

for the buyer.

 

     (c) Charge a buyer or receive from a buyer money or other

 

valuable consideration solely for referral to a retail seller who

 

that will or may extend credit to the buyer if the credit that is

 

or may be extended to the buyer is substantially the same as that

 

available to the general public. However, a credit services

 

organization's charges for providing any of the services described

 

in section 2(b)(i) to (vi) are not considered to be money or other

 

consideration charged to or received from a buyer solely for a

 

referral described in this subdivision.

 

     (d) Make or use a false or misleading representation in the

 

offer or sale of the services of a credit services organization.

 

     (e) Engage, directly or indirectly, in a fraudulent or

 

deceptive act, practice, or course of business in connection with

 

the offer or sale of the services of a credit services organization

 

including, but not limited to, both any of the following:

 

     (i) Guaranteeing or otherwise stating that the organization is

 

able to delete an adverse credit history unless the representation

 

clearly discloses, in a manner equally as conspicuous as the

 

guarantee, that this can be done only if the credit history is

 

inaccurate or obsolete and is not claimed to be accurate by the

 

creditor who submitted the information.

 

     (ii) Guaranteeing or otherwise stating that the organization

 

is able to obtain an extension of credit regardless of the buyer's

 

previous credit problems or credit history unless the

 

representation clearly discloses, in a manner equally as

 

conspicuous as the guarantee, the eligibility requirements for

 

obtaining an extension of credit.

 

     (f) Fail to perform the agreed services within 90 days

 

following the date the buyer signs the contract for services.

 

     (g) Counsel or advise a buyer to make a statement that is

 

known, or should be known, to be untrue or misleading to a consumer

 

credit reporting agency, a person who has extended credit to a

 

buyer, or to a person to whom the buyer is applying for an

 

extension of credit.

 

     (h) Remove, assist, or advise the buyer to remove adverse

 

information from the buyer's credit record which that is accurate

 

and not obsolete.

 

     (i) Create, assist, or advise the buyer to create a new credit

 

record by using a different name, address, social security number,

 

or employer identification number.

 

     (j) Submit a buyer's dispute to a consumer credit reporting

 

agency without the buyer's knowledge.

 

     (k) Provide a service to a buyer that is not pursuant to a

 

written contract that complies with this section.

 

     (l) Make a loan or extend credit to a person under another

 

statute of this state and receive compensation for making that loan

 

or extension of credit under this act.

 

     (m) Accept consideration for providing any of the services

 

described in section 2(b)(i) to (vi) that is not authorized under

 

section 3a(1).

 

     Sec. 3a. (1) A credit services organization may accept fees or

 

charges as consideration in return for providing any of the

 

services described in section 2(b)(i) to (vi).

 

     (2) Nothing in this act shall create an inference that the

 

consideration received by a credit services organization for its

 

services is to be considered interest or charges on any loan that

 

may be related to the services provided by the credit services

 

organization.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.