Michigan House Bill HB5535

Michigan 2023-2024 Regular Session

• Introduced: 3/5/24
• Refer: 3/5/24
• Report Pass: 6/18/24
• Engrossed: 6/27/24
• Refer: 7/30/24

Caption

Occupations: pawnbrokers; allowable rate of interest charged by pawnbrokers; increase, and prescribe civil sanctions. Amends title & sec. 18 of 1917 PA 273 (MCL 446.218). TIE BAR WITH: HB 5536'24

Impact

If enacted, HB 5535 would notably revise the penalties associated with violations of the pawnbroker regulations. Notably, it establishes a more robust system for enforcement by allowing the prosecution to impose fines that could go up to $5,000 for certain infractions. This may have substantial implications for how pawnbrokers operate, especially concerning the interest rates they charge. Additionally, the bill ties itself to another bill, HB 5536, indicating an interdependent legislative approach that may further shape the regulatory landscape for pawnbrokers in Michigan.

Summary

House Bill 5535 seeks to amend the 1917 PA 273, which governs the regulation and licensing of pawnbrokers in Michigan. The bill's primary focus is to increase the allowable rate of interest that pawnbrokers can charge on loans and to introduce civil penalties for violations. By modernizing the existing legislation, the bill aims to enhance the regulatory framework surrounding pawnbroker transactions, ensuring that they align with contemporary economic conditions and practices. The bill also prescribes civil penalties for excessive interest charges, which are significant under the proposed amendments.

Sentiment

The sentiment surrounding the bill appears to reflect a mixture of support and concern. Proponents argue that it updates and clarifies existing regulations, making them more relevant to current economic practices. Supporters assert that allowing higher interest rates may benefit pawnbrokers, helping them sustain viable businesses. Conversely, opponents express concern that increased interest rates could exploit vulnerable populations who rely on pawnbroker services. This discord highlights a tension between regulatory reform aimed at economic flexibility and the protection of consumer rights.

Contention

A key point of contention in the discussions around HB 5535 relates to how increased interest rates could affect the most economically disadvantaged individuals who utilize pawnbroker services. Critics argue that the amendments could lead to predatory lending practices and that higher fines may disproportionately impact smaller operations. Furthermore, the bill's tie to HB 5536 suggests a larger legislative strategy, raising questions about the potential for broader changes in how financial services are regulated in Michigan.