Michigan Senate Bill SB0269

Michigan 2023-2024 Regular Session

• Introduced: 4/19/23
• Refer: 4/19/23

Caption

Occupations: pawnbrokers; allowable rate of interest charged by pawnbrokers; increase, and provide civil fines. Amends title & secs. 8, 9 & 18 of 1917 PA 273 (MCL 446.208 et seq.).

Impact

By raising the interest cap, the bill could lead to increased revenue for pawnbrokers, which may positively impact their profitability. However, there are implications for consumers who may bear the brunt of higher borrowing costs. Furthermore, the bill introduces civil fines for pawnbrokers who exceed the established interest rates, targeting those who operate outside the law and providing a mechanism for enforcement. This change aims to ensure better compliance within the industry and protect consumers from predatory lending practices.

Summary

Senate Bill 269 seeks to amend the regulations concerning pawnbrokers as outlined in the 1917 PA 273 law. The primary focus of the bill is to increase the allowable interest rate that licensed pawnbrokers can charge for loans, raising the maximum from 3% to 5% per month. This change is significant as it potentially affects the financial landscape for both pawnbrokers and their customers, providing pawnbrokers with the ability to collect higher fees on loans they provide.

Contention

As with any legislation that modifies financial regulations, there are points of contention. Advocates for the bill argue that the increased interest rates will enable pawnbrokers to remain in business and continue serving customers who often rely on quick and accessible loans. Conversely, opponents may view this as a potential exploitation of vulnerable populations who may not have alternative financial resources, leading to cycles of debt. The civil fines stipulated in the bill could be a point of contention as well, as they introduce a legal framework that some may argue could be too harsh in punishing mistakes made by business owners.