Relating to the regulation of a person who offers, services, or brokers a deferred presentment transaction.
Impact
The primary impact of SB242 on state law relates to the heightened regulatory requirements for businesses involved in deferred presentment transactions. By requiring entities to obtain certification and providing data on their lending practices, the bill seeks to foster greater transparency in the payday lending industry. This may result in improved consumer protections and enhanced accountability for lenders, potentially curbing predatory lending practices that have been a point of contention among consumer advocacy groups.
Summary
SB242 addresses the regulation of individuals and organizations that offer, service, or broker deferred presentment transactions, commonly known as payday loans. The bill establishes a framework for the certification of such entities by the consumer credit commissioner, requiring them to submit regular data to a centralized database. This initiative aims to enhance oversight of the consumer credit sector, particularly concerning those who provide short-term loans which can be burdensome for borrowers if not regulated properly. The legislation mandates the creation of a detailed reporting system that tracks various metrics related to these transactions.
Contention
Notable points of contention surrounding SB242 pertain to the potential burden on small loan businesses as they adjust to the new regulatory landscape. Critics argue that the certification process and data submission requirements could disproportionately impact smaller operators, limiting access to credit for low-income individuals in need of emergency funds. Proponents of the bill contend that it is a necessary step to prevent exploitation of vulnerable populations by unscrupulous lenders and to ensure a fair lending environment.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.
Relating to credit services organizations and extensions of consumer credit facilitated by credit services organizations; increasing a criminal penalty.
Consumer protection: identity theft; references to identity theft protection act in deferred presentment service transactions act; revise. Amends sec. 22 of 2005 PA 244 (MCL 487.2142). TIE BAR WITH: SB 0360'25
Health care entity transaction requirements established, health care transaction data reported, expiration date changed on moratorium conversion transactions, health system required to return charitable assets received from the state to the general fund, study required on regulation of transactions, and report required.
Consumer protection: identity theft; references to identity theft protection act in deferred presentment service transactions act; revise. Amends sec. 22 of 2005 PA 244 (MCL 487.2142). TIE BAR WITH: SB 0888'24