H.B. 5100: COMMITTEE SUMMARY INTEREST ON EMPLOYEE LOANS
House Bill 5100 (as passed by the House) Sponsor: Representative Ken Sikkema House Committee: Commerce
Senate Committee: Financial Services
Date Completed: 2-5-96
The bill would amend the Business Corporation Act to specify that a loan issued by a corporation to an officer or employee of the corporation or one of its subsidiaries, for the officer or employee to purchase shares of the corporation or a subsidiary, could be made at any rate of interest not exceeding the rate allowed under Public Act 259 of 1968. (That Act provides that a person is guilty of criminal usury when he or she knowingly charges, takes, or receives interest at a rate exceeding 25% annually.)
Currently, since the Business Corporation Act does not specify a maximum rate of interest, loans made by a corporation to its officers or employees cannot exceed 7% annually, the maximum interest rate otherwise allowed under the general usury Act (MCL 438.31).
MCL 450.1548 Legislative Analyst: P. Affholter
The bill would have no fiscal impact on State or local government.
Fiscal Analyst: M. Barsch
S9596\S5100SA
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.
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