DEBT MANAGEMENT ACT REVISIONS                                                       S.B. 664 (S-2):

                                                                                                    SUMMARY OF BILL

                                                                                      REPORTED FROM COMMITTEE

 

 

 

 

 

 

 

 

 

Senate Bill 664 (Substitute S-2 as reported)

Sponsor:  Senator Mike Kowall

Committee:  Banking and Financial Institutions

 

CONTENT

 

The bill would amend the Debt Management Act to do the following:

 

 --    Require a licensee, before entering into a contract to provide debt management services, to develop a plan outlining how a debtor would meet the payment obligations of his or her debt management plan if the debtor's monthly expense and debt payments exceeded his or her net income.

 --    Modify the requirements for information that must be included in a budget analysis (which a licensee must prepare before entering into a contract to provide services).

 --    Allow a licensee to charge a nonrefundable fee for establishing a debt management plan for a debtor.

 --    Increase from $25 to $50 the initial fee a licensee may charge for establishing a debt management plan, and allow a fee for the purchase of credit reports and educational materials.

 --    Require a licensee to obtain consent to participate in a debt management plan from at least 51% of the debtor's creditors within 90 days, rather than the current 45 days, after establishing the plan, and otherwise revise the requirements for obtaining consent.

 --    Allow a debtor to add or remove one or more debt obligations from the contract by submitting a written request to the licensee.

 --    Revise the standards for annual reviews of a licensee's procedures.

 --    Allow a licensee to cancel a contract under certain conditions, if a debtor failed to make a payment, and delete provisions allowing a debtor to file a letter of continuation of a contract after failing to make a payment.

 --    Require a licensee to state on a website available to the public that the licensee was licensed in this State.

 --    Remove a requirement that advertising be filed with the Department of Insurance and Financial Services, but prohibit a licensee from advertising, printing, or displaying a false, misleading, or deceptive statement.

 

MCL 451.412 et al.                                                           Legislative Analyst:  Jeff Mann

 

FISCAL IMPACT

 

The bill would have no fiscal impact on State or local government.

 

Date Completed:  3-14-14                                                     Fiscal Analyst:  Josh Sefton

 

 

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.