PROPERTY/CASUALTY INSURANCE S.B. 534 (S-1): FLOOR ANALYSIS
Senate Bill 534 (Substitute S-1 as reported) Sponsor: Senator Michael J. Bouchard Committee: Financial Services
The bill would amend Public Act 135 of 1977, which regulates mortgage lending practices, to specify that a "credit granting institution" that required a mortgagor to maintain property/casualty insurance as a condition to receiving a mortgage loan could not require the amount of the property/casualty insurance to be greater than the replacement cost of the mortgaged building or buildings. A bank could require, however, an amount of property/casualty insurance that was required of the bank as a condition of a sale, transfer, or assignment of all or part of the mortgage to a third party. The bill would not require that a bank anticipate a sale, transfer, or assignment at the time the mortgage loan was made.
"Credit granting institution", under the Act, means a State- or nationally chartered bank, a State- or Federally chartered savings and loan association, a State- or Federally chartered credit union, the Michigan State Housing Development Authority, or a business entity making or purchasing mortgage loans, that has a main office, branch office, or service center doing business within Michigan.
Proposed MCL 445.1602a Legislative Analyst: P. Affholter
The bill would not affect the fiscal requirements or the borrowing or lending activities and programs of the Department of Commerce or of local governmental units.
Date Completed: 5-19-95 Fiscal Analyst: K. Lindquist
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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.