DEBT MANAGEMENT - S.B. 1056 (S-2): FLOOR ANALYSIS

Senate Bill 1056 (Substitute S-2 as reported)

Sponsor: Senator Michael J. Bouchard

Committee: Financial Services

CONTENT

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

-- Increase the maximum term of a contract between a licensee and a client from 24 to 60 months.

-- Provide for the waiver of additional surety bonds if an applicant for licensure had more than 10 offices.

-- Provide for electronic record-keeping, and specify that trust accounts could be reconciled electronically or by other methods.

-- Require licensees annually to verify payments to selected creditor accounts and review certain items.

-- Provide that a client's fee would have to be returned if 51% of the creditors did not approve a debt management plan.

-- Provide that a creditor's consent to a debt management plan could be sought by telephone, facsimile, electronic mail, or first-class mail.

-- Allow a licensee to charge a fee for providing advice or materials or making a referral.

-- Delete the authority of an exempted person to charge fees for debt management services.

-- Include limited liability companies under the Act.

MCL 451.412 et al. - Legislative Analyst: S. Lowe

FISCAL IMPACT

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

Date Completed: 5-11-98 - Fiscal Analyst: M. Tyszkiewiczfloor\sb1056 - Analysis available @ http://www.michiganlegislature.org

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.