SB-0657, As Passed Senate, May 24, 2016

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 657

     A bill to amend 1981 PA 70, entitled

"An act to regulate the collection practices of certain persons; to

provide for the powers and duties of certain state agencies; and to

provide penalties and civil fines,"

by amending section 1 (MCL 445.251).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1. (1) As used in this act:

     (a) "Claim" or "debt" means an obligation or alleged

obligation for the payment of money or thing of value arising out

of an expressed or implied agreement or contract for a purchase

made primarily for personal, family, or household purposes.

     (b) "Collection agency" means a person that is directly or

indirectly engaged in soliciting a claim for collection or

collecting or attempting to collect a claim owed or due or asserted

to be owed or due another, or repossessing or attempting to

repossess a thing of value owed or due or asserted to be owed or

due another person, arising out of an expressed or implied

agreement. Collection agency includes a person representing an

individual who, in the course of collecting, repossessing, or

attempting to collect or repossess, represents himself or herself

as a collection or repossession agency, or a person performing the

activities of a collection agency, on behalf of another, which

activities are regulated by Act No. 299 of the Public Acts of 1980,

as amended, being sections 339.101 to 339.2601 of the Michigan

Compiled Laws. that performs collection activities that are

regulated under article 9 of the occupational code, 1980 PA 299,

MCL 339.901 to 339.920. Collection agency includes a person who

that furnishes or attempts to furnish a form or a written demand

service that is represented to be a collection or repossession

technique, device, or system to be used to collect or repossess

claims, if the form contains the name of a person other than the

creditor in a manner indicating that indicates that a request or

demand for payment is being made by a person other than the

creditor even though the form directs the debtor to make payment

directly to the creditor rather than to the other person whose name

appears on the form. Collection agency includes a person who that

uses a fictitious name or the name of another in the collection or

repossession of claims to convey to the debtor that a third person

is collecting or repossessing or has been employed to collect or

repossess the claim.

     (c) "Communicate" means the conveying of to convey information

regarding a debt directly or indirectly to a person through any

medium.

     (d) "Consumer" or "debtor" means a natural person an

individual who is obligated or allegedly obligated to pay a debt.

     (e) "Creditor" or "principal" means a person who that offers

or extends credit creating a debt or a person to whom which a debt

is owed or due or asserted to be owed or due. Creditor or principal

does not include a person who that receives an assignment or

transfer or a debt solely for the purpose of facilitating

collection of the debt for the assignor or transferor. In those

instances, the assignor or transferor of the debt shall continue to

be considered the creditor or the principal for purposes of this

act.

     (f) "Person" means an individual, sole proprietorship,

partnership, association, or corporation, limited liability

company, or other legal entity.

     (g) "Regulated person" means a person whose collection

activities are confined and are directly related to the operation

of a business other than that of a collection agency including any

of the following:

     (i) A regular employee when collecting who collects accounts

for 1 employer if the collection efforts are carried on in the name

of the employer.

     (ii) A state or federally chartered bank when collecting that

collects its own claim.

     (iii) A trust company when collecting that collects its own

claim.

     (iv) A state or federally chartered savings and loan

Senate Bill No. 657 as amended May 18, 2016

association when collecting that collects its own claim.

     (v) A state or federally chartered credit union when

collecting that collects its own claim.

     (vi) A licensee under Act No. 21 of the Public Acts of 1939,

as amended, being sections 493.1 to 493.26 of the Michigan Compiled

Laws.the regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24.

     (vii) A business that is licensed by the this state under a

regulatory act by which that regulates collection activity. is

regulated.

     (viii) An abstract company doing that is engaged in an escrow

business.

     (ix) A licensed real estate broker or salesperson if the claim

being handled by the broker or salesperson is collecting is related

to or in connection with the broker broker's or salesperson's real

estate business.

     (x) A public officer or a person that is acting under a court

order.

     (xi) An attorney who is handling claims and collections a

claim or collection on behalf of a client and in the attorney's own

name.

     (2) As used in this act, "collecting or attempting to collect

a claim", "repossessing or attempting to repossess a thing of

value", and "collection activities" do not include any of the

following activities of a claim forwarder or remarketer pursuant to

a contract with a creditor:

     (a) Forwarding repossession assignments on behalf of the

creditor [only to a licensed] collection agency that is licensed under

article 9 of

the occupational code, 1980 PA 299, MCL 339.901 to 339.920, for

repossessing or attempting to repossess a thing of value owed or

alleged to be owed on a claim.

     (b) Pursuant to the authorization of a creditor and on the

creditor's behalf, providing or procuring the services of an

auction or other remarketer in connection with the disposition or

preparation for disposition of a thing of value that was previously

repossessed by a creditor or by another person on behalf of the

creditor.

     (c) Communicating with a creditor or the collection agency

regarding the performance of any of the activities described in

subdivision (a) or (b).

     Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.