RESTRICTIONS ON LOAN REFERRAL FEES                                                         S.B. 238:

                                                                                  SUMMARY OF INTRODUCED BILL

                                                                                                         IN COMMITTEE

Senate Bill 238 (as introduced 3-14-17)

Sponsor:  Senator Darwin L. Booher

Committee:  Banking and Financial Services

Date Completed:  3-27-17

CONTENT

The bill would amend the Regulatory Loan Act to prohibit a licensee from paying a person a fee for locating a potential borrower for the licensee or referring a potential borrower to the licensee unless the potential borrower was not charged the fee if he or she entered into the loan with the licensee, and the amount of the fee did not exceed $500.

The Act generally prohibits a person from engaging in the business of making loans of money, credit, or goods and charging or receiving on the loan a greater rate of interest or consideration than the lender would be permitted to charge if it were not a licensee under the Act and without first obtaining a license from the Department of Insurance and Financial Services.

The Act prohibits licensees from engaging in certain conduct, such as advertising, publishing, distributing, or broadcasting a false, misleading, or deceptive statement or representation with regard to the rates, terms, or conditions for the lending of money, credit, goods, or discriminating against a person in the extension of credit on the basis of sex or marital status.

In addition, the bill would prohibit a licensee from paying a person a fee for locating a potential borrower for the licensee or introducing or referring a potential borrower to the licensee unless the potential borrower was not directly or indirectly charged for all or any part of the fee if he or she entered into the loan with the licensee, and the amount of the fee did not exceed $500.

The bill would take effect 90 days after its effective date.

MCL 493.12                                                                     Legislative Analyst:  Jeff Mann

FISCAL IMPACT

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

                                                                                        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.