April 24, 2007, Introduced by Reps. Tobocman, Hopgood, Bauer, Warren and Dean and referred to the Committee on Banking and Financial Services.
A bill to amend 1939 PA 21, entitled
"Regulatory loan act,"
by amending section 1 (MCL 493.1), as amended by 2002 PA 393, and
by adding section 16.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. (1) This act shall be known and may be cited as the
"regulatory loan act".
(2) As used in this act:
(a) "Advertising" means publishing or broadcasting, or causing
to be published or broadcast, material that has been prepared for
public distribution by means of newspapers, magazines, or
electronic media. Advertising does not include a stockholder
communication, such as an annual report, interim financial report,
registration statement, security, prospectus, application for
listing a security on a stock exchange, or proxy materials.
Advertising does not include a communication addressed to a person
who has previously executed a loan agreement relative to that
person's account.
(b) "Annual percentage rate" means the rate as computed under
the federal truth in lending act, 15 USC 1601 to 1667f.
(c) (b)
"Assets" means liquid
assets, collectible loans made
in accordance with this act, and personal property acquired in the
general conduct of business transacted under this act.
(d) (c)
"Commissioner" means the
commissioner of the office of
financial
and insurance services in the department of consumer and
industry
services labor and economic
growth.
(e) (d)
"Control person" means a
director or executive officer
of a licensee or a person who has the authority to participate in
the direction, directly or indirectly through 1 or more other
persons, of the management or policies of a licensee.
(f) (e)
"Executive officer" means
an officer, member, or
partner of a licensee, including chief executive officer,
president, vice president, chief financial officer, controller,
compliance officer, or any other similar position.
(g) "Facilitator" means a person that individually or in
conjunction or cooperation with another person processes, receives,
or accepts for delivery an application for a refund anticipation
loan or a check in payment of refund anticipation loan proceeds or
in any other manner materially facilitates the making of a refund
anticipation loan. The term does not include any of the following:
(i) A person described in section 20.
(ii) An affiliate that is a servicer for a person described in
section 20.
(iii) A person certified, registered, or licensed to engage in
the practice of public accounting under article 7 of the
occupational code, 1980 PA 299, MCL 339.720 to 339.736.
(iv) A person that acts solely as an intermediary and does not
deal with a taxpayer in the making of a refund anticipation loan.
(h) (f)
"Financial licensing act"
means any act listed in
section 2 of the consumer financial services act, 1988 PA 161, MCL
487.2052.
(i) (g)
"License" means a single
license issued to a single
place of business.
(j) (h)
"Licensee" means a person
licensed or required to be
licensed under this act.
(k) (i)
"Liquid assets" means
cash, unrestricted deposits in
banks, and readily marketable securities at their then market
value.
(l) (j)
"Loan" or
"regulatory loan" means a loan made by a
licensee to an individual for personal, family, or household use.
The term includes a refund anticipation loan.
(m) (k)
"Person" means an
individual, partnership,
association, corporation, limited liability company, or other legal
entity.
(n) "Refund anticipation loan" means a loan that a person
arranges to be repaid directly from the proceeds of a taxpayer's
federal or state personal income tax refund.
(o) "Refund anticipation loan fee" means the charges, fees, or
other consideration charged or imposed by a person acting as a
lender or facilitator for the making of a refund anticipation loan.
The term does not include any charge, fee, or other consideration
usually charged or imposed by a facilitator in the ordinary course
of business for tax return preparation, electronic filing of tax
returns, or other nonloan services.
(p) "Taxpayer" means an individual who files a federal or
Michigan personal income tax return.
Sec. 16. (1) Before a taxpayer completes an application for a
refund anticipation loan, the facilitator shall clearly disclose
all of the following in writing, in 14-point type and in the
primary language understood by the taxpayer, to the taxpayer on a
form separate from the application:
(a) A listing or table of refund anticipation loan fees and
the annual percentage rates charged by the facilitator or lender
for 3 or more representative refund anticipation loan amounts. For
each loan amount, the schedule shall list separately the amount of
each fee and the amount of interest charged by the facilitator or
lender and the total amount of fees and interest charged.
(b) That the refund anticipation loan is a loan and not the
taxpayer's actual personal income tax refund.
(c) That electronic filing of the taxpayer's tax return is
available without applying for a refund anticipation loan.
(d) The average time announced by the appropriate taxing
authority within which the taxpayer can expect to receive a refund
if the taxpayer does not obtain a refund anticipation loan and the
taxpayer's return is filed using either of the following methods:
(i) Electronically and the refund is directly deposited in the
taxpayer's bank account.
(ii) By mail and the refund is directly deposited in the
taxpayer's bank account or mailed to the taxpayer.
(e) That the internal revenue service with respect to a
federal personal income tax return, or the department of treasury
with respect to a Michigan personal income tax return, does not
guarantee either of the following:
(i) That the full amount of the anticipated refund will be
paid.
(ii) A specific date on which the taxpayer will receive the
refund.
(f) That the taxpayer is responsible for repayment of the loan
and related fees in the event the tax refund is not paid or is not
paid in full.
(g) The estimated time within which the proceeds of the loan
will be paid to the taxpayer if the loan is approved.
(h) The fees charged by the facilitator or lender if the
refund anticipation loan is not approved.
(2) Before entering into a refund anticipation loan agreement,
the facilitator shall clearly disclose both of the following to the
taxpayer:
(a) The estimated total fees for the loan.
(b) The estimated annual percentage rate for the loan.
(3) A political subdivision of this state shall not adopt any
rule, regulation, code, or ordinance to restrict or limit any
requirements under this section relating to refund anticipation
loans. This section supersedes and preempts any rule, regulation,
code, or ordinance of any political subdivision of this state
relating to refund anticipation loans.
(4) As part of the report required under section 11, each
lender and facilitator shall disclose for the preceding calendar
year the number and dollar amount of refund anticipation loans
made, the average refund anticipation loan, and the average time to
dispense loan proceeds.
(5) As used in this section, "lender" means a person that
makes a refund anticipation loan but does not include a person
described in section 20.