Michigan Laws 445.1856 – Regulated lender; authority to charge fee for late payment or dishonored check; fee or charge not considered as interest; excessive fee or charge
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(1) Except for depository institutions and as otherwise provided by law, a regulated lender may do any of the following:
(a) Require the borrower to pay a processing fee in connection with making, closing, disbursing, extending, readjusting, or renewing an extension of credit. The processing fee allowed under this subdivision shall not exceed 2% of the amount of the extension of credit.
Terms Used In Michigan Laws 445.1856
- Borrower: means a person who obtains an extension of credit from a regulated lender. See Michigan Laws 445.1852
- Excessive fee or charge: means a fee or charge that exceeds the amount allowed in section 6(1), (2), or (3), section 7, or any other applicable law or statute of this state. See Michigan Laws 445.1852
- Extension of credit: means a loan or credit sale made by a regulated lender. See Michigan Laws 445.1852
- Grace period: The number of days you'll have to pay your bill for purchases in full without triggering a finance charge. Source: Federal Reserve
- Regulated lender: means a depository institution, a licensee under the consumer financial services act, Act No. See Michigan Laws 445.1852
(b) Charge the borrower a late fee for an installment payment that is received by the regulated lender after the expiration of an agreed-upon grace period following the date on which the payment was due.
(c) A late fee allowed by this subdivision shall not exceed $15.00 or 5% of the installment payment, whichever is greater.
(2) A regulated lender may charge a fee not to exceed $25.00 for a check or other payment instrument that is dishonored because of insufficient funds in the account on which the check or instrument is drawn.
(3) A fee or charge allowed by this section is not considered interest.
(4) A regulated lender shall not require a borrower or buyer to pay an excessive fee or charge.