Michigan Laws 487.2158 – Endorsement of check; returned check charge; liability for dishonored check
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Terms Used In Michigan Laws 487.2158
- Check: means a draft that is payable on demand and drawn on a bank, savings bank, savings and loan association, or credit union. See Michigan Laws 487.2122
- Commissioner: means the director or his or her authorized representative. See Michigan Laws 487.2122
- Contract: A legal written agreement that becomes binding when signed.
- Customer: means an individual who inquires into the availability of or applies for a deferred presentment service transaction or a drawer who enters into a deferred presentment service transaction. See Michigan Laws 487.2122
- deferred presentment service transaction: means a transaction between a licensee and a customer under which the licensee agrees to do all of the following:
(i) Pay to the customer an agreed-upon amount in exchange for a fee. See Michigan Laws 487.2122Department: means the department of insurance and financial services. See Michigan Laws 487.2122 Drawee: means a bank, savings bank, savings and loan association, credit union, or other person on which a check is drawn. See Michigan Laws 487.2122 Drawer: means a customer who enters into a deferred presentment service transaction with a licensee. See Michigan Laws 487.2122 Licensee: means a person that is licensed to engage in the business of providing deferred presentment service transactions under this act. See Michigan Laws 487.2122 United States: shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) A licensee shall endorse a check given to it by a drawer with the actual name under which the licensee is doing business before the licensee negotiates or presents the check for payment.
(2) A licensee may contract for and collect a returned check charge that does not exceed the maximum returned check charge determined under subsection (3) if the drawer’s check that the licensee is holding in a deferred presentment service transaction is returned by the drawee due to insufficient funds, a closed account, or a stop payment order. The licensee may only contract for and collect 1 returned check charge under this subsection in a transaction with a customer. In addition to the charge authorized by this section, a licensee may exercise any other remedy available under any law applicable to the return of a check because of a closed account or a stop payment order.
(3) The initial maximum amount of a returned check charge described in subsection (2) is $25.00. Beginning March 1, 2011, and by March 1 of every fifth year after March 1, 2011, the licensee may adjust the maximum returned check charge by an amount determined by the commissioner to reflect the cumulative percentage change in the Detroit consumer price index over the preceding 5 calendar years. As used in this subsection, “Detroit consumer price index” means the most comprehensive index of consumer prices available for the Detroit area from the bureau of labor statistics of the United States department of labor.
(4) A drawer is not subject to any criminal penalty for entering into a deferred presentment service transaction and is not subject to any criminal penalty in the event the drawer’s check is dishonored.