(Source: MIRS.news, Published 03/29/23) A Rep. Jennifer Conlin (D-Ann Arbor) bill requiring a yearly report on payday lending practices in Michigan was recently introduced in the House.
HB 4343 requires the state Department of Insurance and Financial Services (DIFS) to conduct a yearly study and make a report to the respective House and Senate committees dealing with banking and financial services.
The last time this was required was July 31, 2007.
The report would include statistics containing the number of active licensees providing “deferred presentment service transactions” in Michigan the year prior, including provider locations.
It would also include information about customer transaction volumes by month, transaction amounts, fees and total number of customers.
Finally, the report would contain the number of complaints filed with the department against licensees and non-licensees arising from transactions.
Conlin said the bill would attempt to limit the practice of predatory or “payday lending,” where lenders impose unfair terms, including high interest rates and narrow time windows for repayment.
She said lenders have been known to use coercive tactics and target borrowers without other options, typically those with credit problems or who are under other financial stress.
Rising prices have provided greater opportunity and higher profits during the COVID-19 pandemic, she added.
According to the Consumer Federation of America (CFA), 16 states and Washington, D.C., prohibit high-cost payday lending.
Thirty-one states, including Michigan, Illinois, Indiana, Minnesota and Ohio, still allow high-cost payday lending.
Conlin’s bill would not prohibit payday lending, but it would require DIFS to submit the report starting March 31, 2024, and continuing every March through 2030.
The entirety of the report will also be published on DIFS’ website.
The bill was referred to the House Insurance and Financial Services Committee, where it awaits further consideration.
