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HB 5799

AN ACT RELATING TO TOWNS AND CITIES -- SUBDIVISION OF LAND

2025 Regular Session Introduced by Karen Alzate and 9 co-sponsors

Aligns the Consumer Financial Services Act with the Money Transmission Modernization Act, shifting money-transmission oversight to DIFS and updating bonds and net-worth rules.

05/23/2025 Referred to Senate Housing and Municipal Government
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Bill Summary · HB 5799

Summary — HB 5799 (Consumer Financial Services Act amendments)

Status: Referred to Committee on Government Operations (most recent referral to Appropriations 2025-01-22)
Introduced: June 6, 2024 (Rep. Mai Xiong) — Passed by House Dec. 12, 2024 (given immediate effect by the House)

Purpose

HB 5799 updates internal references and cross‑references in the Consumer Financial Services Act (1988 PA 161, MCL 487.2052 et seq.) to align the act with Michigan’s newer regulatory framework for money transmission. The bill revises definitions, licensing financial‑requirements, and bond references so that money‑transmission activities are governed by the Money Transmission Modernization Act and the Department of Insurance and Financial Services (DIFS) administrative structure.

Key provisions and changes

  • Amends sections 2, 5, 6, and 10g of the Consumer Financial Services Act.
  • Terminology and agency references:
    • Replaces older references to the “bureau” and “commissioner” with the Department of Insurance and Financial Services (or director of the bureau/department) as appropriate.
  • Definitions:
    • Defines “money transmission” by reference to the Money Transmission Modernization Act (specifically the definition in that act).
    • Updates the list of “financial licensing acts” to include the Money Transmission Modernization Act and to treat the 2006 Money Transmission Services Act as applicable only through June 30, 2025 (transitional).
  • Net worth requirements (Sec. 5):
    • Maintains/clarifies thresholds for applicants: Class I — $100,000; Class II — $50,000; certain activities under 1984 PA 379 — $1,000,000.
    • For applicants intending to provide money transmission services: $100,000 plus $25,000 per location/authorized delegate, or up to $1,000,000 (whichever is less) — with reference to the money transmission statutory framework.
    • Continues exclusions and computation rules for net worth (GAAP, excluded assets).
  • Surety bond / letter of credit (Sec. 6):
    • Standard principal amount floor of $500,000 for applicants, except that applicants intending to provide money transmission services must file a surety bond in the principal amount determined under the Money Transmission Modernization Act (bill cites the applicable provision in that act).
    • Bonds/letters of credit must be payable to the state and maintained for the licensure period.

Who is affected

  • Money transmitters and applicants for consumer financial services licenses (including entities moving from the old Money Transmission Services Act to the Money Transmission Modernization Act).
  • Existing licensees under the Consumer Financial Services Act may see changed cross‑references and compliance/reporting alignment with DIFS and the new money transmission law.
  • DIFS (administration and enforcement) — clearer statutory alignment and delegated authority.

Procedural / timeline notes

  • Introduced June 6, 2024. Passed the Michigan House on Dec. 12, 2024 (House vote 56–53) with immediate effect stated by the House.
  • Referred to Committee on Government Operations (Dec. 18, 2024) and later to the Joint Committee on Appropriations (Jan. 22, 2025).
  • The bill functions principally to harmonize statutory cross‑references and transition money transmission oversight to the newer money transmission statute; its operational effect depends on enactment of the Money Transmission Modernization Act provisions it references.

Practical implications

  • Clarifies regulatory authority and legal definitions for money‑transmission activities in Michigan.
  • May change the specific bond and capitalization metrics applicable to money transmitters (as determined by the Money Transmission Modernization Act), potentially affecting smaller transmitters or multi‑location operations.
  • Intended to reduce ambiguity and create consistency across Michigan’s financial licensing statutes.

Compiled from official sources — confirm details with the bill’s official record.

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