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SB 701

Consumer credit: interest rates; maximum interest rate allowed for medical debt; modify. Amends sec. 3 of 1976 PA 331 (MCL 445.903). TIE BAR WITH: SB 0702'25

2025-2026 Regular Session Introduced by Sarah Anthony and 4 co-sponsors

Michigan bill caps interest rates on medical debt to reduce consumer financial burden from healthcare-related borrowing costs.

referred to Committee on Health Policy
#consumercredit:interestrates #health:other
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Bill Summary · SB 701

Legislative bill overview

SB 701 proposes to amend Michigan's consumer credit law (the Consumer Protection Act) to establish a maximum interest rate cap specifically for medical debt. The bill targets the finance charges that creditors can charge on medical debts, modifying existing rate regulations under MCL 445.903.

Why is this important

Medical debt is a leading cause of personal bankruptcy and financial hardship in the United States. By capping interest rates on medical debt, this bill could reduce the total amount consumers owe and prevent debt from compounding into unmanageable levels, particularly affecting lower-income households facing unexpected healthcare costs.

Potential points of contention

  • Definition and scope: The bill's language doesn't specify what qualifies as "medical debt" (unpaid provider bills vs. medical credit cards vs. all healthcare-related borrowing), which could create ambiguity in enforcement
  • Market impact: Creditors and debt collectors may argue that rate caps reduce lending availability for medical expenses or increase costs elsewhere in credit markets
  • Interaction with existing law: The amendment's specific rate cap level is not detailed in this summary, raising questions about whether it aligns with federal lending standards and how it compares to other states' approaches

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

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