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HB 6199

Financial institutions: mortgage brokers and lenders; consolidation of certain licensing statutes related to residential mortgages; make conforming changes in the Michigan penal code. Amends secs. 219e & 219f of 1931 PA 328 (MCL 750.219e & 750.219f). TIE BAR WITH: HB 6177'26

2025-2026 Regular Session Introduced by Parker Fairbairn and 1 co-sponsor

HB 6199 strengthens penalties for fraudulently preparing, submitting, or handling loan applications in another person’s name and broadens who counts as a financial institution.

bill electronically reproduced 07/03/2026
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Bill Summary · HB 6199

Summary of HB 6199 (Michigan, 2025-2026)

Main purpose and intent

HB 6199 amends sections of Michigan’s penal code to strengthen penalties and clarify enforcement related to fraudulent mortgage applications and related instruments. The bill targets activities where applications for loans or access devices are prepared, submitted, or possessed in the name of another person without authorization, and it expands the scope of what constitutes a “financial institution” for purposes of the penalties. It ties its effective date to HB 6177, indicating a broader package on residential mortgage licensing and supervision.

Key provisions and changes

  • Prohibited conduct (Section 219e):

    • Prohibits preparing or submitting loan/applications in another person’s name without authorization.
    • Prohibits receiving or possessing such applications knowing they were prepared in violation.
    • Prohibits receiving or possessing any instrument or device for accessing loan proceeds knowing it was obtained in violation.

  • Penalties (Section 219e(2)):

    • Violations are felonies punishable by up to 4 years in prison, or fines up to $2,500, or both.

  • Exceptions for financial institutions and related personnel (Section 219e(3)):

    • Provides carve-outs for financial institutions, their affiliates/licensees/franchisees, and their directors/officers/employees when they act without actual knowledge of the violation.
    • Allows actions such as submitting an application in another name, or forwarding/receiving such applications to law enforcement, regulatory agencies, or credit bureaus, under specified conditions.

  • Definition of “financial institution” (Section 219e(4)):

    • Broadly defines “financial institution” to include:
    • Regulated lenders.
    • Licensees under the Michigan BIDCO Act.
    • Mortgage brokers, lenders, and servicers licensees (for 6 months after the effective date of the Residential Mortgage Licensing and Supervision Act).
    • Secondary mortgage loan act licensees (for 6 months after the effective date).
    • Entities licensed under the Residential Mortgage Licensing and Supervision Act (from its effective date forward).
    • Parties subject to the Retail Installment Sales Act.
    • Parties subject to the Motor Vehicle Sales Finance Act.
    • Entities chartered or regulated by federal banking/credit agencies (OCC, FDIC, Fed, OCC-related bodies).

  • Provisions for receiving/forwarding violations (Section 219f):

    • Outlaws receiving with intent to forward, possessing with intent to forward, or forwarding applications prepared in another person’s name, knowing they were prepared in violation.
    • Outlaws receiving/forwarding instruments or devices obtained as a result of such violations.

  • Penalties under Section 219f:

    • Violations are felonies with up to 4 years imprisonment, or fines up to $100,000, or both.

  • Exceptions and protections (Section 219f(4)-(5)):

    • Similar to 219e, provides exceptions for financial institutions and personnel acting without actual knowledge of the violation.
    • Defines “financial institution” in alignment with 219e, including conditional 6-month transitional periods for certain mortgage licensing entities.

  • Enacting clause (final):

    • The act takes effect only if HB 6177 is enacted into law (ties this bill to the broader mortgage licensing package).

Who would be affected

  • Financial institutions and licensees across various mortgage-related sectors (lenders, brokers, servicers, and related licensees) would be subject to these enhanced prohibitions and transitional definitions.
  • Individuals and entities who prepare, submit, receive, or forward loan applications or access instruments in another person’s name without authorization could face felony penalties.
  • Regulated financial regulators and enforcement bodies may see expanded scope for investigating and prosecuting violations.

Procedural and timeline aspects

  • HB 6199 is introduced July 3, 2026, and referred to the Committee on Finance.
  • The act’s applicability is contingent on the passage of HB 6177 (the residential mortgage licensing and supervision act) for its effective date, creating a tie-bar relationship to that broader reform package.
  • Transitional provisions specify temporary six-month periods after the effective date for certain mortgage licensing entities to be treated as “financial institutions” under the new framework.

Notes

  • The bill focuses on preventing name-imitation loan applications and misuse of access devices, with significant penalties to deter fraud.
  • The interplay with HB 6177 suggests a comprehensive overhaul of Michigan’s residential mortgage licensing regime, including licensing, supervision, and associated penalties.

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

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