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Bill

HB 6177

Financial institutions: mortgage brokers and lenders; residential mortgage licensing and supervision act; establish. Creates new act.

2025-2026 Regular Session Introduced by Mark Tisdel

Michigan would require a state-licensed framework with minimum net worth, bonding, and annual oversight for mortgage brokers, lenders, servicers, and originators to improve consume

bill electronically reproduced 07/03/2026
#financialinstitutions:mortgagebrokersandlenders
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Bill Summary · HB 6177

Summary of HB 6177 (Michigan, 2025-2026)

Purpose and overall aim

HB 6177 proposes a comprehensive framework to license, regulate, and supervise Michigan entities involved in residential mortgage finance. The act establishes a state-wide licensing regime for mortgage brokers, mortgage lenders, mortgage servicers, and mortgage loan originators, creates a conservatorship and advisory structures, and authorizes rulemaking, with the goal of improving oversight, consumer protection, and financial stability in the residential mortgage market.

Key provisions and changes

  • Regulated roles and licensing scope

    • Creates licensing and regulatory requirements for:
    • Mortgage brokers
    • Mortgage lenders
    • Mortgage servicers
    • Mortgage loan originators
    • Distinguishes related roles (affiliates, control persons, sponsors, etc.) and defines terms such as “residential mortgage loan,” “dwelling,” and “nationwide multistate licensing system and registry (NMLS).”

  • Definitions and exemptions

    • Defines core terms (affiliate, control person, sponsor, net worth, open-end credit, unique identifier, etc.).
    • Establishes exemptions from licensing (e.g., certain depository institutions, specific real estate activities, certain nonprofit or government-related programs) and special provisions for temporary or provisional authorities.

  • Licensing requirements and process

    • Requires licensing for regulated activities; permits temporary operating status during a transition period after enactment.
    • Requires fingerprints, background checks, credit history checks, and sponsor identification for license applicants.
    • Sets up fees for applications, renewals, amendments, investigations, and annual operating costs; ties some fees to licensing system data and loan activity.

  • Financial requirements for licensees

    • Establishes minimum net worth requirements by license type:
    • Mortgage broker: either $25,000 (no funding from borrowers) or $50,000 (if funds are received from prospective borrowers before closing)
    • Mortgage lender: $100,000
    • Mortgage servicer: $250,000
    • Requires annual financial statements (with GAAP metrics) and excludes certain assets from net worth calculations.

  • Bonding and financial responsibility

    • Requires corporate surety bonds for licensees and, for originators, sponsorship by a licensed broker/lender or equivalent bond coverage.
    • Specifies bond amounts based on business volume (brokers/lenders) and sets conditions for bond forms and renewal.

  • Annual licensing cycle and reporting

    • Licenses expire December 31 each year and require renewal with fees; annual financial reporting is due within 90 days after fiscal year-end.
    • Establishes late filing and late renewal penalties.

  • Operations and name restrictions

    • Regulates business names to avoid implying banking status (with limited exceptions for “mortgage banking” terminology).
    • Requires licenses to approve the business name and prohibits unauthorized use.

  • Regulatory authority and enforcement

    • Grants the Michigan Department of Insurance and Financial Services (the “Director”) broad powers to supervise, examine, and discipline licensees, including suspensions, revocations, cease-and-desist orders, restitution, civil fines, and conservatorship.
    • Enables cooperation with the Nationwide Multistate Licensing System and Registry (NMLS), and allows use of audits and reports from other regulators.
    • Provides authority to appoint conservators and to issue temporary orders to cease business when warranted.

  • Examinations, confidentiality, and information sharing

    • Establishes examination procedures, subpoena powers, and confidentiality protections for examination reports and related materials; permits limited, controlled sharing with certain parties and the NMLS.

Who would be affected

  • Mortgage brokers, lenders, servicers, and mortgage loan originators operating in Michigan.
  • Affiliates, control persons, sponsors, and employees of these licensees.
  • The regulatory environment would also affect depository institutions and certain real estate professionals under exemptions.

Timelines and procedural notes

  • Initial licensing transition: within six months after the act’s effective date, existing licensees must apply for licensure under HB 6177.
  • Licenses renew annually; annual financial statements due within 90 days post fiscal year-end.
  • Various fees and bond requirements become due as part of licensing and renewal processes; director can promulgate implementing rules under the Administrative Procedures Act.

If you’d like, I can produce a plain-language quick-reference checklist for licensees or a comparison with current Michigan consumer financial services laws.

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

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