Summary — HB 5800 (Deferred Presentment Service Transactions Act amendments)
Status and procedural history
- Bill: HB 5800 — amends section 2 of the Deferred Presentment Service Transactions Act (2005 PA 244; MCL 487.2122).
- Introduced: June 6, 2024 (Rep. Cynthia Neeley).
- Passed House: December 12, 2024 (given immediate effect by House vote).
- Subsequent referrals: Referred to Committee on Government Operations (Dec. 18, 2024) and to Joint Committee on Appropriations (Jan. 22, 2025).
- Effective date language: the bill includes an enactment date of January 1, 2025, but contains a contingency that it does not take effect unless a companion bill (SB ___ or HB 5798 of the 102nd Legislature) is enacted.
Purpose and intent
- HB 5800 updates and clarifies statutory definitions in the Deferred Presentment Service Transactions Act (commonly governing payday or “check-cash/hold” lending). It largely revises internal references and exclusion language, particularly concerning entities regulated under Michigan’s money transmission laws and related licensing statutes.
Key provisions and changes
- Definition revisions: The bill amends multiple definitions in section 2 (applicant, check, closed, commissioner/director, customer, database provider, department/office, drawee, drawer, executive officer, financial licensing act, licensee, maturity date, person, redeem). Many edits are stylistic/terminological (e.g., “director”/“commissioner” wording).
- Deferred presentment transaction: Clarifies that, subject to subsection (2), such a transaction requires (1) payment to the customer of an agreed amount in exchange for a fee and (2) holding the customer’s check for a period before presentment — language tightened to “both of the following.”
- Exclusions (subsection 2): Expands/updates the list of regulatory regimes whose licensees are excluded from the Act’s definition of deferred presentment service transactions. Notably:
- Retains exclusions for licensees under the Consumer Financial Services Act, Regulatory Loan Act, Secondary Mortgage Loan Act, Motor Vehicle Sales Finance Act, certain 1984 act, and Mortgage Brokers/Lenders/Servicers Licensing Act.
- Adds a time-limited exclusion: transactions by entities licensed under the Money Transmission Services Act (2006 PA 250, MCL 487.1001–487.1047) are excluded only “through June 30, 2025.”
- Adds the “Money Transmission Modernization Act” as an exclusion (reflecting concurrent/related statutory modernization efforts).
- Database provider: Clarifies who operates the statewide database — either a third-party provider selected by the director or, if none is selected, the director.
Who is affected
- Primary: businesses licensed (or seeking licensure) under the Deferred Presentment Service Transactions Act (payday/deferred presentment providers) and their customers (individuals using these services).
- Secondary: entities and licensees under the state laws listed in subsection (2) — especially money transmitters and any persons covered by the Money Transmission Modernization Act — because the bill alters whether their delay-in-presentment activity is treated as deferred presentment (and thus regulated as a payday transaction).
- Regulator: Michigan Department of Insurance and Financial Services (references and administrative roles clarified).
Practical impact
- The bill is mostly definitional and reference-updating; it clarifies regulatory boundaries between deferred presentment (payday) licensing and other financial licensing regimes, especially for money transmission businesses undergoing statutory modernization. The time-limited exclusion for the older Money Transmission Services Act through June 30, 2025, suggests coordination with transition timelines for money transmission law changes. Final effect depends on enactment of the companion modernization bill referenced in the contingency.
