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HB 4890

Occupations: collection practices; references to collection agencies in 1989 PA 211; revise. Amends sec. 2 of 1989 PA 211 (MCL 445.272). TIE BAR WITH: HB 4887'25

2025-2026 Regular Session Introduced by Ken Borton and 4 co-sponsors

HB 4890 would require notice by mail to cosigners before reporting adverse information or initiating collection actions, and provide a 30-day response window; tied to HB 4887.

bill electronically reproduced 09/11/2025
#occupations:businesslicensingandregistration #occupations:collectionpractices
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Bill Summary · HB 4890

Summary of HB 4890 (Michigan, 2025)

Overview

HB 4890 amends section 2 of 1989 PA 211 (MCL 445.272) to revise how cosigners are treated in relation to reporting to consumer reporting agencies and to collection actions. The bill aims to require notice to cosigners before adverse information about the cosigned obligation is reported or before certain collection actions are taken, and to set a minimum response period for the cosigner. The enactment is contingent on the related HB 4887 becoming law (tie-bar).

  • Bill: HB 4890
  • Title: Occupations: collection practices; references to collection agencies in 1989 PA 211; revise
  • Purpose: Strengthen protections for cosigners by requiring notice and a response window before adverse reporting or collection actions occur
  • Tie-bar: Requires passage of HB 4887 to take effect
  • Introduced: September 11, 2025 (Rep. William Bruck and co-sponsors)
  • Committee: Regulatory Reform
  • Status: Introduced and referred to Committee on Regulatory Reform; prior actions include first-time readings and referral in spring 2025

What the bill would do (key provisions)

1) Before reporting or taking collection action against a cosigner
- The bill requires a person to do both of the following before reporting adverse information about a cosigner to a consumer reporting agency, or before providing information to a collection agency about the cosigner, or before taking collection action against the cosigner (beyond oral disclosure allowed under the same subdivision):
- (a) Send the cosigner a notice by first-class mail stating that the primary obligor is delinquent or in default and that the cosigner is responsible for payment.
- (b) Give the cosigner at least 30 days to respond, by either:
- (i) Paying the amount due, or
- (ii) Arranging satisfactory payment terms with the creditor.

2) If the cosigner responds within the 30-day window
- A person may not report adverse information about the cosigner if the cosigner has responded as described above (i.e., paying or arranging satisfactory terms).

3) Definitions
- The bill expands and clarifies the definition of “collection agency” to include various entities that collect or attempt to collect claims, with specific categories and exceptions.
- It includes examples of entities that are not considered collection agencies (the exemptions), such as:
- Regular employees collecting for one employer
- Banks, trust companies, savings and loan associations, and credit unions collecting their own claims
- Licensees under the Regulatory Loan Act
- Abstract companies, certain real estate brokers/salespersons in related real estate activities
- Public officers or court-order actors
- Attorneys collecting on behalf of clients
- Forwarding agencies acting on behalf of creditors
- It also clarifies activities that do not constitute “collection” for the purposes of the bill (e.g., certain forward-looking or remarketing actions under contract with a creditor).

Who would be affected

  • Cosigners: Receive mandated notice and a 30-day response window before adverse reporting or collection action.
  • Primary obligors (the debtor): Their delinquency triggers notice to cosigners.
  • Creditors and lenders: Must provide notice and manage timing before reporting or initiating collection actions against cosigners; must comply with new procedural requirements.
  • Collection agencies and entities engaging in collection activities: Subject to the notice and response requirements when dealing with cosigners, subject to the defined exemptions.
  • Other entities involved in credit and collection processes (e.g., claim forwarders, remarketers) as defined by the bill.

Procedural and timeline aspects

  • Tie-bar: HB 4890’s effect is contingent on HB 4887 becoming law.
  • Legislative history (highlights):
    • Filed: March 13, 2025
    • Read first time and referred to committee in spring 2025
    • Read again and introduced in September 2025
    • Referred to Committee on Regulatory Reform (current stage)

Potential impact and considerations

  • Consumer protections: Provides cosigners with advance notice and a formal opportunity to respond, potentially reducing surprise adverse reporting.
  • Administrative burden: Lenders and collection agencies would need to implement notice procedures and track response deadlines.
  • Financial impact: No explicit fiscal estimates are provided in the available material.
  • Scope and clarity: The bill clarifies who counts as a “collection agency” and outlines specific exemptions, which could affect which entities are subject to the notice requirements.

This summary emphasizes the bill’s substantive changes, who is affected, and the anticipated regulatory and operational implications, pending enactment (and the passage of HB 4887).

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

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