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HB 4891

Occupations: collection practices; references to collection agencies in debt management act; revise. Amends sec. 6 of 1975 PA 148 (MCL 451.416). TIE BAR WITH: HB 4887'25

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

HB 4891 tightens debt-management licensing and requires counselor certification, restricting affiliations with collection agencies (waivers possible).

bill electronically reproduced 09/11/2025
#occupations:businesslicensingandregistration #occupations:collectionpractices
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Bill Summary · HB 4891

Summary — HB 4891 (House Bill)

Title: Occupations: collection practices; references to collection agencies in debt management act; revise. (Amends sec. 6 of 1975 PA 148 — Debt Management Act, MCL 451.416)
Tie bar: HB 4887

Main purpose

HB 4891 amends section 6 of Michigan’s Debt Management Act to (1) clarify and expand the department’s licensing investigation standards for debt management businesses, (2) add/clarify disqualification criteria for license applicants (including affiliation with collection agencies or process servers), and (3) impose or clarify counselor certification requirements for license applicants and employer-licensees.

Key provisions and changes

  • Amends licensing investigation requirements: the department must investigate the applicant’s responsibility, experience, character, and fitness and, when warranted, issue a license after fees and surety bond are approved.
  • Specifies which persons associated with different business forms (corporations, partnerships, LLCs, associations, other entities) must be investigated.
  • Lists disqualifying factors that prevent issuance of a license, including:
    • Conviction of crimes involving moral turpitude (forgery, embezzlement, larceny, extortion, conspiracy to defraud, etc.).
    • Violations of the Debt Management Act or its rules.
    • Prior revocation/suspension of a debt management license (except for nonpayment of fees).
    • Default in the payment of money collected for others (bankruptcy may be excused by director discretion with proof).
    • Applicants who are not at least 18 years of age and U.S. citizens (bill language is written as a requirement for age and citizenship).
    • Entities not authorized to do business in Michigan (when required).
    • Applicants who are employees/owners of, or otherwise affiliated with, a collection agency or process serving business — subject to possible director waiver if sufficient safeguards are shown.
  • Requires certification of counselors:
    • Individual applicants must be certified counselors before license issuance.
    • For non-individual applicants (entities), each counselor employed must become a certified counselor within 180 days of employment.
  • Expands and clarifies the statutory definition of "collection agency" and enumerates specific exclusions (e.g., in-house collectors, banks, trust companies, certain licensees, attorneys acting for clients, public officers, etc.).
  • Contains an enactment condition: this amendment does not take effect unless HB 4887 is enacted.

Who is affected

  • Debt management companies and their principals, officers, managers, partners, and designated controlling persons.
  • Individual and employed counselors working for debt management firms (new or clarified certification timing).
  • Collection agencies, process servers, and businesses affiliated with collection activities — affiliation can bar eligibility unless waived.
  • Department responsible for licensing and enforcement (implements background checks, waivers, and certification verification).

Procedural status / timeline (as of electronic reproduction)

  • Originally filed: March 13, 2025. Committee activity and substitute reported favorably in April–May 2025 (placed on General State Calendar May 15, 2025).
  • Bill electronically reproduced and reintroduced/registered: September 11, 2025. Read and referred to Committee on Regulatory Reform the same day.
  • Enactment condition: tied to passage of HB 4887.

Practical impact

If enacted, HB 4891 would tighten licensing scrutiny for debt management businesses, strengthen separation between debt management providers and collection/process-serving operations (potentially limiting affiliates), and formalize counselor certification timing — increasing regulatory compliance requirements for firms and individuals in the debt management sector.

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

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