Bill Text: MI SB0947 | 2013-2014 | 97th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Occupations; collection practices; records of licensed collection agencies; modify requirement for department audit. Amends secs. 910 & 917 of 1980 PA 299 (MCL 339.910 & 339.917).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2014-12-31 - Assigned Pa 0560'14 With Immediate Effect [SB0947 Detail]

Download: Michigan-2013-SB0947-Engrossed.html

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SB-0947, As Passed House, December 18, 2014

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 947

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1980 PA 299, entitled

 

"Occupational code,"

 

by amending sections 901, 910, and 917 (MCL 339.901, 339.910, and

 

339.917), section 901 as amended by 1981 PA 83 and sections 910 and

 

917 as amended by 1996 PA 151.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 901. As used in this article:

 

     (a) "Claim" or "debt" means an obligation or alleged

 

obligation for the payment of money or thing of value arising out

 

of an expressed or implied agreement or contract for a purchase

 

made primarily for personal, family, or household purposes.

 

     (b) "Collection agency" means a person that is directly or

 

indirectly engaged in soliciting a claim for collection or

 

collecting or attempting to collect a claim owed or due or asserted

 

to be owed or due another, or repossessing or attempting to

 

repossess a thing of value owed or due or asserted to be owed or

 

due another arising out of an expressed or implied agreement. A

 

collection Collection agency shall include includes a person

 

representing himself or herself as a collection or repossession

 

agency, or a person performing the activities of a collection

 

agency, on behalf of another , which that are regulated by this

 

act. A collection Collection agency shall also include includes a

 

person who that furnishes or attempts to furnish a form or a

 

written demand service represented to be a collection or

 

repossession technique, device, or system to be used to collect or

 

repossess claims, if the form contains the name of a person other

 

than the creditor in a manner indicating that a request or demand

 

for payment is being made by a person other than the creditor even

 

though the form directs the debtor to make payment directly to the

 

creditor rather than to the other person whose name appears on the

 

form. Collection agency also includes a person who that uses a

 

fictitious name or the name of another in the collection or

 

repossession of claims to convey to the debtor that a third person

 

is collecting or repossessing or has been employed to collect or

 

repossess the claim. Collection agency does not include a person

 

whose collection activities are confined and are directly related

 

to the operation of a business other than that of a collection

 

agency such as, but not limited to, the following:

 

     (i) A regular employee when collecting amounts for 1 employer

 

if all collection efforts are carried on in the name of the

 

employer.

 

     (ii) A state or nationally chartered bank when collecting its

 

own claims.

 

     (iii) A trust company when collecting its own claims.

 

     (iv) A state or federally chartered savings and loan

 

association when collecting its own claims.

 

     (v) A state or federally chartered credit union when

 

collecting its own claims.

 

     (vi) A licensee under Act No. 21 of the Public Acts of 1939, as

 

amended, being sections 493.1 to 493.26 of the Michigan Compiled

 

Laws.the regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24.

 

     (vii) A business licensed by this state under a regulatory act

 

in which collection activity is regulated.

 

     (viii) An abstract company doing an escrow business.

 

     (ix) A licensed real estate broker or salesperson if the claims

 

being handled by the broker or salesperson are related to or in

 

connection with his or her real estate business.

 

     (x) A public officer or person acting under a court order.

 

     (xi) An attorney handling claims and collections on behalf of

 

clients and in the attorney's own name.

 

     (c) "Collection agency manager" means the individual

 

responsible for the operation of a collection agency.

 

     (d) "Communicate" means the conveying of information regarding

 

a debt directly or indirectly to a person through any medium.

 

     (e) "Creditor" or "principal" means a person who that offers

 

or extends credit creating a debt or a person to whom which a debt

 

is owed or due or asserted to be owed or due. Creditor or principal

 

shall does not include a person who that receives an assignment or

 

transfer of a debt solely for the purpose of facilitating

 

collection of the debt for the assignor or transferor. In those

 

instances, the assignor or transferor of the debt shall continue to

 

be considered the creditor or the principal for purposes of this

 

article.

 

     (f) "Consumer" or "debtor" means a natural person obligated or

 

allegedly obligated to pay a debt.

 

     (g) "Insolvency" means the failure of a licensee to pay debts

 

in the ordinary course of business.

 

     (h) "Office" means a regular place of business where complete

 

records are kept of collections and claims handled by a licensee.

 

     Sec. 910. (1) A collection agency shall keep and use books,

 

accounts, or records that the department requires to determine

 

whether the collection agency is complying with this article and

 

the rules promulgated under this article. These books, accounts,

 

and records shall consist of include at least , but not be limited

 

to, all of the following:

 

     (a) Permanent records that show the chronological sequence in

 

which funds are money is received and disbursed. For funds money

 

received, the record shall include the date of receipt and deposit,

 

the number of the account to which it is deposited, the name of the

 

debtor, the name of the principal, and the amount. For

 

disbursements, the record shall include the date, the payee, the

 

check number, and the amount, with a corresponding debtor

 

reference.

 

     (b) Each For an agency licensee, shall:all of the following:

 

     (i) Maintain records Records or books of accounts that set

 

forth include the account of each client in alphabetical order

 

according to the names of the clients. If the licensee's books of

 

accounting are kept in numerical order, then the licensee shall

 

maintain an alphabetical cross index of each client corresponding

 

with the number of the account. Each account shall reflect the true

 

condition of each debtor's account at the end of each calendar

 

month and shall include all of the following:

 

     (A) The name and address of the client.

 

     (B) The name of the debtor or debtors from whom collection was

 

or is being made.

 

     (C) The amount and description of each debit and each credit

 

and date of each debit and credit.

 

     (D) The balance due to or owing from each client.

 

     (ii) Maintain a A record and history of each claim or account

 

for collection that shall clearly show all of the following:

 

     (A) The name of the debtor.

 

     (B) The principal amount of the obligation.

 

     (C) Any other or additional amounts or items charged or

 

collected with a description of amounts or items charged or

 

collected.

 

     (D) Each payment received or collected and the date of receipt

 

or collection.

 

     (E) The balance owing.

 

     (c) All receipts Each receipt issued, shall be signed by and

 

with the name or initials of the person issuing individual who

 

issued the receipt and shall show the name of the issuing agency.

 

     (2) A collection agency shall preserve the books, accounts,

 

and records described in subsection (1) and make them or true

 

copies of them accessible to the department for at least 3 years

 

after making the final payment entry on an account recorded in

 

those books, accounts, and records.

 

     (3) Annually before May 16 a collection agency shall file a

 

report with the department giving that includes any relevant

 

information that required by the department requires concerning the

 

business and operations during the preceding calendar year of each

 

licensed place of business conducted by the collection agency. The

 

report shall be made under oath and in the form prescribed by the

 

department.

 

     (4) The department may require a collection agency to file a

 

sworn financial report of the trust account the collection agency

 

is required to be maintained by the collection agency maintain and

 

may designate the information to be contained the collection agency

 

must include in the report.

 

     (5) Collection agency The department may audit a collection

 

agency's books, accounts, and records shall be audited by the

 

department on a biennial basis or when determined necessary by the

 

director.

 

     (6) Information provided to the director under this section

 

shall be is exempted from disclosure except in actions commenced

 

under this article.

 

     (7) A collection agency that is located in this state shall

 

maintain its books and records in this state. A collection agency

 

that is licensed to do business in this state but is located in

 

another state may maintain its books and records either in this

 

state or in the state where it is located. Except as provided in

 

subsection (8), a collection agency that chooses to maintain its

 

books and records in another state shall pay the expenses of a

 

compliance attestation report by the department. The department

 

shall charge expenses in accordance with the standardized travel

 

regulations of the department of technology, management, and

 

budget.

 

     (8) In place of a department audit under subsection (5), the

 

department may permit a collection agency that is located in

 

another state to submit to a compliance attestation report

 

conducted by a certified public accountant who is licensed in the

 

state in which the collection agency is located.

 

     Sec. 917. A licensee who that commits 1 or more of the

 

following is subject to the strictures penalties described in

 

article 6:

 

     (a) Cancellation of a surety bond.

 

     (b) Failure to notify the director of any changes in corporate

 

or partnership structure pursuant to under section 906.

 

     (c) Failure to apply for a separate license for each place of

 

business pursuant to under section 904.

 

     (d) Commencing operation before issuance of a license pursuant

 

to under section 904.

 

     (e) Operation before the renewal of an expired license.

 

     (f) Failure to preserve and make accessible books, accounts,

 

and records pursuant to under section 910(2).

 

     (g) Failure to submit an annual report pursuant to under

 

Senate Bill No. 947 (S-2) as amended December 18, 2014

section 910(3).

 

     (h) Failure to file a sworn financial report when required by

 

the director pursuant to under section 910(4).

 

     (i) Failure to allow an audit of books, accounts, and records

 

on a biennial basis or when determined necessary by the director

 

pursuant to under section 910(5).

 

     (j) Failure to pay the expenses of an audit conducted by the

 

department pursuant to under section 910(7), if the licensee is not

 

located in this state.

 

     (k) Violation of any federal or state act relating to debt

 

collection.

 

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