STATE OF MICHIGAN DEPARTMENT OF COMMERCE BANKING INSTITUTIONS BUREAU

STATE OF MICHIGAN DEPARTMENT OF COMMERCE BANKING INSTITUTIONS BUREAU

IN RE: REQUEST BY OAK BROOK/CASH NOW PARTNERS d/b/a MONEY CONNECTION FOR A DECLARATORY RULING FROM THE APPLICABILITY OF THIS REGULATORY LOAN ACT OF 1963, AS AMENDED, TO CERTAIN TRANSACTIONS.

CHOICE

We. Facts

Oak Brook/Cash Now Partners d/b/a Cash Connection („Cash Connection“) is a small business that runs into the greater metropolitan Detroit area. Its main activity is cashing checks for the cost, along with other ancillary solutions include issuance of cash purchases, giving and getting Western Union money transfers, along with other associated services. Money Connection has required a ruling on solution that is a variation on its check cashing company.

With its check that is normal cashing money Connection will cash payroll, federal government, and individual checks for a fee of 10% regarding the level of the https://cashnetusaapplynow.com/payday-loans-tx/dayton/ check. Money Connection has inquired about an expansion of the check that is personal cashing to a site referred to as „Payday Advance.“ The pay day loan transaction, as described by money Connection, varies from the check that is normal deal for the reason that there is a dental contract to put on a present-dated look for a amount of as much as fourteen days. The check is held considering that the cabinet has inadequate funds in his / her account regarding the time the check is exchanged for money, but guarantees to possess funds in their or her account from the agreed upon date, the consumer’s next payday, that the check should be presented for re re payment. Because of this added service one more 5% cost could be charged. The typical deal would be for $100.00, and would not meet or exceed $500.00. Prior to making a wage advance, each consumer will be needed to finish a work verification kind, bank authorization type (consumer authorizes their bank to reveal bank checking account information), and a file card containing specific information that is personal.

On January 26, 1995, a letter from Cash Connection’s counsel was received by the Commissioner of the Financial Institutions Bureau („Bureau“) requesting a declaratory ruling on the applicability of the Regulatory Loan Act of 1 963, as amended, MCL 493.1 et thursday. seq.; MSA 23.667(1 ) et. seq., (hereinafter „Regulatory Loan Act“) towards the Payday Advance that is above-described deal. More particularly, Money Connection asked:

„Is a check cashing business which cashes a individual look for a client and agrees to wait presentment for re payment of these check towards the drawer/maker’s bank before the consumer’s next payday involved with the generating of that loan susceptible to what’s needed of this Regulatory Loan Act of 1963 citation omitted.“

The ask for had been made pursuant to area 63 for the Administrative treatments Act of 1969, as amended, MCL 24.263; MSA 3.560(163).

II. Statutes

At problem in this demand is whether or not the Regulatory Loan Act does apply to the wage advance deal as described. The chapters of the Act become talked about in this ruling are:

„Sec. 1. (1) an individual shall perhaps maybe perhaps not participate in the business enterprise of earning loans of income . . . in an amount . . . A greater rate of interest, discount, or consideration, than the lender would be permitted by law to charge if the lender were not a licensee except as authorized by this act and without first obtaining a license from the commissioner for each location at which business is to be conducted under this act, or by obtaining a license under the consumer financial services act citation omitted within the regulatory loan ceiling and charge, contract for, or receive on the loan.

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