Michigan Laws 445.272 – Reporting adverse information about cosigner; notice; response; prohibition
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(1) Before reporting adverse information about a cosigner to a consumer reporting agency as defined in the fair credit reporting act, 15 U.S.C. §§ 1681–1681t, concerning the obligation that was cosigned or providing any information regarding the cosigner’s obligation to a collection agency as defined in section 901 of the occupational code, Act No. 299 of the Public Acts of 1980, being section 339.901 of the Michigan Compiled Laws, concerning the obligation that was cosigned or taking any collection action on the obligation against the cosigner that was cosigned, other than orally communicating the information permitted in subdivision (a), a person shall do both of the following:
(a) Send to the cosigner, by first class mail, a notice indicating that the primary obligor has become delinquent or defaulted on the obligation and that the cosigner is responsible for payment of the obligation.
Terms Used In Michigan Laws 445.272
- Adverse information: means information indicating that the cosigner has not complied with the contractual provisions of an obligation. See Michigan Laws 445.271
- Collection action: means requesting a cosigner to pay all or part of the obligation. See Michigan Laws 445.271
- Cosigner: means a natural person who renders himself or herself liable for the obligation of another person without compensation. See Michigan Laws 445.271
- Fair Credit Reporting Act: A federal law, established in 1971 and revised in 1997, that gives consumers the right to see their credit records and correct any mistakes. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Obligation: means an indebtedness incurred by an individual for personal, family, or household purposes. See Michigan Laws 445.271
- Person: means an individual, firm, partnership, association, or corporation. See Michigan Laws 445.271
- Primary obligor: means a person, other than a cosigner, who signs an obligation as a debtor. See Michigan Laws 445.271
(b) Allow the cosigner not less than 30 days from the date that the notice was sent to respond to the notice by doing either of the following:
(i) Paying the amount then due and owing under the obligation.
(ii) Making other arrangements satisfactory to the person to whom the obligation is owed.
(2) A person shall not report adverse information regarding a cosigner if the cosigner has responded to a notice in the manner described in subsection (1)(b).