Michigan Laws 451.426 – Duties of licensee
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 451.426
- Contract: A legal written agreement that becomes binding when signed.
- Creditor: means a person for whose benefit a licensee collects and disperses money. See Michigan Laws 451.412
- Debt management: means the planning and management of the financial affairs of a debtor and the receipt of money from the debtor for distribution to 1 or more of the debtor's creditors in payment or partial payment of the debtor's obligations. See Michigan Laws 451.412
- Debtor: means a person from which money is collected for the benefit of a creditor of the debtor. See Michigan Laws 451.412
- Department: means the department of insurance and financial services. See Michigan Laws 451.412
- Director: means the director of the department or his or her authorized representative. See Michigan Laws 451.412
- Licensee: means a person that is licensed, or is required to be licensed, under this act to perform debt management services and is located inside or outside the boundaries of this state. See Michigan Laws 451.412
- month: means a calendar month; the word "year" a calendar year; and the word "year" alone shall be equivalent to the words "year of our Lord". See Michigan Laws 8.3j
(1) A licensee shall do all of the following:
(a) Create and maintain records of the accounts, contracts, correspondence, memoranda, papers, books, and other records of the debt management business. If the licensee elects not to retain original records, the licensee may utilize electronic, photocopy, or computerized methods of record keeping. The licensee shall preserve the records created under this subdivision for at least 6 years after they are created.
(b) Make all the records created and maintained under subdivision (a) available for examination by examiners of the department.
(c) When it enters into a contract with a debtor, give a copy of the contract to the debtor.
(d) Deliver a receipt to a debtor when it receives cash from a debtor, and at least monthly beginning with the first month after contracting with a debtor deliver a statement that includes the dates and amounts received and disbursed on behalf of the debtor and the fees collected by the licensee on those amounts.
(e) Within 5 business days after a request from a debtor, provide a written statement that includes all of the following:
(i) All transactions concerning the money received from or on behalf of the debtor.
(ii) The total amount paid to each creditor.
(iii) The total amount of fees collected by the licensee on the amounts described in subparagraph (ii).
(iv) The amount held in reserve.
(f) At least every 90 days after contracting with a debtor, provide a written statement to the debtor that includes all of the following:
(i) The total amount received from and on behalf of the debtor.
(ii) The total amount paid to each creditor.
(iii) The total amount of fees collected by the licensee on the amounts described in subparagraph (ii).
(iv) The amount held in reserve.
(g) Subject to subsection (2), at least annually, do, or designate or direct 1 or more persons to do, all of the following:
(i) Review procedures used by the licensee for processing checks and handling cash.
(ii) Verify that payments to selected creditor accounts are properly disbursed.
(iii) Verify that consumer complaints are properly handled.
(iv) Review selected client files to confirm that they contain the proper documentation.
(h) If a contract with a debtor is lawfully sold, transferred, or assigned to a licensee by another licensee, furnish to the debtor a written notice of the sale, transfer, or assignment. The notice shall contain the name, address, and contact telephone number of the licensee.
(2) A licensee that has proper controls in place to ensure that the actions described in subsection (1)(g)(i) to (iv) are done meets the requirements of subsection (1)(g).
(3) Annually, on or before a date established by the director, each licensee shall file with the director a report, on a form provided by the director, stating the licensee’s volume and type of business activities for the immediately preceding calendar year.