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 IN 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 operates into the greater metropolitan Detroit area. Its main activity is cashing checks for a cost, as well as other ancillary solutions include issuance of income instructions, giving and getting Western Union money transfers, along with other associated solutions. Cash Connection has required a ruling for solution this is certainly a variation on its check https://cashnetusaapplynow.com/payday-loans-mi/midland/ cashing company.

With its normal check cashing company money Connection will cash payroll, federal federal government, and private checks for a fee of 10% of this level of the check. Money Connection has inquired about an expansion of the individual check cashing procedure to a site referred to as “Payday Advance.” The wage advance transaction, as described by Cash Connection, varies from the normal check cashing deal for the reason that there is an dental contract to keep a present-dated search for a time period of as much as week or two. The check is held as the drawer has funds that are insufficient their account regarding the time the check is exchanged for money, but guarantees to possess funds in the or her account in the agreed upon date, the consumer’s next payday, that the check is likely to be presented for re re re payment. Because of this additional service one more 5% charge could be charged. The transaction that is typical be for $100.00, and could not surpass $500.00. Each customer would be required to complete an employment verification form, bank authorization form (customer authorizes his or her bank to disclose checking account information), and a file card containing certain personal information before making a Payday Advance.

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”) to your Payday Advance that is above-described deal. More particularly, Money Connection asked:

“Is a check cashing business which cashes a individual search for a customer and agrees to wait presentment for re re payment of these check into the drawer/maker’s bank before the client’s next payday involved with the creating of that loan at the mercy of what’s needed of this Regulatory Loan Act of 1963 citation omitted.”

The obtain had been made pursuant to area 63 of this 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 is relevant to your wage advance deal as described. The chapters of the Act become talked about in this ruling are:

“Sec. 1. (1) an individual shall maybe perhaps not participate in the company of earning loans of income . . . in an amount . . . inside the regulatory loan roof and fee, agreement for, or get in the loan a higher interest rate, discount, or consideration, compared to the loan provider will be permitted for legal reasons to charge in the event that loan provider are not a licensee except as authorized by this work and without very first finding a permit through the commissioner for every location of which company is become carried out under this act, or by getting a permit underneath the customer financial services act citation omitted.

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