The bill amends the Credit Reform Act of 1995 by revising Section 4 to impose stricter regulations on interest rates charged by regulated lenders. Specifically, it prohibits these lenders from charging, collecting, or receiving any interest or finance charge for an extension of credit that exceeds 10% per annum, replacing the previous cap of 25%. Additionally, the bill clarifies that the interest or finance charge must be computed solely on the basis of the unpaid balance of the principal, rather than on the total amount.

Furthermore, the bill removes the provision that allowed depository institutions to charge any rate of interest or finance charge for credit card arrangements, thereby tightening the regulations on credit card interest rates as well. Overall, these changes aim to protect consumers from excessive interest rates and ensure fair lending practices in Michigan.

Statutes affected:
House Introduced Bill: 445.1854