The bill amends the 1966 PA 326, which regulates interest rates on loans, by updating various provisions related to interest charged by brokers, lenders, and other financial entities. Key changes include clarifying that interest charged by registered brokers for carrying a debit balance is exempt from the act's limitations if the balance is secured by stocks or bonds. Additionally, it allows parties to certain financial agreements, such as notes or land contracts, to agree on any interest rate, provided that the initial rate cannot be increased for any reason. The bill also specifies that lenders cannot impose certain conditions, such as requiring deposits or prepayment penalties exceeding 1% within three years of the loan.

Further amendments include the stipulation that interest rates on certain loans, including mortgages and land contracts, must not exceed 11% per annum and must be inclusive of all finance charges. The bill also introduces provisions for interest-bearing deposit accounts as a condition for loans, detailing how these accounts should be managed and the rights of parties involved. Overall, the bill aims to modernize and clarify the regulations surrounding interest rates and lending practices in Michigan, ensuring consumer protection while allowing for flexibility in financial agreements.

Statutes affected:
House Introduced Bill: 438.31
As Passed by the House: 438.31