The bill amends the 1966 PA 326, which regulates the rate of interest on money, specifically focusing on the provisions related to interest charged by brokers or dealers registered under the Securities Exchange Act of 1934. It clarifies that interest on a debit balance in a customer account is not subject to the limitations of this act if the balance is payable on demand and secured by stocks or bonds. Additionally, it allows parties to a note, bond, or other evidence of indebtedness secured by real property to agree in writing on any rate of interest, provided that the initial rate cannot be increased for any reason. The bill also introduces various stipulations regarding the conditions under which lenders may require deposits, impose fees, and charge prepayment penalties.

Furthermore, the bill specifies that lenders or vendors not qualified to make loans under certain federal regulations may still offer mortgage loans and land contracts with an interest rate not exceeding 11% per annum. It establishes that interest charged by certain trusts is exempt from the act's limitations and outlines the conditions under which interest-bearing deposit accounts may be established as part of mortgage or land contract agreements. The bill also includes definitions for terms related to mortgages and loans, and it sets forth requirements for lenders regarding the maintenance of deposit accounts for borrowers, particularly in the context of biweekly payment arrangements. Overall, the amendments aim to provide clarity and flexibility in the regulation of interest rates and lending practices.

Statutes affected:
House Introduced Bill: 438.31