STATE OF MICHIGAN DEPARTMENT OF COMMERCE FINANCE INSTITUTIONS BUREAU

IN RE: REQUEST BY OAK BROOK/CASH NOW PARTNERS d/b/a MONEY CONNECTION FOR A DECLARATORY RULING FROM THE APPLICABILITY OF THIS REGULATORY LOAN ACT direct payday loans Chandler, TX OF 1963, AS AMENDED, TO CERTAIN TRANSACTIONS.

CHOICE

We. Facts

Oak Brook/Cash Now Partners d/b/a Cash Connection (“Cash Connection”) is a company that runs into the greater metropolitan Detroit area. Its main activity is cashing checks for the cost, along with other ancillary solutions include issuance of cash requests, delivering and getting Western Union cash transfers, along with other relevant solutions. money Connection has required a ruling on an ongoing solution that is a variation on its check cashing company.

With its normal check cashing company money Connection will cash payroll, federal federal federal government, and private checks for a cost of 10% associated with quantity of the check. Money Connection has inquired about an expansion of its check that is personal cashing to a site referred to as “Payday Advance.” The pay day loan transaction, as described by money Connection, varies from the check that is normal deal for the reason that there is an dental contract to put up a present-dated search for a time period of as much as week or two. The check is held since the cabinet has inadequate funds in his / her account in the time the check is exchanged for money, but guarantees to own funds inside the or her account from the agreed upon date, the client’s next payday, that the check should be presented for re re re payment. With this additional service one more 5% cost is charged. The transaction that is typical be for $100.00, and would not meet or exceed $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 Thursday, January 26, 1995, a page from Cash Connection’s counsel ended up being gotten because of the Commissioner associated with finance institutions Bureau (“Bureau”) asking for a declaratory ruling from the applicability regarding the Regulatory Loan Act of just one 963, as amended, MCL 493.1 et. seq.; MSA 23.667(1 ) et. seq., (hereinafter “Regulatory Loan Act”) to your above-described pay day loan deal. More particularly, Money Connection asked:

“Is a check cashing business which cashes a individual search for a consumer and agrees to postpone presentment for re payment of these check to your drawer/maker’s bank before the consumer’s next payday involved in the generating of financing susceptible to what’s needed associated with Regulatory Loan Act of 1963 citation omitted.”

The request had been made pursuant to area 63 regarding the Administrative treatments Act of 1969, as amended, MCL 24.263; MSA 3.560(163).

II. Statutes

At problem in this demand is whether the Regulatory Loan Act does apply towards the pay day loan deal as described. The chapters of the Act become talked about in this ruling are:

“Sec. 1. (1) an individual shall maybe maybe perhaps not participate in the business enterprise of earning loans of income . . . in an amount . . . A greater rate of interest, discount, or consideration, than the lender would be permitted by law to charge if the lender were not a licensee except as authorized by this act and without first obtaining a license from the commissioner for each location at which business is to be conducted under this act, or by obtaining a license under the consumer financial services act citation omitted within the regulatory loan ceiling and charge, contract for, or receive on the loan.