SB 1288 Summary

• Enacts the "Uniform Debt-Management Services Act" to regulate debt-management service providers in Michigan, requiring registration with the Commissioner of Financial and Insurance Regulation.

• Establishes registration requirements including bonding ($50,000 minimum surety bond), insurance ($250,000 minimum), financial statements, accreditation evidence, and criminal background checks for providers and key personnel.

• Prohibits providers from charging fees before executing a signed agreement; limits setup fees to $50 for debt reduction plans and up to $400 or 4% of debt (whichever is less) for settlement plans; caps total fees at 17-20% of principal debt depending on fee structure.

• Requires providers to establish trust accounts for client funds, provide detailed disclosures before agreements, maintain monthly accounting records, and allow clients to cancel within 3 business days or 30 days if agreement terms are violated.

• Repeals the existing 1975 Debt Management Act (MCL 451.411-451.437) and takes effect 12 months after enactment; authorizes the administrator to enforce compliance through cease-and-desist orders, restitution, fines up to $10,000, and civil actions.