Michigan House Bill HB4906

Michigan 2025-2026 Regular Session

• Introduced: 9/11/25
• Refer: 9/11/25

Caption

Consumer credit: collection practices; requirements for location of trust accounts; clarify. Amends sec. 909 of 1980 PA 299 (MCL 339.909).

Impact

The legislation seeks to clarify and solidify the financial handling practices of collection agencies in Michigan. By requiring the maintenance of a trust account, it ensures that there is a clear distinction between agency funds and clients' funds. This measure is expected to better protect consumers by guaranteeing that their money is handled appropriately and remains accessible when due. The changes could also lead to stricter regulatory oversight over collection agencies, potentially enhancing trust in the industry.

Summary

House Bill 4906 proposes amendments to the Occupational Code regarding collection practices by collection agencies. Specifically, the bill mandates that collection agencies maintain a separate trust account for all funds collected, which must be deposited within three banking days of receipt. Trust accounts must be maintained at specific financial institutions, such as state or federally chartered banks, savings banks, or credit unions, ensuring that funds are available to clients when owed. This move aims to enhance transparency and accountability in financial dealings between collection agencies and their clients.

Contention

While the bill has garnered support for its consumer protection aspects, it may raise concerns among law practitioners and collection agencies regarding implementation costs and compliance burdens. Agencies might argue that the regulations could impose additional operational challenges, particularly for smaller firms. The conversation surrounding HB4906 suggests a broader debate about balancing consumer protection with the operational realities of collection practices in Michigan, indicating that further discussions may be warranted as the bill progresses through the legislative process.