RFR-Page 2
Deferred presentment is a transaction in which an individual may obtain up to $600 on a promise
to repay the money, with a service charge, within 31 days. The practice is regulated under the
deferred presentment service transactions act, MCL 487.2121, et seq. Deferred presentment
transactions must be formalized in a written service agreement between a “drawer”, (the
individual obtaining the funds) and an entity licensed under the Act to issue the funds. A service
agreement can be extended under some limited circumstances, detailed in Section 35(1) of the Act,
MCL 487.2155(1):
"A licensee shall not renew a deferred presentment service agreement. A licensee may extend a
deferred presentment service agreement only if the licensee does not charge a fee in connection
with the extended transaction. A licensee who extends an agreement under this subsection shall
not create a balance owed above the amount owed on the original agreement."
The proposed rule will formalize the extension of the service agreement and give the drawer a
written record of the extension of the service agreement.
In addition –
1. The title of the deferred presentment rule set will be changed from “Deferred Presentment
Statewide Database” to “Deferred Presentment – Statewide Database and Service Agreements”.
2. The citation of authority will be amended to read: "By authority conferred on the director of the
Department of Insurance and Financial Services…"
3 The definition in Rule 1(c), R 487.2121(c), will be amended to read: (c) “Director” means the
director of the Department of Insurance and Financial Services.
8. Please cite the specific promulgation authority for the rules (i.e. department director,
commission, board, etc.).
The Director of the Department of Insurance and Financial Services has the authority to
promulgate rules under MCL 487.2140; 487.2142; 487.2171; and Executive Reorganization Order
Nos. 2000-2 and 2003-1, MCL 445.2003 and 445.2011.
A. Please list all applicable statutory references (MCLs, Executive Orders, etc.).
Article 3 of the Deferred Presentment Service Transactions Act, MCL 487.2151, et seq.
MCL 487.2140
MCL 487.2142
MCL 487.2171
Executive Reorganization Order Nos. 2000-2 and 2003-1, MCL 445.2003 and 445.2011.
B. Are the rules mandated by any applicable constitutional or statutory provision? If so, please
explain.
MCL 487.2142(12) requires the Director to promulgate rules related to the Act’s deferred
presentment database. However, the proposed rule, which relates to service agreement extensions,
is not mandated by any applicable constitutional or statutory provision.
9. Please describe the extent to which the rules conflict with or duplicate similar rules,
compliance requirements, or other standards adopted at the state, regional, or federal level.
The rules do not conflict with or duplicate similar rules or regulations adopted by the state or
federal government.
10. Is the subject matter of the rules currently contained in any guideline, handbook, manual,
instructional bulletin, form with instructions, or operational memoranda?
MCL 24.239