Bill > HB4116

This bill amends Michigan's existing pawnbroker regulations by increasing the maximum monthly interest rate from 3% to 5% per month. The changes require pawnbrokers to modify their loan documentation to reflect the new interest rate, including printing a specific warning on the back of loan memorandums that explains the consequences of charging excessive interest. The bill mandates that pawnbrokers cannot charge interest in advance, must compute interest on unpaid monthly balances without compounding, and cannot charge any examination fees beyond the specified interest rates. Additionally, pawnbrokers can continue to charge $3.00 per month for storing pawned items, and they are not required to accept interest payments less than 50 cents on a single loan. The bill is tied to another piece of legislation (House Bill 4115) and will only take effect if that bill is also enacted into law. These modifications aim to provide clearer regulations for pawnbrokers while potentially offering borrowers slightly more favorable loan terms by increasing the allowable interest rate and explicitly stating borrower protections.

Budget and Finance, Government Affairs

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-4116