Bill > HB4890

This bill amends a 1989 law regarding collection practices by revising requirements for notifying cosigners before reporting adverse information to credit agencies or taking collection actions. Specifically, before reporting negative information about a cosigner to a consumer reporting agency or a collection agency, the creditor must first send a written notice via first-class mail informing the cosigner that the primary borrower has become delinquent or defaulted. The notice must allow the cosigner at least 30 days to either pay the amount due or make alternative payment arrangements satisfactory to the creditor. The bill also provides an extensive new definition of "collection agency" that includes various entities engaged in debt collection, while explicitly excluding certain types of financial institutions and professionals like banks, credit unions, attorneys, and real estate brokers from being classified as collection agencies. Additionally, the bill specifies that a creditor cannot report adverse information about a cosigner if the cosigner responds to the notice and makes appropriate arrangements. The bill is tied to another house bill and will only take effect if that companion bill is also enacted into law.

Government Affairs

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-4890