Payday Loan Laws

Michigan Payday loan laws. Michigan Payday loan legislation.

Michigan does have specific, enabling payday loan legislation in place. M.C.L.A. 487.2121 et seq.

15% on 1st $100. 14% on 2nd $100; 13% on 3rd $100; 12% on 4th $100; 11% on 5th and 6th $100.
The maximum permitted term is 31 days.
The maximum amount of the advance is $600.
Payday loan rollovers are not permitted.
There is no mandated cooling off period.
Regarding extended repayment options, customers are elegible for a plan if unable to pay 8th loan with any licensee in any 12 month period; lender must advise borrower of repayment option when it is available.
A Michigan industry-wide data base is mandated.

For a thorough discussion of the Michigan payday loan industry including sample contracts, fee structures, disclosure forms, the state data base and access to our payday loan training materials, we recommend you proceed to

Michigan Payday Loan Laws & Legislation State Information

Legal Status: Legal

Mich. Comp. Laws 487.2121 et seq.

Loan Terms:
Maximum Loan Amount: $600
Loan Term: Max: 31 days
Maximum Finance Rate and Fees: 15% of first $100, 14% of second $100, 13% of third $100, 12% of fourth $100, 11% of fifth $100, 11% of sixth $100 + any database verification fee
Finance Charge for 14-day $100 loan: $15
APR for 14-day $100 loan: 390%

Debt Limits:
Maximum Number of Outstanding Loans at One Time: One with licensee or more than one with any other licensee
Rollovers Permitted: None (cannot renew; lender may extend only if it does not charge a fee)
Cooling-off Period:
Repayment Plan: Yes

Collection Limits:
Collection Fees: One $25 returned check charge
Criminal Action: Prohibited

Regulator: Michigan Office of Financial and Insurance Services
Address: P.O. Box 30220 Lansing MI 48909
Phone: (877) 999-6442
Fax: (517) 335-4978
Regulatory Contact: ,
Regulator Website

Contact: OFIS (toll-free) 1-877-999-6442 

Administrative action and fines to be imposed for unlicensed payday lenders

OFIS Commissioner Linda A. Watters today announced she is cracking down on companies that are conducting unlicensed deferred presentment transactions. Deferred presentment providers, commonly known as payday lenders, who are operating without licenses will face administrative action and fines by the Office of Financial Services (OFIS).

Currently OFIS regulates payday lenders under the Deferred Presentment Service Transactions Act signed into law by Governor Jennifer Granholm in 2005. The law requires that deferred presentment providers be licensed at each location where they are conducting business. All Michigan deferred presentment providers were required to be licensed by June 1, 2006. 

“While the majority of deferred presentment providers have complied with the law, we are aware of some payday lenders who are operating illegally,” Watters said. “This law was put into place to protect consumers, and we intend to deal with all offenders to the full extent of the law.”

To date, OFIS has issued licenses to 780 locations. Access to licensee information may be found at under “Who We Regulate”.

Operating without a deferred presentment license is a violation of the law and violators are subject to a civil fine of not less than $1,000.00 or more than $10,000.00 for each violation.

However, if the Commissioner finds that a person has violated this act and that the person knew or reasonably should have known that he or she was in violation, the Commissioner may order the person to pay a civil fine of not less than $5,000 or more than $50,000 for each violation. The Commissioner may also order the person to pay the costs of the investigation.

OFIS is reviewing and investigating complaints, advertisements, and web sites in determining unlicensed deferred presentment activity. Companies found not in compliance with the licensing requirements will be dealt with to the full extent of the law, taking into consideration its cooperation with OFIS, how long the company has operated without a license, the number of deferred presentment transactions conducted, willfulness and intention of operating without a license, and in what capacity the company is in compliance with the law other than operating without the requisite license. 

The law prescribes the conduct of deferred presentment service providers in a number of ways, including specific fee maximums for each loan on a reverse sliding scale; limiting the number of loans that a consumer can have at one time; imposing a maximum transaction amount of $600; providing a method for customers to seek restitution in case of a violation; and giving consumers the ability to voluntarily enter into a payment plan.

 Companies that intend to conduct deferred presentment activities need to apply to the Commissioner and receive the appropriate license prior to conducting deferred presentment business. 

For more information on Deferred Presentment Service Transactions regulation, visit .