Deferred Presentment FAQ
- Are licensees required to inform customers when they are eligible for a repayment plan?
Yes. The licensee must advise a customer of the repayment plan option at the time he or she is eligible for a repayment plan. Veritec will notify the licensee if a transaction is eligible for a repayment plan when the transaction is entered into the database. If eligible, a written notice must be provided the customer.
Refer to MCL 487.2155, Section 35(3) for the specific wording of the repayment plan notice.
- Are licensees authorized to collect a fee when the customer enters into an eligible repayment plan?
Yes. If the customer is eligible for a repayment plan and has signed a repayment plan agreement, licensees are authorized to collect a fee from a customer.
- What is the allowable repayment plan fee?
$17.20 beginning February 18, 2016.
$16.13 from March 1, 2011 to February 18, 2016.
$15.00 prior to March 1, 2011.
Refer to Bulletin 2016-05-CF for the current calculation of the repayment plan fee.
- When must the licensee deposit the check if the customer defaults on any of the 3 scheduled payments of a written repayment plan?
If the customer defaults on a repayment plan installment by not making the payment when due, the check must be deposited at the close of business on the repayment plan installment date.
- Is a customer required to come into a licensed branch location to enter into and sign the written repayment plan?
No. However, the written repayment plan must be signed by the customer. Section 35(2), MCL 487.2155(2) provides for a "written repayment plan." A request for a repayment plan can be either verbal or in writing, but the actual repayment plan agreement must be in writing, and would not be effective until signed by both parties. The customer could sign the repayment plan agreement and fax or email it to the licensee.
- If a customer is eligible for a repayment plan and does not enter into a repayment plan prior to the deferred presentment transaction maturity date, must the licensee present the customer's check into the check-clearing process on the maturity date?
Yes. The check must be presented on the maturity date.
- If a customer's check is entered into the check-clearing process on the maturity date, can a customer request and enter into a written repayment plan during the time period the customer's check is in the check clearing process?
No. After a check has been presented for payment, a licensee cannot enter into a repayment plan with the customer until the check is dishonored.
- If a customer's transaction is paid in full and closed in Veritec, is a licensee required to void the paid transaction and issue a refund to the customer, if they request a written repayment plan within 30 days of the transaction maturity date?
No. Once the customer redeems the check, the obligation is satisfied. The transaction cannot be reopened and the customer cannot enter into a repayment plan.
- Is the customer required to make the first installment payment at the time of entering into a repayment plan?
No. The drawer must repay the transaction in 3 equal installments with 1 installment due on each of the customer’s next 3 dates he/she receives regular wages from an employer or other regular source of income. The first payment is not due until the customer’s first regular pay date after the repayment plan agreement is signed.
- After a customer enters into a repayment plan, do they have to wait until they have had an additional 8 transactions before being eligible for another repayment plan?
No. Any individual who has had 8 transactions in the previous 12-month period is eligible for the repayment plan. The database provider will notify the licensee if the customer’s transaction is eligible for a repayment plan.
- If a customer is in a repayment plan at one licensee are they eligible to enter into a repayment plan with another licensee?
Yes. If the customer is eligible for a repayment plan when both transactions were granted, the customer can enter into two repayment plans at the same time.
- Is the customer required to provide a new check(s) for a repayment plan?
No. The licensee is required to keep the original check. The customer is to pay the licensee the 3 equal installments on the dates designated on the repayment plan agreement.
- Can the customer enter into a new transaction if the customer has an open repayment plan?
No. A customer is not eligible for a transaction if they have one or more transactions open in repayment plans. The database provider will notify the licensee if the customer is ineligible for a transaction.
- If a partial payment is made at the time the customer enters into a repayment plan, what amount should be used to calculate the repayment plan installments?
The repayment plan installments should be calculated using the balance due prior to the partial payment. The partial payment must be applied to the first installment amount.
- If a partial payment was made prior to the date the customer enters into a repayment plan, what amount should be used to calculate the repayment plan installments?
The balance due at the time of the repayment plan must be used to schedule the installment payments.
The answers provided are not meant to be a substitute for legal advice.