Michigan Updates Security Freeze Act
by: Zachary Pearlstein
Effective January 3, 2014, the state of Michigan has added provisions under the Security Freeze Act.
A “security freeze” is a restriction placed on a consumer’s credit report at the request of the consumer, which prohibits a consumer reporting agency from releasing the consumer’s credit report (or any information derived from the consumer’s credit report) without the express authorization of the consumer.
Under the Act, a consumer reporting agency must place a security freeze on a consumer’s credit report if the following conditions are met:
- The consumer reporting agency receives a request from the consumer for the placement of the security freeze under this act; and 174
- The consumer:
– Submits a request to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency; and
– Provides to the consumer reporting agency sufficient proof of identification of the consumer; and
– Pays to the consumer reporting agency the appropriate fee under section 31.
Within 5 business days after receiving a request that meets the above requirements, a consumer reporting agency shall place a security freeze for the consumer.
Within 5 business days after placing a security freeze on a consumer’s credit report, the consumer reporting agency shall do all of the following:
– Send a written confirmation of the security freeze to the consumer.
– Provide the consumer with a unique personal identification number or password to be used by the consumer when authorizing the release of the consumer’s credit report to a specific person or for a specific period of time.
– Provide the consumer with a written statement of the procedures for requesting the consumer reporting agency to remove or temporarily lift a security freeze.
Except as provided in section 14 (which allows for the release of a consumer’s credit report at the consumer’s request), if a security freeze is in place, a consumer reporting agency may not release a consumer’s credit report or any information derived from a consumer’s credit report without the express prior authorization of the consumer.
Michigan Enacts Revisions Regarding Civil Fines and Penalties Relative to Property Blight Violations
The state of Michigan has revised civil fines and penalties relating to property blight.
If the civil fines and costs are $1,000.00 or more and the person does not pay within 30 days after a final decision and order of the hearing officer, or of the circuit court, the following penalties apply:
– For a first violation, the person is responsible for a state civil infraction and may be ordered to pay a civil fine of not more than $500.00.
– For a second violation, the person is guilty of a misdemeanor punishable by imprisonment for not more than 93 days or a fine of not more than $500.00, or both.
– For a third or subsequent violation, the person is guilty of a misdemeanor and may be imprisoned for not more than 1 year and shall be fined $500.00.
These penalties do not apply to any of the following entities, if they become the owner of a property after foreclosure (or after taking a deed in lieu of foreclosure): a government-sponsored enterprise, a financial institution, mortgage servicer, or a credit union service organization, organized under either the laws of the state of Michigan or the United States.
About the Author
Zachary Pearlstein, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Brandeis University and earned his Juris Doctor at Suffolk Law School. He is admitted to the Massachusetts Bar. Zachary can be reached at
zachary@bankersadvisory.comTags: Michigan, State Mortgage Compliance | Comments Off on Michigan Updates Security Freeze Act
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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