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Fri February 19, 2010
Mich. court upholds cap on payday loan bounce fees
The Michigan Court of Appeals says payday loan companies can no longer charge borrowers triple damages plus $250 if their checks bounce.
The court's ruling released Friday reverses an Oakland County court decision in favor of a lenders group.
The decision upholds state regulators enforcing a law designed to rein in practices by an industry used mainly by low-pay workers.
Michigan law says people who receive bad checks can collect triple damages and court costs of up to $250 in some cases. In 2005, the Legislature capped the amount a payday lender can collect for a returned check to the face value plus $25.
The Michigan Deferred Presentment Services Association challenged a state order demanding lenders observe the fee limit.