Michigan Deferred Presentment Service Provider Bond

A Michigan Deferred Presentment Service Provider Bond, or DPSP Bond, or Payday Lender Bond is a type of surety bond required by the Michigan Department of Insurance and Financial Services. The bond amount is $50,000 and the cost of the surety bond is usually between 1% and 3% of the bond amount. Surety1 will shop its many markets to procure the right price at the right terms.

How to Get a Michigan Deferred Presentment Service Provider Bond

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the DPSP Bond will be shipped to the bond applicant.
^{1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.} 

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

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Who Needs This Surety Bond?

Michigan defines deferred presentment services as transactions governed by the Deferred Presentment Service Transactions Act (Act 244 of 2005). This Act outlines what constitutes such a service. Here’s the key point: Michigan Deferred Presentment Service Providers Bond

• Deferred presentment services involve holding a customer’s check or obtaining electronic debit authorization for a set amount without immediately cashing the check or debiting the account.

In simpler terms, it’s a short-term loan where the lender holds onto your check or gets permission to debit your account later, typically on your next payday, for a fee. The Act itself doesn’t use terms like “payday loan” or “cash advance.” But these are common names for the type of service that falls under the umbrella of deferred presentment services in Michigan. To perform these services, one must be licensed and provide a Michigan Deferred Presentment Service Provider Bond.

Specifically, any business operating in Michigan that offers deferred presentment services needs a Michigan Deferred Presentment Service Provider Bond. Deferred presentment services include, but are not limited to:

• Payday lenders: This is the most common example. Payday lenders offer short-term cash advances in exchange for a post-dated check or electronic debit authorization for a larger amount.
• Check cashing businesses: These businesses allow customers to cash checks for a fee, often a percentage of the check amount.
• Businesses offering short-term loans with post-dated check repayment: This could include some pawn shops or other businesses that offer small, short-term loans.

Here’s a helpful tip: The Michigan Department of Insurance and Financial Services (DIFS) regulates these services. Their website has a resource to help determine if your business falls under this category https://www.michigan.gov/difs/industry/licensing-cf/deferred-presentment.

How to Get a DPSP License

Getting a Michigan Deferred Presentment Service Provider (DPSP) license involves several steps regulated by the Department of Insurance and Financial Services (DIFS). Here’s a breakdown of the process:

1. Gather Documents: You’ll need various documents, including
   • A completed application form (Form FIS 2040),
   • business entity documents,
   • financial statements, and a Michigan DPSP Bond.
2. Surety Bond:
   • Obtain a Michigan Deferred Presentment Service Provider Bond from a licensed surety bond agency like Surety1.com. 
3. Application Fees:
   • Calculate and submit the required application fees using Form FIS 2042 Fee Calculation for DPSPs.
4. Submit Application:
   • File your completed application package with original signatures to the DIFS.
   • They will review it and conduct an investigation to ensure you meet the licensing criteria.

Here are some resources from the DIFS website to help you through the process:

• Michigan Deferred Presentment Service Providers Application(DPSPs)
• Fee Schedule – Deferred Presentment: https://www.michigan.gov/-/media/Project/Websites/difs/Form/CF/DP/FIS_2040.pdf?rev=d71427b7cc444fe5b5ba52351b8e3753

Remember, these resources provide a general outline. It’s advisable to consult directly with DIFS if you have any questions or need clarification on specific requirements for your situation. You can find their contact information on the DIFS website.

The information provided above is for general informational purposes only and does not constitute legal advice.  Do not rely solely on the information presented here as a substitute for professional legal counsel.