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Financial Services Law Insights and Observations

Michigan regulator urges institutions to protect stimulus payments from overdrafts, fees

State Issues Covid-19 Michigan Bank Compliance Overdraft Financial Institutions

State Issues

On March 15, the Michigan Department of Insurance and Financial Services issued a bulletin “strongly” encouraging financial institutions to protect payments made to customers under the American Rescue Plan from overdrafts and fees. The bulletin further instructs that if a financial institution’s system automatically applies such a payment to a preexisting overdraft, the institution should reverse the application of the direct payment as promptly as possible.