The Michigan Court of Appeals, in a published opinion, held that payday lenders must comply with the Michigan Deferred Presentment Service Transactions Act (DPSTA), MCL 487.2121 et seq and cannot seek treble damages for nonsufficient funds (NSF) checks from their customers.  Michigan Deferred Presentment Services Assoc v Ross, No. 292685 (Oakland Cir Ct, Feb 18, 2010).  In 2005, the legislature enacted the DPSTA to regulate payday lenders and to curb their abusive lending practices.  The DPSTA also limited the amount the payday lenders could collect for NSF checks to the check amount plus $25.  MCL 487.2158.  However, after the passage of DPSTA, the payday lenders continued to seek treble damages for NSF checks under another statute (MCL 600.2952).  In April 2008, the Commissioner of the Office of Financial and Insurance Regulation (OFIR), issued an administrative order that prohibited payday lenders from continuing current practices and it required that they conform to the limitations in MCL 487.2158 regarding NSF checks.  The payday lenders sued OFIR for violating their constitutional rights, such as access to courts, freedom of speech, due process, etc.

After examining the two statutes, MCL 487.2158 and MCL 600.2952, the Court concluded: “[t]he two statutory sections irreconcilably conflict.  Although [MCL 600.2952] would grant treble damages plus costs to [the payday lender] given an NSF check, . . ., the DPSTA limits the recovery to the amount on the check plus a returned check charge of $25.  MCL 487.2158(2),(3). . . . the more specific statute must control. . . . The DPSTA is clearly the more specific statute.”  “Accordingly, the DPSTA controls the remedies available to a payday lender who is given a check by a customer when the check, upon deferred presentment, is dishonored by the drawee because of insufficient funds.”