State Representative Bill G. Schuette secured House passage on Mar. 19 of a proposal to modernize Michigan’s lending regulations, aiming to address what he described as outdated rules that have hindered the state’s competitiveness and forced lenders to follow standards set nearly five decades ago.
The legislation is intended to make Michigan more attractive for lending companies by adjusting minimum mortgage loan amounts, which supporters say no longer reflect current economic realities. The plan would gradually increase the minimum mortgage loan from $10,000 to $45,000 by 2028, with an initial rise to $15,000 upon signing and then $30,000 after Jan. 1, 2027. Home improvement loan minimums would also be raised from $1,000 to $4,500 over the same period.
“Michigan’s current lending minimums put our state at a competitive disadvantage when trying to attract new lending companies,” Schuette said. “There are fixed costs associated with originating a loan – underwriting, appraisal, and processing – that don’t change whether the loan is for $30,000 or $3 million. When the state requires companies to offer extremely small loans, many of which no longer make sense in today’s economic climate, lenders often lose money on those transactions.”
Schuette said this would be the first major update since 1977 and emphasized that while lenders could still issue smaller mortgages if they choose, they would not be required by law to do so. The bill also allows for future adjustments every five years based on changes in the Consumer Price Index starting in 2032 and removes requirements limiting these restrictions only to institutions physically located in Michigan.
“By updating these limits to reflect today’s economic realities, we’re ensuring lenders in Michigan are not burdened by unnecessary regulatory barriers,” Schuette said. “Inflation has affected every sector of the economy over the last 50 years. Michigan shouldn’t require lenders to operate under standards that were written in the 1970s.”
Schuette has hosted community events such as ‘Ask Bill G.’ sessions and tele-townhalls as part of his engagement efforts with constituents according to the official website. He has focused on priorities including infrastructure improvements, regulatory reforms, tax relief for residents according to the official website, and represents Midland and Gladwin counties in Michigan’s 95th House District according to the official website.
In addition to regulatory reform efforts like this bill, Schuette has championed bipartisan initiatives aimed at reducing regulations and ensuring full home heating tax credits for residents according to the official website. He has also worked with local leaders on events honoring first responders and military heroes according to the official website, while emphasizing policy areas such as economic development and technology investments within state government according to the official website.
The legislation now moves forward for consideration in the Senate.
