2006 Michigan Compiled Laws - Mich. Comp. Laws § 451.425 Trust account.

Sec. 15.

(1) Subject to subsection (5), payments received by a licensee from or on behalf of a debtor for the benefit of a creditor shall be held in trust in a separate account maintained for the benefit of the licensee's Michigan clients at a financial institution whose deposits are insured by an agency of the United States government. Disbursements whether to the debtor or to the creditors of the debtor shall be made from the trust account. A payment from a debtor or on behalf of a debtor shall be deposited in the account not later than 2 business days after receipt of the payment. A sweep arrangement may be utilized if the trust account is insured for 100% or more of the balance in the trust account.

(2) The trust account shall be reconciled not less than once a month. The reconciliation shall ascertain the actual cash balance in the account and compare it with the sum of the escrow balances in each debtor's account. The reconciliation may be done electronically or by any other appropriate method and shall be done not more than 45 business days after receipt of the bank statement. An electronic or other appropriate notation of the reconciliation shall be kept as a permanent record of the licensee and shall be considered as in compliance with this section. Each trust account shall be individually scheduled in a licensee's reconciliation records.

(3) The trust account shall at all times have an actual cash balance equal to or greater than the sum of the escrow balances of each debtor's account, and failure to maintain that amount is cause for a summary suspension of the license.

(4) If a trust account fails to contain sufficient funds to cover the debtor escrow balances, the licensee shall immediately upon discovery notify the director by telephone, facsimile, electronic mail, or other method approved by the department. The licensee shall also provide written notice including a description of the remedial action taken.

(5) If the trust account described in subsection (1) is maintained at a financial institution described in subsection (1) located outside of this state, the licensee shall furnish a surety bond or irrevocable letter of credit to the people of the state of Michigan in an amount equal to or exceeding 100% of the average amount of deposits held in the trust account from month to month and in a form approved by the department. This requirement is in addition to an applicant's obligation under section 5(2)(c).

History: 1975, Act 148, Eff. Mar. 31, 1976 ;-- Am. 2000, Act 255, Imd. Eff. June 29, 2000
Compiler's Notes: For transfer of statutory authority, powers, duties, and functions of the corporations, securities and land development bureau to the office of financial and insurance services by type III transfer, see E.R.O. No. 2000-2, compiled at § 445.2003 of the Michigan compiled laws.