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CU System
Michigan law requires licensed tow companies on repos
LANSING, Mich. (1/20/12)--A new Michigan law requires towing companies to obtain authorization from a state agency to operate, according to information provided to the Michigan Credit Union League (MCUL).

The Midwest Auto Auction in Michigan advised MCUL & Affiliates that Public Act 111 of 2011 now requires all businesses that transport vehicles for hire as part of their business operations to be subject to the Michigan Motor Carrier Act and to obtain intrastate authority from the Michigan Public Service Commission (Michigan Monitor Jan. 16). The law went into effect Jan. 1.

Failure to register is a misdemeanor punishable with a fine up to $500 and/or 90 days in jail. Also, operators who are not licensed can have their tow truck and any attached vehicle impounded.

Although the state's towing industry was in the process of becoming licensed, they were surprised by the legislation, MCUL said. Credit unions and other auto lenders in the state should ensure that the companies they hire to tow or repossess vehicles are licensed due to potential impounding, MCUL said.

All previously existing exemptions for towing companies have been eliminated, including towing companies, repossession operations, repair facilities, auto auctions and dealerships, MCUL said. The license is good for the calendar year and must be renewed by the carrier every year.


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