Regulated lender; authority to charge fee for late payment or dishonored check; fee or charge not considered as interest; excessive fee or charge.

(1) Except for depository institutions and as otherwise provided by law, a regulated lender may do any of the following: (a) Require the borrower to pay a processing fee in connection with making, closing, disbursing, extending, readjusting, or renewing an extension of credit. The processing fee allowed under this subdivision shall not exceed 2% of the amount of the extension of credit. (b) Charge the borrower a late fee for an installment payment that is received by the regulated lender after the expiration of an agreed-upon grace period following the date on which the payment was due. (c) A late fee allowed by this subdivision shall not exceed $15.00 or 5% of the installment payment, whichever is greater. (2) A regulated lender may charge a fee not to exceed $25.00 for a check or other payment instrument that is dishonored because of insufficient funds in the account on which the check or instrument is drawn. (3) A fee or charge allowed by this section is not considered interest. (4) A regulated lender shall not require a borrower or buyer to pay an excessive fee or charge.