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Rental application fees would be capped at $25 under legislation considered by Michigan senators
(michiganadvance.com)
I did property management for two years, and we took an application fee of $50.00. The theory was that the fee would prohibit people that new they couldn't qualify from applying for the rental unit. If people asked about the fee I was supposed to tell them it was to cover the cost of the background check.
In practice, no one knew if they did or didn't qualify, so everyone applied. The background check was me google searching their name and looking at the provided pay stubs. We kept showing the unit and taking applications, with the fee, up until the new tenant took possession of the property.
These are common practices, and some property manager/owner will take application fees as high as $100. I met one guy that boasted how he made more off of the app fees than a month of rent. There is a reason I don't do that kind of work anymore, and I don't think this law goes far enough. Application fees should be illegal because they create an opportunity for land lords to exploit vulnerable and desperate people in need of housing.