Senate Bill 0194e1
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
A bill to be entitled
2
An act relating to title loan transactions;
3
creating the "Florida Title Loan Act";
4
providing definitions; requiring licensure by
5
the Department of Agriculture and Consumer
6
Services to be in the business as a title loan
7
lender; providing for eligibility for
8
licensure; providing for application; providing
9
for suspension or revocation of license;
10
providing for a title loan transaction form;
11
providing for recordkeeping and reporting and
12
safekeeping of property; providing for title
13
loan charges; providing a holding period when
14
there is a default under the title loan
15
agreement; providing for the disposal of
16
pledged property; providing for disposition of
17
excess proceeds; prohibiting certain acts;
18
providing for the right to redeem; providing
19
for lost title loan transaction forms;
20
providing for a title loan lender's lien;
21
providing for criminal penalties; providing for
22
certain records from the Department of Law
23
Enforcement; providing for subpoenas,
24
enforcement of actions, and rules; providing a
25
fine; providing for investigations and
26
complaints; providing an appropriation;
27
providing legislative intent; repealing s.
28
538.06(5), F.S., which allows a secondhand
29
dealer to engage in a title loan transaction;
30
repealing s. 538.15(4), (5), F.S., which
31
prohibit certain acts and practices by
1
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
secondhand dealers; amending ss. 538.03,
2
538.16, F.S.; deleting references to title
3
loans; providing an effective date.
4
5
Be It Enacted by the Legislature of the State of Florida:
6
7
Section 1. Short title.--This act may be cited as the
8
"Florida Title Loan Act."
9
Section 2. Definitions.--As used in this act, the
10
term:
11
(1) "Department" means the Department of Agriculture
12
and Consumer Services.
13
(2) "Commercially reasonable" means a sale or disposal
14
which occurs and can be construed as an arms-length
15
transaction. Nonpublic sales or disposal of personal property
16
between licensees and business affiliates or family members
17
are sales and disposal which are presumed not to be
18
commercially reasonable.
19
(3) "Executive officer" means the president, chief
20
executive officer, chief financial officer, chief operating
21
officer, executive vice president, senior vice president,
22
secretary, and treasurer.
23
(4) "Identification" means a government issued
24
photographic identification.
25
(5) "Licensee" means a person who is licensed under
26
this act.
27
(6) "Loan property" means any personal property
28
certificate of title that is deposited with a title loan
29
lender in the course of the title loan lender's business and
30
is the subject of a title loan agreement.
31
2
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(7) "Title loan agreement" means a written agreement
2
whereby a title loan lender agrees to make a loan of a
3
specific sum of money to a pledgor, and the pledgor agrees to
4
give the title loan lender a security interest in unencumbered
5
titled personal property, except by a title loan agreement,
6
owned by the pledgor.
7
(8) "Title loan lender" means any person who is
8
engaged in the business of making title loans or engaging in
9
title loan agreements with pledgors.
10
(9) "Title loan office" means the location at which,
11
or premises from which, a title loan lender regularly conducts
12
business.
13
(10) "Title loan transaction form" means the
14
instrument on which a title loan lender records title loan
15
agreements.
16
(11) "Titled personal property" means any personal
17
property that has as evidence of ownership a state-issued
18
certificate of title except for a mobile home that is the
19
primary residence of the pledgor.
20
(12) "Ultimate equitable owner" means a natural person
21
who, directly or indirectly, owns or controls an ownership
22
interest in a corporation, a foreign corporation, an alien
23
business organization, or any other form of business
24
organization, regardless of whether such natural person owns
25
or controls such ownership interest through one or more
26
natural persons or one or more proxies, powers of attorney,
27
nominees, corporations, associations, partnerships, trusts,
28
joint stock companies, or other entities or devices, or any
29
combination thereof.
30
Section 3. License required; license fees.--
31
3
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(1) A person may not engage in business as a title
2
loan lender unless the person has a valid license issued by
3
the department authorizing engagement in the business. A
4
separate license is required for each physical location of a
5
title loan office. The department shall issue more than one
6
license to a person who complies with the requirements of this
7
act for each license.
8
(2) An application for a license under this act must
9
be submitted to the department on such form as the department
10
prescribes by rule. If the department determines that an
11
application should be granted, it shall issue the license for
12
a period not to exceed 1 year. A nonrefundable license fee of
13
$1,500 and a nonrefundable investigation fee of $250 must
14
accompany an initial application for each title loan location.
15
The revenue from these fees is intended to reasonably reflect
16
the actual cost of regulation.
17
(3) A license must be renewed annually and must be
18
accompanied by a nonrefundable fee of $1,500. A license that
19
is not renewed by its expiration date shall automatically
20
expire and revert to inactive status. Such inactive license
21
may be reactivated within 3 months after its expiration date
22
upon submission of a completed reactivation form and payment
23
of a reactivation fee. A license that is not reactivated
24
within 3 months after becoming inactive may not be
25
reactivated.
26
(4) Each license must specify the location for which
27
it is issued and must be conspicuously displayed at that
28
location. When a licensee wishes to move a title loan office
29
to another location, the licensee shall give 30 days prior
30
written notice to the department by certified or registered
31
mail, return receipt requested, and the department shall then
4
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
amend the license accordingly. A license issued under this act
2
is not transferable or assignable.
3
(5) The department may deny an initial application for
4
a license if the applicant or any person with power to direct
5
the management or policies of the applicant is the subject of
6
a pending criminal prosecution or governmental civil
7
enforcement action in any jurisdiction until conclusion of
8
such criminal prosecution or enforcement action.
9
(6) Each licensee shall designate and maintain an
10
agent in this state for service of process.
11
(7) A person must apply to the department for a new
12
license upon the change of any person owning 25 percent or
13
greater interest in any title loan office and pay the
14
nonrefundable license and investigation fees, up to a maximum
15
of $10,000.
16
(8) All moneys collected by the department under this
17
act shall be deposited into the State Treasury to be placed in
18
the General Inspection Trust Fund for the sole purpose of
19
implementing this act.
20
Section 4. Eligibility for license.--
21
(1) To be eligible for a title loan lending license,
22
an applicant must:
23
(a) Be of good moral character.
24
(b) File with the department a bond in the amount of
25
$100,000 for each license with a surety company qualified to
26
do business in this state. In lieu of the bond, the applicant
27
may provide proof to the department that it has a net worth in
28
excess of $1 million; the applicant may provide to the
29
department a current audited financial statement that
30
documents that the applicant's net worth is in excess of $1
31
million; or the applicant may establish a certificate of
5
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
deposit or an irrevocable letter of credit in a Florida
2
financial institution as defined in chapter 655.005, Florida
3
Statutes, in the amount of the bond. The original bond,
4
certificate of deposit, or letter of credit must be filed with
5
the department, and the department must be the beneficiary to
6
the document. The bond, certificate of deposit, or letter of
7
credit must be in favor of the department for the use and
8
benefit of any consumer who is injured pursuant to a title
9
loan transaction by the fraud, misrepresentation, breach of
10
contract, financial failure, or violation of any provision of
11
this act by the title loan lender. Such liability may be
12
enforced either by proceeding in an administrative action or
13
by filing a judicial suit at law in a court of competent
14
jurisdiction. However, in such court suit, the bond,
15
certificate of deposit, or letter of credit posted with the
16
department shall not be amenable or subject to any judgment or
17
other legal process issuing out of or from such court in
18
connection with such lawsuit; but such bond, certificate of
19
deposit, or letter of credit shall be amenable to and
20
enforceable only by and through administrative proceedings
21
before the department. It is the intent of the Legislature
22
that such bond, certificate of deposit, or letter of credit
23
shall be applicable and liable only for the payment of claims
24
duly adjudicated by order of the department. The bond,
25
certificate of deposit, or letter of credit shall be payable
26
on a pro rata basis as determined by the department, but the
27
aggregate amount may not exceed the amount of the bond,
28
certificate of deposit, or letter of credit.
29
(c) Not have been convicted of a felony within the
30
last 10 years or be acting on behalf of an ultimate equitable
31
6
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
owner who has been convicted of a felony within the last 10
2
years.
3
(d) Not have been convicted, and not be acting as an
4
ultimate equitable owner for someone who has been convicted,
5
of a crime that the department finds directly relates to the
6
duties and responsibilities of a title loan lender within the
7
last 10 years.
8
(2) If an applicant for a title loan lending license
9
is other than a corporation, the eligibility requirements of
10
this section apply to each direct or ultimate equitable owner.
11
(3) If an applicant for a title loan lending license
12
is a corporation, the eligibility requirements of this section
13
apply to each direct or ultimate equitable owner of a least 25
14
percent of the outstanding equity interest of such corporation
15
and to each director and executive officer.
16
Section 5. Application for license.--
17
(1) Application for a license to make title loans
18
under this act must be in writing, under oath, and in the form
19
prescribed by department rule, and must contain the name and
20
residence and business addresses of the applicant, and, if the
21
applicant is a partnership or association, of every member
22
thereof, and, if a corporation, of each executive officer and
23
director and ultimate equitable owner of at least 25 percent
24
thereof; must state whether any of the above has been arrested
25
within the last 10 years for, convicted of, or is under
26
indictment or information for, a felony or crime that directly
27
relates to the duties and responsibilities of a title loan
28
lender, and, if so, the nature thereof; must specify the
29
county and municipality, with the street and number or
30
location, where the business is to be conducted; and must
31
provide such further relevant information as the department
7
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
requires by rule. At the time of making such application, the
2
applicant shall pay to the department a nonrefundable license
3
fee of $1,500. Applications, except for applications to renew
4
or reactivate a license, must be accompanied by a
5
nonrefundable investigation fee of $250.
6
(2) Notwithstanding the foregoing, the application
7
need not state the full name and address of each officer,
8
director, and shareholder if the applicant is owned directly
9
or beneficially by a person who as an issuer has a class of
10
securities registered pursuant to Section 12 of the Securities
11
Exchange Act of 1934, or pursuant to Section 15 (d) thereof is
12
an issuer of securities which is required to file reports with
13
the Securities and Exchange Commission, if the person files
14
with the department any information, documents, and reports
15
required by that act to be filed with the Securities and
16
Exchange Commission.
17
(3) Upon the filing of an application for a license
18
and payment of all applicable fees, the department shall,
19
unless the application is to renew or reactivate an existing
20
license, investigate the facts concerning the applicant's
21
proposed activities. The department shall investigate the
22
facts and shall approve an application and issue to the
23
applicant a license that will evidence the authority to do
24
business under this act if the department finds that the
25
eligibility requirements for the license are satisfied. The
26
license must be prominently displayed at the front desk or
27
counter at the title loan office.
28
(4) A license that is not renewed by its expiration
29
date shall automatically revert to inactive status. An
30
inactive license may be reactivated upon submission of a
31
completed reactivation application, payment of the annual
8
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
license fee, and payment of a reactivation fee of $250. A
2
license expires on the date at which it has been inactive for
3
3 months.
4
(5) A licensee may not change the place of business
5
maintained under a license without prior notice to the
6
department. When a licensee wishes to change a place of
7
business, the licensee shall give written notice thereof to
8
the department.
9
(6) A licensee may conduct the business of making
10
loans under this act within a place of business in which other
11
business is solicited or engaged in, unless the department
12
finds that the conduct of such other business by the licensee
13
results in either the evasion of this act or combining such
14
other business activities results in practices which are
15
detrimental, misleading, or unfair to consumers. Upon such a
16
finding, the department shall order the licensee to desist
17
from such evasion or other business activities. However, a
18
license may not be granted to or renewed for any person or
19
organization engaged in the pawnbroking business.
20
(7) Licenses are not transferable or assignable. A
21
licensee may invalidate any license by delivering it to the
22
department with written notice of its surrender by certified
23
or registered mail, return receipt requested, but such
24
delivery does not affect any civil or criminal liability or
25
the authority to enforce this act for acts committed in
26
violation thereof.
27
Section 6. Suspension, revocation of license.--
28
(1) The following acts are violations of this act and
29
constitute grounds for the disciplinary actions specified in
30
subsection (2):
31
9
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(a) Failure to comply with any provision of this act,
2
any rule or order adopted under this act, or any written
3
agreement entered into with the department;
4
(b) Fraud, misrepresentation, deceit, or gross
5
negligence in any title loan transaction, regardless of
6
reliance by or damage to the pledgor;
7
(c) Fraudulent misrepresentation, circumvention, or
8
concealment of any matter required to be stated or furnished
9
to a pledgor under this act, regardless of reliance by or
10
damage to the pledgor;
11
(d) Willful imposition of illegal or excessive charges
12
in any title loan transaction;
13
(e) False, deceptive, or misleading advertising by a
14
title loan lender;
15
(f) Failure to maintain, preserve, and keep available
16
for examination, all books, accounts, or other documents
17
required by this act, by any rule or order adopted under this
18
act, or by any agreement entered into with the department;
19
(g) The title loan lender has aided, abetted, or
20
conspired with an individual or person to circumvent or
21
violate any of the requirements of this act;
22
(h) Refusal to permit inspection of books and records
23
in an investigation or examination by the department or
24
refusal to comply with a subpoena issued by the department; or
25
(i) Criminal conduct in the course of a person's
26
business as a title loan lender.
27
(2) Upon a finding by the department that any person
28
has committed any of the acts set forth in subsection (1), the
29
department may enter an order taking one or more of the
30
following actions:
31
10
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(a) Issuing a notice of noncompliance pursuant to
2
section 120.695, Florida Statutes;
3
(b) Denying an application for a license under this
4
act;
5
(c) Revoking or suspending a license previously
6
granted under this act;
7
(d) Placing a licensee or an applicant for a license
8
on probation for a period of time and subject to such
9
conditions as the department specifies;
10
(e) Placing permanent restrictions or conditions upon
11
issuance or maintenance of a license under this act;
12
(f) Issuing a reprimand; or
13
(g) Imposing an administrative fine not to exceed
14
$5,000 for each such act or violation.
15
(3) In addition to the acts specified in subsection
16
(1), the following are grounds for denial of a license under
17
this act, or for revocation, suspension, or restriction of a
18
license previously granted:
19
(a) A material misstatement of fact in an initial or
20
renewal application for a license;
21
(b) Having a license, registration, or the equivalent,
22
to practice any profession or occupation denied, suspended,
23
revoked, or otherwise acted against by a licensing authority
24
in any jurisdiction for fraud, dishonest dealing, or any act
25
of moral turpitude;
26
(c) Having been convicted or found guilty of a crime
27
involving fraud, dishonest dealing, or any act of moral
28
turpitude;
29
(d) Being insolvent or having demonstrated a lack of
30
honesty or financial responsibility; or
31
11
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(e) The existence of a fact or condition that, if it
2
had existed or had been known to exist at the time of the
3
original issuance of the license, would have justified the
4
department in refusing a license.
5
(4) It is sufficient cause for the department to take
6
any of the actions specified in subsection (2) as to any
7
partnership, corporation, or association if the department
8
finds grounds for such action as to any member of the
9
partnership, as to any executive officer or director of the
10
corporation or association, or as to any person who has power
11
to direct the management or policies of the partnership,
12
corporation, or association.
13
(5) Each licensee under this act is responsible for
14
the acts of its employees and agents if, with actual knowledge
15
of such acts, it retained profits, benefits, or advantages
16
accruing from such acts or ratified the conduct of the
17
employee or agent as a matter of law or fact.
18
(6) The manner of giving notice and conducting a
19
hearing is governed by chapter 120, Florida Statutes.
20
(7) Any title loan agreement made without benefit of a
21
license is voidable, in which case the person forfeits the
22
right to collect any moneys, including principal and finance
23
charges, from the pledgor in connection with such agreement
24
and must return to the pledgor the loan property in connection
25
with such agreement or the fair market value of such property.
26
Section 7. Title loan transaction form.--
27
(1) At the time the title loan lender enters into each
28
title loan agreement, the title loan lender shall complete a
29
title loan transaction form for such transaction, and the
30
pledgor shall sign such completed form. The department shall
31
approve the design and format of the title loan transaction
12
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
form, which shall elicit the information required under this
2
section. In completing the title loan transaction form, the
3
title loan lender shall record the following information,
4
which must be typed or written indelibly and legibly in
5
English:
6
(a) The make, model, and year of the titled personal
7
property to which the loan property relates.
8
(b) The vehicle identification number or other
9
comparable identification number, along with the license plate
10
number, if applicable, of the titled personal property to
11
which the loan property relates.
12
(c) The name, address, date of birth, physical
13
description, and social security number of the pledgor.
14
(d) The date of the transaction.
15
(e) The identification number and the type of
16
identification, including the issuing agency, accepted from
17
the pledgor.
18
(f) The amount of money advanced, which must be
19
designated as the "amount financed."
20
(g) The maturity date of the title loan agreement,
21
which must occur 30 days after the date of the transaction.
22
(h) The total title loan charge payable on the
23
maturity date, designated as the "finance charge."
24
(i) The total amount, amount financed plus finance
25
charge, which must be paid to redeem the loan property on the
26
maturity date, designated as the "total amount of all
27
payments."
28
(j) The annual percentage rate, computed in accordance
29
with the regulations adopted by the Federal Reserve Board
30
pursuant to the Federal Truth-in-Lending Act.
31
13
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(2) The following information must also be printed on
2
all title loan transaction forms:
3
(a) The name and address of the title loan office.
4
(b) The name and address of the department as well as
5
a telephone number that consumers may use to make complaints.
6
(c) The following statement in not less than 12 point
7
type that:
8
1. The pledgor is not obligated to redeem the subject
9
certificate of title.
10
2. If the pledgor does not redeem the certificate of
11
title before the maturity date of the title loan agreement,
12
the title loan lender may repossess the titled personal
13
property to which the certificate of title relates.
14
3. If this title loan transaction form is lost,
15
destroyed, or stolen, the pledgor should immediately so advise
16
the issuing title loan lender in writing.
17
(d) The statement that "The pledgor represents and
18
warrants that the titled personal property to which the loan
19
property relates is not stolen, that it has no liens or
20
encumbrances against it, that the pledgor has the right to
21
enter into this transaction, and that the pledgor will not
22
apply for a duplicate certificate of title while the title
23
loan agreement is in effect."
24
(e) Immediately above the signature of the pledgor,
25
the statement that "I, the pledgor, declare under penalty of
26
perjury that I have read the foregoing document and that to
27
the best of my knowledge and belief the facts contained in it
28
are true and correct."
29
(f) A blank line for the signature of the pledgor.
30
31
14
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(3) At the time of the transaction, the title loan
2
lender shall deliver to the pledgor an exact copy of the
3
completed title loan transaction form.
4
(4) The pledgor shall agree for the title loan lender
5
to keep possession of the certificate of title. The pledgor
6
shall have the exclusive right to redeem the certificate of
7
title by repaying the loan of money in full and by complying
8
with the title loan agreement. When the certificate of title
9
is redeemed, the title loan lender shall release the security
10
interest in the titled personal property and return the
11
personal property certificate of title to the pledgor. The
12
title loan agreement shall provide that upon failure by the
13
pledgor to redeem the certificate of title at the end of the
14
original 30-day-agreement period, or at the end of any 30-day
15
extension thereof, the title loan lender shall be allowed to
16
take possession of the titled personal property. The title
17
loan lender shall retain physical possession of the
18
certificate of title for the entire length of the title loan
19
agreement, but shall not be required to retain physical
20
possession of the titled personal property at any time. A
21
title loan lender may hold only unencumbered certificates of
22
title for loan.
23
Section 8. Recordkeeping; reporting; safekeeping of
24
property.--
25
(1) Every title loan lender shall maintain, at the
26
principal place of business, such books, accounts, and records
27
of the business conducted under the license issued for such
28
place of business as will enable the department to determine
29
the licensee's compliance with this act. The licensee shall
30
make all such books, accounts, and records of business
31
15
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
conducted under the license available at a convenient location
2
in this state upon request of the department.
3
(2) The department may authorize maintenance of books,
4
accounts, and records at a location other than a principal
5
place of business. The department may require books, accounts,
6
and records to be produced and available at a reasonable and
7
convenient location in this state within a reasonable period
8
of time after such a request.
9
(3) The title loan lender shall maintain the original
10
copy of each completed title loan transaction form, and shall
11
not obliterate, discard, or destroy any such original copy,
12
for a period of at least 2 years after making the final entry
13
on any loan recorded therein.
14
(4) All loan property, or property related to the
15
title loan transaction which is delivered to a title loan
16
lender must be securely stored and maintained at the title
17
loan office unless the title document has been forwarded to
18
the appropriate state agency for the purpose of having a lien
19
recorded or deleted.
20
(5) The department may prescribe the minimum
21
information to be shown in the books, accounts, and records of
22
licensees so that such records will enable the department to
23
determine compliance with this act.
24
Section 9. Title loan charges.--
25
(1) In a title loan agreement, a title lender may
26
contract for and receive a finance charge only. The finance
27
charge may not exceed 22 percent simple interest per 30-day
28
period.
29
(2) Any extension must be executed in writing and must
30
clearly specify the new maturity date, the title loan finance
31
charges paid for the extension, and title loan finance charges
16
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
owed on the new maturity date, and a copy must be supplied to
2
the pledgor. In this event, the daily title loan finance
3
charge for the extension shall be equal to the title loan
4
finance charge for the original 30-day period divided by 30
5
days, one-thirtieth of the original total title loan finance
6
charge. A title loan lender is not permitted to capitalize any
7
unpaid finance charge as part of the amount financed in a
8
subsequent title loan transaction.
9
(3)(a) If a title loan agreement has not been
10
satisfied within 120 days after its inception, the title loan
11
lender is entitled to receive a finance charge on the
12
outstanding principal balance at a rate not to exceed 1
13
percent per month for the period of time that the loan remains
14
outstanding, not to exceed 240 days, after the initial 120-day
15
period. However, the title loan lender may collect a finance
16
charge as set forth in subsection (1) for the first 120 days
17
that the title loan agreement is in effect.
18
(b) If a title loan agreement has not been satisfied
19
within 360 days after its inception, the title loan lender is
20
entitled to receive a finance charge on the outstanding
21
principal balance at a rate not to exceed 18 percent per annum
22
for the period of time that the loan remains outstanding
23
beyond 360 days.
24
(4) Any finance charge contracted for or received,
25
directly or indirectly, in excess of the amounts authorized
26
under this section are prohibited, may not be collected, and
27
render the title loan agreement voidable, in which case the
28
title loan lender shall forfeit the right to collect any
29
interest or finance charges. Upon the pledgor's written
30
request delivered to the title loan lender by certified mail,
31
return receipt requested, within 30 days after the maturity
17
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
date, the title loan lender shall be obligated to return to
2
the pledgor the loan property delivered to the title loan
3
lender in connection with the title loan agreement upon
4
payment of the balance of the principal remaining due; there
5
shall be no penalty for a violation resulting from an
6
accidental and bona fide error that is corrected upon
7
discovery. Any action to circumvent the limitation on title
8
loan interest or any other amounts collectible under this act
9
is voidable. Any transaction involving a person's delivery of
10
a personal property certificate of title in exchange for the
11
advancement of funds on the condition that the person shall or
12
may redeem or repurchase the certificate of title upon the
13
payment of a sum of money, whether the transaction be
14
characterized as a "buy-sell agreement," "sale-leaseback
15
agreement," or otherwise, shall be deemed a violation of this
16
act if such sum exceeds the amount that a title loan lender
17
may collect in a title loan agreement under this act or if the
18
terms of the transaction otherwise conflict with the permitted
19
terms and conditions of a title loan agreement under this act.
20
(5) Any fees or taxes paid to a governmental agency
21
and directly related to a particular title loan transaction
22
may be collected from the pledgor and shall be in addition to
23
the permitted finance charge.
24
Section 10. Ten-day holding period; failure to redeem;
25
default.--
26
(1) Upon the pledgor's default under the title loan
27
agreement or failure to redeem the pledged property on or
28
before the maturity date of the title loan agreement, the
29
title loan lender has the right to take possession of the
30
titled personal property. Any repossession of a motor vehicle
31
must be through an agent who is licensed by the state to
18
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
repossess motor vehicles. After taking possession of the
2
titled personal property, the title loan lender shall retain
3
possession of the titled personal property and the certificate
4
of title for a minimum 10-day holding period commencing on the
5
date of repossession.
6
(2) If, during the 10-day holding period, the pledgor
7
redeems the titled personal property and certificate of title
8
by paying all outstanding principal and finance charges and
9
repossession and storage charges permitted in section 11, the
10
pledgor shall be given possession of the titled personal
11
property and the certificate of title without further charge.
12
(3) If the pledgor fails to redeem the titled personal
13
property and certificate of title during the 10-day holding
14
period, then the pledgor shall thereby forfeit all right,
15
title, and interest in and to the titled personal property and
16
certificate of title to the title loan lender, who shall
17
thereby acquire an absolute right of title and ownership to
18
the titled personal property. The title loan lender shall then
19
have the sole right and authority to sell or dispose of the
20
unredeemed titled personal property.
21
Section 11. Disposal of pledged property; excess
22
proceeds.--
23
(1) The title loan lender shall dispose of the pledged
24
personal property within a reasonable length of time after the
25
expiration of the 10-day holding period in a commercially
26
reasonable fashion so as to produce the highest proceeds from
27
such disposal. After the pledged personal property has been
28
disposed of, the title loan lender shall deduct from said
29
proceeds the outstanding principal balance and finance charges
30
that have accrued up until the expiration of the 10-day
31
holding period and the incurred repossession and storage
19
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
charges which are actual and reasonable. Title loan lenders
2
may assess and collect, as reimbursement, only a repossession
3
and storage charge that does not exceed the actual amount
4
charged by an independent and unaffiliated third-party company
5
or contractor that was hired to repossess or store the titled
6
personal property to which the loan property relates. The
7
total amount of reimbursement that the title loan lender may
8
receive as reimbursement for any outstanding charges, except
9
the principal and finance charges, may not exceed $350 for a
10
motor vehicle repossessed within this state or $500 for a
11
motor vehicle repossessed outside this state.
12
(2) After such deductions, any remaining balances or
13
surpluses must be given to the pledgor within 10 days after
14
such disposal. Under no circumstances, including the case in
15
which the sale or disposal proceeds fail to cover the loan
16
amount, shall any deficiency be allowed to be attributed to
17
any pledgor or borrower.
18
Section 12. Prohibited acts.--A title loan lender, or
19
any agent or employee of such title loan lender, may not:
20
(1) Falsify or fail to make an entry of any material
21
matter in a title loan lender transaction form.
22
(2) Refuse to allow the department to inspect
23
completed title loan transaction forms or loan property during
24
the ordinary hours of the title loan lender's business or at
25
other times acceptable to both parties.
26
(3) Enter into a title loan agreement with a person
27
under the age of 18 years.
28
(4) Make any agreement requiring or allowing for the
29
personal liability of a pledgor or the waiver of any of the
30
provisions of this act.
31
20
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(5) Knowingly enter into a title loan agreement with
2
any person who is under the influence of drugs or alcohol when
3
such condition is visible or apparent, or with any person
4
using a name other than his or her own name or the registered
5
name of his or her business.
6
(6) Fail to exercise reasonable care in the
7
safekeeping of loan property or of titled personal property
8
repossessed under this act.
9
(7) Fail to return loan property or repossessed titled
10
personal property to a pledgor, with any and all of the title
11
loan lender's liens on the property properly released, upon
12
payment of the full amount due the title loan lender, unless
13
the property has been seized or impounded by an authorized law
14
enforcement agency, taken into custody by a court, or
15
otherwise disposed of by court order.
16
(8) Sell or otherwise charge for insurance in
17
connection with a title loan agreement, if the title loan
18
lender realizes a profit thereon.
19
(9) Charge or receive any finance charge, interest, or
20
fees which are not authorized by this act.
21
(10) Engage in business as a title loan lender without
22
first securing the license.
23
(11) Refuse to accept a partial repayment of the
24
amount financed, provided that all accrued finance charges
25
have been paid.
26
(12) Charge a prepayment penalty.
27
(13) Advertise using the words "interest free loans"
28
or "no finance charges."
29
Section 13. Right to redeem; lost title loan
30
transaction form.--
31
21
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
(1) Any person presenting identification of himself or
2
herself as the pledgor and presenting the pledgor's copy of
3
the title loan transaction form to the title loan lender is
4
presumed to be entitled to redeem the loan property described
5
in the title loan lender transaction form. However, if the
6
title loan lender determines that the person is not the
7
pledgor, the title loan lender is not required to allow the
8
redemption of the loan property by such person. The person
9
redeeming the loan property must sign the pledgor's copy of
10
the title loan transaction form, which the title loan lender
11
may retain to evidence such person's receipt of the loan
12
property. A person redeeming the loan property who is not the
13
pledgor must show identification to the title loan lender
14
together with written authorization from the pledgor, and the
15
title loan lender shall record that person's name and address
16
on the title loan transaction form retained by the title loan
17
lender. In any such case, the person redeeming the pledgor's
18
copy of the title loan transaction form shall be provided a
19
copy of such signed form as evidence of the concerned
20
transaction.
21
(2) If the pledgor's copy of the title loan
22
transaction form is lost, destroyed, or stolen, the pledgor
23
must notify the title loan lender in writing by certified or
24
registered mail, return receipt requested, or in person
25
evidenced by a signed receipt, and receipt of this notice
26
shall invalidate such title loan transaction form if the loan
27
property has not previously been redeemed. Before delivering
28
the loan property or issuing a new title loan transaction
29
form, the title loan lender shall require the pledgor to make
30
a written statement of the loss, destruction, or theft of the
31
pledgor's copy of the title loan transaction form. The title
22
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
loan lender shall record on the written statement the type of
2
identification and the identification number accepted from the
3
pledgor, the date the statement is given, and the number or
4
date of the title loan transaction form lost, destroyed, or
5
stolen. The statement shall be signed by the title loan lender
6
or the title loan office employee who accepts the statement
7
from the pledgor.
8
Section 14. Title loan lender's lien.--
9
(1) The title loan lender may record its security
10
interest in the titled personal property to which the loan
11
property relates by noting the lien on the certificate of
12
title.
13
(2) The title loan lender is, upon entering into a
14
title loan agreement, considered a bona fide lienholder whose
15
interest has been perfected.
16
Section 15. Criminal penalties.--
17
(1) Any person who engages in business as a title loan
18
lender without first securing the license prescribed by this
19
act commits a felony of the third degree, punishable as
20
provided in section 775.082, Florida Statutes, section
21
775.083, Florida Statutes, or section 775.084, Florida
22
Statutes.
23
(2) In addition to any other penalty which may be
24
applicable, any person who willfully violates this act or who
25
willfully makes a false entry in any record specifically
26
required by this act commits a misdemeanor of the first degree
27
punishable as provided in section 775.082, Florida Statutes,
28
or section 775.083, Florida Statutes.
29
Section 16. Records from the Department of Law
30
Enforcement.--The Department of Law Enforcement, on request,
31
shall supply to the department any arrest and conviction
23
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
records in its possession of an individual applying for or
2
holding a license under this act.
3
Section 17. Subpoenas; enforcement actions; rules.--
4
(1) The department may issue and serve subpoenas to
5
compel the attendance of witnesses and the production of
6
documents, papers, books, records, and other evidence before
7
it in any matter pertaining to this act. The department may
8
administer oaths and affirmations to any person whose
9
testimony is required. If any person refuses to testify,
10
produce books, records, and documents, or otherwise refuses to
11
obey a subpoena issued under this section, the department may
12
enforce the subpoena in the same manner as subpoenas issued
13
under the Administrative Procedure Act are enforced. Witnesses
14
are entitled to the same fees and mileage as they are entitled
15
to by law for attending as witnesses in the circuit court,
16
unless such examination or investigation is held at the place
17
of business or residence of the witness.
18
(2) In addition to any other powers conferred upon it
19
to enforce or administer this act, the department may:
20
(a) Bring an action in any court of competent
21
jurisdiction to enforce or administer this act, any rule or
22
order adopted under this act, or any written agreement entered
23
into with the department. In such action, the department may
24
seek any relief at law or equity including a temporary or
25
permanent injunction, appointment of a receiver or
26
administrator, or an order of restitution.
27
(b) Issue and serve upon a person an order requiring
28
such person to cease and desist and take corrective action
29
whenever the department finds that such person is violating,
30
has violated, or is about to violate any provision of this
31
24
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
act, any rule or order adopted under this act, or any written
2
agreement entered into with the department.
3
(c) Whenever the department finds that conduct
4
described in paragraph (b) presents an immediate danger to the
5
public health, safety, or welfare requiring an immediate final
6
order, issue an emergency cease and desist order reciting with
7
particularity the facts underlying such findings. The
8
emergency cease and desist order is effective immediately upon
9
service of a copy of the order on the respondent named therein
10
and remains effective for 90 days. If the department begins
11
nonemergency proceedings under paragraph (b), the emergency
12
cease and desist order remains effective until the conclusion
13
of the proceedings under sections 120.569 and 120.57, Florida
14
Statutes.
15
(d) Impose and collect an administrative fine against
16
any person found to have violated any provision of this act,
17
any rule or order adopted under this act, or any written
18
agreement entered into with the department, in an amount not
19
to exceed $5,000 for each violation.
20
(3) The department has the authority to adopt rules
21
pursuant to the Administrative Procedure Act.
22
Section 18. Investigations and complaints.--
23
(1) The department may, at intermittent periods, make
24
such investigations and examinations of any licensee or other
25
person as it deems necessary to determine compliance with this
26
act. For such purposes, it may examine the books, accounts,
27
records, and other documents or matters of any licensee or
28
other person. It shall have the power to compel the production
29
of all relevant books, records, and other documents and
30
materials relative to an examination or investigation. Such
31
investigations and examinations shall not be made more often
25
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
than once during any 12-month period unless the department has
2
good cause to believe the licensee is not complying with the
3
provisions of this act.
4
(2) Any person having reason to believe that the
5
provisions of this act have been violated may file with the
6
department a written complaint setting forth the details of
7
such alleged violations and the department, upon receipt of
8
such complaint, may inspect the pertinent books, records,
9
letters, and contracts of the licensee and of the seller
10
involved, relating to such specific written complaint.
11
Section 19. The sum of $700,000 is appropriated from
12
the General Inspection Trust Fund to the Department of
13
Agriculture and Consumer Services to administer this act and
14
to pay the salaries and other administrative expenses for nine
15
positions to carry out the provisions of this act during the
16
1998-1999 fiscal year.
17
Section 20. Legislative intent.--It is the intent of
18
the Legislature that title loans shall be regulated by the
19
provisions of this act. The provisions of this act supersede
20
any provisions of law affecting title loans to the extent of
21
any conflict.
22
Section 21. Subsection (1) of section 538.03, Florida
23
Statutes, is amended to read:
24
538.03 Definitions; applicability.--
25
(1) As used in this part, the term:
26
(a) "Secondhand dealer" means any person, corporation,
27
or other business organization or entity which is not a
28
secondary metals recycler subject to part II and which is
29
engaged in the business of purchasing, consigning, or pawning
30
secondhand goods or entering into title loan transactions.
31
However, secondhand dealers are not limited to dealing only in
26
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
items defined as secondhand goods in paragraph (g). Except as
2
provided in subsection (2), the term means pawnbrokers,
3
jewelers, precious metals dealers, garage sale operators,
4
secondhand stores, and consignment shops.
5
(b) "Precious metals dealer" means a secondhand dealer
6
who normally or regularly engages in the business of buying
7
used precious metals for resale. The term does not include
8
those persons involved in the bulk sale of precious metals
9
from one secondhand or precious metals dealer to another.
10
(c) "Pawnbroker" means any person, corporation, or
11
other business organization or entity which is regularly
12
engaged in the business of making pawns but does not include a
13
financial institution as defined in s. 655.005 or any person
14
who regularly loans money or any other thing of value on
15
stocks, bonds, or other securities.
16
(d) "Pawn" means either of the following transactions:
17
1. Loan of money.--A written or oral bailment of
18
personal property as security for an engagement or debt,
19
redeemable on certain terms and with the implied power of sale
20
on default.
21
2. Buy-sell agreement.--An agreement whereby a
22
purchaser agrees to hold property for a specified period of
23
time to allow the seller the exclusive right to repurchase the
24
property. A buy-sell agreement is not a loan of money.
25
(e) "Secondhand store" means the place or premises at
26
which a secondhand dealer is registered to conduct business as
27
a secondhand dealer, or conducts business, including pawn
28
shops.
29
(f) "Consignment shop" means a shop engaging in the
30
business of accepting for sale, on consignment, secondhand
31
goods which, having once been used or transferred from the
27
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
manufacturer to the dealer, are then received into the
2
possession of a third party.
3
(g) "Secondhand goods" means personal property
4
previously owned or used, which is not regulated metals
5
property regulated under part II and which is purchased,
6
consigned, or pawned as used property. Such secondhand goods
7
shall be limited to watches; diamonds, gems, and other
8
precious stones; fishing rods, reels, and tackle; audio and
9
video electronic equipment, including television sets, compact
10
disc players, radios, amplifiers, receivers, turntables, tape
11
recorders; video tape recorders; speakers and citizens' band
12
radios; computer equipment; radar detectors; depth finders;
13
trolling motors; outboard motors; sterling silver flatware and
14
serving pieces; photographic equipment, including cameras,
15
video and film cameras, lenses, electronic flashes, tripods,
16
and developing equipment; microwave ovens; animal fur coats;
17
marine equipment; video games and cartridges; power lawn and
18
landscape equipment; office equipment such as copiers, fax
19
machines, and postage machines but excluding furniture; sports
20
equipment; weapons, including knives, swords, and air guns;
21
telephones, including cellular and portable; firearms; tools;
22
calculators; musical instruments, excluding pianos and organs;
23
lawnmowers; bicycles; typewriters; motor vehicles; gold,
24
silver, platinum, and other precious metals excluding coins;
25
and jewelry, excluding costume jewelry.
26
(h) "Transaction" means any title loan, purchase,
27
consignment, or pawn of secondhand goods by a secondhand
28
dealer.
29
(i) "Title loan" means a loan of money secured by
30
bailment of a certificate of title to a motor vehicle. A
31
title loan is not a pawn if the secondhand dealer does not
28
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
maintain physical possession of the vehicle throughout the
2
term of the transaction.
3
(i)(j) "Precious metals" means any item containing any
4
gold, silver, or platinum, or any combination thereof,
5
excluding:
6
1. Any chemical or any automotive, photographic,
7
electrical, medical, or dental materials or electronic parts.
8
2. Any coin with an intrinsic value less than its
9
numismatic value.
10
3. Any gold bullion coin.
11
4. Any gold, silver, or platinum bullion that has been
12
assayed and is properly marked as to its weight and fineness.
13
5. Any coin which is mounted in a jewelry setting.
14
(j)(k) "Department" means the Department of Revenue.
15
(k)(l) "Pledge" means pawn or buy-sell agreement.
16
Section 22. Subsection (1) of section 538.16, Florida
17
Statutes, is amended to read:
18
538.16 Pawnbrokers Secondhand dealers; disposal of
19
property.--
20
(1) Any personal property pawned with a pawnbroker,
21
whether the pawn is a loan of money or a buy-sell agreement or
22
a motor vehicle which is security for a title loan, is subject
23
to sale or disposal if the pawn is a loan of money and the
24
property has not been redeemed or there has been no payment on
25
account made for a period of 90 days, or if the pawn is a
26
buy-sell agreement or if it is a title loan and the property
27
has not been repurchased from the pawnbroker or the title
28
redeemed from the title lender or there has been no payment
29
made on account within 60 days.
30
31
29
CODING: Words stricken are deletions; words underlined are additions.
CS for CS for SB 194 First Engrossed
(ntc)
1
Section 23. Subsection (5) of section 538.06, Florida
2
Statutes, and subsections (4) and (5) of section 538.15,
3
Florida Statutes, are repealed.
4
Section 24. This act shall take effect October 1,
5
1998, except that this section and section 19 shall take
6
effect July 1, 1998.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
30