HB 1245CS

CHAMBER ACTION




1The Committee on Commerce recommends the following:
2
3     Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to credit counseling services; creating
7pt. IV, ch. 817, F.S.; providing definitions; prohibiting
8certain persons from accepting certain fees or costs from
9debtors under certain circumstances; providing exceptions;
10providing disclosure and financial reporting requirements
11for debt management or credit counseling services;
12providing disbursement of funds requirements; requiring
13maintenance of a separate trust account under certain
14circumstances; specifying certain violations as unfair or
15deceptive trade practices; providing for penalties and
16damages; providing for actions for damages; providing a
17criminal penalty; providing for awards of attorney's fees
18and costs; providing an effective date.
19
20Be It Enacted by the Legislature of the State of Florida:
21
22     Section 1.  Part IV of chapter 817, Florida Statutes,
23consisting of sections 817.801, 817.802, 817.803, 817.804, and
24817.805, Florida Statutes, is created to read:
25
PART IV
26
CREDIT COUNSELING SERVICES
27     817.801  Definitions.--
28     (1)  "Credit counseling services" means confidential money
29management, debt reduction, and financial educational services.
30     (2)  "Debt management services" means services provided to
31a debtor by a credit counseling organization for a fee to:
32     (a)  Effect the adjustment, compromise, or discharge of any
33unsecured account, note, or other indebtedness of the debtor; or
34     (b)  Receive from the debtor and disburse to a creditor any
35money or other thing of value.
36     (3)  "Person" means any individual, corporation,
37partnership, trust, association, or other legal entity.
38     (4)  "Credit counseling agency" means any organization
39providing credit counseling services.
40     817.802  Unlawful fees and costs.--It is unlawful for any
41person, while engaging in debt management and credit counseling
42services, to impose upon or accept from a debtor, directly or
43indirectly, any charge, fee, contribution, or combination
44thereof in an amount in excess of $50 for an initial setup or
45initial consultation or $120 per year for additional
46consultations. It is also unlawful for any person to impose upon
47or accept from a debtor who resides in this state, directly or
48indirectly, any additional charge, fee, contribution, or
49combination thereof in an amount in excess of 7.5 percent of the
50amount paid monthly by such debtor to such person or $25,
51whichever is greater, for distribution to creditors of such
52debtor, provided no provision of this part prohibits any person,
53while engaging in debt management and credit counseling
54services, from imposing upon and receiving from a debtor a
55reasonable and separate charge or fee for insufficient funds
56transactions. Nothing in this section shall be construed to
57preclude a credit counseling agency from waiving any or all
58fees.
59     817.803  Exceptions.--Nothing in this part applies to any
60debt management and credit counseling services provided in the
61practice of law in this state. Nothing in this part applies to
62any person or entity who engages in debt adjustment to adjust
63the indebtedness owed to such person or entity. Nothing in this
64part applies to the following entities or their subsidiaries:
65the Federal National Mortgage Association; the Federal Home Loan
66Mortgage Corporation; the Florida Housing Finance Corporation, a
67public corporation, created in s. 420.504; or a bank, bank
68holding company, trust company, savings and loan association,
69credit union, credit card bank, or savings bank that is
70regulated and supervised by the Office of the Comptroller of the
71Currency, the Office of Thrift Supervision, the Federal Reserve,
72the Federal Deposit Insurance Corporation, the National Credit
73Union Administration, or the Department of Financial Services.
74     817.804  Requirements; disclosure and financial
75reporting.--
76     (1)  Any person engaged in debt management or credit
77counseling services for debtors residing in this state shall:
78     (a)  Obtain from a certified public accountant licensed
79pursuant to s. 473.308 an annual audit of all accounts of such
80person in which the funds of debtors are deposited and from
81which payments are made to creditors on behalf of debtors.
82     (b)  Obtain and maintain at all times insurance coverage
83for employee dishonesty, depositor's forgery, and computer fraud
84in an amount not less than the greater of $100,000 or 10 percent
85of the monthly average for the immediately preceding 6 months of
86the aggregate amount of all deposits made with such person by
87all debtors. The deductible on such coverage shall not exceed 10
88percent of the face amount of the policy coverage. Such policy
89shall be issued by a company rated at least "A-" or its
90equivalent by a nationally recognized rating organization and
91such policy shall provide for 30 days' advance written notice of
92termination of the policy.
93     (2)  A copy of the annual audit and insurance policies
94required by this section shall be available for public
95inspection at each branch location. Copies shall be made upon
96written request to any party requesting a copy for a charge not
97to exceed the cost of the reproduction of documents.
98     817.805  Disbursement of funds.--
99     (1)  Any person engaged in debt management or credit
100counseling services shall disburse to the appropriate creditors
101all funds received from a debtor, less any fees permitted by s.
102817.802, within 30 days after receipt of such funds. Further,
103any person engaged in such services shall maintain a separate
104trust account for the receipt of any funds from each debtor and
105the disbursement of such funds on behalf of such debtor.
106     (2)  Any violation of this part by a person, agent, or
107employee of a person is an unfair or deceptive trade practice as
108defined in part II of chapter 501. Violators shall be subject to
109the penalties and remedies provided in such part. Further, any
110consumer injured by a violation of this part may bring an action
111for recovery of damages. Judgment shall be entered for actual
112damages, but in no case less than the amount paid by the buyer
113to the credit counseling organization, plus reasonable
114attorney's fees and costs.
115     (3)  Any person convicted of violating any of the
116provisions of this section commits a felony of the third degree,
117punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
118     Section 2.  This act shall take effect upon becoming a law.


CODING: Words stricken are deletions; words underlined are additions.