| 1 | The Committee on Commerce recommends the following: |
| 2 |
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| 3 | Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 | A bill to be entitled |
| 6 | An act relating to credit counseling services; creating |
| 7 | pt. IV, ch. 817, F.S.; providing definitions; prohibiting |
| 8 | certain persons from accepting certain fees or costs from |
| 9 | debtors under certain circumstances; providing exceptions; |
| 10 | providing disclosure and financial reporting requirements |
| 11 | for debt management or credit counseling services; |
| 12 | providing disbursement of funds requirements; requiring |
| 13 | maintenance of a separate trust account under certain |
| 14 | circumstances; specifying certain violations as unfair or |
| 15 | deceptive trade practices; providing for penalties and |
| 16 | damages; providing for actions for damages; providing a |
| 17 | criminal penalty; providing for awards of attorney's fees |
| 18 | and costs; providing an effective date. |
| 19 |
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| 20 | Be It Enacted by the Legislature of the State of Florida: |
| 21 |
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| 22 | Section 1. Part IV of chapter 817, Florida Statutes, |
| 23 | consisting of sections 817.801, 817.802, 817.803, 817.804, and |
| 24 | 817.805, 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 |
| 29 | management, debt reduction, and financial educational services. |
| 30 | (2) "Debt management services" means services provided to |
| 31 | a debtor by a credit counseling organization for a fee to: |
| 32 | (a) Effect the adjustment, compromise, or discharge of any |
| 33 | unsecured account, note, or other indebtedness of the debtor; or |
| 34 | (b) Receive from the debtor and disburse to a creditor any |
| 35 | money or other thing of value. |
| 36 | (3) "Person" means any individual, corporation, |
| 37 | partnership, trust, association, or other legal entity. |
| 38 | (4) "Credit counseling agency" means any organization |
| 39 | providing credit counseling services. |
| 40 | 817.802 Unlawful fees and costs.--It is unlawful for any |
| 41 | person, while engaging in debt management and credit counseling |
| 42 | services, to impose upon or accept from a debtor, directly or |
| 43 | indirectly, any charge, fee, contribution, or combination |
| 44 | thereof in an amount in excess of $50 for an initial setup or |
| 45 | initial consultation or $120 per year for additional |
| 46 | consultations. It is also unlawful for any person to impose upon |
| 47 | or accept from a debtor who resides in this state, directly or |
| 48 | indirectly, any additional charge, fee, contribution, or |
| 49 | combination thereof in an amount in excess of 7.5 percent of the |
| 50 | amount paid monthly by such debtor to such person or $25, |
| 51 | whichever is greater, for distribution to creditors of such |
| 52 | debtor, provided no provision of this part prohibits any person, |
| 53 | while engaging in debt management and credit counseling |
| 54 | services, from imposing upon and receiving from a debtor a |
| 55 | reasonable and separate charge or fee for insufficient funds |
| 56 | transactions. Nothing in this section shall be construed to |
| 57 | preclude a credit counseling agency from waiving any or all |
| 58 | fees. |
| 59 | 817.803 Exceptions.--Nothing in this part applies to any |
| 60 | debt management and credit counseling services provided in the |
| 61 | practice of law in this state. Nothing in this part applies to |
| 62 | any person or entity who engages in debt adjustment to adjust |
| 63 | the indebtedness owed to such person or entity. Nothing in this |
| 64 | part applies to the following entities or their subsidiaries: |
| 65 | the Federal National Mortgage Association; the Federal Home Loan |
| 66 | Mortgage Corporation; the Florida Housing Finance Corporation, a |
| 67 | public corporation, created in s. 420.504; or a bank, bank |
| 68 | holding company, trust company, savings and loan association, |
| 69 | credit union, credit card bank, or savings bank that is |
| 70 | regulated and supervised by the Office of the Comptroller of the |
| 71 | Currency, the Office of Thrift Supervision, the Federal Reserve, |
| 72 | the Federal Deposit Insurance Corporation, the National Credit |
| 73 | Union Administration, or the Department of Financial Services. |
| 74 | 817.804 Requirements; disclosure and financial |
| 75 | reporting.-- |
| 76 | (1) Any person engaged in debt management or credit |
| 77 | counseling services for debtors residing in this state shall: |
| 78 | (a) Obtain from a certified public accountant licensed |
| 79 | pursuant to s. 473.308 an annual audit of all accounts of such |
| 80 | person in which the funds of debtors are deposited and from |
| 81 | which payments are made to creditors on behalf of debtors. |
| 82 | (b) Obtain and maintain at all times insurance coverage |
| 83 | for employee dishonesty, depositor's forgery, and computer fraud |
| 84 | in an amount not less than the greater of $100,000 or 10 percent |
| 85 | of the monthly average for the immediately preceding 6 months of |
| 86 | the aggregate amount of all deposits made with such person by |
| 87 | all debtors. The deductible on such coverage shall not exceed 10 |
| 88 | percent of the face amount of the policy coverage. Such policy |
| 89 | shall be issued by a company rated at least "A-" or its |
| 90 | equivalent by a nationally recognized rating organization and |
| 91 | such policy shall provide for 30 days' advance written notice of |
| 92 | termination of the policy. |
| 93 | (2) A copy of the annual audit and insurance policies |
| 94 | required by this section shall be available for public |
| 95 | inspection at each branch location. Copies shall be made upon |
| 96 | written request to any party requesting a copy for a charge not |
| 97 | to exceed the cost of the reproduction of documents. |
| 98 | 817.805 Disbursement of funds.-- |
| 99 | (1) Any person engaged in debt management or credit |
| 100 | counseling services shall disburse to the appropriate creditors |
| 101 | all funds received from a debtor, less any fees permitted by s. |
| 102 | 817.802, within 30 days after receipt of such funds. Further, |
| 103 | any person engaged in such services shall maintain a separate |
| 104 | trust account for the receipt of any funds from each debtor and |
| 105 | the disbursement of such funds on behalf of such debtor. |
| 106 | (2) Any violation of this part by a person, agent, or |
| 107 | employee of a person is an unfair or deceptive trade practice as |
| 108 | defined in part II of chapter 501. Violators shall be subject to |
| 109 | the penalties and remedies provided in such part. Further, any |
| 110 | consumer injured by a violation of this part may bring an action |
| 111 | for recovery of damages. Judgment shall be entered for actual |
| 112 | damages, but in no case less than the amount paid by the buyer |
| 113 | to the credit counseling organization, plus reasonable |
| 114 | attorney's fees and costs. |
| 115 | (3) Any person convicted of violating any of the |
| 116 | provisions of this section commits a felony of the third degree, |
| 117 | punishable 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. |