HB 1245

1
A bill to be entitled
2An act relating to credit counseling services; creating
3pt. IV, ch. 817, F.S.; providing definitions; prohibiting
4certain persons from accepting certain fees or costs from
5debtors under certain circumstances; providing exceptions;
6providing disclosure and financial reporting requirements
7for debt management or credit counseling services;
8providing disbursement of funds requirements; providing
9civil penalties; providing for awards of attorney's fees
10and costs; providing for criminal penalties; providing an
11effective date.
12
13Be It Enacted by the Legislature of the State of Florida:
14
15     Section 1.  Part IV of chapter 817, Florida Statutes,
16consisting of sections 817.801, 817.802, 817.803, 817.804,
17817.805, and 817.806, Florida Statutes, is created to read:
18
19
PART IV
20
CREDIT COUNSELING SERVICES
21     817.801  Definitions.--As used in this part:
22     (1)  "Credit counseling services" means confidential money
23management, debt reduction, and financial educational services.
24     (2)  "Debt management services" means services provided to
25a debtor by a credit counseling organization for a fee to:
26     (a)  Effect the adjustment, compromise, or discharge of any
27unsecured account, note, or other indebtedness of the debtor; or
28     (b)  Receive from the debtor and disburse to a creditor any
29money or other thing of value.
30     (3)  "Person" means any individual, corporation,
31partnership, trust, association, or other legal entity.
32     (4)  "Credit counseling agency" means any organization
33providing debt management services or credit counseling
34services.
35     817.802  Unlawful fees and costs.--
36     (1)  It is unlawful for any person, while engaging in debt
37management services or credit counseling services, to charge or
38accept from a debtor, directly or indirectly, a fee or
39contribution greater than $50 for the initial setup or initial
40consultation. Subsequently, the person may not charge or accept
41a fee or contribution from a debtor greater than $120 per year
42for additional consultations or, alternatively, if debt
43management services as defined in s. 817.801(2)(b) are provided,
44the person may charge the greater of 7.5 percent of the amount
45paid monthly by the debtor to the person or $35 per month.
46     (2)  No provision of this section prohibits any person,
47while engaging in debt management or credit counseling services,
48from imposing upon and receiving from a debtor a reasonable and
49separate charge or fee for insufficient funds transactions.
50     817.803  Exceptions.--Nothing in this part applies to:
51     (1)  Any debt management or credit counseling services
52provided in the practice of law in this state;
53     (2)  Any person who engages in debt adjustment to adjust
54the indebtedness owed to such person; or
55     (3)  The following entities or their subsidiaries:
56     (a)  The Federal National Mortgage Association;
57     (b)  The Federal Home Loan Mortgage Corporation;
58     (c)  The Florida Housing Finance Corporation, a public
59corporation created in s. 420.504;
60     (d)  A bank, bank holding company, trust company, savings
61and loan association, credit union, credit card bank, or savings
62bank that is regulated and supervised by the Office of the
63Comptroller of the Currency, the Office of Thrift Supervision,
64the Federal Reserve, the Federal Deposit Insurance Corporation,
65the National Credit Union Administration, the Office of
66Financial Regulation of the Department of Financial Services, or
67any state banking regulator;
68     (e)  A consumer reporting agency as defined in the Federal
69Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681y, as it
70existed on April 5, 2004; or
71     (f)  Any subsidiary or affiliate of a bank holding company,
72its employees, and its exclusive agents acting under written
73agreement.
74     817.804  Requirements; disclosure and financial
75reporting.--
76     (1)  Any person engaged in debt management services or
77credit counseling services shall:
78     (a)  Obtain from a certified public accountant licensed
79under s. 473.308 an annual audit of all accounts of such person
80in which the funds of debtors are deposited and from which
81payments 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
84fraud. The insurance coverage must be in an amount not less than
85the greater of $100,000 or 10 percent of the monthly average of
86the aggregate amount of all deposits made for distribution to
87creditors with such person by all debtors for the 6 months
88immediately preceding the date of initial application for or
89renewal of the insurance. The deductible on such coverage shall
90not exceed 10 percent of the face amount of the policy coverage.
91     (2)  A copy of the annual audit and insurance policies
92required by this section shall be available for public
93inspection at each branch location. Copies shall be provided,
94upon written request, to any party requesting a copy for a
95charge not to exceed the cost of the reproduction of documents.
96     817.805  Disbursement of funds.--Any person engaged in debt
97management or credit counseling services shall disburse to the
98appropriate creditors all funds received from a debtor, less any
99fees permitted by s. 817.802, within 30 days after receipt of
100such funds. Further, any person engaged in such services shall
101maintain a separate trust account for the receipt of any funds
102from each debtor and the disbursement of such funds on behalf of
103such debtor.
104     817.806  Violations.--
105     (1)  Any person who violates any provision of this part
106commits an unfair or deceptive trade practice as defined in part
107II of chapter 501. Violators shall be subject to the penalties
108and remedies provided therein. Further, any consumer injured by
109a violation of this part may bring an action for recovery of
110damages. Judgment shall be entered for actual damages, but in no
111case less than the amount paid by the consumer to the credit
112counseling agency, plus reasonable attorney's fees and costs.
113     (2)  Any person who violates any provision of this part
114commits a felony of the third degree, punishable as provided in
115s. 775.082 or s. 775.083.
116     Section 2.  This act shall take effect July 1, 2004.


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