Senate Bill sb2682e1

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    CS for CS for SB 2682                    First Engrossed (ntc)



  1                      A bill to be entitled

  2         An act relating to credit counseling services;

  3         creating pt. IV, ch. 817, F.S.; providing

  4         definitions; prohibiting certain persons from

  5         accepting certain fees or costs from debtors

  6         under certain circumstances; providing

  7         exceptions; providing disclosure and financial

  8         reporting requirements for debt management or

  9         credit counseling services; providing

10         disbursement of funds requirements; providing

11         civil penalties; providing for awards of

12         attorney's fees and costs; providing for

13         criminal penalties; providing an effective

14         date.

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16  Be It Enacted by the Legislature of the State of Florida:

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18         Section 1.  Part IV of chapter 817, Florida Statutes,

19  consisting of sections 817.801, 817.802, 817.803, 817.804,

20  817.805, and 817.806, Florida Statutes, is created to read:

21                             PART IV

22                    CREDIT COUNSELING SERVICES

23         817.801  Definitions.--As used in this part:

24         (1)  "Credit counseling services" means confidential

25  money management, debt reduction, and financial educational

26  services.

27         (2)  "Debt management services" means services provided

28  to a debtor by a credit counseling organization for a fee to:

29         (a)  Effect the adjustment, compromise, or discharge of

30  any unsecured account, note, or other indebtedness of the

31  debtor; or


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    CS for CS for SB 2682                    First Engrossed (ntc)



 1         (b)  Receive from the debtor and disburse to a creditor

 2  any money or other thing of value.

 3         (3)  "Person" means any individual, corporation,

 4  partnership, trust, association, or other legal entity.

 5         (4)  "Credit counseling agency" means any organization

 6  providing debt management services or credit counseling

 7  services.

 8         817.802  Unlawful fees and costs.--

 9         (1)  It is unlawful for any person, while engaging in

10  debt management services or credit counseling services, to

11  charge or accept from a debtor, directly or indirectly, a fee

12  or contribution greater than $50 for the initial setup or

13  initial consultation. Subsequently, the person may not charge

14  or accept a fee or contribution from a debtor greater than

15  $120 per year for additional consultations or, alternatively,

16  if debt management services as defined in s. 817.801(2)(b) are

17  provided, the person may charge the greater of 7.5 percent of

18  the amount paid monthly by the debtor to the person or $35 per

19  month.

20         (2)  No provision of this section prohibits any person,

21  while engaging in debt management or credit counseling

22  services, from imposing upon and receiving from a debtor a

23  reasonable and separate charge or fee for insufficient funds

24  transactions.

25         817.803  Exceptions.--Nothing in this part applies to:

26         (1)  Any debt management or credit counseling services

27  provided in the practice of law in this state;

28         (2)  Any person who engages in debt adjustment to

29  adjust the indebtedness owed to such person; or

30         (3)  The following entities or their subsidiaries:

31         (a)  The Federal National Mortgage Association;


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    CS for CS for SB 2682                    First Engrossed (ntc)



 1         (b)  The Federal Home Loan Mortgage Corporation;

 2         (c)  The Florida Housing Finance Corporation, a public

 3  corporation created in s. 420.504;

 4         (d)  A bank, bank holding company, trust company,

 5  savings and loan association, credit union, credit card bank,

 6  or savings bank that is regulated and supervised by the Office

 7  of the Comptroller of the Currency, the Office of Thrift

 8  Supervision, the Federal Reserve, the Federal Deposit

 9  Insurance Corporation, the National Credit Union

10  Administration, the Office of Financial Regulation of the

11  Department of Financial Services, or any state banking

12  regulator;

13         (e)  A consumer reporting agency as defined in the

14  Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681y,

15  as it existed on April 5, 2004; or

16         (f)  Any subsidiary or affiliate of a bank holding

17  company, its employees and its exclusive agents acting under

18  written agreement.

19         817.804  Requirements; disclosure and financial

20  reporting.--

21         (1)  Any person engaged in debt management services or

22  credit counseling services shall:

23         (a)  Obtain from a certified public accountant licensed

24  under s. 473.308 an annual audit of all accounts of such

25  person in which the funds of debtors are deposited and from

26  which payments are made to creditors on behalf of debtors.

27         (b)  Obtain and maintain at all times insurance

28  coverage for employee dishonesty, depositor's forgery, and

29  computer fraud. The insurance coverage must be in an amount

30  not less than the greater of $100,000 or 10 percent of the

31  monthly average of the aggregate amount of all deposits made


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    CS for CS for SB 2682                    First Engrossed (ntc)



 1  for distribution to creditors with such person by all debtors

 2  for the 6 months immediately preceding the date of initial

 3  application for or renewal of the insurance.  The deductible

 4  on such coverage shall not exceed 10 percent of the face

 5  amount of the policy coverage.

 6         (2)  A copy of the annual audit and insurance policies

 7  required by this section shall be available for public

 8  inspection at each branch location. Copies shall be provided,

 9  upon written request, to any party requesting a copy for a

10  charge not to exceed the cost of the reproduction of

11  documents.

12         817.805  Disbursement of funds.--Any person engaged in

13  debt management or credit counseling services shall disburse

14  to the appropriate creditors all funds received from a debtor,

15  less any fees permitted by s. 817.802, within 30 days after

16  receipt of such funds. Further, any person engaged in such

17  services shall maintain a separate trust account for the

18  receipt of any funds from each debtor and the disbursement of

19  such funds on behalf of such debtor.

20         817.806  Violations.--

21         (1)  Any person who violates any provision of this part

22  commits an unfair or deceptive trade practice as defined in

23  part II of chapter 501. Violators shall be subject to the

24  penalties and remedies provided therein. Further, any consumer

25  injured by a violation of this part may bring an action for

26  recovery of damages. Judgment shall be entered for actual

27  damages, but in no case less than the amount paid by the

28  consumer to the credit counseling agency, plus reasonable

29  attorney's fees and costs.

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    CS for CS for SB 2682                    First Engrossed (ntc)



 1         (2)  Any person who violates any provision of this part

 2  commits a felony of the third degree, punishable as provided

 3  in s. 775.082 or s. 775.083.

 4         Section 2.  This act shall take effect July 1, 2004.

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