Florida Senate - 2009 SB 1056
By Senator Fasano
11-00729A-09 20091056__
1 A bill to be entitled
2 An act relating to tax refund loans or checks;
3 providing a short title; providing definitions;
4 requiring a person engaged in providing refund
5 anticipation loans or checks to comply with certain
6 requirements; requiring facilitators of refund
7 anticipation loans or checks to disclose certain
8 information; prescribing how that information must be
9 displayed; requiring a facilitator to disclose certain
10 information in an application for a refund
11 anticipation loan or check; prescribing how that
12 information must be displayed; requiring a facilitator
13 to provide certain information orally to an applicant
14 for a refund anticipation loan or check; providing
15 activities that are prohibited when transacting a
16 refund anticipation loan or check; limiting the amount
17 of interest that may be charged on a refund
18 anticipation loan; requiring refund anticipation loan
19 and check marketing and advertizing efforts to include
20 certain disclosures; providing remedies, including
21 attorney's fees and costs; providing an effective
22 date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Tax Refund Anticipation Loan Act.—
27 (1) TITLE.—This section may be cited as the “Tax Refund
28 Anticipation Loan Act.”
29 (2) DEFINITIONS.—As used in the section, the term:
30 (a) “Consumer” means an individual who singly, or jointly
31 with another consumer, is solicited for, applies for, or
32 receives the proceeds of a refund anticipation loan or refund
33 anticipation check.
34 (b) “Creditor” means a person who makes a refund
35 anticipation loan or who takes an assignment of a refund
36 anticipation loan.
37 (c) “Facilitator” means a person who individually or with
38 another:
39 1. Solicits the execution of, processes, receives, or
40 accepts an application or agreement for a refund anticipation
41 loan or refund anticipation check;
42 2. Services or collects upon a refund anticipation loan or
43 refund anticipation check; or
44 3. Otherwise facilitates the making of a refund
45 anticipation loan or refund anticipation check.
46 If there is no third-party facilitator because a creditor
47 directly solicits the execution of, receives, or accepts an
48 application or agreement for a refund anticipation loan or
49 refund anticipation check, the creditor is the facilitator.
50 (d) “Market” or “advertise” means to produce, distribute,
51 broadcast, or otherwise display written materials, oral
52 statements, or visual materials describing products and
53 services.
54 (e) “Person” has the same meaning as in s. 1.01.
55 (f) “Refund anticipation check” means a check, stored value
56 card, or other payment mechanism representing the proceeds of a
57 consumer’s tax refund which is issued by a depository
58 institution or other person that receives the direct deposit of
59 the consumer’s tax refund or tax credits, and for which the
60 consumer has paid a fee or other consideration for such payment.
61 (g) “Refund anticipation loan” means a loan that is secured
62 by or that the creditor arranges to be repaid, directly or
63 indirectly, from the proceeds of the consumer's income tax
64 refund or tax credits. A refund anticipation loan also includes
65 any sale, assignment, or purchase of a consumer’s tax refund at
66 a discount or for a fee, regardless of whether the consumer is
67 required to repay the buyer or assignee if the Internal Revenue
68 Service denies or reduces the consumer’s tax refund.
69 (h) “Refund anticipation loan fee” means the charges, fees,
70 or other consideration charged or imposed, directly or
71 indirectly, by the creditor for the making of or in connection
72 with a refund anticipation loan.
73 (i) “Refund anticipation loan interest rate” means the
74 interest rate for a refund anticipation loan calculated as
75 follows: the total amount of refund anticipation loan fees,
76 divided by the loan amount minus any loan fees, divided by the
77 number of days in the loan term, multiplied by 365 and expressed
78 as a percentage. The total amount of the refund anticipation
79 loan fees must include all refund anticipation loan fees
80 imposed. If a deposit account is established or maintained, in
81 whole or in part, to receive the consumer's tax refund in order
82 to repay the amount owed on a refund anticipation loan:
83 1. Any fee charged to the consumer for such deposit account
84 is considered a loan fee and must be included in calculating the
85 refund anticipation loan interest rate; and
86 2. For the purpose of determining the refund anticipation
87 loan interest rate, the maturity date of the loan is the
88 estimated date that the tax refund will be deposited in the
89 deposit account. If a deposit account is not established or
90 maintained, the maturity date of the loan is the estimated date
91 that the tax refund is received by the creditor.
92 (3) SCOPE.—A person, including an agent or employee of such
93 person, may not, individually or with another person, directly
94 or indirectly, solicit the execution of, process, receive, or
95 accept an application or agreement for a tax refund anticipation
96 loan or refund anticipation check, or in any other manner
97 facilitate the making of a refund anticipation loan or refund
98 anticipation check unless the person has complied with the
99 provisions of this section.
100 (4) POSTING OF FEE SCHEDULES AND DISCLOSURES.—
101 (a) Each facilitator must display a fee schedule showing
102 the current fees for refund anticipation loans or refund
103 anticipation checks transacted at the facilitator's place of
104 business in a prominent location at the place of business, in at
105 least 28-point type, and, unless otherwise noted, on a document
106 measuring at least 16 inches by 20 inches. The fee schedule must
107 also include:
108 1. Examples of the refund anticipation loan interest rate
109 for at least five different refund anticipation loan amounts
110 calculated in accordance with the formula set forth in paragraph
111 (2)(i).
112 2. The following statement centered and in 1-inch uppercase
113 and bold type:
114 TAX REFUND ANTICIPATION LOANS
115 WHEN YOU TAKE OUT A REFUND ANTICIPATION LOAN, YOU ARE
116 BORROWING MONEY AGAINST YOUR TAX REFUND. IF YOUR TAX
117 REFUND IS LESS THAN EXPECTED, YOU WILL STILL OWE THE
118 ENTIRE AMOUNT OF THE LOAN. IF YOUR REFUND IS DELAYED,
119 YOU MAY HAVE TO PAY ADDITIONAL FEES.
120 YOU WILL USUALLY RECEIVE YOUR TAX REFUND IN 8 TO 15
121 DAYS WITHOUT OBTAINING A LOAN OR PAYING EXTRA FEES IF
122 YOUR TAX RETURN IS FILED ELECTRONICALLY AND YOUR
123 REFUND IS DEPOSITED DIRECTLY INTO YOUR BANK ACCOUNT.
124 (b) A facilitator may not facilitate a refund anticipation
125 loan or refund anticipation check unless the disclosures
126 required by this section are displayed and the fee charged for
127 the loan or check is the same as the fee displayed on the
128 schedule.
129 (5) APPLICATION DISCLOSURES.—
130 (a) When a consumer applies for a refund anticipation loan
131 or refund anticipation check, the facilitator must disclose to
132 the consumer on a form separate from the application in 14-point
133 type, unless otherwise noted:
134 1. The fee for the refund anticipation loan or refund
135 anticipation check.
136 2. The fee for tax preparation and any other fee charged to
137 the consumer.
138 3. The time within which the proceeds of the refund
139 anticipation loan or check will be paid to the consumer if the
140 loan or check is approved.
141 4. For refund anticipation loans, the following statement
142 centered and in 18-point uppercase and bold type:
143 NOTICE
144 THIS IS A LOAN. YOU ARE BORROWING MONEY AGAINST YOUR
145 TAX REFUND. IF YOUR TAX REFUND IS LESS THAN EXPECTED,
146 YOU WILL STILL OWE THE ENTIRE AMOUNT OF THE LOAN. IF
147 YOUR REFUND IS DELAYED, YOU MAY HAVE TO PAY ADDITIONAL
148 FEES.
149 YOU WILL USUALLY RECEIVE YOUR REFUND IN 8 TO 15 DAYS
150 WITHOUT OBTAINING A LOAN OR PAYING EXTRA FEES IF YOUR
151 TAX RETURN IS FILED ELECTRONICALLY AND YOUR REFUND IS
152 DEPOSITED DIRECTLY INTO YOUR BANK ACCOUNT.
153 5. For refund anticipation loans, the refund anticipation
154 loan interest rate calculated in accordance with the formula set
155 forth in paragraph (2)(i).
156 6. For refund anticipation checks, the following statement
157 centered and in 18-point bold and uppercase type:
158 NOTICE
159 YOU ARE PAYING [...amount of refund anticipation check
160 fee...] TO RECEIVE YOUR REFUND CHECK THROUGH [...name
161 of issuer of refund anticipation check...]. YOU MAY
162 AVOID THIS FEE AND STILL RECEIVE YOUR REFUND IN THE
163 SAME AMOUNT OF TIME BY HAVING YOUR REFUND DIRECTLY
164 DEPOSITED INTO YOUR BANK ACCOUNT. YOU MAY ALSO WAIT
165 FOR THE INTERNAL REVENUE SERVICE (IRS) TO MAIL YOU A
166 CHECK. IF YOU DO NOT HAVE A BANK ACCOUNT, YOU MAY WANT
167 TO CONSIDER GETTING ONE.
168 (b) Before consummating the loan or check transaction, the
169 facilitator must provide to the consumer, in a form that can be
170 kept by the consumer, the disclosure required by paragraph (a),
171 a copy of the completed loan or check application and agreement,
172 and, for refund anticipation loans, the disclosures required
173 under the federal Truth-In-Lending Act.
174 (c) The disclosures required by paragraph (a) must be
175 provided in English and in the language used primarily for oral
176 communication between the facilitator and the consumer.
177 (6) ORAL DISCLOSURES.—
178 (a) If a consumer applies for a refund anticipation loan,
179 the facilitator must orally inform the consumer in the language
180 primarily used for oral communications between the facilitator
181 and consumer:
182 1. That the product is a loan that lasts only for 1 to 2
183 weeks;
184 2. If the consumer’s tax refund is less than expected, the
185 consumer is liable for the full amount of the loan and must
186 repay any difference;
187 3. The amount of the refund anticipation loan fee; and
188 4. The refund anticipation loan interest rate.
189 (b) If a consumer applies for a refund anticipation check,
190 the facilitator must orally inform the consumer in the language
191 primarily used for oral communications between the facilitator
192 and consumer:
193 1. The amount of the refund anticipation check fee; and
194 2. That the consumer will usually receive a refund in the
195 same amount of time without a fee if the tax return is filed
196 electronically and the consumer chooses to have the refund
197 directly deposited to the consumer’s bank account.
198 (c) If the facilitator provides an estimate of the amount
199 that the consumer will receive after deducting fees for tax
200 preparation and fees for the refund anticipation loan or refund
201 anticipation check, the facilitator must also describe all the
202 options available to the consumer and the refund amount and the
203 charge for each fee under each option, including:
204 1. Not obtaining a refund anticipation loan or check and
205 receiving the full tax refund amount by mail within 3 to 8 weeks
206 if the tax return is mailed.
207 2. Not obtaining a refund anticipation loan or check and
208 receiving the full refund amount within 8 to 15 days if the tax
209 return is electronically filed and the refund is directly
210 deposited to the consumer's bank account.
211 3. Obtaining a refund anticipation check within 8 to 15
212 days in the amount anticipated from preparing the tax refund,
213 minus the refund anticipation check fee, the tax preparation
214 fee, and any other fee charged, and not receiving a refund
215 check.
216 4. Obtaining a refund anticipation loan within 1 to 2 days
217 in the amount anticipated from preparing the tax refund, minus
218 the refund anticipation loan fee, the tax preparation fee, and
219 any other fee charged, and not receiving a refund check.
220 These disclosures may be used to fulfill the requirements of
221 subparagraph (a)3. or paragraph (b).
222 (7) PROHIBITED ACTIVITIES.—A person, including an agent or
223 employee of such person, may not:
224 (a) Charge or impose any fee, charge, or other
225 consideration in the making or facilitating of a refund
226 anticipation loan or refund anticipation check apart from the
227 fee charged by the creditor or bank that provides the loan or
228 check. This prohibition does not include any charge or fee
229 imposed by the facilitator to all of its customers, such as a
230 fee for preparing tax returns, if the same fee amount is charged
231 to customers who do not receive a refund anticipation loan,
232 refund anticipation check, or any other tax-related financial
233 product.
234 (b) Engage in unfair or deceptive acts or practices in
235 transacting a refund anticipation check or a refund anticipation
236 loan, including making any oral statements contradicting any of
237 the information required to be disclosed under this section.
238 (c) Fail to comply with any applicable provision of this
239 section.
240 (d) In transacting a refund anticipation loan or refund
241 anticipation check, threaten to take any action that is
242 prohibited by this section or any other law, or that the person
243 does not actually intend to take.
244 (e) Directly or indirectly, arrange for any third party to
245 charge any interest, fee, or charge related to a refund
246 anticipation loan or refund anticipation check, other than the
247 loan or check fee imposed by the creditor, including, but not
248 limited to, charges for insurance, attorney's fees or other
249 collection costs, or check cashing.
250 (f) Include any of the following provisions in any document
251 provided or signed in connection with a refund anticipation loan
252 or refund anticipation check, including the loan application or
253 agreement:
254 1. A hold harmless clause.
255 2. A confession of judgment clause.
256 3. A waiver of the right to a jury trial, if applicable, in
257 any action brought by or against the consumer.
258 4. Any assignment of, or order for, payment of wages or
259 other compensation for services.
260 5. A provision in which the consumer agrees not to assert
261 any claim or defense arising out of the contract, or to seek any
262 remedies available under this section.
263 6. A waiver of any provision of this section. Any such
264 waiver is null, void, and of no effect.
265 7. A waiver of the right to injunctive, declaratory, other
266 equitable relief, or relief on a class-wide basis.
267 8. A requirement that any aspect of a resolution of a
268 dispute between the parties to the agreement be kept
269 confidential. This does not affect the right of the parties to
270 agree that certain specified information is a trade secret or
271 otherwise confidential or to later agree, after a dispute
272 arises, to keep a resolution confidential.
273 (g) Take, or arrange for a creditor to take, a security
274 interest in any of the consumer's property, other than the
275 proceeds of the consumer's tax refund, in order to secure
276 payment of a refund anticipation loan.
277 (h) Directly, indirectly, individually, or with another
278 person, engage in the collection of an outstanding or delinquent
279 refund anticipation loan for any creditor or assignee, including
280 soliciting the execution of, processing, receiving, or accepting
281 an application or agreement for a refund anticipation loan or
282 refund anticipation check that contains a provision authorizing
283 the creditor to repay, by offset or other means, an outstanding
284 or delinquent refund anticipation loan from the proceeds of the
285 consumer’s tax refund.
286 (i) Refer, facilitate, or solicit consumers on behalf of a
287 third party engaged in check cashing for a fee, or allow third
288 party check cashing for a fee, in any place of business in which
289 refund anticipation loans or refund anticipation checks are
290 transacted.
291 (8) INTEREST RATE CAP FOR NONBANK REFUND ANTICIPATION
292 LOANS.—
293 (a) A person may not make or facilitate a refund
294 anticipation loan for which the refund anticipation loan
295 interest rate is greater than the loan rate authorized under s.
296 687.03. The refund anticipation loan interest rate shall be
297 calculated as set forth in paragraph (2)(i). Any refund
298 anticipation loan for which the loan interest rate exceeds the
299 amount allowed under s. 687.03, Florida Statutes, is void ab
300 initio.
301 (b) This subsection does not apply to persons facilitating
302 for or doing business as a bank, thrift association, savings
303 association, or credit union subject to federal laws that
304 preempt the prohibition set forth in paragraph (a).
305 (9) ADVERTISING AND MARKETING.—
306 (a) A facilitator may not market or advertise a refund
307 anticipation loan without including the following statement
308 verbatim: “[...Name of product...] is a loan. You will usually
309 receive get your refund in 8 to 15 days without a loan or extra
310 fees if you use e-file and direct deposit.” For print
311 advertisements, the statement must be printed in type size one
312 half as large as the largest type size in the advertisement. For
313 radio and television advertisements, this statement must receive
314 at least 7 seconds of airtime.
315 (b) A facilitator may not market or advertise a refund
316 anticipation check without including the following statement
317 verbatim: “The [...name of product...] costs [...fee for refund
318 anticipation check...]. You will usually receive your refund in
319 the same amount of time without this fee if you use e-file and
320 direct deposit.” For print advertisements, the statement must be
321 printed in type size one-half as large as the largest type size
322 in the advertisement. For radio and television advertisements,
323 this statement must receive at least 7 seconds of airtime.
324 (10) REMEDIES.—
325 (a) Any violation of:
326 1. Any state law prohibiting unfair or deceptive acts or
327 practices by a facilitator or creditor constitutes a violation
328 of this section.
329 2. The federal Fair Debt Collection Practices Act, 15
330 U.S.C. s. 1692 et seq., by a facilitator or creditor constitutes
331 a violation of this section.
332 3. This section constitutes an unfair or deceptive act or
333 practice.
334 (b) A facilitator or creditor who fails to comply with any
335 provision of this section is liable to the consumer for:
336 1. Actual and consequential damages;
337 2. Statutory damages of $2,500, to be adjusted annually to
338 reflect changes in the Consumer Price Index, or three times the
339 amount of the refund anticipation loan fee or other unauthorized
340 charge, whichever is greater; and
341 3. Reasonable attorney's fees and costs.
342 (c) Any person may sue for injunctive or other appropriate
343 equitable relief to enforce this section.
344 (d) Any consumer may bring a class action suit to enforce
345 this section. In such class action, a facilitator or creditor
346 who fails to comply with any provision of this section is liable
347 to each class member as provided in this subsection.
348 (e) The remedies provided in this subsection are cumulative
349 and do not abrogate any other relief available under state or
350 federal law.
351 Section 2. This act shall take effect July 1, 2009.