Florida Senate - 2017              PROPOSED COMMITTEE SUBSTITUTE
       Bill No. CS for SB 872
       
       
       
       
       
                               Ì485526:Î485526                          
       
       576-03836-17                                                    
       Proposed Committee Substitute by the Committee on Appropriations
       (Appropriations Subcommittee on General Government)
    1                        A bill to be entitled                      
    2         An act relating to consumer finance loans; creating s.
    3         516.40, F.S.; establishing the Access to Responsible
    4         Credit Pilot Program within the Office of Financial
    5         Regulation; providing legislative findings and intent;
    6         creating s. 516.41, F.S.; defining terms; creating s.
    7         516.42, F.S.; prohibiting a person from certain
    8         activities relating to program loans unless the person
    9         obtains a pilot program license from the office;
   10         providing criteria for participation in the pilot
   11         program; specifying application requirements and fees;
   12         providing for construction; specifying a renewal fee;
   13         providing that only one pilot program license is
   14         required for a person to make program loans; requiring
   15         that branch offices of a program licensee be licensed;
   16         specifying requirements and a fee for applications for
   17         a program branch office license; requiring program
   18         branch office licenses to be renewed biennially and
   19         specifying a branch office renewal fee; creating s.
   20         516.43, F.S.; providing requirements for and
   21         limitations on program loans; requiring a program
   22         licensee to provide specified disclosures; authorizing
   23         licensees to provide certain documents in the language
   24         in which the loan was negotiated; requiring a program
   25         licensee to pay for certain translation costs incurred
   26         by the office; authorizing a program licensee to
   27         contract for and receive a specified nonrefundable
   28         origination fee from a borrower on a program loan;
   29         authorizing a program licensee to collect specified
   30         insufficient funds fees and delinquency charges;
   31         requiring a program licensee to provide specified
   32         credit education to a borrower before disbursing
   33         program loan proceeds; requiring a program licensee to
   34         report borrowers’ payment performance to at least one
   35         specified consumer reporting agency and provide
   36         borrowers with the names of such agencies; prohibiting
   37         the office from approving a person for the program
   38         before the person is accepted as a data furnisher by a
   39         consumer reporting agency; requiring a program
   40         licensee to underwrite each program loan; prohibiting
   41         a program licensee from making a program loan under
   42         certain circumstances; providing required and
   43         authorized procedures for a program licensee to
   44         determine a borrower’s ability and willingness to
   45         repay the program loan; prohibiting a program licensee
   46         from requiring certain waivers from a borrower or from
   47         certain acts against a borrower who refuses certain
   48         waivers; providing for applicability and construction;
   49         creating s. 516.44, F.S.; requiring arrangements
   50         between a program licensee and a referral partner to
   51         be specified in a written agreement; providing
   52         requirements for such agreement; specifying authorized
   53         services for referral partners; providing requirements
   54         for a referral partner who accepts loan payments from
   55         a borrower; providing for construction; prohibiting
   56         specified activities by a referral partner; requiring
   57         a referral partner to provide a specified notice to an
   58         applicant for a program loan and certain assistance to
   59         the applicant under certain circumstances; specifying
   60         requirements, limitations, and prohibitions for the
   61         compensation of a referral partner by a program
   62         licensee; requiring a program licensee to provide a
   63         specified notice to the office after entering into a
   64         contract with a referral partner; requiring a referral
   65         partner to provide written notice to the program
   66         licensee of certain information within a specified
   67         time; specifying the program licensee’s responsibility
   68         for acts of its referral partner; requiring a program
   69         licensee to pay a specified fee to the office to file
   70         a referral partner notice; requiring rulemaking by the
   71         Financial Services Commission; creating s. 516.45,
   72         F.S.; requiring the office to examine program
   73         licensees at specified intervals beginning on a
   74         specified date; providing an exception; requiring
   75         program licensees to pay the cost of examinations;
   76         authorizing the office to maintain an action for
   77         recovery of the cost; authorizing a method to
   78         determine the cost of examinations; providing a
   79         recordkeeping requirement for program licensees and
   80         referral partners; providing that a program licensee
   81         is subject to certain disciplinary action for certain
   82         violations; authorizing the office to take certain
   83         disciplinary actions; requiring rulemaking by the
   84         commission; creating s. 516.46, F.S.; requiring a
   85         program licensee to file a specified annual report
   86         with the office beginning on a certain date; requiring
   87         the office to post a report to its website summarizing
   88         the use of the program by a certain date; specifying
   89         information to be contained in the office’s report;
   90         providing for conditional future repeal of the
   91         program; providing an effective date.
   92          
   93  Be It Enacted by the Legislature of the State of Florida:
   94  
   95         Section 1. Section 516.40, Florida Statutes, is created to
   96  read:
   97         516.40 Access to Responsible Credit Pilot Program.—
   98         (1)There is established within the Office of Financial
   99  Regulation the Access to Responsible Credit Pilot Program.
  100         (2) The Legislature finds that demand for responsible
  101  consumer finance loans in principal amounts of at least $300 and
  102  no more than $3,000 exceeds the supply of these loans. As a
  103  first step toward addressing this gap, the Access to Responsible
  104  Credit Pilot Program would allow more Floridians to obtain
  105  responsible consumer finance loans of at least $300 and no more
  106  than $3,000. The pilot program is also intended to assist
  107  consumers in building their credit and has additional consumer
  108  protections for these loans which exceed current protections
  109  under general law.
  110         Section 2. Section 516.41, Florida Statutes, is created to
  111  read:
  112         516.41 Definitions for ss. 516.40-516.46.—As used in ss.
  113  516.40-516.46, the term:
  114         (1) “Consumer reporting agency” has the same meaning as in
  115  s. 603(p) of the Fair Credit Reporting Act, 15 U.S.C. s.
  116  1681a(p).
  117         (2) “Credit score” has the same meaning as in s.
  118  609(f)(2)(A) of the Fair Credit Reporting Act, 15 U.S.C. s.
  119  1681g(f)(2)(A).
  120         (3) “Data furnisher” has the same meaning as the term
  121  “furnisher” in 12 C.F.R. s. 1022.41(c).
  122         (4) “Pilot program” or “program” means the Access to
  123  Responsible Credit Pilot Program.
  124         (5) “Pilot program license” means a license issued under
  125  ss. 516.40-516.46 authorizing a program licensee to make and
  126  collect program loans.
  127         (6) “Program branch office” means a location, other than a
  128  program licensee’s or referral partner’s principal place of
  129  business:
  130         (a) The address of which appears on business cards,
  131  stationery, or advertising used by the program licensee in
  132  connection with business conducted under this chapter;
  133         (b) At which the program licensee’s name, advertising or
  134  promotional materials, or signage suggests that program loans
  135  are originated, negotiated, funded, or serviced; or
  136         (c) At which program loans are originated, negotiated,
  137  funded, or serviced by a program licensee.
  138         (7) “Program branch office license” means a license issued
  139  to a program licensee for each program branch office in the
  140  state.
  141         (8) “Program licensee” means a person who is licensed to
  142  make and collect program loans under this chapter and who is
  143  approved by the office to participate in the program.
  144         (9) “Program loan” means a consumer finance loan with a
  145  principal amount of at least $300 and no more than $3,000
  146  originated pursuant to ss. 516.40–516.44, excluding the amount
  147  of the origination fee authorized under s. 516.43(3).
  148         (10) “Referral partner” means an entity that, at the
  149  referral partner’s physical location for business or through
  150  other means, performs one or more of the services authorized in
  151  s. 516.44(2) on behalf of a program licensee. A referral partner
  152  is not a credit service organization as defined in s. 817.7001
  153  or a loan broker as defined in s. 687.14.
  154         (11) “Refinance program loan” means a program loan that
  155  extends additional principal to a borrower and replaces and
  156  revises an existing program loan contract with the borrower. A
  157  refinance program loan does not include an extension, a
  158  deferral, or a rewrite of the program loan.
  159         Section 3. Section 516.42, Florida Statutes, is created to
  160  read:
  161         516.42 Requirements for program participation; program
  162  application requirements; fees.—
  163         (1) A person may not advertise, offer, or make a program
  164  loan or impose any charges or fees pursuant to s. 516.43 unless
  165  the person first obtains a pilot program license from the
  166  office.
  167         (2)(a) In order to participate in the program, a person
  168  must meet the following criteria:
  169         1. Be licensed to make consumer finance loans under s.
  170  516.05.
  171         2. Not be the subject of any insolvency proceeding.
  172         3. Not be subject to the issuance of a cease and desist
  173  order; the issuance of a removal order; the denial, suspension,
  174  or revocation of a license; or any other action within the
  175  authority of the office or any other state, territory, or
  176  jurisdiction.
  177         4. Not have a deficiency at the time of the person’s
  178  application.
  179         5. Pay a nonrefundable application fee of $1,000 to the
  180  office at the time of making the application, pursuant to rule
  181  of the commission.
  182         (b) A program applicant shall file with the office an
  183  electronic application, in a form and manner prescribed by
  184  commission rule, which contains all of the following information
  185  with respect to the applicant:
  186         1. The legal business name and any other name the applicant
  187  operates under.
  188         2. The applicant’s main address.
  189         3. The telephone number and e-mail address of the
  190  applicant.
  191         4. The address of any program branch office.
  192         5. The name, title, address, telephone number, and e-mail
  193  address of the contact person for the applicant.
  194         6. The applicant’s license number under this chapter.
  195         7. A statement as to whether the applicant intends to use
  196  the services of one or more referral partners under s. 516.44.
  197         8. A statement that the applicant has been accepted as a
  198  data furnisher by a consumer reporting agency and will report to
  199  a consumer reporting agency the payment performance of each
  200  borrower on all loans made under the program.
  201         9. The signature and certification of a control person of
  202  the applicant.
  203         (3) Except as otherwise provided in ss. 516.40-516.46, a
  204  program licensee is subject to all of the laws and rules
  205  governing consumer finance loans under this chapter.
  206         (4) A program licensee shall pay a nonrefundable biennial
  207  renewal fee of $1,000 pursuant to commission rule.
  208         (5) Notwithstanding s. 516.05(3), only one pilot program
  209  license is required for a person to make program loans under ss.
  210  516.40-516.46, regardless of whether the program licensee offers
  211  program loans to prospective borrowers at its own physical
  212  business locations, through referral partners, or through an
  213  electronic access point through which a prospective borrower may
  214  directly access the website of the program licensee.
  215         (6) Each branch office of a program licensee must be
  216  licensed under this section.
  217         (7) The office shall issue a program branch office license
  218  to a program licensee after the office determines that the
  219  program licensee submitted a completed electronic application
  220  for a program branch office license in a form prescribed by
  221  commission rule and paid an initial nonrefundable program branch
  222  office license fee of $30 per branch office as prescribed by
  223  rule of the commission. Application fees may not be prorated for
  224  partial years of licensure. The program branch office license
  225  must be issued in the name of the program licensee that
  226  maintains the branch office. An application is considered
  227  received for purposes of s. 120.60 upon receipt of a completed
  228  application form and the required fees. The application for a
  229  program branch office license must contain the following
  230  information:
  231         (a) The legal business name and any other name the
  232  applicant operates under.
  233         (b) The applicant’s main address.
  234         (c) The applicant’s telephone number and e-mail address.
  235         (d) The address of each program branch office.
  236         (e) The name, title, address, telephone number, and e-mail
  237  address of the contact person for the applicant.
  238         (f) The applicant’s license number under this chapter.
  239         (g) The signature and certification of an authorized person
  240  of the applicant.
  241         (8) A program branch office license must be renewed
  242  biennially at the time of renewing the program license under
  243  subsection (4). A nonrefundable branch renewal fee of $30 per
  244  program branch office, by commission rule, must be submitted at
  245  the time of renewal.
  246         Section 4. Section 516.43, Florida Statutes, is created to
  247  read:
  248         516.43 Requirements for program loans.—
  249         (1) GENERAL REQUIREMENTS.—A program licensee shall comply
  250  with each of the following requirements in making program loans:
  251         (a) A program loan must be unsecured.
  252         (b) A program loan must have a minimum term of 120 days,
  253  but it may not impose a prepayment penalty.
  254         (c) A program loan must be repayable by the borrower in
  255  substantially equal weekly, biweekly, or monthly installments.
  256         (d) A program loan must include a borrower’s right to
  257  rescind the program loan by notifying the program licensee of
  258  the borrower’s intent to rescind the program loan and return the
  259  principal advanced by the end of the business day after the day
  260  the program loan is consummated.
  261         (e) Notwithstanding s. 516.031, the interest rate charged
  262  on a program loan to the borrower may not exceed 36 percent. The
  263  interest rate must be fixed for the life of the program loan and
  264  must accrue on a simple-interest basis through the application
  265  of a daily periodic rate to the actual unpaid principal balance
  266  each day.
  267         (f) The program licensee shall reduce the rate on each
  268  subsequent program loan to the same borrower by a minimum of
  269  one-twelfth of 1 percent per month, if all of the following
  270  conditions are met:
  271         1. The subsequent program loan is originated no more than
  272  180 days after the prior program loan is fully repaid.
  273         2. The borrower was never more than 15 days delinquent on
  274  the prior program loan.
  275         3. The prior program loan was outstanding for at least one
  276  half of its original term before its repayment.
  277         (g) A program licensee may not refinance a program loan
  278  unless all of the following conditions are met at the time the
  279  borrower submits an application to refinance:
  280         1. The principal amount payable does not include more than
  281  60 days of unpaid interest accrued on the previous program loan
  282  in accordance with s. 516.031(5);
  283         2.The borrower has repaid at least 60 percent of the
  284  outstanding principal remaining on his or her existing program
  285  loan;
  286         3. The borrower is current on his or her outstanding
  287  program loan;
  288         4. The program licensee has underwritten the new program
  289  loan in accordance with subsection (7); and
  290         5. The borrower has not previously refinanced the
  291  outstanding program loan.
  292         (h) In lieu of the provisions of s. 687.08, a program
  293  licensee or, if applicable, its approved referral partner shall
  294  make available to the borrower by either electronic or physical
  295  means a plain and complete receipt of payment at the time that a
  296  payment is made by the borrower. For audit purposes, a program
  297  licensee shall maintain an electronic record for each receipt
  298  made available to a borrower, which must include a copy of the
  299  receipt and the date and time that the receipt was generated.
  300  Each receipt of payment must show all of the following:
  301         1. The name of the borrower.
  302         2. The name of the referral partner, if applicable.
  303         3. The total payment amount received.
  304         4. The date of payment.
  305         5. The program loan balance before and after application of
  306  the payment.
  307         6. The amount of the payment that was applied to the
  308  principal, interest, and fees.
  309         7. The type of payment made by the borrower.
  310         8. The following statement, prominently displayed in a type
  311  size equal to or greater than the type size used to display the
  312  other items on the receipt: “If you have any questions about
  313  your loan now or in the future, you should direct those
  314  questions to ...(name of program licensee)... by ...(at least
  315  two different ways in which a borrower may contact the program
  316  licensee)....”
  317         (2) WRITTEN DISCLOSURES.—
  318         (a)A program licensee shall provide those disclosures
  319  required of all licensees in s. 516.15.
  320         (b) Notwithstanding s. 516.15(1), the loan contract and all
  321  written disclosures and statements may be provided in English or
  322  in the language in which the loan is negotiated. A program
  323  licensee shall pay for any translation costs incurred by the
  324  office.
  325         (3) ORIGINATION FEES.—
  326         (a)Notwithstanding s. 516.031, a program licensee may
  327  contract for and receive a nonrefundable origination fee from a
  328  borrower on a program loan. The program licensee may either
  329  deduct the origination fee from the principal amount of the loan
  330  disbursed to the borrower or capitalize the origination fee into
  331  the principal balance of the loan. The origination fee is fully
  332  earned and nonrefundable immediately upon the making of the
  333  program loan and may not exceed 6 percent of the principal
  334  amount of the program loan made to the borrower, exclusive of
  335  the lesser of the origination fee or $75.
  336         (b) A program licensee may not charge a borrower an
  337  origination fee more than once in any 12-month period.
  338         (4) INSUFFICIENT FUNDS FEES AND DELINQUENCY CHARGES.
  339  Notwithstanding s. 516.031, a program licensee approved by the
  340  office to participate in the program may:
  341         (a) Require payment from a borrower of no more than $20 for
  342  fees incurred by the program licensee from a dishonored payment
  343  due to insufficient funds of the borrower.
  344         (b) Notwithstanding s. 516.031(3)(a)9., contract for and
  345  receive a delinquency charge of no more than $15 for each
  346  payment in default for at least 10 days, if the charge is agreed
  347  upon in writing between the parties before imposing the charge.
  348  A delinquency fee imposed by a program licensee is subject to
  349  all of the following restrictions:
  350         1. No more than one delinquency fee may be imposed per
  351  delinquent payment.
  352         2. No more than two delinquency fees may be imposed during
  353  a period of 30 consecutive days.
  354  
  355  The program licensee, or any wholly owned subsidiary of the
  356  program licensee, may not sell or assign an unpaid debt to an
  357  independent third party for collection purposes unless the debt
  358  has been delinquent for at least 30 days.
  359         (5) CREDIT EDUCATION.—Before disbursement of program loan
  360  proceeds to the borrower, the program licensee must:
  361         (a) Direct the borrower to the consumer credit counseling
  362  services offered by an independent third party; or
  363         (b) Provide a credit education program or materials to the
  364  borrower. A borrower is not required to participate in any of
  365  these education programs or seminars. A credit education program
  366  or seminar offered pursuant to this subsection must be provided
  367  at no cost to the borrower.
  368         (6) CREDIT REPORTING.—
  369         (a)The program licensee shall report each borrower’s
  370  payment performance to at least one consumer reporting agency
  371  that compiles and maintains files on consumers on a nationwide
  372  basis. As used in this section, the term “consumer reporting
  373  agency that compiles and maintains files on consumers on a
  374  nationwide basis” has the same meaning as in s. 603(p) of the
  375  Fair Credit Reporting Act, 15 U.S.C. s. 1681a(p).
  376         (b)The office may not approve a person for the program
  377  before the person has been accepted as a data furnisher by a
  378  consumer reporting agency.
  379         (c) The program licensee shall provide each borrower with
  380  the name or names of the consumer reporting agency or agencies
  381  to which it will report the borrower’s payment history.
  382         (7) PROGRAM LOAN UNDERWRITING.—
  383         (a) The program licensee shall underwrite each program loan
  384  to determine a borrower’s ability and willingness to repay the
  385  program loan pursuant to the program loan terms. The program
  386  licensee may not make a program loan if it determines that the
  387  borrower’s total monthly debt service payments at the time of
  388  origination, including the program loan for which the borrower
  389  is being considered and all outstanding forms of credit that can
  390  be independently verified by the program licensee, exceed 35
  391  percent of the borrower’s gross monthly income.
  392         (b)1. The program licensee shall seek information and
  393  documentation pertaining to all of a borrower’s outstanding debt
  394  obligations during the loan application and underwriting
  395  process, including loans that are self-reported by the borrower
  396  but not available through independent verification. The program
  397  licensee shall verify such information using a credit report
  398  from at least one consumer reporting agency that compiles and
  399  maintains files on consumers on a nationwide basis or through
  400  other available electronic debt verification services that
  401  provide reliable evidence of a borrower’s outstanding debt
  402  obligations.
  403         2. The program licensee is not required to consider loans
  404  made to a borrower by friends or family in determining the
  405  borrower’s debt-to-income ratio.
  406         (c) The program licensee shall also verify the borrower’s
  407  income in determining the debt-to-income ratio using information
  408  from:
  409         1. Electronic means or services that provide reliable
  410  evidence of the borrower’s actual income; or
  411         2. Internal Revenue Service Form W-2, tax returns, payroll
  412  receipts, bank statements, or other third-party documents that
  413  provide reasonably reliable evidence of the borrower’s actual
  414  income.
  415         (8) PROVISIONS ON WAIVERS.—
  416         (a) A program licensee may not require, as a condition of
  417  providing the program loan, that the borrower:
  418         1. Waive any right, penalty, remedy, forum, or procedure
  419  provided for in any law applicable to the program loan,
  420  including the right to file and pursue a civil action or file a
  421  complaint with or otherwise communicate with the office, any
  422  court, or other governmental entity.
  423         2. Agree to the application of laws other than those of
  424  this state.
  425         3. Agree to resolve disputes in a jurisdiction outside of
  426  this state.
  427         (b) A waiver that is required as a condition of doing
  428  business with the program licensee is presumed involuntary,
  429  unconscionable, against public policy, and unenforceable.
  430         (c) A program licensee may not refuse to do business with
  431  or discriminate against a borrower or an applicant on the basis
  432  of the borrower’s or applicant’s refusal to waive any right,
  433  penalty, remedy, forum, or procedure, including the right to
  434  file and pursue a civil action or complaint with, or otherwise
  435  notify, the office, a court, or any other governmental entity.
  436  The exercise of a person’s right to refuse to waive any right,
  437  penalty, remedy, forum, or procedure, including a rejection of a
  438  contract requiring a waiver, does not affect any otherwise legal
  439  terms of a contract or an agreement.
  440         (d) This subsection does not apply to any agreement to
  441  waive any right, penalty, remedy, forum, or procedure, including
  442  any agreement to arbitrate a claim or dispute, after a claim or
  443  dispute has arisen. This subsection does not affect the
  444  enforceability or validity of any other provision of the
  445  contract.
  446         Section 5. Section 516.44, Florida Statutes, is created to
  447  read:
  448         516.44 Referral partners.—
  449         (1) REFERRAL PARTNER AGREEMENT.—All arrangements between a
  450  program licensee and a referral partner must be specified in a
  451  written referral partner agreement between the parties. The
  452  agreement must contain a provision that the referral partner
  453  agrees to comply with this section and all rules adopted under
  454  this section regarding the activities of referral partners, and
  455  that the office has access to the referral partner’s books and
  456  records pertaining to the referral partner’s operations under
  457  the agreement with the program licensee in accordance with s.
  458  516.45(4).
  459         (2) AUTHORIZED SERVICES.—A program licensee may use the
  460  services of one or more referral partners as provided in this
  461  section. A referral partner may perform one or more of the
  462  following services for a program licensee:
  463         (a) Distributing, circulating, using, or publishing printed
  464  brochures, flyers, fact sheets, or other written materials
  465  relating to program loans that the program licensee may make or
  466  negotiate. The written materials must be reviewed and approved
  467  in writing by the program licensee before being distributed,
  468  circulated, used, or published.
  469         (b) Providing written factual information about program
  470  loan terms, conditions, or qualification requirements to a
  471  prospective borrower which has been prepared by the program
  472  licensee or reviewed and approved in writing by the program
  473  licensee. A referral partner may discuss the information with a
  474  prospective borrower in general terms.
  475         (c) Notifying a prospective borrower of the information
  476  needed in order to complete a program loan application.
  477         (d) Entering information provided by the prospective
  478  borrower on a preprinted or an electronic application form or in
  479  a preformatted computer database.
  480         (e) Assembling credit applications and other materials
  481  obtained in the course of a credit application transaction for
  482  submission to the program licensee.
  483         (f) Contacting the program licensee to determine the status
  484  of a program loan application.
  485         (g) Communicating a response that is returned by the
  486  program licensee’s automated underwriting system to a borrower
  487  or a prospective borrower.
  488         (h) Obtaining a borrower’s signature on documents prepared
  489  by the program licensee and delivering final copies of the
  490  documents to the borrower.
  491         (i) Disbursing program loan proceeds to a borrower if this
  492  method of disbursement is acceptable to the borrower, subject to
  493  the requirements of subsection (3). A loan disbursement made by
  494  a referral partner under this paragraph is deemed to be made by
  495  the program licensee on the date that the funds are disbursed or
  496  otherwise made available by the referral partner to the
  497  borrower.
  498         (j) Receiving a program loan payment from the borrower if
  499  this method of payment is acceptable to the borrower, subject to
  500  the requirements of subsection (3).
  501         (k) Operating an electronic access point through which a
  502  prospective borrower may directly access the website of the
  503  program licensee to apply for a program loan.
  504         (3) RECEIPT OR DISBURSEMENT OF PROGRAM LOAN PAYMENTS.—
  505         (a) A loan payment made by a borrower to a referral partner
  506  under paragraph (2)(j) must be applied to the borrower’s program
  507  loan and is deemed received by the program licensee as of the
  508  date the payment is received by the referral partner.
  509         (b) A referral partner that receives loan payments must
  510  deliver or cause to be delivered to the borrower a plain and
  511  complete receipt showing all of the information specified in s.
  512  516.43(1)(h) at the time that the payment is made by the
  513  borrower.
  514         (c) A borrower who submits a loan payment to a referral
  515  partner under this subsection is not liable for a failure or
  516  delay by the referral partner in transmitting the payment to the
  517  program licensee.
  518         (d) A referral partner that disburses or receives loan
  519  payments pursuant to paragraph (2)(i) or paragraph (2)(j) must
  520  maintain records of all disbursements made and loan payments
  521  received for a period of at least 2 years.
  522         (4) PROHIBITED ACTIVITIES.—A referral partner may not
  523  engage in any of the following activities:
  524         (a) Providing counseling or advice to a borrower or
  525  prospective borrower with respect to any loan term.
  526         (b) Providing loan-related marketing material that has not
  527  previously been approved by the program licensee to a borrower
  528  or a prospective borrower.
  529         (c) Negotiating a loan term between a program licensee and
  530  a prospective borrower.
  531         (d) Offering information pertaining to a single prospective
  532  borrower to more than one program licensee. However, if a
  533  program licensee has declined to offer a program loan to a
  534  prospective borrower and has so notified the prospective
  535  borrower in writing, the referral partner may then offer
  536  information pertaining to that borrower to another program
  537  licensee with whom it has a referral partner agreement.
  538         (e) Requiring a borrower to pay any fees or charges to the
  539  referral partner or to any other person in connection with a
  540  program loan other than those permitted under ss. 516.40-516.46.
  541         (5) DISCLOSURE NOTICE AND COMMUNICATION.—
  542         (a) At the time the referral partner receives or processes
  543  an application for a program loan, the referral partner shall
  544  provide the following statement to the applicant on behalf of
  545  the program licensee, in no smaller than 10-point type, and
  546  shall request that the applicant acknowledge receipt of the
  547  statement in writing:
  548  
  549         Your loan application has been referred to us by
  550         ...(name of referral partner).... We may pay a fee to
  551         ...(name of referral partner)... for the successful
  552         referral of your loan application. If you are approved
  553         for the loan, ...(name of program licensee)... will
  554         become your lender. If you have any questions about
  555         your loan, now or in the future, you should direct
  556         those questions to ...(name of program licensee)... by
  557         ...(insert at least two different ways in which a
  558         borrower may contact the program licensee).... If you
  559         wish to report a complaint about ...(name of referral
  560         partner)... or ...(name of program licensee)...
  561         regarding this loan transaction, you may contact the
  562         Division of Consumer Finance of the Office of
  563         Financial Regulation at 850-487-9687 or
  564         http://www.flofr.com.
  565  
  566         (b) If the loan applicant has questions about the program
  567  loan which the referral partner is not permitted to answer, the
  568  referral partner must make a good faith effort to assist the
  569  applicant in making direct contact with the program licensee
  570  before the program loan is consummated.
  571         (6) COMPENSATION.—
  572         (a) The program licensee may compensate a referral partner
  573  in accordance with a written agreement and a compensation
  574  schedule that is mutually agreed to by the program licensee and
  575  the referral partner, subject to the requirements in paragraph
  576  (b).
  577         (b) The compensation of a referral partner by a program
  578  licensee is subject to all of the following requirements:
  579         1. Compensation may not be paid to a referral partner in
  580  connection with a loan application unless the program loan is
  581  consummated.
  582         2. Compensation may not be paid to a referral partner based
  583  upon the principal amount of the program loan.
  584         3. Compensation may not be directly or indirectly passed on
  585  to a borrower through a fee or other compensation, or a portion
  586  of a fee or other compensation, charged to a borrower.
  587         4. Subject to the limitations specified in subparagraphs
  588  1., 2., and 3., the total compensation paid by a program
  589  licensee to a referral partner for the services specified in
  590  subsection (2) may not exceed the sum of:
  591         a. Sixty dollars per program loan, on average, assessed
  592  annually, whether paid at the time of consummation, through
  593  installments, or in a manner otherwise agreed upon by the
  594  program licensee and the referral partner; and
  595         b. Two dollars per payment received by the referral partner
  596  on behalf of the program licensee for the duration of the
  597  program loan, if the referral partner receives borrower loan
  598  payments on the program licensee’s behalf in accordance with
  599  subsection (3).
  600         5. The referral partner’s location for services and other
  601  information required by subsection (7) must be reported to the
  602  office.
  603         (c) A program licensee or a referral partner may not pass
  604  on to a borrower, whether directly or indirectly, any additional
  605  cost or other charge for compensation paid to a referral partner
  606  under this program.
  607         (7) NOTICE TO OFFICE.—A program licensee that uses the
  608  service of a referral partner must notify the office, in a form
  609  and manner prescribed by the commission, within 15 days after
  610  entering into a contract with a referral partner regarding all
  611  of the following:
  612         (a) The name, business address, and licensing details of
  613  the referral partner and all locations at which the referral
  614  partner will perform services under this section.
  615         (b) The name and contact information for an employee of the
  616  referral partner who is knowledgeable about, and has the
  617  authority to execute, the referral partner agreement.
  618         (c) The name and contact information of one or more
  619  employees of the referral partner who are responsible for that
  620  referral partner’s referring activities on behalf of the program
  621  licensee.
  622         (d) A statement by the program licensee that it has
  623  conducted due diligence with respect to the referral partner and
  624  has confirmed that none of the following applies:
  625         1. The filing of a petition under the United States
  626  Bankruptcy Code for bankruptcy or reorganization by the referral
  627  partner.
  628         2. The commencement of an administrative or judicial
  629  license suspension or revocation proceeding, or the denial of a
  630  license request or renewal, by any state, the District of
  631  Columbia, any United States territory, or any foreign country in
  632  which the referral partner operates, plans to operate, or is
  633  licensed to operate.
  634         3. A felony indictment involving the referral partner or an
  635  affiliated party.
  636         4. A felony conviction, guilty plea, or plea of nolo
  637  contendere, regardless of adjudication, of the referral partner
  638  or an affiliated party.
  639         5. Any suspected criminal act perpetrated in this state
  640  relating to activities regulated under this chapter by a
  641  referral partner.
  642         6. Notification by a law enforcement or prosecutorial
  643  agency that the referral partner is under criminal investigation
  644  which includes, but is not limited to, subpoenas to produce
  645  records or testimony and warrants issued by a court of competent
  646  jurisdiction which authorize the search and seizure of any
  647  records relating to a business activity regulated under this
  648  chapter.
  649  
  650  As used in this paragraph, the term “affiliated party” means a
  651  director, an officer, a responsible person, an employee, or a
  652  foreign affiliate of a referral partner; or a person who has a
  653  controlling interest in a referral partner.
  654         (e) Any other information requested by the office subject
  655  to the limitations specified in s. 516.45(4).
  656         (8) NOTICE OF CHANGES.—A referral partner must provide the
  657  program licensee with written notice, sent by registered mail,
  658  within 30 days after any changes are made to the information
  659  specified in paragraphs (7)(a)-(c) or within 30 days after the
  660  occurrence or knowledge of any of the events specified in
  661  paragraph (7)(d), whichever is later.
  662         (9) RESPONSIBILITY FOR ACTS OF A REFERRAL PARTNER.—A
  663  program licensee is responsible for any act of its referral
  664  partner if the program licensee should have known of the act or
  665  if the program licensee had actual knowledge that the act is a
  666  violation of this chapter and allowed it to continue. Such
  667  responsibility is limited to conduct engaged in by the referral
  668  partner pursuant to the authority granted to it by the program
  669  licensee under the contract between the referral partner and the
  670  program licensee.
  671         (10) REFERRAL PARTNER FEE.—The program licensee shall pay
  672  to the office at the time it files a referral partner notice
  673  with the office a one-time, nonrefundable fee of $30 for each
  674  referral partner, as prescribed by commission rule.
  675         Section 6. Section 516.45, Florida Statutes, is created to
  676  read:
  677         516.45 Examinations; disciplinary actions.—
  678         (1) Notwithstanding any other law, commencing on January 1,
  679  2019, the office shall examine each program licensee that is
  680  accepted into the program in accordance with this chapter at
  681  least once every 24 months.
  682         (2) Notwithstanding subsection (1), the office may waive
  683  one or more branch office examinations if the office finds that
  684  such examinations are not necessary for the protection of the
  685  public due to the centralized operations of the program licensee
  686  or other factors acceptable to the office.
  687         (3) The examined program licensee shall pay for the cost of
  688  an examination to the office, pursuant to commission rule, and
  689  the office may maintain an action for the recovery of the cost
  690  in any court of competent jurisdiction. In determining the cost
  691  of the examination, the office may use the estimated average
  692  hourly cost for all persons performing examinations of program
  693  licensees or other persons subject to ss. 516.40-516.46 for the
  694  fiscal year.
  695         (4) A program licensee or referral partner shall maintain,
  696  preserve, and keep available for examination all books,
  697  accounts, or other documents required by this chapter, any rule
  698  or order adopted under this chapter, or any agreement entered
  699  into with the office.
  700         (5) A program licensee who violates any applicable
  701  provision of this chapter is subject to disciplinary action
  702  pursuant to s. 516.07(2). Any such disciplinary action is
  703  subject to s. 120.60. A program licensee is also subject to
  704  disciplinary action for a violation of s. 516.44 committed by
  705  any of its referral partners.
  706         (6) The office may take any of the following actions
  707  against a referral partner who violates s. 516.44:
  708         (a) Disqualify the referral partner from performing
  709  services under this chapter;
  710         (b) Bar the referral partner from performing services at
  711  one or more specific locations of the referral partner;
  712         (c) Terminate a written agreement between a referral
  713  partner and a program licensee;
  714         (d) Impose an administrative fine not to exceed $1,000 for
  715  each such act of the referral partner; and
  716         (e) Prohibit program licensees from using the referral
  717  partner, if the office deems it to be in the public interest.
  718         Section 7. Section 516.46, Florida Statutes, is created to
  719  read:
  720         516.46 Annual reports; reports by the office.—
  721         (1) Beginning in 2019, on or before March 15 of each year,
  722  a program licensee shall file a report with the office on each
  723  of the items specified in subsection (2), on a form and in a
  724  manner as prescribed by commission rule, which contains
  725  aggregated or anonymized data without reference to any
  726  borrower’s nonpublic personal information or any proprietary or
  727  trade secret information of the program licensee.
  728         (2) On or before January 1, 2020, the office shall post a
  729  report on its website summarizing the use of the program based
  730  on the information contained in reports filed by each program
  731  licensee under subsection (1). The report must state the
  732  information in the aggregate so as not to identify data by
  733  specific program licensee and must specify the period to which
  734  the report corresponds. The report must include, but not be
  735  limited to, the following for that period:
  736         (a) The number of entities that applied to participate in
  737  the program.
  738         (b) The number of entities accepted to participate in the
  739  program.
  740         (c) The office’s reasons for rejecting applications for
  741  participation, if applicable. This information must be provided
  742  in a manner that does not identify the entity or entities
  743  rejected.
  744         (d) The number of program loan applications received by
  745  program licensees participating in the program, the number of
  746  program loans made under the program, the total amount loaned,
  747  the distribution of loan lengths upon origination, and the
  748  distribution of interest rates and principal amounts upon
  749  origination among those program loans.
  750         (e) The number of borrowers who obtained more than one
  751  program loan and the distribution of the number of program loans
  752  per borrower.
  753         (f) Of the borrowers who obtained more than one program
  754  loan, the percentage of those borrowers whose credit scores
  755  increased between successive loans, based on information from at
  756  least one major credit bureau, and the average size of the
  757  increase.
  758         (g) The income distribution of borrowers upon program loan
  759  origination, including the number of borrowers who obtained at
  760  least one program loan and who resided in a low-income or
  761  moderate-income census tract at the time of their loan
  762  applications.
  763         (h) The number of borrowers who obtained program loans for
  764  the following purposes, based on borrower responses at the time
  765  of their loan applications indicating the primary purpose for
  766  which the program loan was obtained:
  767         1. Pay medical expenses.
  768         2. Pay for vehicle repair or a vehicle purchase.
  769         3. Pay bills.
  770         4. Consolidate debt.
  771         5. Build or repair credit history.
  772         6. Pay other expenses.
  773         (i) The number of borrowers who self-report that they had a
  774  bank account at the time of their loan application and the
  775  number of borrowers who self-report that they did not have a
  776  bank account at the time of their loan application.
  777         (j) With respect to refinance program loans, the report
  778  must specifically include the following information:
  779         1. The number and percentage of borrowers who applied for a
  780  refinance program loan.
  781         2. Of those borrowers who applied for a refinance program
  782  loan, the number and percentage of borrowers who obtained a
  783  refinance program loan.
  784         (k) The number and type of referral partners used by
  785  program licensees.
  786         (l) The number and percentage of borrowers who obtained one
  787  or more program loans on which delinquency charges were
  788  assessed, the total amount of delinquency charges assessed, and
  789  the average delinquency charge assessed by dollar amount and as
  790  a percentage of the principal amount loaned.
  791         (m) The performance of program loans under the program as
  792  reflected by all of the following:
  793         1. The number and percentage of borrowers who experienced
  794  at least one delinquency lasting between 7 and 29 days, and the
  795  distribution of principal loan amounts corresponding to those
  796  delinquencies.
  797         2. The number and percentage of borrowers who experienced
  798  at least one delinquency lasting between 30 and 59 days, and the
  799  distribution of principal loan amounts corresponding to those
  800  delinquencies.
  801         3. The number and percentage of borrowers who experienced
  802  at least one delinquency lasting 60 days or more, and the
  803  distribution of principal loan amounts corresponding to those
  804  delinquencies.
  805         (n) The number and types of violations of ss. 516.40-516.46
  806  by referral partners which were documented by the office.
  807         (o) The number and types of violations of ss. 516.40-516.46
  808  by program licensees which were documented by the office.
  809         (p) The number of times that the office disqualified a
  810  referral partner from performing services, barred a referral
  811  partner from performing services at one or more specific
  812  locations of the referral partner, terminated a written
  813  agreement between a referral partner and a program licensee, or
  814  imposed an administrative penalty.
  815         (q) The number of complaints received by the office about a
  816  program licensee or a referral partner and the nature of those
  817  complaints.
  818         Section 8. Sections 516.40-516.46, Florida Statutes, are
  819  repealed on December 31, 2022, unless reenacted or superseded by
  820  another law enacted by the Legislature before that date.
  821         Section 9. This act shall take effect July 1, 2018.