Florida Senate - 2018                                     SB 640
       By Senator Rouson
       19-00837-18                                            2018640__
    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         actions 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         licensure of branch offices of a program licensee;
   16         specifying application requirements and fees for a
   17         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, limitations, and
   21         prohibitions relating to program loans and the
   22         refinancing of program loans; authorizing licensees to
   23         provide certain documents in the language in which the
   24         loan was negotiated; requiring a program licensee to
   25         pay for certain translation costs incurred by the
   26         office; requiring a program licensee to provide
   27         specified disclosures; authorizing a program licensee
   28         to contract for and receive a specified origination
   29         fee from a borrower on a program loan; specifying
   30         methods for collecting the origination fee; specifying
   31         limitations on the amount and frequency of the
   32         origination fee; authorizing a program licensee to
   33         collect specified insufficient funds fees and
   34         delinquency charges; providing that program licensees
   35         or their wholly owned subsidiaries may not sell or
   36         assign unpaid debts to independent third parties for
   37         collection purposes unless the debt has been
   38         delinquent for a specified timeframe; requiring
   39         program licensees to direct borrowers to certain
   40         credit counseling services or provide certain credit
   41         education to borrowers before disbursing program loan
   42         proceeds; requiring program licensees to report
   43         borrowers’ payment performance to at least one
   44         specified consumer reporting agency; defining the term
   45         “consumer reporting agency that compiles and maintains
   46         files on consumers on a nationwide basis”; prohibiting
   47         the office from approving a person for the program
   48         before the person is accepted as a data furnisher by a
   49         consumer reporting agency; requiring program licensees
   50         to provide borrowers with the names of consumer
   51         reporting agencies that payment histories are reported
   52         to; requiring a program licensee to underwrite each
   53         program loan; prohibiting a program licensee from
   54         making a program loan under certain circumstances;
   55         providing underwriting procedures and requirements;
   56         prohibiting a program licensee from requiring certain
   57         waivers from a borrower or from certain acts against a
   58         borrower who refuses certain waivers; providing
   59         applicability and construction; creating s. 516.44,
   60         F.S.; requiring arrangements between a program
   61         licensee and a referral partner to be specified in a
   62         written agreement; providing requirements for such
   63         agreement; specifying authorized services of referral
   64         partners; providing requirements for a referral
   65         partner who accepts program loan payments from a
   66         borrower; providing construction; prohibiting referral
   67         partners from performing specified activities;
   68         requiring a referral partner to provide a specified
   69         notice to an applicant for a program loan and certain
   70         assistance to the applicant under certain
   71         circumstances; specifying requirements, limitations,
   72         and prohibitions for the compensation of a referral
   73         partner by a program licensee; requiring a program
   74         licensee to provide, within a certain timeframe, a
   75         specified notice to the office after entering into a
   76         contract with a referral partner; requiring a referral
   77         partner to provide, within a specified timeframe,
   78         written notice to the program licensee of changes to
   79         certain information; providing that program licensees
   80         are responsible for the acts of referral partners
   81         which are in violation of ch. 516, F.S.; requiring a
   82         program licensee to pay a specified fee to the office
   83         to file a referral partner notice; requiring the
   84         Financial Services Commission to adopt rules; creating
   85         s. 516.45, F.S.; requiring the office, beginning on a
   86         specified date, to examine program licensees at
   87         specified intervals; providing an exception; requiring
   88         program licensees to pay the cost of examinations;
   89         authorizing the office to maintain an action for
   90         recovery of such cost; authorizing a method to
   91         determine the cost of examinations; providing a
   92         limitation to the scope of investigations or
   93         examinations; providing that a program licensee is
   94         subject to certain disciplinary actions for certain
   95         violations; authorizing the office to take certain
   96         disciplinary actions; creating s. 516.46, F.S.;
   97         requiring a program licensee, beginning on a certain
   98         date, to file a specified annual report with the
   99         office; requiring the office to post, by a certain
  100         date, a report to its website summarizing the use of
  101         the program; specifying information to be contained in
  102         the office’s report; providing for conditional future
  103         repeal of the program; providing an effective date.
  105  Be It Enacted by the Legislature of the State of Florida:
  107         Section 1. Section 516.40, Florida Statutes, is created to
  108  read:
  109         516.40 Access to Responsible Credit Pilot Program.—
  110         (1)There is established within the Office of Financial
  111  Regulation the Access to Responsible Credit Pilot Program.
  112         (2) The Legislature finds that demand for responsible
  113  consumer finance loans in principal amounts of at least $300 and
  114  no more than $10,000 exceeds the supply of these loans. As a
  115  first step toward addressing this gap, the Access to Responsible
  116  Credit Pilot Program would allow more Floridians to obtain
  117  responsible consumer finance loans of at least $300 and no more
  118  than $10,000. The pilot program is also intended to assist
  119  consumers in building their credit and has additional consumer
  120  protections for these loans which exceed current protections
  121  under general law.
  122         Section 2. Section 516.41, Florida Statutes, is created to
  123  read:
  124         516.41 Definitions for ss. 516.40-516.46.—As used in ss.
  125  516.40-516.46, the term:
  126         (1) “Consumer reporting agency” has the same meaning as in
  127  s. 603(p) of the Fair Credit Reporting Act, 15 U.S.C. s.
  128  1681a(p).
  129         (2) “Credit score” has the same meaning as in s.
  130  609(f)(2)(A) of the Fair Credit Reporting Act, 15 U.S.C. s.
  131  1681g(f)(2)(A).
  132         (3) “Data furnisher” has the same meaning as the term
  133  “furnisher” in 12 C.F.R. s. 1022.41(c).
  134         (4) “Pilot program” or “program” means the Access to
  135  Responsible Credit Pilot Program.
  136         (5) “Pilot program license” means a license issued under
  137  ss. 516.40-516.46 authorizing a program licensee to make and
  138  collect program loans.
  139         (6) “Program branch office” means a location, other than a
  140  program licensee’s or referral partner’s principal place of
  141  business:
  142         (a) The address of which appears on business cards,
  143  stationery, or advertising used by the program licensee in
  144  connection with business conducted under this chapter;
  145         (b) At which the program licensee’s name, advertising or
  146  promotional materials, or signage suggests that program loans
  147  are originated, negotiated, funded, or serviced; or
  148         (c) At which program loans are originated, negotiated,
  149  funded, or serviced by a program licensee.
  150         (7) “Program licensee” means a person who is licensed to
  151  make and collect program loans under this chapter and who is
  152  approved by the office to participate in the program.
  153         (8) “Program loan” means a consumer finance loan with a
  154  principal amount of at least $300 and no more than $10,000
  155  originated pursuant to ss. 516.40–516.44, excluding the amount
  156  of the origination fee authorized under s. 516.43(3).
  157         (9) “Referral partner” means an entity that, at the
  158  referral partner’s physical location for business or through
  159  other means, performs one or more of the services authorized in
  160  s. 516.44(2) on behalf of a program licensee. A referral partner
  161  is not a credit service organization as defined in s. 817.7001
  162  or a loan broker as defined in s. 687.14.
  163         (10) “Refinance program loan” means a program loan that
  164  extends additional principal to a borrower and replaces and
  165  revises an existing program loan contract with the borrower. A
  166  refinance program loan does not include an extension, a
  167  deferral, or a rewrite of the program loan.
  168         Section 3. Section 516.42, Florida Statutes, is created to
  169  read:
  170         516.42 Requirements for program participation; program
  171  application requirements; fees.—
  172         (1) A person may not advertise, offer, or make a program
  173  loan or impose any charges or fees pursuant to s. 516.43 unless
  174  the person first obtains a pilot program license from the
  175  office.
  176         (2)(a) In order to participate in the program, a person
  177  must meet the following criteria:
  178         1. Be licensed to make consumer finance loans under s.
  179  516.05.
  180         2. Not be the subject of any insolvency proceeding.
  181         3. Not be subject to the issuance of a cease and desist
  182  order; the issuance of a removal order; the denial, suspension,
  183  or revocation of a license; or any other action within the
  184  authority of the office or other financial regulatory agency in
  185  this state.
  186         4. Not have a deficiency at the time of the person’s
  187  application.
  188         5. Pay a nonrefundable application fee of $1,000 to the
  189  office at the time of making the application, pursuant to rule
  190  of the commission.
  191         (b) A program applicant shall file with the office a
  192  digital application, in a form and manner prescribed by
  193  commission rule, which contains all of the following information
  194  with respect to the applicant:
  195         1. The legal business name and any other name the applicant
  196  operates under.
  197         2. The applicant’s main address.
  198         3. The telephone number and e-mail address of the
  199  applicant.
  200         4. The address of any program branch office.
  201         5. The name, title, address, telephone number, and e-mail
  202  address of the contact person for the applicant.
  203         6. The applicant’s license number, if the applicant is
  204  licensed under this chapter.
  205         7. A statement as to whether the applicant intends to use
  206  the services of one or more referral partners under s. 516.44.
  207         8. A statement that the applicant has been accepted as a
  208  data furnisher by a consumer reporting agency and will report to
  209  a consumer reporting agency the payment performance of each
  210  borrower on all loans made under the program.
  211         9. The signature and certification of an authorized person
  212  of the applicant.
  213         (3)A person who desires to participate in the program but
  214  who is not licensed to make consumer finance loans pursuant to
  215  s. 516.05 must concurrently submit the following digital
  216  applications to the office, in the form and manner specified in
  217  this chapter:
  218         (a) An application and fee pursuant to s. 516.03 for
  219  licensure to make consumer finance loans; and
  220         (b) An application and fee for admission to the program in
  221  accordance with subsection (2).
  222         (4) Except as otherwise provided in ss. 516.40-516.46, a
  223  program licensee is subject to all of the laws and rules
  224  governing consumer finance loans under this chapter.
  225         (5) A program licensee shall pay a nonrefundable biennial
  226  renewal fee of $1,000 pursuant to commission rule.
  227         (6) Notwithstanding s. 516.05(3), only one pilot program
  228  license is required for a person to make program loans under ss.
  229  516.40-516.46, regardless of whether the program licensee offers
  230  program loans to prospective borrowers at its own physical
  231  business locations, through referral partners, or through an
  232  electronic access point through which a prospective borrower may
  233  directly access the website of the program licensee.
  234         (7) Each branch office of a program licensee must be
  235  licensed under this section.
  236         (8) The office shall issue a program branch office license
  237  to a program licensee after the office determines that the
  238  program licensee submitted a completed electronic application
  239  for a program branch office license in a form prescribed by
  240  commission rule and paid an initial nonrefundable program branch
  241  office license fee of $30 per branch office as prescribed by
  242  rule of the commission. Application fees may not be prorated for
  243  partial years of licensure. The program branch office license
  244  must be issued in the name of the program licensee that
  245  maintains the branch office. An application is considered
  246  received for purposes of s. 120.60 upon receipt of a completed
  247  application form and the required fees. The application for a
  248  program branch office license must contain the following
  249  information:
  250         (a) The legal business name and any other name the
  251  applicant operates under.
  252         (b) The applicant’s main address.
  253         (c) The applicant’s telephone number and e-mail address.
  254         (d) The address of each program branch office.
  255         (e) The name, title, address, telephone number, and e-mail
  256  address of the contact person for the applicant.
  257         (f) The applicant’s license number, if the applicant is
  258  licensed under this chapter.
  259         (g) The signature and certification of an authorized person
  260  of the applicant.
  261         (9) A program branch office license must be renewed
  262  biennially at the time of program license renewal under
  263  subsection (5). A nonrefundable branch renewal fee of $30 per
  264  program branch office, by commission rule, must be submitted at
  265  the time of renewal.
  266         Section 4. Section 516.43, Florida Statutes, is created to
  267  read:
  268         516.43 Requirements for program loans.—
  269         (1) GENERAL REQUIREMENTS.—A program licensee shall comply
  270  with each of the following requirements in making program loans:
  271         (a) A program loan must be unsecured.
  272         (b) A program loan must have a minimum term of 120 days and
  273  a maximum term of 60 months, but it may not impose a prepayment
  274  penalty.
  275         (c) A program loan must be repayable by the borrower in
  276  substantially equal periodic installments, except that the final
  277  payment may be less than the amount of the prior installments.
  278  Installments may be due every 2 weeks, semimonthly, or monthly.
  279         (d) A program loan must include a borrower’s right to
  280  rescind the program loan by notifying the program licensee of
  281  the borrower’s intent to rescind the program loan and return the
  282  principal advanced by the end of the business day after the day
  283  the program loan is consummated.
  284         (e) Notwithstanding s. 516.031, the maximum annual interest
  285  rate that may be charged on a program loan to the borrower on
  286  that portion of the unpaid principal balance of the program
  287  loan:
  288         1. Up to and including $3,000 is 36 percent.
  289         2. Over $3,000, and up to and including $4,000, is 30
  290  percent.
  291         3. Over $4,000, and up to and including $10,000, is 24
  292  percent.
  294  The original principal amount of the program loan is equal to
  295  the amount financed as defined by the federal Truth in Lending
  296  Act and Regulation Z of the federal Consumer Financial
  297  Protection Bureau. In determining compliance with the statutory
  298  maximum interest rates in this paragraph, the computations used
  299  must be simple interest, through the application of a daily
  300  periodic rate to the actual unpaid principal balance each day,
  301  and may not be add-on interest or any other computations.
  302         (f)If two or more interest rates are applied to the
  303  principal amount of a program loan, the licensee may charge,
  304  contract for, and receive interest at that single annual
  305  percentage rate that, if applied according to the actuarial
  306  method to each of the scheduled periodic balances of principal,
  307  would produce at maturity the same total amount of interest as
  308  would result from the application of the two or more rates
  309  otherwise permitted, based upon the assumption that all payments
  310  are made as agreed.
  311         (g) The program licensee must reduce the rate on each
  312  subsequent program loan to the same borrower by a minimum of
  313  one-twelfth of 1 percent per month, if all of the following
  314  conditions are met:
  315         1. The subsequent program loan is originated no more than
  316  180 days after the prior program loan is fully repaid.
  317         2. The borrower was never more than 15 days delinquent on
  318  the prior program loan.
  319         3. The prior program loan was outstanding for at least one
  320  half of its original term before its repayment.
  321         (h)A program licensee may not induce or permit any person
  322  to become obligated to the program licensee, directly or
  323  contingently, or both, under more than one program loan at the
  324  same time with the program licensee.
  325         (i) A program licensee may not refinance a program loan
  326  unless all of the following conditions are met at the time the
  327  borrower submits an application to refinance:
  328         1. The principal amount payable does not include more than
  329  60 days of unpaid interest accrued on the previous program loan
  330  in accordance with s. 516.031(5);
  331         2.For program loans with an original term of less than 25
  332  months, the borrower has repaid at least 60 percent of the
  333  outstanding principal remaining on his or her existing program
  334  loan;
  335         3.For program loans with an original term of greater than
  336  25 months but no more than 60 months, the borrower has made
  337  current payments for at least 9 months on his or her program
  338  loan;
  339         4. The borrower is current on his or her outstanding
  340  program loan; and
  341         5. The program licensee has underwritten the new program
  342  loan in accordance with subsection (7).
  343         (j) In lieu of the provisions of s. 687.08, a program
  344  licensee or, if applicable, its approved referral partner shall
  345  make available to the borrower by either electronic or physical
  346  means a plain and complete receipt of payment at the time that a
  347  payment is made by the borrower. For audit purposes, a program
  348  licensee shall maintain an electronic record for each receipt
  349  made available to a borrower, which must include a copy of the
  350  receipt and the date and time that the receipt was generated.
  351  Each receipt of payment must show all of the following:
  352         1. The name of the borrower.
  353         2. The name of the referral partner, if applicable.
  354         3. The total payment amount received.
  355         4. The date of payment.
  356         5. The program loan balance before and after application of
  357  the payment.
  358         6. The amount of the payment that was applied to the
  359  principal, interest, and fees.
  360         7. The type of payment made by the borrower.
  361         8. The following statement, prominently displayed in a type
  362  size equal to or greater than the type size used to display the
  363  other items on the receipt: “If you have any questions about
  364  your loan now or in the future, you should direct those
  365  questions to ...(name of program licensee)... by ...(at least
  366  two different ways in which a borrower may contact the program
  367  licensee)....”
  368         (2) WRITTEN DISCLOSURES.—
  369         (a) Notwithstanding s. 516.15(1), the loan contract and all
  370  written disclosures and statements may be provided in English or
  371  in the language in which the loan is negotiated. A program
  372  licensee shall pay for any translation costs incurred by the
  373  office.
  374         (b)A program licensee shall provide those disclosures
  375  required of all licensees in s. 516.15.
  376         (3) ORIGINATION FEES.—
  377         (a)Notwithstanding s. 516.031, a program licensee may
  378  contract for and receive an origination fee from a borrower on a
  379  program loan. The program licensee may either deduct the
  380  origination fee from the principal amount of the loan disbursed
  381  to the borrower or capitalize the origination fee into the
  382  principal balance of the loan. The origination fee is fully
  383  earned and nonrefundable immediately upon the making of the
  384  program loan and may not exceed the lesser of 6 percent of the
  385  principal amount of the program loan made to the borrower,
  386  exclusive of the origination fee, or $75.
  387         (b) A program licensee may not charge a borrower an
  388  origination fee more than twice in any 12-month period.
  390  Notwithstanding s. 516.031, a program licensee approved by the
  391  office to participate in the program may:
  392         (a) Require payment from a borrower of no more than $20 for
  393  fees incurred by the program licensee from a dishonored payment
  394  due to insufficient funds of the borrower.
  395         (b) Notwithstanding s. 516.031(3)(a)9., contract for and
  396  receive a delinquency charge of up to $15 for each calendar
  397  month for each payment in default for at least 10 days, if the
  398  charge is agreed upon in writing between the parties before it
  399  is imposed.
  401  The program licensee, or any wholly owned subsidiary of the
  402  program licensee, may not sell or assign an unpaid debt to an
  403  independent third party for collection purposes unless the debt
  404  has been delinquent for at least 30 days.
  405         (5) CREDIT EDUCATION.—Before disbursement of program loan
  406  proceeds to the borrower, the program licensee must:
  407         (a) Direct the borrower to the consumer credit counseling
  408  services offered by an independent third party; or
  409         (b) Provide a credit education program or materials to the
  410  borrower. A borrower is not required to participate in any of
  411  these education programs or seminars. A credit education program
  412  or seminar offered pursuant to this subsection must be provided
  413  at no cost to the borrower.
  414         (6) CREDIT REPORTING.—
  415         (a)The program licensee shall report each borrower’s
  416  payment performance to at least one consumer reporting agency
  417  that compiles and maintains files on consumers on a nationwide
  418  basis. As used in this section, the term “consumer reporting
  419  agency that compiles and maintains files on consumers on a
  420  nationwide basis” has the same meaning as in s. 603(p) of the
  421  Fair Credit Reporting Act, 15 U.S.C. s. 1681a(p).
  422         (b)The office may not approve a person for the program
  423  before the person has been accepted as a data furnisher by a
  424  consumer reporting agency.
  425         (c) The program licensee shall provide each borrower with
  426  the name or names of the consumer reporting agency or agencies
  427  to which it will report the borrower’s payment history.
  429         (a) The program licensee shall underwrite each program loan
  430  to determine a borrower’s ability and willingness to repay the
  431  program loan pursuant to the program loan terms. The program
  432  licensee may not make a program loan if it determines that the
  433  borrower’s total monthly debt service payments at the time of
  434  origination, including the program loan for which the borrower
  435  is being considered and all outstanding forms of credit that can
  436  be independently verified by the program licensee, exceed 35
  437  percent of the borrower’s gross monthly income.
  438         (b)1. The program licensee shall seek information and
  439  documentation pertaining to all of a borrower’s outstanding debt
  440  obligations during the loan application and underwriting
  441  process, including loans that are self-reported by the borrower
  442  but not available through independent verification. The program
  443  licensee shall verify such information using a credit report
  444  from at least one consumer reporting agency that compiles and
  445  maintains files on consumers on a nationwide basis or through
  446  other available electronic debt verification services that
  447  provide reliable evidence of a borrower’s outstanding debt
  448  obligations.
  449         2. The program licensee is not required to consider loans
  450  made to a borrower by friends or family in determining the
  451  borrower’s debt-to-income ratio.
  452         (c) The program licensee shall also verify the borrower’s
  453  income in determining the debt-to-income ratio using information
  454  from:
  455         1. Electronic means or services that provide reliable
  456  evidence of the borrower’s actual income; or
  457         2. Internal Revenue Service Form W-2, tax returns, payroll
  458  receipts, bank statements, or other third-party documents that
  459  provide reasonably reliable evidence of the borrower’s actual
  460  income.
  461         (8) PROVISIONS ON WAIVERS.—
  462         (a) A program licensee may not require, as a condition of
  463  providing the program loan, that the borrower:
  464         1. Waive any right, penalty, remedy, forum, or procedure
  465  provided for in any law applicable to the program loan,
  466  including the right to file and pursue a civil action or file a
  467  complaint with or otherwise communicate with the office, any
  468  court, or other governmental entity.
  469         2. Agree to the application of laws other than those of
  470  this state.
  471         3. Agree to resolve disputes in a jurisdiction outside of
  472  this state.
  473         (b) A waiver that is required as a condition of doing
  474  business with the program licensee is presumed involuntary,
  475  unconscionable, against public policy, and unenforceable.
  476         (c) A program licensee may not refuse to do business with
  477  or discriminate against a borrower or an applicant on the basis
  478  of the borrower’s or applicant’s refusal to waive any right,
  479  penalty, remedy, forum, or procedure, including the right to
  480  file and pursue a civil action or complaint with, or otherwise
  481  notify, the office, a court, or any other governmental entity.
  482  The exercise of a person’s right to refuse to waive any right,
  483  penalty, remedy, forum, or procedure, including a rejection of a
  484  contract requiring a waiver, does not affect any otherwise legal
  485  terms of a contract or an agreement.
  486         (d) This subsection does not apply to any agreement to
  487  waive any right, penalty, remedy, forum, or procedure, including
  488  any agreement to arbitrate a claim or dispute, after a claim or
  489  dispute has arisen. This subsection does not affect the
  490  enforceability or validity of any other provision of the
  491  contract.
  492         Section 5. Section 516.44, Florida Statutes, is created to
  493  read:
  494         516.44 Referral partners.—
  495         (1) REFERRAL PARTNER AGREEMENT.—All arrangements between a
  496  program licensee and a referral partner must be specified in a
  497  written referral partner agreement between the parties. The
  498  agreement must contain a provision that the referral partner
  499  agrees to comply with this section and all rules adopted under
  500  this section regarding the activities of referral partners, and
  501  that the office has access to the referral partner’s books and
  502  records pertaining to the referral partner’s operations under
  503  the agreement with the program licensee in accordance with s.
  504  516.45(4) and the office may examine the referral partner
  505  pursuant to s. 516.45.
  506         (2) AUTHORIZED SERVICES.—A program licensee may use the
  507  services of one or more referral partners as provided in this
  508  section. A referral partner may perform one or more of the
  509  following services for a program licensee:
  510         (a) Distributing, circulating, using, or publishing printed
  511  brochures, flyers, fact sheets, or other written materials
  512  relating to program loans that the program licensee may make or
  513  negotiate. The written materials must be reviewed and approved
  514  in writing by the program licensee before being distributed,
  515  circulated, used, or published.
  516         (b) Providing written factual information about program
  517  loan terms, conditions, or qualification requirements to a
  518  prospective borrower which has been prepared by the program
  519  licensee or reviewed and approved in writing by the program
  520  licensee. A referral partner may discuss the information with a
  521  prospective borrower in general terms.
  522         (c) Notifying a prospective borrower of the information
  523  needed in order to complete a program loan application.
  524         (d) Entering information provided by the prospective
  525  borrower on a preprinted or an electronic application form or in
  526  a preformatted computer database.
  527         (e) Assembling credit applications and other materials
  528  obtained in the course of a credit application transaction for
  529  submission to the program licensee.
  530         (f) Contacting the program licensee to determine the status
  531  of a program loan application.
  532         (g) Communicating a response that is returned by the
  533  program licensee’s automated underwriting system to a borrower
  534  or a prospective borrower.
  535         (h) Obtaining a borrower’s signature on documents prepared
  536  by the program licensee and delivering final copies of the
  537  documents to the borrower.
  538         (i) Disbursing program loan proceeds to a borrower if this
  539  method of disbursement is acceptable to the borrower, subject to
  540  the requirements of subsection (3). A loan disbursement made by
  541  a referral partner under this paragraph is deemed to be made by
  542  the program licensee on the date that the funds are disbursed or
  543  otherwise made available by the referral partner to the
  544  borrower.
  545         (j) Receiving a program loan payment from the borrower if
  546  this method of payment is acceptable to the borrower, subject to
  547  the requirements of subsection (3).
  548         (k) Operating an electronic access point through which a
  549  prospective borrower may directly access the website of the
  550  program licensee to apply for a program loan.
  552         (a) A loan payment made by a borrower to a referral partner
  553  under paragraph (2)(j) must be applied to the borrower’s program
  554  loan and is deemed received by the program licensee as of the
  555  date the payment is received by the referral partner.
  556         (b) A referral partner that receives loan payments must
  557  deliver or cause to be delivered to the borrower a plain and
  558  complete receipt showing all of the information specified in s.
  559  516.43(1)(j) at the time that the payment is made by the
  560  borrower.
  561         (c) A borrower who submits a loan payment to a referral
  562  partner under this subsection is not liable for a failure or
  563  delay by the referral partner in transmitting the payment to the
  564  program licensee.
  565         (d) A referral partner that disburses or receives loan
  566  payments pursuant to paragraph (2)(i) or paragraph (2)(j) must
  567  maintain records of all disbursements made and loan payments
  568  received for a period of at least 2 years.
  569         (4) PROHIBITED ACTIVITIES.—A referral partner may not
  570  engage in any of the following activities:
  571         (a) Providing counseling or advice to a borrower or
  572  prospective borrower with respect to any loan term.
  573         (b) Providing loan-related marketing material that has not
  574  previously been approved by the program licensee to a borrower
  575  or a prospective borrower.
  576         (c) Negotiating a loan term between a program licensee and
  577  a prospective borrower.
  578         (d) Offering information pertaining to a single prospective
  579  borrower to more than one program licensee. However, if a
  580  program licensee has declined to offer a program loan to a
  581  prospective borrower and has so notified the prospective
  582  borrower in writing, the referral partner may then offer
  583  information pertaining to that borrower to another program
  584  licensee with whom it has a referral partner agreement.
  585         (e) Requiring a borrower to pay any fees or charges other
  586  than those permitted under ss. 516.40-516.46 to the referral
  587  partner or to any other person in connection with a program
  588  loan.
  590         (a) At the time the referral partner receives or processes
  591  an application for a program loan, the referral partner shall
  592  provide the following statement to the applicant on behalf of
  593  the program licensee, in no smaller than 10-point type, and
  594  shall request that the applicant acknowledge receipt of the
  595  statement in writing:
  597         Your loan application has been referred to us by
  598         ...(name of referral partner).... We may pay a fee to
  599         ...(name of referral partner)... for the successful
  600         referral of your loan application. If you are approved
  601         for the loan, ...(name of program licensee)... will
  602         become your lender. If you have any questions about
  603         your loan, now or in the future, you should direct
  604         those questions to ...(name of program licensee)... by
  605         ...(insert at least two different ways in which a
  606         borrower may contact the program licensee).... If you
  607         wish to report a complaint about ...(name of referral
  608         partner)... or ...(name of program licensee)...
  609         regarding this loan transaction, you may contact the
  610         Division of Consumer Finance of the Office of
  611         Financial Regulation at 850-487-9687 or
  612         http://www.flofr.com.
  614         (b) If the loan applicant has questions about the program
  615  loan which the referral partner is not permitted to answer, the
  616  referral partner must make a good faith effort to assist the
  617  applicant in making direct contact with the program licensee
  618  before the program loan is consummated.
  619         (6) COMPENSATION.—
  620         (a) The program licensee may compensate a referral partner
  621  in accordance with a written agreement and a compensation
  622  schedule that is mutually agreed to by the program licensee and
  623  the referral partner, subject to the requirements in paragraph
  624  (b).
  625         (b) The compensation of a referral partner by a program
  626  licensee is subject to all of the following requirements:
  627         1. Compensation may not be paid to a referral partner in
  628  connection with a loan application unless the program loan is
  629  consummated.
  630         2. Compensation may not be paid to a referral partner based
  631  upon the principal amount of the program loan.
  632         3. Compensation may not be directly or indirectly passed on
  633  to a borrower through a fee or other compensation, or a portion
  634  of a fee or other compensation, charged to a borrower.
  635         4. Subject to the limitations specified in subparagraphs
  636  1., 2., and 3., the total compensation paid by a program
  637  licensee to a referral partner for the services specified in
  638  subsection (2) may not exceed the sum of:
  639         a. Sixty dollars per program loan, on average, assessed
  640  annually, whether paid at the time of consummation, through
  641  installments, or in a manner otherwise agreed upon by the
  642  program licensee and the referral partner; and
  643         b. Two dollars per payment received by the referral partner
  644  on behalf of the program licensee for the duration of a program
  645  loan, if the referral partner receives borrower loan payments on
  646  the program licensee’s behalf in accordance with subsection (3).
  647         5. The referral partner’s location for services and other
  648  information required by subsection (7) must be reported to the
  649  office.
  650         (c) A program licensee or a referral partner may not pass
  651  on to a borrower, whether directly or indirectly, any additional
  652  cost or other charge for compensation paid to a referral partner
  653  under this program.
  654         (7) NOTICE TO OFFICE.—A program licensee that uses the
  655  service of a referral partner must notify the office, in a form
  656  and manner prescribed by the commission, within 15 days after
  657  entering into a contract with a referral partner regarding all
  658  of the following:
  659         (a) The name, business address, and licensing details of
  660  the referral partner and all locations at which the referral
  661  partner will perform services under this section.
  662         (b) The name and contact information for an employee of the
  663  referral partner who is knowledgeable about, and has the
  664  authority to execute, the referral partner agreement.
  665         (c) The name and contact information of one or more
  666  employees of the referral partner who are responsible for that
  667  referral partner’s referring activities on behalf of the program
  668  licensee.
  669         (d) A statement by the program licensee that it has
  670  conducted due diligence with respect to the referral partner and
  671  has confirmed that none of the following applies:
  672         1. The filing of a petition under the United States
  673  Bankruptcy Code for bankruptcy or reorganization by the referral
  674  partner.
  675         2. The commencement of an administrative or judicial
  676  license suspension or revocation proceeding, or the denial of a
  677  license request or renewal, by any state, the District of
  678  Columbia, any United States territory, or any foreign country in
  679  which the referral partner operates, plans to operate, or is
  680  licensed to operate.
  681         3. A felony indictment involving the referral partner or an
  682  affiliated party.
  683         4. A felony conviction, guilty plea, or plea of nolo
  684  contendere, regardless of adjudication, of the referral partner
  685  or an affiliated party.
  686         5. Any suspected criminal act perpetrated in this state
  687  relating to activities regulated under this chapter by the
  688  referral partner.
  689         6. Notification by a law enforcement or prosecutorial
  690  agency that the referral partner is under criminal investigation
  691  which includes, but is not limited to, subpoenas to produce
  692  records or testimony and warrants issued by a court of competent
  693  jurisdiction which authorize the search and seizure of any
  694  records relating to a business activity regulated under this
  695  chapter.
  697  As used in this paragraph, the term “affiliated party” means a
  698  director, an officer, a responsible person, an employee, or a
  699  foreign affiliate of a referral partner; or a person who has a
  700  controlling interest in a referral partner.
  701         (e) Any other information requested by the office subject
  702  to the limitations specified in s. 516.45(4).
  703         (8) NOTICE OF CHANGES.—A referral partner must provide the
  704  program licensee with written notice, sent by registered mail,
  705  within 30 days after any changes are made to the information
  706  specified in paragraphs (7)(a)-(c) or within 30 days after the
  707  occurrence or knowledge of any of the events specified in
  708  paragraph (7)(d), whichever is later.
  710  program licensee is responsible for any act of its referral
  711  partner if the act is a violation of this chapter.
  712         (10) REFERRAL PARTNER FEE.—The program licensee shall pay
  713  to the office at the time it files a referral partner notice
  714  with the office a one-time, nonrefundable fee of $30 for each
  715  referral partner, as prescribed by commission rule.
  716         Section 6. Section 516.45, Florida Statutes, is created to
  717  read:
  718         516.45 Examinations; disciplinary actions.—
  719         (1) Notwithstanding any other law, commencing on January 1,
  720  2019, the office shall examine each program licensee that is
  721  accepted into the program in accordance with this chapter at
  722  least once every 24 months.
  723         (2) Notwithstanding subsection (1), the office may waive
  724  one or more branch office examinations if the office finds that
  725  such examinations are not necessary for the protection of the
  726  public due to the centralized operations of the program licensee
  727  or other factors acceptable to the office.
  728         (3) The examined program licensee shall pay for the cost of
  729  an examination to the office, pursuant to commission rule, and
  730  the office may maintain an action for the recovery of the cost
  731  in any court of competent jurisdiction. In determining the cost
  732  of the examination, the office may use the estimated average
  733  hourly cost for all persons performing examinations of program
  734  licensees or other persons subject to ss. 516.40-516.46 for the
  735  fiscal year.
  736         (4) The scope of any investigation or examination of a
  737  program licensee or referral partner must be limited to those
  738  books, accounts, records, documents, materials, and matters
  739  reasonably necessary to determine compliance with this chapter.
  740         (5) A program licensee who violates any applicable
  741  provision of this chapter is subject to disciplinary action
  742  pursuant to s. 516.07(2). Any such disciplinary action is
  743  subject to s. 120.60. A program licensee is also subject to
  744  disciplinary action for a violation of s. 516.44 committed by
  745  any of its referral partners.
  746         (6) The office may take any of the following actions
  747  against a referral partner who violates s. 516.44:
  748         (a) Disqualify the referral partner from performing
  749  services under this chapter;
  750         (b) Bar the referral partner from performing services at
  751  one or more specific locations of the referral partner;
  752         (c) Terminate a written agreement between a referral
  753  partner and a program licensee;
  754         (d) Impose an administrative fine not to exceed $1,000 for
  755  each such act of the referral partner; and
  756         (e) Prohibit program licensees from using the referral
  757  partner, if the office deems it to be in the public interest.
  758         Section 7. Section 516.46, Florida Statutes, is created to
  759  read:
  760         516.46 Annual reports; reports by the office.—
  761         (1) Beginning in 2020, on or before March 15 of each year,
  762  a program licensee shall file a report with the office on each
  763  of the items specified in subsection (2), on a form and in a
  764  manner as prescribed by commission rule, which contains
  765  aggregated or anonymized data without reference to any
  766  borrower’s nonpublic personal information or any proprietary or
  767  trade secret information of the program licensee.
  768         (2) On or before January 1, 2021, the office shall post a
  769  report on its website summarizing the use of the program based
  770  on the information contained in reports filed by each program
  771  licensee under subsection (1). The report must state the
  772  information in the aggregate so as not to identify data by
  773  specific program licensee and must specify the period to which
  774  the report corresponds. The report must include, but not be
  775  limited to, the following for that period:
  776         (a) The number of entities that applied to participate in
  777  the program.
  778         (b) The number of entities accepted to participate in the
  779  program.
  780         (c) The office’s reasons for rejecting applications for
  781  participation, if applicable. This information must be provided
  782  in a manner that does not identify the entity or entities
  783  rejected.
  784         (d) The number of program loan applications received by
  785  program licensees participating in the program, the number of
  786  program loans made under the program, the total amount loaned,
  787  the distribution of loan lengths upon origination, and the
  788  distribution of interest rates and principal amounts upon
  789  origination among those program loans.
  790         (e) The number of borrowers who obtained more than one
  791  program loan and the distribution of the number of program loans
  792  per borrower.
  793         (f) Of the borrowers who obtained more than one program
  794  loan, the percentage of those borrowers whose credit scores
  795  increased between successive loans, based on information from at
  796  least one major credit bureau, and the average size of the
  797  increase.
  798         (g) The income distribution of borrowers upon program loan
  799  origination, including the number of borrowers who obtained at
  800  least one program loan and who resided in a low-income or
  801  moderate-income census tract at the time of their loan
  802  applications.
  803         (h) The number of borrowers who obtained program loans for
  804  the following purposes, based on borrower responses at the time
  805  of their loan applications indicating the primary purpose for
  806  which the program loan was obtained:
  807         1. Pay medical expenses.
  808         2. Pay for vehicle repair or a vehicle purchase.
  809         3. Pay bills.
  810         4. Consolidate debt.
  811         5. Build or repair credit history.
  812         6. Pay other expenses.
  813         (i) The number of borrowers who self-report that they had a
  814  bank account at the time of their loan application and the
  815  number of borrowers who self-report that they did not have a
  816  bank account at the time of their loan application.
  817         (j) With respect to refinance program loans, the report
  818  must specifically include the following information:
  819         1. The number and percentage of borrowers who applied for a
  820  refinance program loan.
  821         2. Of those borrowers who applied for a refinance program
  822  loan, the number and percentage of borrowers who obtained a
  823  refinance program loan.
  824         (k) The number and type of referral partners used by
  825  program licensees.
  826         (l) The number and percentage of borrowers who obtained one
  827  or more program loans on which delinquency charges were
  828  assessed, the total amount of delinquency charges assessed, and
  829  the average delinquency charge assessed by dollar amount and as
  830  a percentage of the principal amount loaned.
  831         (m) The performance of program loans under the program as
  832  reflected by all of the following:
  833         1. The number and percentage of borrowers who experienced
  834  at least one delinquency lasting between 7 and 29 days, and the
  835  distribution of principal loan amounts corresponding to those
  836  delinquencies.
  837         2. The number and percentage of borrowers who experienced
  838  at least one delinquency lasting between 30 and 59 days, and the
  839  distribution of principal loan amounts corresponding to those
  840  delinquencies.
  841         3. The number and percentage of borrowers who experienced
  842  at least one delinquency lasting 60 days or more, and the
  843  distribution of principal loan amounts corresponding to those
  844  delinquencies.
  845         (n) The number and types of violations of ss. 516.40-516.46
  846  by referral partners which were documented by the office.
  847         (o) The number and types of violations of ss. 516.40-516.46
  848  by program licensees which were documented by the office.
  849         (p) The number of times that the office disqualified a
  850  referral partner from performing services, barred a referral
  851  partner from performing services at one or more specific
  852  locations of the referral partner, terminated a written
  853  agreement between a referral partner and a program licensee, or
  854  imposed an administrative penalty.
  855         (q) The number of complaints received by the office about a
  856  program licensee or a referral partner and the nature of those
  857  complaints.
  858         Section 8. Sections 516.40-516.46, Florida Statutes, are
  859  repealed on December 31, 2023, unless reenacted or superseded by
  860  another law enacted by the Legislature before that date.
  861         Section 9. This act shall take effect October 1, 2018.