Florida Senate - 2022 SB 546 By Senator Gruters 23-00431-22 2022546__ 1 A bill to be entitled 2 An act relating to consumer finance loans; amending s. 3 516.03, F.S.; authorizing an applicant for a license 4 to make and collect loans under the Florida Consumer 5 Finance Act to provide certain documents in lieu of 6 evidence of liquid assets; amending s. 516.031, F.S.; 7 prohibiting a person licensed to make and collect 8 consumer finance loans from charging prepayment 9 penalties for loans; amending s. 516.05, F.S.; 10 authorizing a licensee or an applicant for a license 11 to make and collect consumer finance loans to provide 12 a surety bond, certificate of deposit, or letter of 13 credit in lieu of evidence of liquid assets; providing 14 requirements for such bonds, certificates of deposit, 15 and letters of credit; providing rulemaking authority 16 to the Financial Services Commission; amending s. 17 516.07, F.S.; modifying grounds for denial of license 18 or disciplinary action for certain violations of the 19 Florida Consumer Finance Act; amending s. 559.952, 20 F.S.; revising exceptions for a licensee during the 21 Financial Technology Sandbox period; providing an 22 effective date. 23 24 Be It Enacted by the Legislature of the State of Florida: 25 26 Section 1. Subsection (1) of section 516.03, Florida 27 Statutes, is amended to read: 28 516.03 Application for license; fees; etc.— 29 (1) APPLICATION.—Application for a license to make loans 30 under this chapter shall be in the form prescribed by rule of 31 the commission. The commission may require each applicant to 32 provide any information reasonably necessary to determine the 33 applicant’s eligibility for licensure. The applicant shall also 34 provide information that the office requires concerning any 35 officer, director, control person, member, partner, or joint 36 venturer of the applicant or any person having the same or 37 substantially similar status or performing substantially similar 38 functions or concerning any individual who is the ultimate 39 equitable owner of a 10-percent or greater interest in the 40 applicant. The office may require information concerning any 41 such applicant or person, including, but not limited to, his or 42 her full name and any other names by which he or she may have 43 been known, age, social security number, residential history, 44 qualifications, educational and business history, and 45 disciplinary and criminal history. The applicant must provide 46 evidence of liquid assets of at least $25,000 or documents 47 satisfying the requirements of s. 516.05(10). At the time of 48 making such application the applicant shall pay to the office a 49 nonrefundable biennial license fee of $625. Applications, except 50 for applications to renew or reactivate a license, must also be 51 accompanied by a nonrefundable investigation fee of $200. An 52 application is considered received for purposes of s. 120.60 53 upon receipt of a completed application form as prescribed by 54 commission rule, a nonrefundable application fee of $625, and 55 any other fee prescribed by law. The commission may adopt rules 56 requiring electronic submission of any form, document, or fee 57 required by this act if such rules reasonably accommodate 58 technological or financial hardship. The commission may 59 prescribe by rule requirements and procedures for obtaining an 60 exemption due to a technological or financial hardship. 61 Section 2. Subsection (6) is added to section 516.031, 62 Florida Statutes, to read: 63 516.031 Finance charge; maximum rates.— 64 (6) PREPAYMENT PENALTIES PROHIBITED.—A licensee may not 65 require a borrower to pay a prepayment penalty for paying all or 66 part of the loan principal before the date on which the payment 67 is due. 68 Section 3. Subsection (10) is added to section 516.05, 69 Florida Statutes, to read: 70 516.05 License.— 71 (10)(a) In lieu of the $25,000 liquid asset requirement in 72 s. 516.03(1), a licensee or an applicant may provide to the 73 office: 74 1.a. A surety bond in the amount of at least $25,000, 75 issued by a bonding company or an insurance company authorized 76 to do business in this state. 77 b. A company with at least one currently licensed location 78 must provide to the office a rider or surety bond in the amount 79 of at least $5,000 for each additional license, issued by a 80 bonding company or an insurance company authorized to do 81 business in this state. However, the aggregate amount of the 82 surety bond required for a company with multiple licenses may 83 not exceed $100,000. 84 2. Evidence of a certificate of deposit in the amount of at 85 least $25,000. The certificate of deposit must be deposited in a 86 financial institution as defined in s. 655.005(1)(i). 87 3. An irrevocable letter of credit in the amount of at 88 least $25,000. 89 (b) The original surety bond, certificate of deposit, or 90 letter of credit must be filed with the office, and the office 91 must be named as beneficiary. The surety bond, certificate of 92 deposit, or letter of credit must be for the use and benefit of 93 any borrower who is injured by acts of a licensee involving 94 fraud, misrepresentation, or deceit, including willful 95 imposition of illegal or excessive charges, or 96 misrepresentation, circumvention, or concealment of any matter 97 required to be stated or furnished to a borrower, where such 98 acts are in connection with a loan made under this chapter. The 99 office, or any claimant, may bring an action in a court of 100 competent jurisdiction on the surety bond, certificate of 101 deposit, or letter of credit. The surety bond, certificate of 102 deposit, or letter of credit must be payable on a pro rata 103 basis, but the aggregate amount may not exceed the amount of the 104 surety bond, certificate of deposit, or letter of credit. 105 (c) The surety bond, certificate of deposit, or letter of 106 credit may not be canceled by the licensee, bonding or insurance 107 company, or financial institution except upon notice to the 108 office by certified mail. A cancellation may not take effect 109 until 30 calendar days after receipt by the office of the 110 written notice. 111 (d) The bonding or insurance company or financial 112 institution must, within 10 calendar days after it pays a claim, 113 give written notice to the office by certified mail of such 114 payment, with details sufficient to identify the claimant and 115 the claim or judgment paid. 116 (e) If the principal sum of the surety bond, certificate of 117 deposit, or letter of credit is reduced by one or more 118 recoveries or payments, the licensee must furnish to the office 119 a new or additional surety bond, certificate of deposit, or 120 letter of credit so that the total or aggregate principal sum 121 equals the amount required under this subsection. Alternatively, 122 a licensee may furnish an endorsement executed by the bonding or 123 insurance company or financial institution reinstating the 124 required principal amount. 125 (f) The required surety bond, certificate of deposit, or 126 letter of credit must remain in place for 2 years after the 127 licensee ceases licensed operations in this state. During the 2 128 year period, the office may allow for a reduction or elimination 129 of the surety bond, certificate of deposit, or letter of credit 130 to the extent the licensee’s outstanding consumer finance loans 131 in this state are reduced. 132 (g) The commission may prescribe by rule forms and 133 procedures to implement this subsection. 134 Section 4. Paragraph (b) of subsection (1) of section 135 516.07, Florida Statutes, is amended to read: 136 516.07 Grounds for denial of license or for disciplinary 137 action.— 138 (1) The following acts are violations of this chapter and 139 constitute grounds for denial of an application for a license to 140 make consumer finance loans and grounds for any of the 141 disciplinary actions specified in subsection (2): 142 (b) Failure to maintain liquid assets of at least $25,000 143 or a surety bond, certificate of deposit, or letter of credit in 144 the amount required by s. 516.05(10) at all times for the 145 operation of business at a licensed location or proposed 146 location. 147 Section 5. Paragraph (a) of subsection (4) of section 148 559.952, Florida Statutes, is amended to read: 149 559.952 Financial Technology Sandbox.— 150 (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE 151 REQUIREMENTS.— 152 (a) Notwithstanding any other law, upon approval of a 153 Financial Technology Sandbox application, the following 154 provisions and corresponding rule requirements are not 155 applicable to the licensee during the sandbox period: 156 1. Section 516.03(1), except for the application fee, the 157 investigation fee, the requirement to provide the social 158 security numbers of control persons, evidence of liquid assets 159 of at least $25,000 or documents satisfying the requirements of 160 s. 516.05(10), and the office’s authority to investigate the 161 applicant’s background. The office may prorate the license 162 renewal fee for an extension granted under subsection (7). 163 2. Section 516.05(1) and (2), except that the office shall 164 investigate the applicant’s background. 165 3. Section 560.109, only to the extent that the section 166 requires the office to examine a licensee at least once every 5 167 years. 168 4. Section 560.118(2). 169 5. Section 560.125(1), only to the extent that the 170 subsection would prohibit a licensee from engaging in the 171 business of a money transmitter or payment instrument seller 172 during the sandbox period. 173 6. Section 560.125(2), only to the extent that the 174 subsection would prohibit a licensee from appointing an 175 authorized vendor during the sandbox period. Any authorized 176 vendor of such a licensee during the sandbox period remains 177 liable to the holder or remitter. 178 7. Section 560.128. 179 8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7. 180 10. and (b), (c), and (d). 181 9. Section 560.142(1) and (2), except that the office may 182 prorate, but may not entirely eliminate, the license renewal 183 fees in s. 560.143 for an extension granted under subsection 184 (7). 185 10. Section 560.143(2), only to the extent necessary for 186 proration of the renewal fee under subparagraph 9. 187 11. Section 560.204(1), only to the extent that the 188 subsection would prohibit a licensee from engaging in, or 189 advertising that it engages in, the selling or issuing of 190 payment instruments or in the activity of a money transmitter 191 during the sandbox period. 192 12. Section 560.205(2). 193 13. Section 560.208(2). 194 14. Section 560.209, only to the extent that the office may 195 modify, but may not entirely eliminate, the net worth, corporate 196 surety bond, and collateral deposit amounts required under that 197 section. The modified amounts must be in such lower amounts that 198 the office determines to be commensurate with the factors under 199 paragraph (5)(c) and the maximum number of consumers authorized 200 to receive the financial product or service under this section. 201 Section 6. This act shall take effect October 1, 2022.