SB 546 First Engrossed (ntc) 2022546e1 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): 73 1. An applicant or a licensee may provide to the office a 74 surety bond in the amount of at least $25,000, issued by a 75 bonding company or insurance company authorized to do business 76 in this state. 77 2. 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 insurance company authorized to do business 81 in this state. However, in no event may the aggregate amount of 82 the surety bond required for a company with multiple licenses 83 exceed $100,000. 84 (b) In lieu of a surety bond, the applicant or the licensee 85 may provide evidence of a certificate of deposit or an 86 irrevocable letter of credit in the same amount of the surety 87 bond required under paragraph (a). The certificate of deposit 88 must be deposited in a financial institution, as defined in s. 89 655.005(1)(i). The letter of credit must be issued by a 90 financial institution, as defined in s. 655.005(1)(i). 91 (c) The original surety bond, certificate of deposit, or 92 letter of credit must be filed with the office, and the office 93 must be named as beneficiary. The surety bond, certificate of 94 deposit, or letter of credit must be for the use and benefit of 95 any borrower who is injured by acts of a licensee involving 96 fraud, misrepresentation, or deceit, including willful 97 imposition of illegal or excessive charges; or 98 misrepresentation, circumvention, or concealment of any matter 99 required to be stated or furnished to a borrower, where such 100 acts are in connection with a loan made under this chapter. The 101 office, or any claimant, may bring an action in a court of 102 competent jurisdiction on the surety bond, certificate of 103 deposit, or letter of credit. The surety bond, certificate of 104 deposit, or letter of credit must be payable on a pro rata 105 basis, but the aggregate amount may not exceed the amount of the 106 surety bond, certificate of deposit, or letter of credit. 107 (d) The surety bond, certificate of deposit, or letter of 108 credit may not be canceled by the licensee, bonding or insurance 109 company, or financial institution except upon notice to the 110 office by certified mail. A cancellation may not take effect 111 until 30 calendar days after receipt by the office of the 112 notice. 113 (e) The bonding or insurance company or financial 114 institution must, within 10 calendar days after it pays a claim, 115 give notice to the office by certified mail of such payment with 116 details sufficient to identify the claimant and the claim or 117 judgment paid. 118 (f) If the principal sum of the surety bond, certificate of 119 deposit, or letter of credit is reduced by one or more 120 recoveries or payments, the licensee must furnish to the office 121 a new or additional surety bond, certificate of deposit, or 122 letter of credit so that the total or aggregate principal sum 123 equals the amount required under this subsection. Alternatively, 124 a licensee may furnish an endorsement executed by the bonding or 125 insurance company or financial institution reinstating the 126 required principal amount. 127 (g) The required surety bond, certificate of deposit, or 128 letter of credit must remain in place for 2 years after the 129 licensee ceases licensed operations in this state. During the 2 130 year period, the office may allow for a reduction or elimination 131 of the surety bond, certificate of deposit, or letter of credit 132 to the extent the licensee’s outstanding consumer finance loans 133 in this state are reduced. 134 (h) The commission may prescribe by rule forms and 135 procedures to implement this subsection. 136 Section 4. Paragraph (b) of subsection (1) of section 137 516.07, Florida Statutes, is amended to read: 138 516.07 Grounds for denial of license or for disciplinary 139 action.— 140 (1) The following acts are violations of this chapter and 141 constitute grounds for denial of an application for a license to 142 make consumer finance loans and grounds for any of the 143 disciplinary actions specified in subsection (2): 144 (b) Failure to maintain liquid assets of at least $25,000 145 or a surety bond, certificate of deposit, or letter of credit in 146 the amount required by s. 516.05(10) at all times for the 147 operation of business at a licensed location or proposed 148 location. 149 Section 5. Paragraph (a) of subsection (4) of section 150 559.952, Florida Statutes, is amended to read: 151 559.952 Financial Technology Sandbox.— 152 (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE 153 REQUIREMENTS.— 154 (a) Notwithstanding any other law, upon approval of a 155 Financial Technology Sandbox application, the following 156 provisions and corresponding rule requirements are not 157 applicable to the licensee during the sandbox period: 158 1. Section 516.03(1), except for the application fee, the 159 investigation fee, the requirement to provide the social 160 security numbers of control persons, evidence of liquid assets 161 of at least $25,000 or documents satisfying the requirements of 162 s. 516.05(10), and the office’s authority to investigate the 163 applicant’s background. The office may prorate the license 164 renewal fee for an extension granted under subsection (7). 165 2. Section 516.05(1) and (2), except that the office shall 166 investigate the applicant’s background. 167 3. Section 560.109, only to the extent that the section 168 requires the office to examine a licensee at least once every 5 169 years. 170 4. Section 560.118(2). 171 5. Section 560.125(1), only to the extent that the 172 subsection would prohibit a licensee from engaging in the 173 business of a money transmitter or payment instrument seller 174 during the sandbox period. 175 6. Section 560.125(2), only to the extent that the 176 subsection would prohibit a licensee from appointing an 177 authorized vendor during the sandbox period. Any authorized 178 vendor of such a licensee during the sandbox period remains 179 liable to the holder or remitter. 180 7. Section 560.128. 181 8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7. 182 10. and (b), (c), and (d). 183 9. Section 560.142(1) and (2), except that the office may 184 prorate, but may not entirely eliminate, the license renewal 185 fees in s. 560.143 for an extension granted under subsection 186 (7). 187 10. Section 560.143(2), only to the extent necessary for 188 proration of the renewal fee under subparagraph 9. 189 11. Section 560.204(1), only to the extent that the 190 subsection would prohibit a licensee from engaging in, or 191 advertising that it engages in, the selling or issuing of 192 payment instruments or in the activity of a money transmitter 193 during the sandbox period. 194 12. Section 560.205(2). 195 13. Section 560.208(2). 196 14. Section 560.209, only to the extent that the office may 197 modify, but may not entirely eliminate, the net worth, corporate 198 surety bond, and collateral deposit amounts required under that 199 section. The modified amounts must be in such lower amounts that 200 the office determines to be commensurate with the factors under 201 paragraph (5)(c) and the maximum number of consumers authorized 202 to receive the financial product or service under this section. 203 Section 6. This act shall take effect October 1, 2022.