Florida Senate - 2023                              CS for SB 580
       
       
        
       By the Committee on Banking and Insurance; and Senator Gruters
       
       
       
       
       
       597-03292-23                                           2023580c1
    1                        A bill to be entitled                      
    2         An act relating to consumer finance loans; reordering
    3         and amending s. 516.01, F.S.; defining the term
    4         “branch”; amending s. 516.02, F.S.; prohibiting a
    5         person from operating a branch of a business making
    6         consumer finance loans before obtaining a license from
    7         the Office of Financial Regulation; amending s.
    8         516.03, F.S.; specifying application fees for branch
    9         licenses; revising the applicability of investigation
   10         fees; making a technical change; amending s. 516.031,
   11         F.S.; revising the maximum interest rate and the
   12         calculation of interest rates on consumer finance
   13         loans; revising the minimum amount of time before
   14         which a delinquency charge for each payment in default
   15         may be imposed; amending s. 516.15, F.S.; requiring
   16         licensees offering an assistance program to borrowers
   17         after a federally declared major disaster to send a
   18         specified notice to the office within a certain
   19         timeframe; providing construction; creating s. 516.38,
   20         F.S.; requiring licensees to file annual reports with
   21         the office; providing for rulemaking by the Financial
   22         Services Commission; specifying requirements for the
   23         reports; providing requirements for a licensee
   24         claiming that submitted information contains a trade
   25         secret; authorizing the office to publish a report in
   26         a certain manner; creating s. 516.39, F.S.; requiring
   27         certain licensees to suspend specified actions for a
   28         certain timeframe after a federally declared disaster;
   29         reenacting s. 516.19, F.S., relating to penalties, to
   30         incorporate the amendments made to ss. 516.02 and
   31         516.031, F.S., in references thereto; providing an
   32         effective date.
   33          
   34  Be It Enacted by the Legislature of the State of Florida:
   35  
   36         Section 1. Section 516.01, Florida Statutes, is reordered
   37  and amended to read:
   38         516.01 Definitions.—As used in this chapter, the term:
   39         (1)“Branch” means any location, other than a licensee’s
   40  principal place of business, at which a licensee operates or
   41  conducts business under this chapter or which the licensee owns
   42  or controls for the purpose of conducting business under this
   43  chapter.
   44         (3)(1) “Consumer finance borrower” or “borrower” means a
   45  person who has incurred either direct or contingent liability to
   46  repay a consumer finance loan.
   47         (4)(2) “Consumer finance loan” means a loan of money,
   48  credit, goods, or choses in action, including, except as
   49  otherwise specifically indicated, provision of a line of credit,
   50  in an amount or to a value of $25,000 or less for which the
   51  lender charges, contracts for, collects, or receives interest at
   52  a rate greater than 18 percent per annum.
   53         (2)(3) “Commission” means the Financial Services
   54  Commission.
   55         (9)(4) “Office” means the Office of Financial Regulation of
   56  the commission.
   57         (6)(5) “Interest” means the cost of obtaining a consumer
   58  finance loan and includes any profit or advantage of any kind
   59  whatsoever that a lender may charge, contract for, collect,
   60  receive, or in anywise obtain, including by means of any
   61  collateral sale, purchase, or agreement, as a condition for a
   62  consumer finance loan. Charges specifically permitted by this
   63  chapter, including commissions received for insurance written as
   64  permitted by this chapter, shall not be deemed interest.
   65         (7)(6) “License” means a permit issued under this chapter
   66  to make and collect loans in accordance with this chapter at a
   67  single place of business.
   68         (8)(7) “Licensee” means a person to whom a license is
   69  issued.
   70         (5)(8) “Control person” means an individual, partnership,
   71  corporation, trust, or other organization that possesses the
   72  power, directly or indirectly, to direct the management or
   73  policies of a company, whether through ownership of securities,
   74  by contract, or otherwise. A person is presumed to control a
   75  company if, with respect to a particular company, that person:
   76         (a) Is a director, general partner, or officer exercising
   77  executive responsibility or having similar status or functions;
   78         (b) Directly or indirectly may vote 10 percent or more of a
   79  class of a voting security or sell or direct the sale of 10
   80  percent or more of a class of voting securities; or
   81         (c) In the case of a partnership, may receive upon
   82  dissolution or has contributed 10 percent or more of the
   83  capital.
   84         Section 2. Subsection (1) of section 516.02, Florida
   85  Statutes, is amended to read:
   86         516.02 Loans; lines of credit; rate of interest; license.—
   87         (1) A person must not engage in the business of making
   88  consumer finance loans or operate a branch of such business
   89  unless she or he is authorized to do so under this chapter or
   90  other statutes and unless the person first obtains a license
   91  from the office.
   92         Section 3. Subsection (1) of section 516.03, Florida
   93  Statutes, is amended to read:
   94         516.03 Application for license; fees; etc.—
   95         (1) APPLICATION.—Application for a license to make loans
   96  under this chapter shall be in the form prescribed by rule of
   97  the commission. The commission may require each applicant to
   98  provide any information reasonably necessary to determine the
   99  applicant’s eligibility for licensure. The applicant shall also
  100  provide information that the office requires concerning any
  101  officer, director, control person, member, partner, or joint
  102  venturer of the applicant or any person having the same or
  103  substantially similar status or performing substantially similar
  104  functions or concerning any individual who is the ultimate
  105  equitable owner of a 10-percent or greater interest in the
  106  applicant. The office may require information concerning any
  107  such applicant or person, including, but not limited to, his or
  108  her full name and any other names by which he or she may have
  109  been known, age, social security number, residential history,
  110  qualifications, educational and business history, and
  111  disciplinary and criminal history. The applicant must provide
  112  evidence of liquid assets of at least $25,000 or documents
  113  satisfying the requirements of s. 516.05(10). At the time of
  114  making such application, the applicant shall pay to the office a
  115  nonrefundable biennial license fee of $625 for the principal
  116  place of business and for each branch application filed.
  117  Applications for a license for the principal place of business,
  118  except for applications to renew or reactivate a license, must
  119  also be accompanied by a nonrefundable investigation fee of
  120  $200. An application is considered received for purposes of s.
  121  120.60 upon receipt of a completed application form as
  122  prescribed by commission rule, a nonrefundable application fee
  123  of $625, and any other fee prescribed by law. The commission may
  124  adopt rules requiring electronic submission of any form,
  125  document, or fee required by this chapter act if such rules
  126  reasonably accommodate technological or financial hardship. The
  127  commission may prescribe by rule requirements and procedures for
  128  obtaining an exemption due to a technological or financial
  129  hardship.
  130         Section 4. Subsection (1) and paragraph (a) of subsection
  131  (3) of section 516.031, Florida Statutes, are amended to read:
  132         516.031 Finance charge; maximum rates.—
  133         (1) INTEREST RATES.—A licensee may lend any sum of money up
  134  to $25,000. A licensee may not take a security interest secured
  135  by land on any loan less than $1,000. The licensee may charge,
  136  contract for, and receive thereon interest charges as provided
  137  and authorized by this section. The maximum interest rate shall
  138  be 36 30 percent per annum, computed on the first $3,000 of the
  139  principal amount; 24 percent per annum on that part of the
  140  principal amount exceeding $3,000 and up to $4,000; and 18
  141  percent per annum on that part of the principal amount exceeding
  142  $4,000 and up to $25,000. The original principal amount as used
  143  in this section is the same as the amount financed as defined by
  144  the federal Truth in Lending Act and Regulation Z of the Board
  145  of Governors of the Federal Reserve System. In determining
  146  compliance with the statutory maximum interest and finance
  147  charges set forth herein, the computations used shall be simple
  148  interest and not add-on interest or any other computations. If
  149  two or more interest rates are applied to the principal amount
  150  of a loan, the licensee may charge, contract for, and receive
  151  interest at that single annual percentage rate which, if applied
  152  according to the actuarial method to each of the scheduled
  153  periodic balances of principal, would produce at maturity the
  154  same total amount of interest as would result from the
  155  application of the two or more rates otherwise permitted, based
  156  upon the assumption that all payments are made as agreed.
  157         (3) OTHER CHARGES.—
  158         (a) In addition to the interest, delinquency, and insurance
  159  charges provided in this section, further or other charges or
  160  amount for any examination, service, commission, or other thing
  161  or otherwise may not be directly or indirectly charged,
  162  contracted for, or received as a condition to the grant of a
  163  loan, except:
  164         1. An amount of up to $25 to reimburse a portion of the
  165  costs for investigating the character and credit of the person
  166  applying for the loan;
  167         2. An annual fee of $25 on the anniversary date of each
  168  line-of-credit account;
  169         3. Charges paid for the brokerage fee on a loan or line of
  170  credit of more than $10,000, title insurance, and the appraisal
  171  of real property offered as security if paid to a third party
  172  and supported by an actual expenditure;
  173         4. Intangible personal property tax on the loan note or
  174  obligation if secured by a lien on real property;
  175         5. The documentary excise tax and lawful fees, if any,
  176  actually and necessarily paid out by the licensee to any public
  177  officer for filing, recording, or releasing in any public office
  178  any instrument securing the loan, which may be collected when
  179  the loan is made or at any time thereafter;
  180         6. The premium payable for any insurance in lieu of
  181  perfecting any security interest otherwise required by the
  182  licensee in connection with the loan if the premium does not
  183  exceed the fees which would otherwise be payable, which may be
  184  collected when the loan is made or at any time thereafter;
  185         7. Actual and reasonable attorney fees and court costs as
  186  determined by the court in which suit is filed;
  187         8. Actual and commercially reasonable expenses for
  188  repossession, storing, repairing and placing in condition for
  189  sale, and selling of any property pledged as security; or
  190         9. A delinquency charge for each payment in default for at
  191  least 12 10 days if the charge is agreed upon, in writing,
  192  between the parties before imposing the charge. Delinquency
  193  charges may be imposed as follows:
  194         a. For payments due monthly, the delinquency charge for a
  195  payment in default may not exceed $15.
  196         b. For payments due semimonthly, the delinquency charge for
  197  a payment in default may not exceed $7.50.
  198         c. For payments due every 2 weeks, the delinquency charge
  199  for a payment in default may not exceed $7.50 if two payments
  200  are due within the same calendar month, and may not exceed $5 if
  201  three payments are due within the same calendar month.
  202  
  203  Any charges, including interest, in excess of the combined total
  204  of all charges authorized and permitted by this chapter
  205  constitute a violation of chapter 687 governing interest and
  206  usury, and the penalties of that chapter apply. In the event of
  207  a bona fide error, the licensee shall refund or credit the
  208  borrower with the amount of the overcharge immediately but
  209  within 20 days after the discovery of such error.
  210         Section 5. Subsection (5) is added to section 516.15,
  211  Florida Statutes, to read:
  212         516.15 Duties of licensee.—Every licensee shall:
  213         (5) If the Federal Emergency Management Agency issues a
  214  major disaster declaration for this state and if a licensee
  215  offers an assistance program to borrowers impacted by the
  216  disaster, within 10 days after the licensee’s establishment of
  217  the program, send written notice to the office in either
  218  physical or electronic format and include the following
  219  information, subject to change as any additional declarations
  220  are issued or declarations are revoked:
  221         (a)The licensed locations affected by the disaster
  222  declaration, including physical addresses, if applicable;
  223         (b)The telephone number, e-mail address, or other contact
  224  information for the licensee;
  225         (c)A brief description of the assistance program available
  226  to borrowers in the affected areas; and
  227         (d)The start date, and end date if known, of the
  228  assistance program.
  229  
  230  For purposes of this subsection, assistance programs may
  231  include, but are not limited to, deferments, forbearance, waiver
  232  of late fees, payment modification, or changing payment due
  233  dates.
  234         Section 6. Section 516.38, Florida Statutes, is created to
  235  read:
  236         516.38 Annual reports by licensees.—
  237         (1)By March 15, 2024, and each March 15 thereafter, a
  238  licensee shall file a report with the office in a form and
  239  manner prescribed by commission rule. The report must include
  240  each of the items specified in subsection (2) for the preceding
  241  calendar year using aggregated and anonymized data and without
  242  reference to any borrower’s nonpublic personal information.
  243         (2)The report must include the following information for
  244  the preceding calendar year:
  245         (a)The number of locations held by the licensee under this
  246  chapter as of December 31 of the preceding calendar year.
  247         (b)The number of loan originations by the licensee from
  248  all licenses held under this chapter during the preceding
  249  calendar year.
  250         (c)The total dollar amount of loans and the number of
  251  loans outstanding with the licensee from all licenses held under
  252  this chapter as of December 31 of the preceding calendar year.
  253         (d)The total dollar amount of loans and the number of
  254  loans in which the licensee holds a security interest in
  255  collateral as of December 31 of the preceding calendar year.
  256         (e)The total dollar amount of loans and the number of
  257  unsecured loans as of December 31 of the preceding calendar
  258  year.
  259         (f)The total number of loans, separated by principal
  260  amount, in the following ranges as of December 31 of the
  261  preceding calendar year:
  262         1.Up to and including $5,000.
  263         2.Five thousand and one dollars to $10,000.
  264         3.Ten thousand and one dollars to $15,000.
  265         4.Fifteen thousand and one dollars to $20,000.
  266         5.Twenty thousand and one dollars to $25,000.
  267         (g)The total dollar amount of loans and the number of
  268  loans charged off as of December 31 of the preceding calendar
  269  year.
  270         (h)The total dollar amount of loans and the number of
  271  loans with delinquency status listed as:
  272         1.Current or less than 30 days past due.
  273         2.From 30 to 59 days past due.
  274         3.From 60 to 89 days past due.
  275         4.At least 90 days past due.
  276         (3)A licensee claiming that any information submitted in
  277  the report contains a trade secret must submit to the office an
  278  accompanying affidavit in accordance with s. 655.0591 and
  279  designate the information claimed to be a trade secret pursuant
  280  to s. 655.0591.
  281         (4)The office may publish a report of information
  282  submitted pursuant to this section, provided that all data
  283  published in the report is anonymized and aggregated from all
  284  licensees.
  285         Section 7. Section 516.39, Florida Statutes, is created to
  286  read:
  287         516.39 Suspension of penalties and remedial measures after
  288  federal disaster declaration.—If the Federal Emergency
  289  Management Agency issues a major disaster declaration for a
  290  county, a licensee operating in that county designated in the
  291  declaration must suspend for a period of 90 days after the date
  292  of the initial declaration the following:
  293         (1)The application of delinquency charges under s.
  294  516.031(3)(a)9.
  295         (2)Repossessions of collateral pledged to loans made under
  296  this chapter.
  297         (3)The filing of civil actions for the collection of
  298  amounts owed for loans made under this chapter.
  299         Section 8. For the purpose of incorporating the amendments
  300  made by this act to sections 516.02 and 516.031, Florida
  301  Statutes, in references thereto, section 516.19, Florida
  302  Statutes, is reenacted to read:
  303         516.19 Penalties.—Any person who violates any of the
  304  provisions of s. 516.02, s. 516.031, s. 516.05(3), s. 516.05(6),
  305  or s. 516.07(1)(e) commits a misdemeanor of the first degree,
  306  punishable as provided in s. 775.082 or s. 775.083.
  307         Section 9. This act shall take effect July 1, 2023.