Florida Senate - 2024 SB 1436
By Senator Burton
12-01002-24 20241436__
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 on consumer
12 finance loans; revising the minimum amount of time
13 before which a delinquency charge for each payment in
14 default may be imposed; amending s. 516.15, F.S.;
15 requiring licensees offering an assistance program to
16 borrowers after a federally declared disaster to send
17 a specified notice to the office within a certain
18 timeframe; providing construction; creating s. 516.38,
19 F.S.; requiring licensees to file annual reports with
20 the office; providing for rulemaking by the Financial
21 Services Commission; specifying requirements for the
22 reports; providing requirements for a licensee
23 claiming that submitted information contains a trade
24 secret; authorizing the office to publish a report in
25 a certain manner; creating s. 516.39, F.S.; requiring
26 certain licensees to suspend specified actions for a
27 certain timeframe after a federally declared disaster;
28 reenacting s. 516.19, F.S., relating to penalties, to
29 incorporate the amendments made to ss. 516.02 and
30 516.031, F.S., in references thereto; providing an
31 effective date.
32
33 Be It Enacted by the Legislature of the State of Florida:
34
35 Section 1. Section 516.01, Florida Statutes, is reordered
36 and amended to read:
37 516.01 Definitions.—As used in this chapter, the term:
38 (1) “Branch” means any location, other than a licensee’s
39 principal place of business, at which a licensee operates or
40 conducts business under this chapter or which the licensee owns
41 or controls for the purpose of conducting business under this
42 chapter.
43 (3) “Consumer finance borrower” or “borrower” means a
44 person who has incurred either direct or contingent liability to
45 repay a consumer finance loan.
46 (4)(2) “Consumer finance loan” means a loan of money,
47 credit, goods, or choses in action, including, except as
48 otherwise specifically indicated, provision of a line of credit,
49 in an amount or to a value of $25,000 or less for which the
50 lender charges, contracts for, collects, or receives interest at
51 a rate greater than 18 percent per annum.
52 (2)(3) “Commission” means the Financial Services
53 Commission.
54 (9)(4) “Office” means the Office of Financial Regulation of
55 the commission.
56 (6)(5) “Interest” means the cost of obtaining a consumer
57 finance loan and includes any profit or advantage of any kind
58 whatsoever that a lender may charge, contract for, collect,
59 receive, or in anywise obtain, including by means of any
60 collateral sale, purchase, or agreement, as a condition for a
61 consumer finance loan. Charges specifically permitted by this
62 chapter, including commissions received for insurance written as
63 permitted by this chapter, shall not be deemed interest.
64 (7)(6) “License” means a permit issued under this chapter
65 to make and collect loans in accordance with this chapter at a
66 single place of business.
67 (8)(7) “Licensee” means a person to whom a license is
68 issued.
69 (5)(8) “Control person” means an individual, partnership,
70 corporation, trust, or other organization that possesses the
71 power, directly or indirectly, to direct the management or
72 policies of a company, whether through ownership of securities,
73 by contract, or otherwise. A person is presumed to control a
74 company if, with respect to a particular company, that person:
75 (a) Is a director, general partner, or officer exercising
76 executive responsibility or having similar status or functions;
77 (b) Directly or indirectly may vote 10 percent or more of a
78 class of a voting security or sell or direct the sale of 10
79 percent or more of a class of voting securities; or
80 (c) In the case of a partnership, may receive upon
81 dissolution or has contributed 10 percent or more of the
82 capital.
83 Section 2. Subsection (1) of section 516.02, Florida
84 Statutes, is amended to read:
85 516.02 Loans; lines of credit; rate of interest; license.—
86 (1) A person may must not engage in the business of making
87 consumer finance loans or operate a branch of such business
88 unless she or he is authorized to do so under this chapter or
89 other statutes and unless the person first obtains a license
90 from the office.
91 Section 3. Subsection (1) of section 516.03, Florida
92 Statutes, is amended to read:
93 516.03 Application for license; fees; etc.—
94 (1) APPLICATION.—Application for a license to make loans
95 under this chapter shall be in the form prescribed by rule of
96 the commission. The commission may require each applicant to
97 provide any information reasonably necessary to determine the
98 applicant’s eligibility for licensure. The applicant shall also
99 provide information that the office requires concerning any
100 officer, director, control person, member, partner, or joint
101 venturer of the applicant or any person having the same or
102 substantially similar status or performing substantially similar
103 functions or concerning any individual who is the ultimate
104 equitable owner of a 10-percent or greater interest in the
105 applicant. The office may require information concerning any
106 such applicant or person, including, but not limited to, his or
107 her full name and any other names by which he or she may have
108 been known, age, social security number, residential history,
109 qualifications, educational and business history, and
110 disciplinary and criminal history. The applicant must provide
111 evidence of liquid assets of at least $25,000 or documents
112 satisfying the requirements of s. 516.05(10). At the time of
113 making such application, the applicant shall pay to the office a
114 nonrefundable biennial license fee of $625 for the principal
115 place of business and for each branch application filed.
116 Applications for a license for the principal place of business,
117 except for applications to renew or reactivate a license, must
118 also be accompanied by a nonrefundable investigation fee of
119 $200. An application is considered received for purposes of s.
120 120.60 upon receipt of a completed application form as
121 prescribed by commission rule, a nonrefundable application fee
122 of $625, and any other fee prescribed by law. The commission may
123 adopt rules requiring electronic submission of any form,
124 document, or fee required by this chapter act if such rules
125 reasonably accommodate technological or financial hardship. The
126 commission may prescribe by rule requirements and procedures for
127 obtaining an exemption due to a technological or financial
128 hardship.
129 Section 4. Subsection (1) and paragraph (a) of subsection
130 (3) of section 516.031, Florida Statutes, are amended to read:
131 516.031 Finance charge; maximum rates.—
132 (1) INTEREST RATES.—A licensee may lend any sum of money up
133 to $25,000. A licensee may not take a security interest secured
134 by land on any loan less than $1,000. The licensee may charge,
135 contract for, and receive thereon interest charges as provided
136 and authorized by this section. The maximum interest rate shall
137 be 36 30 percent per annum, computed on the first $10,000 $3,000
138 of the principal amount; 30 24 percent per annum on that part of
139 the principal amount exceeding $10,000 $3,000 and up to $20,000
140 $4,000; and 24 18 percent per annum on that part of the
141 principal amount exceeding $20,000 $4,000 and up to $25,000. The
142 original principal amount as used in this section is the same as
143 the amount financed as defined by the federal Truth in Lending
144 Act and Regulation Z of the Board of Governors of the Federal
145 Reserve System. In determining compliance with the statutory
146 maximum interest and finance charges set forth herein, the
147 computations used shall be simple interest and not add-on
148 interest or any other computations. If two or more interest
149 rates are applied to the principal amount of a loan, the
150 licensee may charge, contract for, and receive interest at that
151 single annual percentage rate which, if applied according to the
152 actuarial method to each of the scheduled periodic balances of
153 principal, would produce at maturity the same total amount of
154 interest as would result from the application of the two or more
155 rates otherwise permitted, based upon the assumption that all
156 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) In the event of a Federal Emergency Management Agency
214 response to a Presidential Disaster Declaration in the state, if
215 the licensee offers any assistance program to borrowers impacted
216 by the disaster, within 10 days after the licensee’s
217 establishment of the program, send written notice to the office
218 in either physical or electronic format and include the
219 following information, subject to change as any additional
220 declarations 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, 2025, 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.—In the event of a Federal
289 Emergency Management Agency response to a Presidential Disaster
290 Declaration in the state, a licensee operating in a county
291 designated in the declaration must suspend for a period of 90
292 days after the date 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, 2024.