CS/HB 123 2022
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
A bill to be entitled 1
An act relating to consumer finance loans; amending s. 2
516.03, F.S.; authorizing an applicant for a license 3
to make and collect loans under the Florida Consumer 4
Finance Act to provide a surety bond, certificate of 5
deposit, or letter of credit in lieu of liquid assets; 6
amending s. 516.031, F.S.; prohibiting a person 7
licensed to make and collect consumer finance loans 8
from charging prepayment penalties for loans; am ending 9
s. 516.05, F.S.; authorizing an applicant for a 10
license to make and collect consumer finance loans or 11
a licensee to provide a surety bond, certificate of 12
deposit, or letter of credit in lieu of liquid assets; 13
providing requirements for such bonds, c ertificates of 14
deposit, and letters of credit; providing rulemaking 15
authority; amending s. 516.07, F.S.; revising grounds 16
for denial of license or disciplinary action; amending 17
s. 559.952, F.S.; revising exceptions for a licensee 18
during the Financial Techn ology Sandbox period; 19
providing an effective date. 20
21
Be It Enacted by the Legislature of the State of Florida: 22
23
Section 1. Subsection (1) of section 516.03, Florida 24
Statutes, is amended to read: 25
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
516.03 Application for license; fees; assets, bonds, 26
certificates of deposit, or letters of credit; etc.— 27
(1) APPLICATION.—Application for a license to make loans 28
under this chapter shall be in the form prescribed by rule of 29
the commission. The commission may require each applicant to 30
provide any informat ion reasonably necessary to determine the 31
applicant's eligibility for licensure. The applicant shall also 32
provide information that the office requires concerning any 33
officer, director, control person, member, partner, or joint 34
venturer of the applicant or any person having the same or 35
substantially similar status or performing substantially similar 36
functions or concerning any individual who is the ultimate 37
equitable owner of a 10 -percent or greater interest in the 38
applicant. The office may require informati on concerning any 39
such applicant or person, including, but not limited to, his or 40
her full name and any other names by which he or she may have 41
been known, age, social security number, residential history, 42
qualifications, educational and business history, and 43
disciplinary and criminal history. The applicant must provide 44
evidence of liquid assets of at least $25,000 or documents 45
satisfying the requirements in s. 516.05(10) . At the time of 46
making such application the applicant shall pay to the office a 47
nonrefundable biennial license fee of $625. Applications, except 48
for applications to renew or reactivate a license, must also be 49
accompanied by a nonrefundable investigation fee of $200. An 50
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
application is considered received for purposes of s. 120.60 51
upon receipt of a completed application form as prescribed by 52
commission rule, a nonrefundable application fee of $625, and 53
any other fee prescribed by law. The commission may adopt rules 54
requiring electronic submission of any form, document, or fee 55
required by this act if such rules reasonably accommodate 56
technological or financial hardship. The commission may 57
prescribe by rule requirements and procedures for obtaining an 58
exemption due to a technological or financial hardship. 59
Section 2. Subsection (6) is added t o section 516.031, 60
Florida Statutes, to read: 61
516.031 Finance charge; maximum rates. — 62
(6) PREPAYMENT PENALTIES PROHIBITED. —A licensee may not 63
require a borrower to pay a prepayment penalty for paying all or 64
part of the loan principal before the date on which the payment 65
is due. 66
Section 3. Subsection (10) is added to section 516.05, 67
Florida Statutes, to read: 68
516.05 License.— 69
(10)(a) In lieu of the $25,000 liquid asset requirement in 70
s. 516.03(1): 71
1. An applicant or a licensee may provide to th e office a 72
surety bond in the amount of at least $25,000, issued by a 73
bonding company or insurance company authorized to do business 74
in this state. 75
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2. A company with at least one currently licensed location 76
must provide to the office a rider or surety bo nd, in the amount 77
of at least $5,000 for each additional license, issued by a 78
bonding company or insurance company authorized to do business 79
in this state. However, in no event may the aggregate amount of 80
the surety bond required for a company with multipl e licenses 81
exceed $100,000. 82
(b) In lieu of a surety bond, the applicant or the 83
licensee may provide evidence of a certificate of deposit or an 84
irrevocable letter of credit in the same amount of the surety 85
bond required under paragraph (a). The certificat e of deposit 86
must be deposited in a financial institution, as defined in s. 87
655.005(1)(i). The letter of credit must be issued by a 88
financial institution, as defined in s. 655.005(1)(i). 89
(c) 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
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competent jurisdiction on the surety bond, certificate of 101
deposit, or letter of credit. The surety bond, certifi cate 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
(d) 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
notice. 111
(e) The bonding or insurance company or financial 112
institution must, within 10 calendar days after it pays a claim, 113
give notice to the office by certified mail of such payment with 114
details sufficient to identify the claimant and the claim or 115
judgment paid. 116
(f) If the principal sum of the surety bond, certificate 117
of 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 tha t 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
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(g) 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 the state are reduced. 132
(h) 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 appli cation 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 Technolo gy Sandbox.— 150
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(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 in 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 t hat 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 appoint ing an 175
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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 a ctivity 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 195
may modify, but may not entirely eliminate, the net worth, 196
corporate surety bond, and co llateral deposit amounts required 197
under that section. The modified amounts must be in such lower 198
amounts that the office determines to be commensurate with the 199
factors under paragraph (5)(c) and the maximum number of 200
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consumers authorized to receive the fin ancial product or service 201
under this section. 202
Section 6. This act shall take effect October 1, 2022. 203