Florida 2023 Regular Session

Florida House Bill H1353 Compare Versions

Version 1 (Old)

Version 2 (New)

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10	10		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
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14		-	1
	14	+	A bill to be entitled 1
15	15		An act relating to commercial financing product 2
16	16		brokers and providers; creating part XIII of ch. 559, 3
17	17		F.S., entitled "Florida Commercial Financing 4
18	18		Disclosure Law"; creating s. 559.961, F.S.; providing 5
19	19		a short title; creating s. 559.9611, F.S.; defining 6
20	20		terms; creating s. 559.9612, F.S.; providing 7
21	21		applicability; creating s. 559.9613, F.S.; requiring 8
22	22		providers that consummate commercial financing 9
23	23		transactions to provide specified written disclosures; 10
24	24		authorizing providers to provide specified required 11
25	25		disclosures when consummating a commercial financing 12
26	26		facility which are based on an example of a 13
27	27		transaction; specifying that disclosures are not 14
28	28		required under certain circumstances; creating s. 15
29	29		559.9614, F.S.; prohibiting brokers from taking 16
30	30		specified actions; creating s. 559.9615, F.S.; 17
31	31		providing exclusive authority of the Attorney General 18
32	32		to enforce specified provisions; providing civil 19
33	33		penalties; providing constr uction; providing an 20
34	34		effective date. 21
35	35		22
36	36		Be It Enacted by the Legislature of the State of Florida: 23
37	37		24
38	38		Section 1. Part XIII of chapter 559, Florida Statutes, 25
39		-	~~ENROLLED~~
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	40	+	CS/HB 1353, Engrossed 1 2023
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47	47		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
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51	51		consisting of sections 559.961, 559.9611, 559.9612, 559.9613, 26
52	52		559.9614, and 559.9615, Florida St atutes, is created to read: 27
53	53		PART XIII 28
54	54		FLORIDA COMMERCIAL FINANCING DISCLOSURE LAW 29
55	55		559.961 Short title. —This part may be cited as the 30
56	56		"Florida Commercial Financing Disclosure Law." 31
57	57		559.9611 Definitions. —As used in this part, the term: 32
58	58		(1) "Accounts receivable purchase transaction" means a 33
59	59		transaction in which a business forwards or otherwise sells to a 34
60	60		person all or a portion of the business's accounts or payment 35
61	61		intangibles as those terms are defined in s. 679.1021(1) at a 36
62	62		discount to the expected val ue of the account or payment 37
63	63		intangibles. For purposes of this part, the provider's 38
64	64		characterization of an accounts receivable purchase transaction 39
65	65		as a purchase is conclusive that the accounts receivable 40
66	66		purchase transaction is not a loan or a transaction for the use, 41
67	67		forbearance, or detention of money. 42
68	68		(2) "Advance fee" means any consideration that is assessed 43
69	69		or collected by a broker before the closing of a commercial 44
70	70		financing transaction. 45
71	71		(3) "Broker" means a person who, for compensation or the 46
72	72		expectation of compensation, arranges a commercial financing 47
73	73		transaction or an offer between a third party and a business in 48
74	74		this state which would, if executed, be binding upon that third 49
75	75		party. The term excludes a provider and any individual or entity 50
76		-	~~ENROLLED~~
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84	84		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
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88	88		whose compensation is not based or dependent upon the terms of 51
89	89		the specific commercial financing transaction obtained or 52
90	90		offered. 53
91	91		(4) "Business" means an individual or a group of 54
92	92		individuals, a sole proprietorship, a corporation, a limited 55
93	93		liability company, a trust, an estate, a cooperative, an 56
94	94		association, or a limited or general partnership engaged in a 57
95	95		business activity. 58
96	96		(5) "Commercial financing facility" means a provider's 59
97	97		plan for purchasing multiple accounts receivable from the 60
98	98		recipient over a perio d of time pursuant to an agreement that 61
99	99		sets forth the terms and conditions governing the use of the 62
100	100		facility. 63
101	101		(6) "Commercial financing transaction" means a commercial 64
102	102		loan, an accounts receivable purchase transaction, or a 65
103	103		commercial open-end credit plan to the extent the transaction is 66
104	104		also a business purpose transaction. As used in this subsection, 67
105	105		the term "business purpose transaction" means a transaction the 68
106	106		proceeds of which are provided to a business or are intended to 69
107	107		be used to carry on a busin ess and not to be used for personal, 70
108	108		family, or household purposes. For purposes of determining 71
109	109		whether a transaction is a business purpose transaction, the 72
110	110		provider may rely on any written statement of intended purpose 73
111	111		signed by the business. The statemen t may be a separate 74
112	112		statement or may be contained in an application, agreement, or 75
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121	121		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
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125	125		other document signed by the business or the business owner. 76
126	126		(7) "Commercial loan" means a loan to a business, whether 77
127	127		secured or unsecured. 78
128	128		(8) "Commercial open -end credit plan" means commercial 79
129	129		financing extended by any provider under a plan in which: 80
130	130		(a) The provider reasonably contemplates repeat 81
131	131		transactions. 82
132	132		(b) The amount of financing that may be extended to the 83
133	133		business during the term of the plan, up to any limit set by the 84
134	134		provider, is generally made available to the extent that any 85
135	135		outstanding balance is repaid. 86
136	136		(9) "Depository institution" means a Florida state -87
137	137		chartered bank, savings bank, credit union, or trust company, or 88
138	138		a federal savings or thrift a ssociation, bank, credit union, 89
139	139		savings bank, or thrift. 90
140	140		(10) "Provider" means a person who consummates more than 91
141	141		five commercial financing transactions with a business located 92
142	142		in this state in any calendar year. The term also includes a 93
143	143		person who enters into a written agreement with a depository 94
144	144		institution to arrange a commercial financing transaction 95
145	145		between the depository institution and a business via an online 96
146	146		lending platform administered by the person. The fact that a 97
147	147		provider extends a specific offer for a commercial financing 98
148	148		transaction on behalf of a depository institution may not be 99
149	149		construed to mean that the provider engaged in lending or 100
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158	158		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
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162	162		financing or originated that loan or financing. 101
163	163		559.9612 Scope of this part. —This part applies to any 102
164	164		commercial financing transaction consummated on or after January 103
165	165		1, 2024. This part does not apply to: 104
166	166		(1) A provider that is: 105
167	167		(a) A federally insured depository institution or an 106
168	168		affiliate or holding company of such institution; or 107
169	169		(b) A subsidiary or service corporation that is owned and 108
170	170		controlled by a federally insured depository institution or 109
171	171		under common ownership with such institution. 110
172	172		(2) A provider that is a lender regulated under the Farm 111
173	173		Credit Act of 1971, 12 U.S.C. ss. 2001 et seq. 112
174	174		(3) A commercial financing transaction that is: 113
175	175		(a) Secured by real property; 114
176	176		(b) A lease; or 115
177	177		(c) A purchase money obligation that is incurred as all or 116
178	178		part of the price of the collateral or for value given to enable 117
179	179		the business to acquire rights in or the use of the collateral 118
180	180		if the value is in fact so used. 119
181	181		(4) A commercial financing transaction in which the 120
182	182		recipient is a motor vehicle dealer or an affiliate of such a 121
183	183		dealer, or a vehicle rental company or an affiliate of such a 122
184	184		company, pursuant to a commercial loan or commercial open -end 123
185	185		credit plan of at least $50,000 or a commercial financing 124
186	186		transaction offered by a person in connection with the sale or 125
187		-	~~ENROLLED~~
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195	195		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
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199	199		lease of products or services that such person manufactures, 126
200	200		licenses, or distributes, o r whose parent company or any of its 127
201	201		directly or indirectly owned and controlled subsidiaries 128
202	202		manufactures, licenses, or distributes. 129
203	203		(5) A provider that is licensed as a money transmitter 130
204	204		under chapter 560 or licensed as a money transmitter by any 131
205	205		other state, district, territory, or commonwealth of the United 132
206	206		States. 133
207	207		(6) A provider that consummates no more than five 134
208	208		commercial financing transactions in this state in a 12 -month 135
209	209		period. 136
210	210		(7) A commercial financing transaction of more than 137
211	211		$500,000. 138
212	212		559.9613 Disclosures. — 139
213	213		(1) A provider that consummates a commercial financing 140
214	214		transaction shall provide a written disclosure of the terms of 141
215	215		the commercial financing transaction as required by subsection 142
216	216		(2). The disclosure must be provided at or before c onsummation 143
217	217		of the transaction. Only one disclosure must be provided for 144
218	218		each commercial financing transaction, and a disclosure is not 145
219	219		required as result of a modification, forbearance, or change to 146
220	220		a consummated commercial financing transaction. 147
221	221		(2) A provider shall provide a written disclosure of the 148
222	222		following information in connection with each commercial 149
223	223		financing transaction: 150
224		-	~~ENROLLED~~
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232	232		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
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236	236		(a) The total amount of funds provided to the business 151
237	237		under the terms of the agreement. 152
238	238		(b) The total amount of funds di sbursed to the business if 153
239	239		less than the amount specified in paragraph (a) as a result of 154
240	240		any fees deducted or withheld at disbursement, any amount paid 155
241	241		to the provider to satisfy a prior balance, and any amount paid 156
242	242		to a third party on behalf of the busin ess. 157
243	243		(c) The total amount to be paid to the provider under the 158
244	244		terms of the agreement. 159
245	245		(d) The total dollar cost under the terms of the 160
246	246		agreement, calculated by finding the difference between the 161
247	247		amount specified in paragraph (a) and the amount specifi ed in 162
248	248		paragraph (c). 163
249	249		(e)1. The manner, frequency, and amount of each payment; 164
250	250		or 165
251	251		2. If the amount of the payments may vary, the manner and 166
252	252		frequency of the payments, the estimated amount of the initial 167
253	253		payment, a description of the methodology for calc ulating any 168
254	254		variable payment, and the circumstances under which payments may 169
255	255		vary. 170
256	256		(f) Whether there are any costs or discounts associated 171
257	257		with prepayment, including a reference to the provision in the 172
258	258		agreement which creates the contractual rights of the parties 173
259	259		related to prepayment. 174
260	260		(3) A provider that consummates a commercial financing 175
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269	269		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
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273	273		facility may provide disclosures required by subsection (2) 176
274	274		which are based on an example of a transaction that could occur 177
275	275		under the agreement. The example must be based on an account 178
276	276		receivable total face amount owed of $10,000. Only one 179
277	277		disclosure is required for each commercial financing facility, 180
278	278		and a disclosure is not required as result of a modification, 181
279	279		forbearance, or change to the facility. A new disclosur e is not 182
280	280		required each time accounts receivable are purchased under the 183
281	281		facility. 184
282	282		559.9614 Prohibited acts. —A broker may not do any of the 185
283	283		following: 186
284	284		(1) Assess, collect, or solicit an advance fee from a 187
285	285		business to provide services as a broker. However, this 188
286	286		subsection does not preclude a broker from soliciting a business 189
287	287		to pay for, or preclude a business from paying for, actual 190
288	288		services necessary to apply for a commercial financing 191
289	289		transaction, including, but not limited to, a credit check or a n 192
290	290		appraisal of security, if such payment is made by check or money 193
291	291		order payable to a party independent of the broker. 194
292	292		(2) Make or use any false or misleading representation or 195
293	293		omit any material fact in the offer or sale of the services of a 196
294	294		broker or engage, directly or indirectly, in any act that 197
295	295		operates or would operate as fraud or deception upon any person 198
296	296		in connection with the offer or sale of the services of a 199
297	297		broker, notwithstanding the absence of reliance by the business. 200
298		-	~~ENROLLED~~
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310	310		(3) Make or use any f alse or deceptive representation in 201
311	311		its business dealings. 202
312	312		(4) Offer the services of a broker in any advertisement 203
313	313		without disclosing the actual address and telephone number of 204
314	314		the business of the broker and the address and telephone number 205
315	315		of any forwarding service the broker may use, if any. 206
316	316		559.9615 Enforcement. — 207
317	317		(1) The Attorney General has exclusive authority to 208
318	318		enforce this part. The Attorney General may: 209
319	319		(a) Receive and act on complaints. 210
320	320		(b) Take action designed to obtain voluntary complia nce 211
321	321		with this part. 212
322	322		(c) Commence administrative or judicial proceedings to 213
323	323		enforce compliance with this part. 214
324	324		(2)(a) A violation of this part is punishable by a fine of 215
325	325		$500 per incident, not to exceed $20,000 for all aggregated 216
326	326		violations, arising fro m the use of the transaction 217
327	327		documentation or materials found to be in violation of this 218
328	328		part. 219
329	329		(b) A violation of this part after receipt of a written 220
330	330		notice of a prior violation from the Attorney General is 221
331	331		punishable by a fine of $1,000 per incident, n ot to exceed 222
332	332		$50,000 for all aggregated violations, arising from the use of 223
333	333		the transaction documentation or materials found to be in 224
334	334		violation of this part. 225
335		-	~~ENROLLED~~
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347	347		(c) A violation of this part does not affect the 226
348	348		enforceability or validity of the underlying co mmercial 227
349	349		financing transaction. 228
350	350		(3) This part does not create a private right of action 229
351	351		against any person or entity based upon compliance or 230
352	352		noncompliance with this part. 231
353	353		Section 2. This act shall take effect July 1, 2023. 232