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: 37 516.01Definitions.As used in this chapter, the term: 38 (1)Branch means any location, other than a licensees 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: 85 516.02Loans; 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: 93 516.03Application 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 applicants 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: 131 516.031Finance 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: 212 516.15Duties 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 licensees 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: 236 516.38Annual 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 borrowers 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: 287 516.39Suspension 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: 303 516.19Penalties.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.