Florida Senate - 2011 SENATOR AMENDMENT
Bill No. CS for SB 920
Barcode 765374
LEGISLATIVE ACTION
Senate . House
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Floor: WD/2R .
05/03/2011 03:50 PM .
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Senator Richter moved the following:
1 Senate Amendment (with title amendment)
2
3 Between lines 33 and 34
4 insert:
5 Section 2. Section 817.801, Florida Statutes, is amended to
6 read:
7 817.801 Definitions.—As used in this part:
8 (1) “Credit counseling agency” means any organization
9 providing debt management services, debt settlement services, or
10 credit counseling services for compensation.
11 (2) “Credit counseling services” means confidential money
12 management, debt reduction, and financial educational services.
13 (3) “Creditor contribution” means any sum that a creditor
14 agrees to contribute to a credit counseling agency, whether
15 directly or by setoff against amounts otherwise payable to the
16 creditor on behalf of debtors.
17 (4) “Debt management plan” means a written agreement or
18 contract between a credit counseling agency and a debtor whereby
19 the credit counseling agency, in return for a direct or indirect
20 payment by the debtor of fees not exceeding those set forth in
21 s. 817.802, will provide credit counseling services or debt
22 management services that contemplate that creditors will reduce
23 finance charges or fees for late payment, default, or
24 delinquency.
25 (5)(4) “Debt management services” means services provided
26 to a debtor by a credit counseling organization for a fee to:
27 (a) Effect the adjustment, compromise, reduction of
28 interest rate or fees, modification of terms, or negotiation or
29 discharge of any unsecured account, note, or other indebtedness
30 of the debtor; or
31 (b) Receive from the debtor and disburse to a creditor any
32 money or other thing of value with the expectation that the
33 debtor will repay the entire principal amount owed to the
34 creditor.
35 (6) “Debt settlement services” means services provided to a
36 debtor with the expectation of obtaining the creditor’s
37 agreement to accept less than the principal amount of debt in
38 full satisfaction of the debt.
39 (7) “Debt settlement plan” means a written agreement or
40 contract between a credit counseling agency and a debtor whereby
41 the credit counseling agency, in return for payment by the
42 debtor, will provide debt settlement services that contemplate
43 that creditors will settle debts for less than the principal
44 amount of the debt.
45 (8)(5) “Person” means any individual, corporation,
46 partnership, trust, association, or other legal entity.
47 Section 3. Subsection (1) of section 817.802, Florida
48 Statutes, is amended to read:
49 817.802 Unlawful fees and costs.—
50 (1) It is unlawful for any person, while engaging in debt
51 management services or credit counseling services, to charge or
52 accept from a debtor residing in this state, directly or
53 indirectly, a fee or contribution greater than $50 for the
54 initial setup or initial consultation. Subsequently, the person
55 may not charge or accept a fee or contribution from a debtor
56 residing in this state greater than $120 per year for additional
57 consultations or, alternatively, if debt management services as
58 defined in s. 817.801(5)(b) 817.801(4)(b) are provided, the
59 person may charge the greater of 7.5 percent of the amount paid
60 monthly by the debtor to the person or $35 per month.
61 Section 4. Section 817.8035, Florida Statutes, is created
62 to read:
63 817.8035 Debt settlement plans; disclosures to debtor;
64 payments; refunds.—
65 (1) Debt settlement services or credit counseling services
66 provided to a debtor residing in this state may be provided only
67 pursuant to a debt settlement plan that complies with this part.
68 (2) Before a debtor consents to payment for debt settlement
69 services, the credit counseling agency must disclose truthfully,
70 in a clear and conspicuous manner, all of the following material
71 information:
72 (a) The amount of time necessary to achieve the represented
73 results, and, to the extent that the debt settlement service may
74 include a settlement offer to any of the debtor’s creditors or
75 debt collectors, the anticipated time by which the credit
76 counseling agency will make a bona fide settlement offer to each
77 of them.
78 (b) To the extent that the debt settlement service may
79 include a settlement offer to any of the debtor’s creditors or
80 debt collectors, the amount of money or the percentage of each
81 outstanding debt which the debtor must accumulate before the
82 credit counseling agency will make a bona fide settlement offer
83 to each of them.
84 (c) To the extent that any aspect of the debt settlement
85 service relies upon or results in the debtor’s failure to make
86 timely payments to creditors or debt collectors, that the use of
87 the debt settlement service will likely adversely affect the
88 debtor’s creditworthiness, may result in the debtor being
89 subject to collection actions or sued by creditors or debt
90 collectors, and may increase the amount of money the debtor owes
91 due to the accrual of fees and interest.
92 (d) To the extent that the credit counseling agency
93 requests or requires the debtor to place funds in an account at
94 an insured financial institution, that the debtor owns the funds
95 held in the account, the debtor may withdraw such funds from the
96 debt settlement service at any time without penalty, and, if the
97 debtor requests to withdraw such funds, the debtor must receive
98 all funds in the account, other than funds earned by the credit
99 counseling agency, within 7 business days after the debtor’s
100 request.
101 (3) The credit counseling agency shall provide the debtor
102 with a copy of the disclosures required under subsection (2)
103 within 7 days after consenting to pay the credit counseling
104 agency for debt settlement services.
105 (4) A credit counseling agency may not misrepresent,
106 directly or by implication, any material aspect of any debt
107 management service, including, but not limited to, the amount of
108 money or the percentage of the debt amount which a debtor may
109 save by using such service; the amount of time necessary to
110 achieve the represented results; the amount of money or the
111 percentage of each outstanding debt that the debtor must
112 accumulate before the credit counseling agency will initiate
113 attempts or make a bona fide offer to negotiate, settle, or
114 modify the terms of the debtor’s debt with the debtor’s
115 creditors or debt collectors; the effect of the service on a
116 debtor’s creditworthiness; the effect of the service on the
117 collection efforts of the debtor’s creditors or debt collectors;
118 the percentage or number of debtors who attain the represented
119 results; and whether a debt settlement service is offered or
120 provided by a nonprofit entity.
121 (5) A credit counseling agency may not receive payment of
122 any fee or consideration for any debt settlement service until:
123 (a) The credit counseling agency has renegotiated, settled,
124 reduced, or otherwise altered the terms of at least one debt
125 pursuant to a debt settlement plan;
126 (b) The debtor has made at least one payment pursuant to
127 that debt settlement plan; and
128 (c) The fee or consideration for settling each individual
129 debt enrolled in a debt settlement plan:
130 1. Bears the same proportional relationship to the total
131 fee for settling the entire debt balance as the individual debt
132 amount bears to the entire debt amount. The individual debt
133 amount and the entire debt amount are those owed at the time the
134 debt was enrolled in the debt management service; or
135 2. Is a percentage of the amount saved as a result of the
136 settlement. The percentage charged may not change from one
137 individual debt to another and may not exceed 30 percent of the
138 amount saved. The amount saved is the difference between the
139 amount owed at the time the debt was enrolled in the debt
140 settlement service and the amount actually paid to satisfy the
141 debt.
142 (6) This section does not prohibit a credit counseling
143 agency from requesting or requiring the debtor to place funds in
144 an account to be used for the credit counseling agency’s fees
145 and for payments to creditors or debt collectors in connection
146 with a renegotiation, settlement, reduction, or other alteration
147 of the terms of payment or other terms of a debt if:
148 (a) The funds are held in an account at an insured
149 financial institution;
150 (b) The debtor owns the funds held in the account and is
151 paid accrued interest on the account, if any;
152 (c) If the credit counseling agency does not administer the
153 account, the entity administering the account is not owned or
154 controlled by, or in any way affiliated with, the credit
155 counseling agency; and
156 (d) The entity administering the account does not give or
157 accept any money or other compensation in exchange for referrals
158 of business by the credit counseling agency.
159 (7) The debtor may withdraw from the debt settlement
160 service at any time without penalty, and must receive all funds
161 held in the account, other than funds earned by the credit
162 counseling agency in compliance with this part, within 7
163 business days after the debtor’s request.
164 Section 5. Section 817.805, Florida Statutes, is amended to
165 read:
166 817.805 Disbursement of funds.—Any person engaged in debt
167 management, debt settlement, or credit counseling services shall
168 disburse to the appropriate creditors all funds received from a
169 debtor, less any fees permitted by s. 817.802 and any creditor
170 contributions, within 30 days after receipt of such funds,
171 unless the reasonable payment of one or more of the debtor’s
172 obligations requires that the funds be held for a longer period
173 in order to accumulate. However, a creditor contribution may not
174 reduce any sums to be credited to the account of a debtor making
175 a payment to the credit counseling agency for further payment to
176 the creditor. Further, any person engaged in such services shall
177 maintain a separate trust account for the receipt of any funds
178 from debtors and the disbursement of such funds on behalf of
179 such debtors.
180
181 ================= T I T L E A M E N D M E N T ================
182 And the title is amended as follows:
183
184 Delete line 10
185 and insert:
186 unlawful use does not commit a violation of the act;
187 amending s. 817.801, F.S.; defining the terms “debt
188 management plan,” “debt settlement services,” and
189 “debt settlement plan”; amending s. 817.802, F.S.;
190 conforming a cross-reference; creating s. 817.8035,
191 F.S.; requiring that debt management and credit
192 counseling services be provided pursuant to a debt
193 management or debt settlement plan; requiring the
194 credit counseling agency to make certain disclosures
195 to the debtor before the debtor consents to payment;
196 prohibiting the agency from making certain
197 misrepresentations to the debtor; providing certain
198 conditions that the agency must meet before receiving
199 payment; providing that the debtor may withdraw any
200 account funds placed with the agency at any time
201 without penalty; amending s. 817.805, F.S.;
202 authorizing the agency to hold funds in order to allow
203 the funds to accumulate;