Florida Senate - 2021                        COMMITTEE AMENDMENT
       Bill No. SB 1478
       
       
       
       
       
       
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                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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       The Committee on Banking and Insurance (Gibson) recommended the
       following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Subsection (1) of section 516.03, Florida
    6  Statutes, is amended to read:
    7         516.03 Application for license; fees; etc.—
    8         (1) APPLICATION.—Application for a license to make loans
    9  under this chapter shall be in the form prescribed by rule of
   10  the commission. The commission may require each applicant to
   11  provide any information reasonably necessary to determine the
   12  applicant’s eligibility for licensure. The applicant shall also
   13  provide information that the office requires concerning any
   14  officer, director, control person, member, partner, or joint
   15  venturer of the applicant or any person having the same or
   16  substantially similar status or performing substantially similar
   17  functions or concerning any individual who is the ultimate
   18  equitable owner of a 10-percent or greater interest in the
   19  applicant. The office may require information concerning any
   20  such applicant or person, including, but not limited to, his or
   21  her full name and any other names by which he or she may have
   22  been known, age, social security number, residential history,
   23  qualifications, educational and business history, and
   24  disciplinary and criminal history. The applicant must provide
   25  evidence of liquid assets of at least $25,000 or documents
   26  satisfying the requirements of s. 516.05(10). At the time of
   27  making such application the applicant shall pay to the office a
   28  nonrefundable biennial license fee of $625. Applications, except
   29  for applications to renew or reactivate a license, must also be
   30  accompanied by a nonrefundable investigation fee of $200. An
   31  application is considered received for purposes of s. 120.60
   32  upon receipt of a completed application form as prescribed by
   33  commission rule, a nonrefundable application fee of $625, and
   34  any other fee prescribed by law. The commission may adopt rules
   35  requiring electronic submission of any form, document, or fee
   36  required by this act if such rules reasonably accommodate
   37  technological or financial hardship. The commission may
   38  prescribe by rule requirements and procedures for obtaining an
   39  exemption due to a technological or financial hardship.
   40         Section 2. Subsection (6) is added to section 516.031,
   41  Florida Statutes, to read:
   42         516.031 Finance charge; maximum rates.—
   43         (6)PREPAYMENT PENALTIES PROHIBITED.—A licensee may not
   44  require a borrower to pay a prepayment penalty for paying all or
   45  part of the loan principal before the date on which the payment
   46  is due.
   47         Section 3. Subsection (10) is added to section 516.05,
   48  Florida Statutes, to read:
   49         516.05 License.—
   50         (10)(a) In lieu of the $25,000 liquid asset requirement in
   51  s. 516.03(1):
   52         1.An applicant or a licensee may provide to the office a
   53  surety bond in the amount of at least $25,000, issued by a
   54  bonding company or insurance company authorized to do business
   55  in this state.
   56         2.A company with at least one currently licensed location
   57  must provide to the office a rider or surety bond in the amount
   58  of at least $5,000 for each additional license, issued by a
   59  bonding company or insurance company authorized to do business
   60  in this state. However, in no event may the aggregate amount of
   61  the surety bond required for a company with multiple licenses
   62  exceed $100,000.
   63         (b)In lieu of a surety bond, the applicant or the licensee
   64  may provide evidence of a certificate of deposit or an
   65  irrevocable letter of credit in the same amount of the surety
   66  bond required under paragraph (a). The certificate of deposit
   67  must be deposited in a financial institution, as defined in s.
   68  655.005(1)(i).
   69         (c)The original surety bond, certificate of deposit, or
   70  letter of credit must be filed with the office, and the office
   71  must be named as beneficiary. The surety bond, certificate of
   72  deposit, or letter of credit must be for the use and benefit of
   73  any borrower who is injured by acts of a licensee involving
   74  fraud, misrepresentation, or deceit, including willful
   75  imposition of illegal or excessive charges, or
   76  misrepresentation, circumvention, or concealment of any matter
   77  required to be stated or furnished to a borrower, where such
   78  acts are in connection with a loan made under this chapter. The
   79  office, or any claimant, may bring an action in a court of
   80  competent jurisdiction on the surety bond, certificate of
   81  deposit, or letter of credit. The surety bond, certificate of
   82  deposit, or letter of credit must be payable on a pro rata
   83  basis, but the aggregate amount may not exceed the amount of the
   84  surety bond, certificate of deposit, or letter of credit.
   85         (d)The surety bond, certificate of deposit, or letter of
   86  credit may not be canceled by the licensee, bonding or insurance
   87  company, or financial institution except upon notice to the
   88  office by certified mail. A cancellation may not take effect
   89  until 30 calendar days after receipt by the office of the
   90  written notice.
   91         (e)The bonding or insurance company or financial
   92  institution must, within 10 calendar days after it pays a claim,
   93  give written notice to the office by certified mail of such
   94  payment with details sufficient to identify the claimant and the
   95  claim or judgment paid.
   96         (f)If the principal sum of the surety bond, certificate of
   97  deposit, or letter of credit is reduced by one or more
   98  recoveries or payments, the licensee must furnish to the office
   99  a new or additional surety bond, certificate of deposit, or
  100  letter of credit so that the total or aggregate principal sum
  101  equals the amount required under this subsection. Alternatively,
  102  a licensee may furnish an endorsement executed by the bonding or
  103  insurance company or financial institution reinstating the
  104  required principal amount.
  105         (g)The required surety bond, certificate of deposit, or
  106  letter of credit must remain in place for 2 years after the
  107  licensee ceases licensed operations in this state. During the 2
  108  year period, the office may allow for a reduction or elimination
  109  of the surety bond, certificate of deposit, or letter of credit
  110  to the extent the licensee’s outstanding consumer finance loans
  111  in this state are reduced.
  112         (h)The commission may prescribe by rule forms and
  113  procedures to implement this subsection.
  114         Section 4. Paragraph (b) of subsection (1) of section
  115  516.07, Florida Statutes, is amended to read:
  116         516.07 Grounds for denial of license or for disciplinary
  117  action.—
  118         (1) The following acts are violations of this chapter and
  119  constitute grounds for denial of an application for a license to
  120  make consumer finance loans and grounds for any of the
  121  disciplinary actions specified in subsection (2):
  122         (b) Failure to maintain liquid assets of at least $25,000
  123  or a surety bond, certificate of deposit, or letter of credit in
  124  the amount required by s. 516.05(10) at all times for the
  125  operation of business at a licensed location or proposed
  126  location.
  127         Section 5. Section 516.36, Florida Statutes, is amended to
  128  read:
  129         516.36 Installment requirement.—
  130         (1) Every loan made pursuant to this chapter must be repaid
  131  in periodic installments as nearly equal as mathematically
  132  practicable, except that the final payment may be less than the
  133  amount of the prior installments. Installments may be due every
  134  2 weeks, semimonthly, or monthly. This section does not apply to
  135  lines of credit.
  136         (2)Every loan, including a refinancing, made pursuant to
  137  this chapter on or after October 1, 2021, must have a minimum
  138  loan term of 6 months.
  139         Section 6. Paragraph (a) of subsection (4) of section
  140  559.952, Florida Statutes, is amended to read:
  141         559.952 Financial Technology Sandbox.—
  142         (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE
  143  REQUIREMENTS.—
  144         (a) Notwithstanding any other law, upon approval of a
  145  Financial Technology Sandbox application, the following
  146  provisions and corresponding rule requirements are not
  147  applicable to the licensee during the sandbox period:
  148         1. Section 516.03(1), except for the application fee, the
  149  investigation fee, the requirement to provide the social
  150  security numbers of control persons, evidence of liquid assets
  151  of at least $25,000 or documents satisfying the requirements of
  152  s. 516.05(10), and the office’s authority to investigate the
  153  applicant’s background. The office may prorate the license
  154  renewal fee for an extension granted under subsection (7).
  155         2. Section 516.05(1) and (2), except that the office shall
  156  investigate the applicant’s background.
  157         3. Section 560.109, only to the extent that the section
  158  requires the office to examine a licensee at least once every 5
  159  years.
  160         4. Section 560.118(2).
  161         5. Section 560.125(1), only to the extent that the
  162  subsection would prohibit a licensee from engaging in the
  163  business of a money transmitter or payment instrument seller
  164  during the sandbox period.
  165         6. Section 560.125(2), only to the extent that the
  166  subsection would prohibit a licensee from appointing an
  167  authorized vendor during the sandbox period. Any authorized
  168  vendor of such a licensee during the sandbox period remains
  169  liable to the holder or remitter.
  170         7. Section 560.128.
  171         8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7.
  172  10. and (b), (c), and (d).
  173         9. Section 560.142(1) and (2), except that the office may
  174  prorate, but may not entirely eliminate, the license renewal
  175  fees in s. 560.143 for an extension granted under subsection
  176  (7).
  177         10. Section 560.143(2), only to the extent necessary for
  178  proration of the renewal fee under subparagraph 9.
  179         11. Section 560.204(1), only to the extent that the
  180  subsection would prohibit a licensee from engaging in, or
  181  advertising that it engages in, the selling or issuing of
  182  payment instruments or in the activity of a money transmitter
  183  during the sandbox period.
  184         12. Section 560.205(2).
  185         13. Section 560.208(2).
  186         14. Section 560.209, only to the extent that the office may
  187  modify, but may not entirely eliminate, the net worth, corporate
  188  surety bond, and collateral deposit amounts required under that
  189  section. The modified amounts must be in such lower amounts that
  190  the office determines to be commensurate with the factors under
  191  paragraph (5)(c) and the maximum number of consumers authorized
  192  to receive the financial product or service under this section.
  193         Section 7. This act shall take effect October 1, 2021.
  194  
  195  ================= T I T L E  A M E N D M E N T ================
  196  And the title is amended as follows:
  197         Delete everything before the enacting clause
  198  and insert:
  199                        A bill to be entitled                      
  200         An act relating to consumer finance loans; amending s.
  201         516.03, F.S.; authorizing an applicant for a license
  202         to make and collect loans under the Florida Consumer
  203         Finance Act to provide certain documents in lieu of
  204         evidence of liquid assets; amending s. 516.031, F.S.;
  205         prohibiting a person licensed to make and collect
  206         consumer finance loans from charging prepayment
  207         penalties for loans; amending s. 516.05, F.S.;
  208         authorizing an applicant for a license to make and
  209         collect consumer finance loans or a licensee to
  210         provide a surety bond, certificate of deposit, or
  211         letter of credit in lieu of evidence of liquid assets;
  212         providing requirements for such bonds, certificates of
  213         deposit, and letters of credit; providing rulemaking
  214         authority; amending s. 516.07, F.S.; amending grounds
  215         for denial of license or disciplinary action; amending
  216         s. 516.36, F.S.; providing requirements for loan
  217         terms; amending s. 559.952, F.S.; revising exceptions
  218         for a licensee during the Financial Technology Sandbox
  219         period; providing an effective date.