The Florida Senate

537.011  Title loan charges.--

(1)  A title loan lender may charge a maximum interest rate of 30 percent per annum computed on the first $2,000 of the principal amount, 24 percent per annum on that part of the principal amount exceeding $2,000 and not exceeding $3,000, and 18 percent per annum on that part of the principal amount exceeding $3,000. The original principal amount is the same amount as the amount financed, as defined by the federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal Reserve System. In determining compliance with the statutory maximum interest, the computations must be simple interest and not add-on interest or any other computations. When two or more interest rates are to be applied to the principal amount, the lender may charge interest at that single annual percentage rate which, if applied according to the actuarial method to each of the scheduled periodic balances of principal, would produce at maturity the same total amount of interest as would result from the application of the two or more rates otherwise permitted, based upon the assumption that all payments are made as agreed.

(2)  The annual percentage rate that may be charged for a title loan may equal, but not exceed, the annual percentage rate that must be computed and disclosed as required by the federal Truth in Lending Act and Regulation Z of the Board of Governors of the Federal Reserve System. The maximum annual percentage rate of interest that may be charged is 12 times the maximum monthly rate, and the maximum monthly rate must be computed on the basis of one-twelfth of the annual rate for each full month. The commission shall establish by rule the rate for each day in a fraction of a month when the period for which the charge is computed is more or less than 1 month.

(3)  A title loan agreement may be extended for one or more 30-day periods by mutual consent of the title loan lender and the borrower. Each extension of a title loan agreement shall be executed in a separate extension agreement, each of which shall comply with the requirements for executing a title loan agreement as provided in this act. The interest rate charged in any title loan extension agreement shall not exceed the interest rate charged in the related title loan agreement. A title loan lender may not capitalize in any title loan extension agreement any unpaid interest due on the related title loan agreement or any subsequent extensions to that title loan agreement.

(4)  Any interest contracted for or received, directly or indirectly, by a title loan lender, or an agent of the title loan lender, in excess of the amounts authorized under this chapter is prohibited and may not be collected by the title loan lender or an agent of the title loan lender.

(a)  If such excess interest resulted from a bona fide error by the title loan lender, or an agent of the title loan lender, the title loan agreement shall be voidable and the lender shall refund the excess interest to the borrower within 20 days after discovery by the lender or borrower of the bona fide error, whichever occurs first.

(b)  If such excess interest resulted from an act by the title loan lender, or an agent of the title loan lender, to circumvent the maximum title loan interest allowed by this act, the title loan agreement is void. The lender shall refund to the borrower any interest paid on the title loan and return to the borrower the loan property. The title loan lender forfeits the lender's right to collect any principal owed by the borrower on the title loan.

(c)  The office may order a title loan lender, or an agent of the title loan lender, to comply with the provisions of paragraphs (a) and (b).

(5)  Any interest contracted for or received, directly or indirectly, by a title loan lender, or an agent of the title loan lender, in excess of the amount allowed by this act constitutes a violation of chapter 687, governing interest and usury, and the penalties of that chapter apply.

History.--s. 10, ch. 2000-138; s. 646, ch. 2003-261.