House Bill 3975e2

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                                     HB 3975, Second Engrossed/ntc



  1                      A bill to be entitled

  2         An act relating to title loan transactions;

  3         creating the "Florida Title Loan Act";

  4         providing definitions; providing legislative

  5         intent; requiring licensure by the Department

  6         of Banking and Finance to be in the business as

  7         a title loan lender; providing for eligibility

  8         for licensure; providing for application;

  9         providing for suspension or revocation of

10         license;  providing for a title loan

11         transaction form; providing for recordkeeping

12         and reporting and safekeeping of property;

13         providing for title loan charges; providing a

14         holding period when there is a failure to

15         redeem; providing for the disposal of pledged

16         property; providing for disposition of excess

17         proceeds; prohibiting certain acts; providing

18         for the right to redeem; providing for lost

19         title loan transaction forms; providing for a

20         title loan lenders lien; providing for criminal

21         penalties; providing for certain records from

22         the Department of Law Enforcement; providing

23         for subpoenas, enforcement of actions, and

24         rules; providing a fine; providing for

25         investigations and complaints; amending ss.

26         538.03 and 538.16, F.S.; deleting provisions

27         relating to title loan transactions; providing

28         an appropriation; repealing ss. 538.03(1)(i),

29         538.06(5), and 538.15(4) and (5), F.S.,

30         relating to title loan transactions by

31         secondhand dealers; providing effective dates.


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                                     HB 3975, Second Engrossed/ntc



  1  Be It Enacted by the Legislature of the State of Florida:

  2

  3         Section 1.  Short title.--This act may be cited as the

  4  "Florida Title Loan Act."

  5         Section 2.  Legislative intent.--It is the intent of

  6  the Legislature that title loans shall be regulated by the

  7  provisions of this act. The provisions of this act shall

  8  supersede any other provisions of law affecting title loans to

  9  the extent of any conflict.

10         Section 3.  Definitions.--As used in this act, unless

11  the context otherwise requires:

12         (1)  "Department" means the Department of Banking and

13  Finance.

14         (2)  "Commercially reasonable" means a sale or disposal

15  which occurs and can be construed as an arms' length

16  transaction. Nonpublic sales or disposal of personal property

17  between licensees and business affiliates or family members

18  are sales and disposal that are presumed not to be in a

19  commercially reasonable fashion.

20         (3)  "Executive officer" means the president, chief

21  executive officer, chief financial officer, chief operating

22  officer, executive vice president, senior vice president,

23  secretary, and treasurer.

24         (4)  "Identification" means a government issued

25  photographic identification.

26         (5)  "Interest" means the cost of obtaining a title

27  loan and includes any profit or advantage of any kind

28  whatsoever that a title loan lender may charge, contract for,

29  collect, receive, or in any way obtain, including, by means of

30  any collateral sale, purchase, or agreement, as a condition of

31  the title loan.


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                                     HB 3975, Second Engrossed/ntc



  1         (6)  "Licensee" means a person who is licensed pursuant

  2  to the provisions of this act.

  3         (7)  "License" means a permit issued under this chapter

  4  to make and collect title loans in accordance with this

  5  chapter at a single place of business.

  6         (8)  "Loan property" means any motor vehicle

  7  certificate of title that is deposited with a title loan

  8  lender in the course of the title loan lender's business and

  9  is the subject of a title loan agreement.

10         (9)  "Motor vehicle" means an automobile, motorcycle,

11  truck, trailer, semi-trailer, truck tractor and semitrailer

12  combination, or any other vehicle operated on the public

13  highways and streets of this state, used to transport persons

14  or property, and propelled by power other than muscular power,

15  but excluding vehicles which run only upon a track.

16         (10)  "Title loan" means a loan of money secured by

17  bailment of a certificate of title to a motor vehicle.

18         (11)  "Title loan agreement" means a written agreement

19  whereby a title loan lender agrees to make a loan of a

20  specific sum of money to a pledgor, and the pledgor agrees to

21  give the title loan lender a security interest in an

22  unencumbered motor vehicle certificate of title owned by the

23  pledgor.

24         (12)  "Title loan lender" means any person who is

25  engaged in the business of making title loans or engaging in

26  title loan agreements with pledgors.

27         (13)  "Title loan office" means the location at which,

28  or premises from which, a title loan lender regularly conducts

29  business.

30         (14)  "Title loan transaction" means any title loan of

31  a motor vehicle from lender to borrower for money.


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                                     HB 3975, Second Engrossed/ntc



  1         (15)  "Title loan transaction form" means the

  2  instrument on which a title loan lender records title loan

  3  agreements.

  4         (16)  "Titled personal property" means a motor vehicle

  5  that has as evidence of ownership a state-issued certificate

  6  of title except for a mobile home that is the primary

  7  residence of the pledgor.

  8         (17)  "Ultimate equitable owner" means a natural person

  9  who, directly or indirectly, owns or controls an ownership

10  interest in a corporation, a foreign corporation, an alien

11  business organization, or any other form of business

12  organization, regardless of whether such natural person owns

13  or controls such ownership interest through one or more

14  natural persons or one or more proxies, powers of attorney,

15  nominees, corporations, associations, partnerships, trusts,

16  joint stock companies, or other entities or devices, or any

17  combination thereof.

18         Section 4.  License required; license fees.--

19         (1)  A person may not engage in business as a title

20  loan lender unless the person has a valid license issued by

21  the department authorizing the engagement in the business. A

22  separate license is required for each physical location of a

23  title loan office. The department shall issue more than one

24  license to a person who complies with the requirements of this

25  act for each license.

26         (2)  An application for a license pursuant to this act

27  shall be submitted to the department on such forms as the

28  department prescribes by rule. If the department determines

29  that an application should be granted, the department shall

30  issue the license for a period not to exceed 2 years. A

31  nonrefundable license fee not to exceed $500 and a


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                                     HB 3975, Second Engrossed/ntc



  1  nonrefundable investigation fee of $200 shall accompany an

  2  initial application for each title loan location. The revenue

  3  from such fees is intended to reasonably reflect the actual

  4  cost of regulation.

  5         (3)  A license shall be renewed biannually and shall be

  6  accompanied by a nonrefundable fee not to exceed $500. A

  7  license that is not renewed by its expiration date shall

  8  automatically expire and revert to inactive status. Such

  9  inactive license may be reactivated within 3 months after the

10  expiration date upon submission of a completed reactivation

11  form and payment of a reactivation fee of $250. A license that

12  is not reactivated within 3 months after becoming inactive may

13  not be reactivated.

14         (4)  Each license must specify the location for which

15  the license is issued and must be conspicuously displayed at

16  that location. When a licensee wishes to move a title loan

17  office to another location, the licensee shall give 30 days'

18  prior written notice to the department by certified or

19  registered mail, return receipt requested, and the department

20  shall then amend the license accordingly. A license issued

21  pursuant to this act is not transferable or assignable.

22         (5)  The department may deny an initial application for

23  a license if the applicant or any person with power to direct

24  the management or policies of the applicant is the subject of

25  a pending criminal prosecution or governmental civil

26  enforcement action, in any jurisdiction, until conclusion of

27  such criminal prosecution or enforcement action.

28         (6)  Each licensee shall designate and maintain an

29  agent in this state for service of process.

30         (7)  A person shall apply to the department for a new

31  license upon the change of any person owning 25 percent or


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                                     HB 3975, Second Engrossed/ntc



  1  greater interest in any title loan office and shall pay the

  2  nonrefundable license and investigation fees.

  3         (8)  All moneys collected by the department under this

  4  act shall be deposited into the Regulatory Trust Fund of the

  5  Department of Banking and Finance for the sole purpose of

  6  implementing this act.

  7         Section 5.  Eligibility for license.--

  8         (1)  To be eligible for a title loan lending license,

  9  an applicant must:

10         (a)  Be of good moral character.

11         (b)  File with the department a bond, in the amount of

12  $100,000 for each license, with a surety company qualified to

13  do business in this state. In lieu of the bond, the applicant

14  may establish a certificate of deposit or an irrevocable

15  letter of credit in a financial institution, as defined in s.

16  655.005, in the amount of the bond. The original bond,

17  certificate of deposit, or letter of credit shall be filed

18  with the department, and the department shall be the

19  beneficiary to that document. The bond, certificate of

20  deposit, or letter of credit shall be in favor of the

21  department for the use and benefit of any consumer who is

22  injured pursuant to a title loan transaction by the fraud,

23  misrepresentation, breach of contract, financial failure, or

24  violation of any provision of this act by the title loan

25  lender. Such liability may be enforced either by proceeding in

26  an administrative action or by filing a judicial suit at law

27  in a court of competent jurisdiction. However, in such court

28  suit, the bond, certificate of deposit, or letter of credit

29  posted with the department shall not be amenable or subject to

30  any judgment or other legal process issuing out of or from

31  such court in connection with such lawsuit, but such bond,


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                                     HB 3975, Second Engrossed/ntc



  1  certificate of deposit, or letter of credit shall be amenable

  2  to and enforceable only by and through administrative

  3  proceedings before the department. It is the intent of the

  4  Legislature that such bond, certificate of deposit, or letter

  5  of credit shall be applicable and liable only for the payment

  6  of claims duly adjudicated by order of the department. The

  7  bond, certificate of deposit, or letter of credit shall be

  8  payable on a pro-rata basis as determined by the department,

  9  but the aggregate amount may not exceed the amount of the

10  bond, certificate of deposit, or letter of credit.

11         (c)  Not have been convicted of a felony within the

12  last 10 years or be acting as an ultimate equitable owner for

13  someone who has been convicted of a felony within the last 10

14  years.

15         (d)  Not have been convicted, and not be acting as an

16  ultimate equitable owner for someone who has been convicted,

17  of a crime that the department finds directly relates to the

18  duties and responsibilities of a title loan lender within the

19  last 10 years.

20         (2)  If an applicant for a title loan lending license

21  is other than a corporation, the eligibility requirements of

22  this section apply to each direct or ultimate equitable owner.

23         (3)  If an applicant for a title loan lending license

24  is a corporation, the eligibility requirements of this section

25  apply to each direct or ultimate equitable owner of a least 25

26  percent of the outstanding equity interest of such corporation

27  and to each director and executive officer.

28         Section 6.  Application for license.--

29         (1)  Application for a license to make title loans

30  under this act shall be in writing, under oath, and in the

31  form prescribed by department rule, and shall:


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                                     HB 3975, Second Engrossed/ntc



  1         (a)  Contain the name and the residence and business

  2  addresses of the applicant and, if the applicant is a

  3  partnership or association, of every member of such

  4  partnership or association and, if a corporation, of each

  5  executive officer and director and ultimate equitable owner of

  6  at least 25 percent of such corporation.

  7         (b)  State whether any of the above has, within the

  8  last 10 years, been arrested for or convicted of, or is under

  9  indictment or information for, a felony or crime.

10         (c)  Identify the county and municipality with the

11  street and number or location where the business is to be

12  conducted.

13         (d)  Contain such further relevant information as the

14  department requires pursuant to rule.

15

16  At the time of making such application the applicant shall pay

17  to the department a nonrefundable license fee not to exceed

18  $500. Applications, except for applications to renew or

19  reactivate a license, must be accompanied by a nonrefundable

20  investigation fee of $200.

21         (2)  Notwithstanding subsection (1), the application

22  need not state the full name and address of each officer,

23  director, and shareholder if the applicant is owned directly

24  or beneficially by a person who as an issuer has a class of

25  securities registered pursuant to section 12 of the Securities

26  Exchange Act of 1934 or, pursuant to section 15(d) of such

27  act, is an issuer of securities which is required to file

28  reports with the Securities and Exchange Commission, if the

29  person files with the department any information, documents,

30  and reports required by such act to be filed with the

31  Securities and Exchange Commission.


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                                     HB 3975, Second Engrossed/ntc



  1         (3)  Upon the filing of an application for a license

  2  and payment of all applicable fees, unless the application is

  3  to renew or reactivate an existing license, the department

  4  shall investigate the facts concerning the applicant's

  5  proposed activities. The department shall investigate the

  6  facts, and shall approve an application and issue to the

  7  applicant a license that will evidence the authority to do

  8  business under the provisions of this act if the department

  9  finds that the eligibility requirements for the license are

10  satisfied. The license must be prominently displayed at the

11  front desk or counter at the title loan office.

12         (4)  A license that is not renewed by its expiration

13  date shall automatically revert to inactive status. An

14  inactive license may be reactivated upon submission of a

15  completed reactivation application, payment of the biannual

16  license fee, and payment of a reactivation fee of $250. A

17  license expires on the date on which it has been inactive for

18  3 months.

19         (5)  A licensee may not change the place of business

20  maintained under a license without prior notice to the

21  department. When a licensee wishes to change a place of

22  business, the licensee shall give written notice of such

23  change to the department.

24         (6)  A licensee may not conduct the business of making

25  loans under this act within a place of business in which other

26  business is solicited or engaged in, unless the department

27  finds that the conduct of such other business by the licensee

28  does not result in either the evasion of this act or the

29  combining of such other business activities does not result in

30  practices that are detrimental, misleading, or unfair to

31  consumers. Upon such a finding, the department may authorize


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                                     HB 3975, Second Engrossed/ntc



  1  the combining of such other business activities. However, no

  2  license shall be granted to or renewed for any person or

  3  organization engaged in the pawnbroking business.

  4         (7)  Licenses are not transferable or assignable. A

  5  licensee may invalidate any license by delivering the license

  6  to the department with written notice of its surrender by

  7  certified or registered mail, return receipt requested, but

  8  such delivery does not affect any civil or criminal liability

  9  or the authority to enforce this act for acts committed in

10  violation thereof.

11         Section 7.  Suspension, revocation of license.--

12         (1)  The following acts are violations of this act and

13  constitute grounds for the disciplinary actions specified in

14  subsection (2):

15         (a)  Failure to comply with any provision of this act,

16  any rule or order adopted pursuant to this act, or any written

17  agreement entered into with the department.

18         (b)  Fraud, misrepresentation, deceit, or gross

19  negligence in any title loan transaction, regardless of

20  reliance by or damage to the pledgor.

21         (c)  Fraudulent misrepresentation, circumvention, or

22  concealment of any matter required to be stated or furnished

23  to a pledgor pursuant to this act, regardless of reliance by

24  or damage to the pledgor.

25         (d)  Willful imposition of illegal or excessive charges

26  in any title loan transaction.

27         (e)  False, deceptive, or misleading advertising by a

28  title loan lender.

29         (f)  Failure to maintain, preserve, and keep available

30  for examination, all books, accounts, or other documents

31  required by this act, by any rule or order adopted pursuant to


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                                     HB 3975, Second Engrossed/ntc



  1  this act, or by any agreement entered into with the

  2  department.

  3         (g)  The title loan lender has aided, abetted, or

  4  conspired with an individual or person to circumvent or

  5  violate any of the requirements of this act.

  6         (h)  Refusal to permit inspection of books and records

  7  in an investigation or examination by the department or

  8  refusal to comply with a subpoena issued by the department.

  9         (i)  Criminal conduct by a title loan lender.

10         (2)  Upon a finding by the department that any person

11  has committed any of the acts set forth in subsection (1), the

12  department may enter an order taking any of the following

13  actions:

14         (a)  Issuing a notice of noncompliance pursuant to s.

15  120.695, Florida Statutes;

16         (b)  Denying an application for a license pursuant to

17  this act;

18         (c)  Revoking or suspending a license previously

19  granted pursuant to this act;

20         (d)  Placing a licensee or an applicant for a license

21  on probation for a period of time and subject to such

22  conditions as the department specifies;

23         (e)  Placing permanent restrictions or conditions upon

24  issuance or maintenance of a license pursuant to this act;

25         (f)  Issuing a reprimand; or

26         (g)  Imposing an administrative fine not to exceed

27  $5,000 for each such act or violation.

28         (3)  In addition to the acts specified in subsection

29  (1), the following shall be grounds for denial of a license

30  pursuant to this act, or for revocation, suspension, or

31  restriction of a license previously granted:


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                                     HB 3975, Second Engrossed/ntc



  1         (a)  A material misstatement of fact in an initial or

  2  renewal application for a license.

  3         (b)  Having a license, registration, or the equivalent,

  4  to practice any profession or occupation denied, suspended,

  5  revoked, or otherwise acted against by a licensing authority

  6  in any jurisdiction for fraud, dishonest dealing, or any act

  7  of moral turpitude.

  8         (c)  Having been convicted or found guilty of a crime

  9  involving fraud, dishonest dealing, or any act of moral

10  turpitude.

11         (d)  Being insolvent or having demonstrated a lack of

12  honesty or financial responsibility.

13         (e)  A fact or condition exists which, if it had

14  existed or had been known to exist at the time of the original

15  issuance of the license, would have justified the department

16  in refusing a license.

17         (4)  It is sufficient cause for the department to take

18  any of the actions specified in subsection (2), as to any

19  partnership, corporation, or association, if the department

20  finds grounds for such action as to any member of the

21  partnership, as to any executive officer or director of the

22  corporation or association, or as to any person with power to

23  direct the management or policies of the partnership,

24  corporation, or association.

25         (5)  Each licensee licensed pursuant to this act is

26  responsible for the acts of employees and agents of the

27  licensee if the licensee knew or should have known about such

28  acts and the licensee retained the profits, benefits, or

29  advantages accruing from such acts or ratified the conduct of

30  the employee or agent as a matter of law or fact.

31


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                                     HB 3975, Second Engrossed/ntc



  1         (6)  The manner of giving notice and conducting a

  2  hearing is governed by chapter 120, Florida Statutes.

  3         (7)  Any title loan agreement made without benefit of a

  4  license is voidable, in which case the person forfeits the

  5  right to collect any moneys, including principal and finance

  6  charges, from the pledgor in connection with such agreement,

  7  and shall return to the pledgor the loan property in

  8  connection with such agreement or the fair market value of

  9  such property and all principal and interest made by the

10  pledgor.

11         Section 8.  Title loan transaction form.--

12         (1)  At the time a title loan lender enters into each

13  title loan agreement, the title loan lender shall complete a

14  title loan transaction form for such transaction, and the

15  pledgor shall sign such completed form. The department shall

16  approve the design and format of the title loan transaction

17  form, which shall elicit the information required under this

18  section. In completing the title loan transaction form, the

19  title loan lender shall record the following information,

20  which shall be typed or written indelibly and legibly in

21  English.

22         (a)  The make, model, and year of the titled personal

23  property to which the loan property relates.

24         (b)  The vehicle identification number, or other

25  comparable identification number, along with the license plate

26  number, if applicable, of the titled personal property to

27  which the loan property relates.

28         (c)  The name, address, date of birth, physical

29  description, and social security number of the pledgor.

30         (d)  The date of the transaction.

31


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  1         (e)  The identification number and the type of

  2  identification, including the issuing agency, accepted from

  3  the pledgor.

  4         (f)  The amount of money advanced, which shall be

  5  designated as the "amount financed."

  6         (g)  The maturity date of the title loan agreement,

  7  which shall be 30 days after the date of the transaction.

  8         (h)  The total title loan charge payable on the

  9  maturity date, designated as the "finance charge."

10         (i)  The total amount, amount financed plus finance

11  charge, which must be paid to redeem the loan property on the

12  maturity date, designated as the "total amount of all

13  payments."

14         (j)  The annual percentage rate, computed in accordance

15  with the regulations adopted by the Federal Reserve Board

16  pursuant to the Federal Truth-in-Lending Act.

17         (2)  The following information shall also be printed on

18  all title loan transaction forms:

19         (a)  The name and address of the title loan office.

20         (b)  The name and address of the department as well as

21  a telephone number to which consumers may address complaints.

22         (c)  The following statement in not less than 12-point

23  type that:

24         1.  The pledgor is not obligated to redeem the subject

25  certificate of title.

26         2.  If the pledgor does not redeem the certificate of

27  title before the maturity date of the title loan agreement,

28  the title loan lender may repossess the titled personal

29  property to which the certificate of title relates.

30

31


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  1         3.  If the title loan transaction form is lost,

  2  destroyed, or stolen, the pledgor should immediately so advise

  3  the issuing title loan lender in writing.

  4         (d)  The statement that "The pledgor represents and

  5  warrants that the titled personal property to which the loan

  6  property relates is not stolen and has no liens or

  7  encumbrances against it, the pledgor has the right to enter

  8  into this transaction, and the pledgor will not apply for a

  9  duplicate certificate of title while the title loan agreement

10  is in effect."

11         (e)  Immediately above the signature of the pledgor,

12  the statement that "I, the pledgor declare under penalty of

13  perjury that I have read the foregoing document and that, to

14  the best of my knowledge and belief, the facts contained in it

15  are true and correct."

16         (f)  A blank line for the signature of the pledgor.

17         (3)  At the time of the transaction, the title loan

18  lender shall deliver to the pledgor an exact copy of the

19  completed title loan transaction form.

20         (4)  The pledgor shall agree for the title loan lender

21  to keep possession of the certificate of title. The pledgor

22  shall have the exclusive right to redeem the certificate of

23  title by repaying the loan of money in full and by complying

24  with the title loan agreement. When the certificate of title

25  is redeemed, the title loan lender shall release the security

26  interest in the titled personal property and return the

27  personal property certificate of title to the  pledgor. The

28  title loan agreement shall provide that upon failure by the

29  pledgor to redeem the certificate of title at the end of the

30  original 30-day-agreement period, or at the end of any 30-day

31  extension of such period, the title loan lender shall be


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  1  allowed to take possession of the titled personal property.

  2  The title loan lender shall retain physical possession of the

  3  certificate of title for the entire term of the title loan

  4  agreement, but shall not be required to retain physical

  5  possession of the titled personal property at any time. A

  6  title loan lender may only hold unencumbered certificates of

  7  title for loan.

  8         Section 9.  Recordkeeping; reporting; safekeeping of

  9  property.--

10         (1)  Every title loan lender shall maintain, at the

11  principal place of business, such books, accounts, and records

12  of the business conducted under the license issued for such

13  place of business as will enable the department to determine

14  the licensee's compliance with this act. The licensee shall

15  make all such books, accounts, and records of business

16  conducted under the license available at a convenient location

17  in this state upon request of the department.

18         (2)  The department may authorize the maintenance of

19  books, accounts, and records at a location other than a

20  principal place of business. The department may require books,

21  accounts, and records to be produced and available at a

22  reasonable and convenient location in this state within a

23  reasonable period of time after such a request.

24         (3)  The title loan lender shall maintain the original

25  copy of each completed title loan transaction form on the

26  title loan office premises, and shall not obliterate, discard,

27  or destroy any such original copy, for a period of at least 2

28  years after making the final entry on any loan recorded in

29  such office.

30         (4)  All loan property, or property related to the

31  title loan transaction, which is delivered to a title loan


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  1  lender shall be securely stored and maintained at the title

  2  loan office unless the title document has been forwarded to

  3  the appropriate state agency for the purpose of having a lien

  4  recorded or deleted.

  5         (5)  The department may prescribe the minimum

  6  information to be shown in the books, accounts, and records of

  7  licensees so that such records will enable the department to

  8  determine compliance with the provisions of this act.

  9         Section 10.  Title loan charges.--

10         (1)  A title loan lender may charge a maximum interest

11  rate of 30 percent per annum computed on the first $2,000 of

12  the principal amount, 24 percent per annum on that part of the

13  principal amount exceeding $2,000 and not exceeding $3,000,

14  and 18 percent per annum on that part of the principal amount

15  exceeding $3,000. The original principal amount is the same

16  amount as the amount financed, as defined by the federal Truth

17  in Lending Act and Regulation Z of the Board of Governors of

18  the Federal Reserve System. In determining compliance with the

19  statutory maximum interest and finance charges, the

20  computations must be simple interest and not add-on interest

21  or any other computations. When two or more interest rates are

22  to be applied to the principal amount, the lender may charge

23  interest at that single annual percentage rate which, if

24  applied according to the actuarial method to each of the

25  scheduled periodic balances of principal, would produce at

26  maturity the same total amount of interest as would result

27  from the application of the two or more rates otherwise

28  permitted, based upon the assumption that all payments are

29  made as agreed.

30         (2)  The annual percentage rate that may be charged in

31  a title loan transaction may equal, but not exceed, the annual


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                                     HB 3975, Second Engrossed/ntc



  1  percentage rate that must be computed and disclosed as

  2  required by the federal Truth in Lending Act and Regulation Z

  3  of the Board of Governors of the Federal Reserve System. The

  4  maximum annual percentage rate of finance charge that may be

  5  charged is 12 times the maximum monthly rate, and the maximum

  6  monthly rate must be computed on the basis of one-twelfth of

  7  the annual rate for each full month. The Department of Banking

  8  and Finance shall establish the rate for each day in a

  9  fraction of a month when the period for which the charge is

10  computed is more or less than 1 month.

11         (3)  Any charges, including interest, in excess of the

12  combined total of all charges permitted by this act constitute

13  a violation of chapter 687, Florida Statutes, governing

14  interest and usury, and the penalties of that chapter apply.

15  If a bona fide error occurs, the lender must refund or credit

16  the borrower with the amount of the overcharge within 20 days

17  after the discovery of such error.

18         (4)  Any finance charge contracted for or received,

19  directly or indirectly, in excess of the amounts authorized

20  under this section are prohibited, may not be collected, and

21  render the title loan agreement voidable, in which case the

22  title loan lender shall forfeit the right to collect any

23  interest or finance charges. Upon the pledgor's written

24  request delivered to the title loan lender by certified mail,

25  return receipt requested, within 30 days after the maturity

26  date, the title loan lender shall be obligated to return to

27  the pledgor the loan property delivered to the title loan

28  lender in connection with the title loan agreement upon

29  payment of the balance of the principal remaining due,

30  provided that there shall be no penalty for a violation

31  resulting from an accidental and bona fide error that is


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  1  corrected upon discovery. Any action to circumvent the

  2  limitation on title loan interest or any other amounts

  3  collectible under this act is voidable. Any transaction

  4  involving a person's delivery of a personal property

  5  certificate of title in exchange for the advancement of funds

  6  on the condition that the person shall or may redeem or

  7  repurchase the certificate of title upon the payment of a sum

  8  of money, whether the transaction be characterized as a

  9  "buy-sell agreement," "sale-leaseback agreement," or

10  otherwise, shall be deemed a violation of this act if such sum

11  exceeds the amount that a title loan lender may collect in a

12  title loan agreement under this act or if the terms of the

13  transaction otherwise conflict with the permitted terms and

14  conditions of a title loan agreement under this act.

15         Section 11.  Disposal of pledged property; excess

16  proceeds.--

17         (1)  Any motor vehicle which is security for a title

18  loan, is subject to sale or disposal if the title has not been

19  redeemed from the title lender or there has been no payment

20  made on account within 60 days after payment was due. Every

21  title loan transaction form shall contain a notice of the

22  provisions of this subsection. Any such sale or disposal shall

23  vest in the purchaser the right, title, and interest of the

24  owner and the title loan lender.

25         (2)  A title loan lender has the right to take

26  possession of the motor vehicle upon failure of the owner to

27  redeem the title within the time period specified in

28  subsection (1). The title loan lender shall only take

29  possession of a motor vehicle through an agent who is licensed

30  by the state to repossess motor vehicles. The title loan

31  lender may dispose of the motor vehicle as provided in this


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  1  section. Any sale or disposal of the motor vehicle shall be

  2  made through a motor vehicle dealer licensed under s. 320.27.

  3         (3)  Within 30 days after the sale of the motor

  4  vehicle, the title loan borrower is entitled to receive moneys

  5  from the sale of the motor vehicle in excess of the principal

  6  amount of the loan, interest on the loan up to the date of

  7  repossession, and reasonable expenses for the repossession,

  8  holding, and sale of the motor vehicle. The borrower is

  9  entitled to receive reasonable attorney's fees and costs in

10  any action brought to recover the excess amount that results

11  in the title loan lender being ordered to return all or part

12  of such amount.

13         (4)  Except as provided by this section, the taking

14  possession and sale or disposal of the motor vehicle is

15  subject to the requirements of chapter 679, Florida Statutes.

16         Section 12.  Prohibited acts.--

17         (1)  A title loan lender, or any agent or employee of a

18  title loan lender, shall not:

19         (a)  Falsify or fail to make an entry of any material

20  matter in a title loan lender transaction form.

21         (b)  Refuse to allow the department to inspect

22  completed title loan transaction forms or loan property during

23  the ordinary hours of the title loan lender's business or

24  other times acceptable to both parties.

25         (c)  Enter into a title loan agreement with a person

26  under the age of 18 years.

27         (d)  Make any agreement requiring or allowing for the

28  personal liability of a pledgor or the waiver of any of the

29  provisions of this act.

30         (e)  Knowingly enter into a title loan agreement with

31  any person who is under the influence of drugs or alcohol when


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  1  such condition is visible or apparent, or with any person

  2  using a name other than such person's own name or the

  3  registered name of the person's business.

  4         (f)  Fail to exercise reasonable care in the

  5  safekeeping of loan property or of titled personal property

  6  repossessed pursuant to this act.

  7         (g)  Fail to return loan property or repossessed titled

  8  personal property to a pledgor, with any and all of the title

  9  loan lender's liens on the property properly released, upon

10  payment of the full amount due the title loan lender, unless

11  the property has been seized or impounded by an authorized law

12  enforcement agency, taken into custody by a court, or

13  otherwise disposed of by court order.

14         (h)  Sell or otherwise charge for insurance in

15  connection with a title loan agreement.

16         (i)  Charge or receive any finance charge, interest, or

17  fees which are not authorized pursuant to this act.

18         (j)  Engage in business as a title loan lender without

19  first securing a license.

20         (k)  Refuse to accept a partial repayment of the

21  obligation owed and outstanding.

22         (l)  Charge a prepayment penalty.

23         (2)  Title loan companies may not advertise using the

24  words "interest free loans" or "no finance charges."

25         Section 13.  Right to redeem; lost title loan

26  transaction form.--

27         (1)  Any person presenting identification of such

28  person as the pledgor and presenting the pledgor's copy of the

29  title loan transaction form to the title loan lender is

30  presumed to be entitled to redeem the loan property described

31  in the title loan lender transaction form. However, if the


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                                     HB 3975, Second Engrossed/ntc



  1  title loan lender determines that the person is not the

  2  pledgor, the title loan lender is not required to allow the

  3  redemption of the loan property by such person. The person

  4  redeeming the loan property must sign the pledgor's copy of

  5  the title loan transaction form, which the title loan lender

  6  may retain to evidence such person's receipt of the loan

  7  property. A person redeeming the loan property who is not the

  8  pledgor, must show identification to the title loan lender,

  9  together with written authorization from the pledgor, and the

10  title loan lender shall record that person's name and address

11  on the title loan transaction form retained by the title loan

12  lender. In any such case, the person redeeming the pledgor's

13  copy of the title loan transaction form shall be provided a

14  copy of such signed form as evidence of such transaction.

15         (2)  If the pledgor's copy of the title loan

16  transaction form is lost, destroyed, or stolen, the pledgor

17  must notify the title loan lender, in writing by certified or

18  registered mail, return receipt requested, or in person

19  evidenced by a signed receipt, and receipt of such notice

20  shall invalidate such title loan transaction form if the loan

21  property has not previously been redeemed. Before delivering

22  the loan property or issuing a new title loan transaction

23  form, the title loan lender shall require the pledgor to make

24  a written statement of the loss, destruction, or theft of the

25  pledgor's copy of the title loan transaction form. The title

26  loan lender shall record on the written statement the type of

27  identification and the identification number accepted from the

28  pledgor, the date the statement is given, and the number or

29  date of the title loan transaction form lost, destroyed, or

30  stolen. The statement shall be signed by the title loan lender

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                                     HB 3975, Second Engrossed/ntc



  1  or the title loan office employee who accepts the statement

  2  from the pledgor.

  3         Section 14.  Criminal penalties.--

  4         (1)  Any person who engages in business as a title loan

  5  lender without first securing the license prescribed by this

  6  act commits a felony of the third degree, punishable as

  7  provided in s. 775.082, s. 775.083, or s. 775.084, Florida

  8  Statutes.

  9         (2)  In addition to any other applicable penalty, any

10  person who willfully violates any provision of this act or who

11  willfully makes a false entry in any record specifically

12  required by this act commits a misdemeanor of the first

13  degree, punishable as provided in s. 775.082 or s. 775.083,

14  Florida Statutes.

15         Section 15.  Records from the Department of Law

16  Enforcement.--The Department of Law Enforcement, on request,

17  shall supply to the department any arrest and conviction

18  records in the possession of the Department of Law Enforcement

19  of an individual applying for or holding a license under this

20  act.

21         Section 16.  Subpoenas; enforcement actions; rules.--

22         (1)  The department may issue and serve subpoenas to

23  compel the attendance of witnesses and the production of

24  documents, papers, books, records, and other evidence before

25  the department in any matter pertaining to this act. The

26  department may administer oaths and affirmations to any person

27  whose testimony is required. If any person refuses to testify,

28  produce books, records, and documents, or otherwise refuses to

29  obey a subpoena issued under this section, the department may

30  enforce the subpoena in the same manner as subpoenas issued

31  under the Administrative Procedure Act are enforced. Witnesses


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                                     HB 3975, Second Engrossed/ntc



  1  are entitled to the same fees and mileage as they are entitled

  2  to by law for attending as witnesses in the circuit court,

  3  unless such examination or investigation is held at the place

  4  of business or residence of the witness.

  5         (2)  In addition to any other powers conferred upon the

  6  department to enforce or administer this act, the department

  7  may:

  8         (a)  Bring an action in any court of competent

  9  jurisdiction to enforce or administer this act, any rule or

10  order adopted under this act, or any written agreement entered

11  into with the department. In such action, the department may

12  seek any relief at law or equity including a temporary or

13  permanent injunction, appointment of a receiver or

14  administrator, or an order of restitution.

15         (b)  Issue and serve upon a person an order requiring

16  such person to cease and desist and take corrective action

17  whenever the department finds that such person is violating,

18  has violated, or is about to violate any provision of this

19  act, any rule or order adopted under this act, or any written

20  agreement entered into with the department.

21         (c)  Whenever the department finds that conduct

22  described in paragraph (b) presents an immediate danger to the

23  public health, safety, or welfare requiring an immediate final

24  order, the department may issue an emergency cease and desist

25  order reciting with particularity the facts underlying such

26  findings. The emergency cease and desist order is effective

27  immediately upon service of a copy of the order on the

28  respondent named in the order and shall remain effective for

29  90 days. If the department begins nonemergency proceedings

30  under paragraph (b), the emergency cease and desist order

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                                     HB 3975, Second Engrossed/ntc



  1  remains effective until the conclusion of the proceedings

  2  under ss. 120.569 and 120.57, Florida Statutes.

  3         (d)  Impose and collect an administrative fine against

  4  any person found to have violated any provision of this act,

  5  any rule or order adopted under this act, or any written

  6  agreement entered into with the department, in an amount not

  7  to exceed $5,000 for each violation.

  8         (3)  The department may adopt rules pursuant to the

  9  Administrative Procedure Act to implement this act.

10         Section 17.  Investigations and complaints.--

11         (1)  The department may make any investigation and

12  examination of any licensee or other person the department

13  deems necessary to determine compliance with this act. For

14  such purposes, the department may examine the books, accounts,

15  records, and other documents or matters of any licensee or

16  other person. The department may compel the production of all

17  relevant books, records, and other documents and materials

18  relative to an examination or investigation. Such

19  investigations and examinations shall not be made more often

20  than once during any 12-month period unless the department has

21  good cause to believe the licensee is not complying with the

22  provisions of this act.

23         (2)  The expenses of the department incurred in each

24  such examination may be established by department rule but

25  shall not exceed $250 per 8-hour day for each examiner.  Such

26  examination fee shall be calculated on an hourly basis and

27  shall be rounded to the nearest hour.  The licensee shall also

28  pay the travel expense and per diem subsistence allowance

29  provided for state employees in s. 112.061.  The licensee

30  shall not be required to pay a per diem fee and expenses of an

31  examination which shall consume more than 30 worker-days in


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                                     HB 3975, Second Engrossed/ntc



  1  any one year unless such examination or investigation is due

  2  to fraudulent practices of the licensee, in which case such

  3  licensee shall be required to pay the entire cost regardless

  4  of time consumed.

  5         (3)  Any person having reason to believe that any

  6  provision of this act has been violated may file with the

  7  department a written complaint setting forth the details of

  8  such alleged violation and the department upon receipt of such

  9  complaint, may inspect the pertinent books, records, letters,

10  and contracts of the licensee and of the seller involved,

11  relating to such specific written complaint.

12         Section 18.  Paragraphs (a) and (h) of subsection (1)

13  of section 538.03, Florida Statutes, are amended to read:

14         538.03  Definitions; applicability.--

15         (1)  As used in this part, the term:

16         (a)  "Secondhand dealer" means any person, corporation,

17  or other business organization or entity which is not a

18  secondary metals recycler subject to part II and which is

19  engaged in the business of purchasing, consigning, or pawning

20  secondhand goods or entering into title loan transactions.

21  However, secondhand dealers are not limited to dealing only in

22  items defined as secondhand goods in paragraph (g).  Except as

23  provided in subsection (2), the term means pawnbrokers,

24  jewelers, precious metals dealers, garage sale operators,

25  secondhand stores, and consignment shops.

26         (h)  "Transaction" means any title loan, purchase,

27  consignment, or pawn of secondhand goods by a secondhand

28  dealer.

29         Section 19.  Subsection (1) of section 538.16, Florida

30  Statutes, is amended to read:

31         538.16  Secondhand dealers; disposal of property.--


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                                     HB 3975, Second Engrossed/ntc



  1         (1)  Any personal property pawned with a pawnbroker,

  2  whether the pawn is a loan of money or a buy-sell agreement or

  3  a motor vehicle which is security for a title loan, is subject

  4  to sale or disposal if the pawn is a loan of money and the

  5  property has not been redeemed or there has been no payment on

  6  account made for a period of 90 days, or if the pawn is a

  7  buy-sell agreement or if it is a title loan and the property

  8  has not been repurchased from the pawnbroker or the title

  9  redeemed from the title lender or there has been no payment

10  made on account within 60 days.

11         Section 20.  Effective July 1, 1998, the sum of

12  $500,000 is hereby appropriated for the 1998-1999 fiscal year

13  from the Regulatory Trust Fund of the Department of Banking

14  and Finance to the department to fund nine positions for the

15  purpose of carrying out the provisions of this act.

16         Section 21.  Paragraph (i) of subsection (1) of section

17  538.03, Florida Statutes, subsection (5) of section 538.06,

18  Florida Statutes, and subsections (4) and (5) of section

19  538.15, Florida Statutes, are hereby repealed.

20         Section 22.  Except as otherwise provided in this act,

21  this act shall take effect October 1 of the year in which

22  enacted.

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