House Bill 0299

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    Florida House of Representatives - 1999                 HB 299

        By Representative Sublette






  1                      A bill to be entitled

  2         An act relating to title loan transactions;

  3         creating the "Florida Title Loan Act";

  4         providing legislative intent; providing

  5         definitions; requiring licensure by the

  6         Department of Banking and Finance to be in the

  7         business as a title loan lender; providing for

  8         fees; providing for eligibility for licensure;

  9         providing for application; providing for

10         suspension or revocation of license; providing

11         a fine; providing for a title loan transaction

12         form; providing requirements; providing for

13         redemption of a repossessed motor vehicle under

14         certain circumstances; providing entitlement to

15         certain excess proceeds of a sale or disposal

16         of a motor vehicle; providing for recordkeeping

17         and reporting and safekeeping of property;

18         providing for title loan charges and interest

19         rates; providing a holding period when there is

20         a failure to redeem; providing for the disposal

21         of pledged property; providing for disposition

22         of excess proceeds; prohibiting certain acts;

23         providing for the right to redeem; providing

24         for lost title loan transaction forms;

25         providing for a title loan lenders lien;

26         providing for criminal penalties; providing for

27         certain records from the Department of Law

28         Enforcement; providing for subpoenas,

29         enforcement of actions, and rules; providing a

30         fine; providing for investigations and

31         complaints; amending ss. 538.03 and 538.16,

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  1         F.S.; deleting provisions relating to title

  2         loan transactions; providing for more

  3         restrictive local ordinances; providing an

  4         appropriation; repealing ss. 538.03(1)(i),

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

  6         relating to title loan transactions by

  7         secondhand dealers; providing effective dates.

  8

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

10

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

12  "Florida Title Loan Act."

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

14  the Legislature that title loans shall be regulated by the

15  provisions of this act. The provisions of this act shall

16  supersede any other provisions of law affecting title loans to

17  the extent of any conflict.

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

19  the context otherwise requires:

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

21  Finance.

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

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

24  transaction. Nonpublic sales or disposal of personal property

25  between licensees and business affiliates or family members

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

27  commercially reasonable fashion.

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

29  executive officer, chief financial officer, chief operating

30  officer, executive vice president, senior vice president,

31  secretary, and treasurer.

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  1         (4)  "Identification" means a government-issued

  2  photographic identification.

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

  4  loan and includes any profit or advantage of any kind

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

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

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

  8  the title loan.

  9         (6)  "License" means a permit issued under this chapter

10  to make and collect title loans in accordance with this

11  chapter at a single place of business.

12         (7)  "Licensee" means a person who is licensed pursuant

13  to the provisions of this act.

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

15  certificate of title that is deposited with a title loan

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

17  is the subject of a title loan agreement.

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

19  truck, trailer, semitrailer, truck tractor and semitrailer

20  combination, or any other vehicle operated on the public

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

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

23  but excluding vehicles which run only upon a track.

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

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

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

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

28  specific sum of money to a borrower, and the borrower agrees

29  to give the title loan lender a security interest in an

30  unencumbered motor vehicle certificate of title owned by the

31  borrower.

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

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

  3  title loan agreements with borrowers.

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

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

  6  business.

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

  8  a motor vehicle from lender to borrower for money.

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

10  instrument on which a title loan lender records title loan

11  agreements.

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

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

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

15  residence of the borrower.

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

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

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

19  business organization, or any other form of business

20  organization, regardless of whether such natural person owns

21  or controls such ownership interest through one or more

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

23  nominees, corporations, associations, partnerships, trusts,

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

25  combination thereof.

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

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

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

29  the department authorizing the engagement in the business. A

30  separate license is required for each physical location of a

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

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

  2  act for each license.

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

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

  5  department prescribes by rule. If the department determines

  6  that an application should be granted, the department shall

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

  8  nonrefundable license fee not to exceed $500 and a

  9  nonrefundable investigation fee of $200 shall accompany an

10  initial application for each title loan location. The revenue

11  from such fees is intended to reasonably reflect the actual

12  cost of regulation.

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

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

15  license that is not renewed by its expiration date shall

16  automatically expire and revert to inactive status. Such

17  inactive license may be reactivated within 3 months after the

18  expiration date upon submission of a completed reactivation

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

20  is not reactivated within 3 months after becoming inactive may

21  not be reactivated.

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

23  the license is issued and must be conspicuously displayed at

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

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

26  prior written notice to the department by certified or

27  registered mail, return receipt requested, and the department

28  shall then amend the license accordingly. A license issued

29  pursuant to this act is not transferable or assignable.

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

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

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

  2  a pending criminal prosecution or governmental civil

  3  enforcement action, in any jurisdiction, until conclusion of

  4  such criminal prosecution or enforcement action.

  5         (6)  Each licensee shall designate and maintain an

  6  agent in this state for service of process.

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

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

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

10  nonrefundable license and investigation fees.

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

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

13  Department of Banking and Finance for the sole purpose of

14  implementing this act.

15         Section 5.  Eligibility for license.--

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

17  an applicant must:

18         (a)  Be of good moral character.

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

20  $100,000 for each license, with a surety company qualified to

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

22  may establish a certificate of deposit or an irrevocable

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

24  655.005, Florida Statutes, in the amount of the bond. The

25  original bond, certificate of deposit, or letter of credit

26  shall be filed with the department, and the department shall

27  be the beneficiary to that document. The bond, certificate of

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

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

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

31  misrepresentation, breach of contract, financial failure, or

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

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

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

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

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

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

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

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

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

10  to and enforceable only by and through administrative

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

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

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

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

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

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

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

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

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

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

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

22  years.

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

24  ultimate equitable owner for someone who has been convicted,

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

26  duties and responsibilities of a title loan lender within the

27  last 10 years.

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

29  is other than a corporation, the eligibility requirements of

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

31

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

  2  is a corporation, the eligibility requirements of this section

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

  4  percent of the outstanding equity interest of such corporation

  5  and to each director and executive officer.

  6         Section 6.  Application for license.--

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

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

  9  form prescribed by department rule, and shall:

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

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

12  partnership or association, of every member of such

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

14  executive officer and director and ultimate equitable owner of

15  at least 25 percent of such corporation.

16         (b)  State whether any individual identified in

17  paragraph (a) has, within the last 10 years, been arrested for

18  or convicted of, or is under indictment or information for, a

19  felony or crime.

20         (c)  Identify the county and municipality with the

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

22  conducted.

23         (d)  Contain such further relevant information as the

24  department requires pursuant to rule.

25

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

27  to the department a nonrefundable license fee not to exceed

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

29  reactivate a license, must be accompanied by a nonrefundable

30  investigation fee of $200.

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

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

  3  director, and shareholder if the applicant is owned directly

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

  5  securities registered pursuant to section 12 of the Securities

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

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

  8  reports with the Securities and Exchange Commission, if the

  9  person files with the department any information, documents,

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

11  Securities and Exchange Commission.

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

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

14  to renew or reactivate an existing license, the department

15  shall investigate the facts concerning the applicant's

16  proposed activities. The department shall investigate the

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

18  applicant a license that will evidence the authority to do

19  business under the provisions of this act if the department

20  finds that the eligibility requirements for the license are

21  satisfied. The license must be prominently displayed at the

22  front desk or counter at the title loan office.

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

24  date shall automatically revert to inactive status. An

25  inactive license may be reactivated upon submission of a

26  completed reactivation application, payment of the biannual

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

28  license expires 3 months after the date on which it became

29  inactive.

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

31  maintained under a license without prior notice to the

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

  2  business, the licensee shall give written notice of such

  3  change to the department.

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

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

  6  business is solicited or engaged in, unless the department

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

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

  9  combining of such other business activities does not result in

10  practices that are detrimental, misleading, or unfair to

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

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

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

14  organization engaged in the pawnbroking business.

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

16  licensee may invalidate any license by delivering the license

17  to the department with written notice of its surrender by

18  certified or registered mail, return receipt requested, but

19  such delivery does not affect any civil or criminal liability

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

21  violation thereof.

22         Section 7.  Suspension or revocation of license.--

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

24  constitute grounds for the disciplinary actions specified in

25  subsection (2):

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

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

28  agreement entered into with the department.

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

30  negligence in any title loan transaction, regardless of

31  reliance by or damage to the borrower.

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  1         (c)  Fraudulent misrepresentation, circumvention, or

  2  concealment of any matter required to be stated or furnished

  3  to a borrower pursuant to this act, regardless of reliance by

  4  or damage to the borrower.

  5         (d)  Willful imposition of illegal or excessive charges

  6  in any title loan transaction.

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

  8  title loan lender.

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

10  for examination all books, accounts, or other documents

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

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

13  department.

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

15  conspired with an individual or person to circumvent or

16  violate any of the requirements of this act.

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

18  in an investigation or examination by the department or

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

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

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

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

23  department may enter an order taking any of the following

24  actions:

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

26  120.695, Florida Statutes;

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

28  this act;

29         (c)  Revoking or suspending a license previously

30  granted pursuant to this act;

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

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

  3  conditions as the department specifies;

  4         (e)  Placing permanent restrictions or conditions upon

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

  6         (f)  Issuing a reprimand; or

  7         (g)  Imposing an administrative fine not to exceed

  8  $5,000 for each such act or violation.

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

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

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

12  restriction of a license previously granted:

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

14  renewal application for a license.

15         (b)  Having a license or registration, or the

16  equivalent, to practice any profession or occupation denied,

17  suspended, revoked, or otherwise acted against by a licensing

18  authority in any jurisdiction for fraud, dishonest dealing, or

19  any act of moral turpitude.

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

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

22  turpitude.

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

24  honesty or financial responsibility.

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

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

27  issuance of the license, would have justified the department

28  in refusing a license.

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

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

31  partnership, corporation, or association, if the department

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

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

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

  4  direct the management or policies of the partnership,

  5  corporation, or association.

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

  7  responsible for the acts of employees and agents of the

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

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

10  advantages accruing from such acts or ratified the conduct of

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

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

13  hearing is governed by chapter 120, Florida Statutes.

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

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

16  right to collect any moneys, including principal and finance

17  charges, from the borrower in connection with such agreement,

18  and shall return to the borrower the loan property in

19  connection with such agreement or the fair market value of

20  such property and all principal and interest made by the

21  borrower.

22         Section 8.  Title loan transaction form.--

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

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

25  title loan transaction form for such transaction, and the

26  borrower shall sign such completed form. The department shall

27  approve the design and format of the title loan transaction

28  form, which shall elicit the information required under this

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

30  title loan lender shall record the following information,

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  1  which shall be typed or written indelibly and legibly in

  2  English:

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

  4  property to which the loan property relates.

  5         (b)  The vehicle identification number, or other

  6  comparable identification number, along with the license plate

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

  8  which the loan property relates.

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

10  description, and social security number of the borrower.

11         (d)  The date of the transaction.

12         (e)  The identification number and the type of

13  identification, including the issuing agency, accepted from

14  the borrower.

15         (f)  The amount of money advanced, designated as the

16  "amount financed."

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

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

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

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

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

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

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

24  payments."

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

26  with the regulations adopted by the Federal Reserve Board

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

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

29  all title loan transaction forms:

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

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

  2  a telephone number to which consumers may address complaints.

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

  4  type that:

  5         1.  If the borrower does not redeem the certificate of

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

  7  the title loan lender may repossess the motor vehicle to which

  8  the certificate of title relates.

  9         2.  If the title loan transaction form is lost,

10  destroyed, or stolen, the borrower should immediately so

11  advise the issuing title loan lender in writing.

12         (d)  The statement that "The borrower represents and

13  warrants that the titled personal property to which the loan

14  property relates is not stolen and has no liens or

15  encumbrances against it, the borrower has the right to enter

16  into this transaction, and the borrower will not apply for a

17  duplicate certificate of title while the title loan agreement

18  is in effect."

19         (e)  A blank line for the signature of the borrower.

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

21  lender shall deliver to the borrower an exact copy of the

22  completed title loan transaction form.

23         (4)  The borrower shall agree for the title loan lender

24  to keep possession of the certificate of title. The borrower

25  shall have the exclusive right to redeem the certificate of

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

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

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

29  interest in the titled personal property and return the

30  personal property certificate of title to the  borrower. The

31  title loan agreement shall provide that upon failure by the

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  1  borrower to redeem the certificate of title at the end of the

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

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

  4  allowed to take possession of the titled personal property.

  5  The title loan lender shall retain physical possession of the

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

  7  agreement, but shall not be required to retain physical

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

  9  title loan lender may only hold unencumbered certificates of

10  title for loan.

11         (5)  If a motor vehicle is repossessed under subsection

12  (4), the title loan borrower has 60 days to redeem the motor

13  vehicle before the motor vehicle is subject to sale or

14  disposal.

15         (6)  The title loan borrower is entitled to the excess

16  proceeds in the event the motor vehicle is sold or disposed of

17  under subsection (5).

18         Section 9.  Recordkeeping; reporting; safekeeping of

19  property.--

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

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

22  of the business conducted under the license issued for such

23  place of business as will enable the department to determine

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

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

26  conducted under the license available at a convenient location

27  in this state upon request of the department.

28         (2)  The department may authorize the maintenance of

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

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

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

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  1  reasonable and convenient location in this state within a

  2  reasonable period of time after such a request.

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

  4  copy of each completed title loan transaction form on the

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

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

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

  8  such office.

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

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

11  lender shall be securely stored and maintained at the title

12  loan office unless the title document has been forwarded to

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

14  recorded or deleted.

15         (5)  The department may prescribe the minimum

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

17  licensees so that such records will enable the department to

18  determine compliance with the provisions of this act.

19         Section 10.  Title loan charges.--

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

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

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

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

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

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

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

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

28  the Federal Reserve System. In determining compliance with the

29  statutory maximum interest and finance charges, the

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

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

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

  2  interest at that single annual percentage rate which, if

  3  applied according to the actuarial method to each of the

  4  scheduled periodic balances of principal, would produce at

  5  maturity the same total amount of interest as would result

  6  from the application of the two or more rates otherwise

  7  permitted, based upon the assumption that all payments are

  8  made as agreed.

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

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

11  percentage rate that must be computed and disclosed as

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

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

14  maximum annual percentage rate of finance charge that may be

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

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

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

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

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

20  computed is more or less than 1 month.

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

22  combined total of all charges permitted by this act constitute

23  a violation of chapter 687, Florida Statutes, governing

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

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

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

27  after the discovery of such error.

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

29  directly or indirectly, in excess of the amounts authorized

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

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

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  1  title loan lender shall forfeit the right to collect any

  2  interest or finance charges. Upon the borrower's written

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

  4  return receipt requested, within 30 days after the maturity

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

  6  the borrower the loan property delivered to the title loan

  7  lender in connection with the title loan agreement upon

  8  payment of the balance of the principal remaining due,

  9  provided that there shall be no penalty for a violation

10  resulting from an accidental and bona fide error that is

11  corrected upon discovery. Any action to circumvent the

12  limitation on title loan interest or any other amounts

13  collectible under this act is voidable. Any transaction

14  involving a person's delivery of a personal property

15  certificate of title in exchange for the advancement of funds

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

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

18  of money, whether the transaction be characterized as a

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

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

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

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

23  transaction otherwise conflict with the permitted terms and

24  conditions of a title loan agreement under this act.

25         Section 11.  Disposal of pledged property; excess

26  proceeds.--

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

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

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

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

31  title loan transaction form shall contain a notice of the

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

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

  3  owner and the title loan lender.

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

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

  6  redeem the title within the time period specified in

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

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

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

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

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

12  made through a motor vehicle dealer licensed under s. 320.27,

13  Florida Statutes.

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

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

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

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

18  repossession, and reasonable expenses for the repossession,

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

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

21  any action brought to recover the excess amount that results

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

23  of such amount.

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

25  possession and sale or disposal of the motor vehicle is

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

27         Section 12.  Prohibited acts.--

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

29  title loan lender, shall not:

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

31  matter in a title loan lender transaction form.

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  1         (b)  Refuse to allow the department to inspect

  2  completed title loan transaction forms or loan property during

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

  4  other times acceptable to both parties.

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

  6  under the age of 18 years.

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

  8  personal liability of a borrower or the waiver of any of the

  9  provisions of this act.

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

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

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

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

14  registered name of the person's business.

15         (f)  Fail to exercise reasonable care in the

16  safekeeping of loan property or of titled personal property

17  repossessed pursuant to this act.

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

19  personal property to a borrower, with any and all of the title

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

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

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

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

24  otherwise disposed of by court order.

25         (h)  Sell or otherwise charge for insurance in

26  connection with a title loan agreement.

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

28  fees which are not authorized pursuant to this act.

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

30  first securing a license.

31

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

  2  obligation owed and outstanding.

  3         (l)  Charge a prepayment penalty.

  4         (m)  Engage in the business of selling new or used

  5  motor vehicles, or parts for motor vehicles.

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

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

  8         Section 13.  Right to redeem; lost title loan

  9  transaction form.--

10         (1)  Any person presenting identification of such

11  person as the borrower and presenting the borrower's copy of

12  the title loan transaction form to the title loan lender is

13  presumed to be entitled to redeem the loan property described

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

15  title loan lender determines that the person is not the

16  borrower, the title loan lender is not required to allow the

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

18  redeeming the loan property must sign the borrower's copy of

19  the title loan transaction form which the title loan lender

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

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

22  borrower must show identification to the title loan lender,

23  together with written authorization from the borrower, and the

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

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

26  lender. In any such case, the person redeeming the borrower's

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

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

29         (2)  If the borrower's copy of the title loan

30  transaction form is lost, destroyed, or stolen, the borrower

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

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  1  registered mail, return receipt requested, or in person

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

  3  shall invalidate such title loan transaction form if the loan

  4  property has not previously been redeemed. Before delivering

  5  the loan property or issuing a new title loan transaction

  6  form, the title loan lender shall require the borrower to make

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

  8  borrower's copy of the title loan transaction form. The title

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

10  identification and the identification number accepted from the

11  borrower, the date the statement is given, and the number or

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

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

14  or the title loan office employee who accepts the statement

15  from the borrower.

16         Section 14.  Criminal penalties.--

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

18  lender without first securing the license prescribed by this

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

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

21  Statutes.

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

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

24  willfully makes a false entry in any record specifically

25  required by this act commits a misdemeanor of the first

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

27  Florida Statutes.

28         Section 15.  Records from the Department of Law

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

30  shall supply to the department any arrest and conviction

31  records in the possession of the Department of Law Enforcement

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

  2  act.

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

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

  5  compel the attendance of witnesses and the production of

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

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

  8  department may administer oaths and affirmations to any person

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

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

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

12  enforce the subpoena in the same manner as subpoenas issued

13  under the Administrative Procedure Act are enforced. Witnesses

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

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

16  unless such examination or investigation is held at the place

17  of business or residence of the witness.

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

19  department to enforce or administer this act, the department

20  may:

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

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

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

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

25  seek any relief at law or equity, including a temporary or

26  permanent injunction, appointment of a receiver or

27  administrator, or an order of restitution.

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

29  such person to cease and desist and take corrective action

30  whenever the department finds that such person is violating,

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

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

  2  agreement entered into with the department.

  3         (c)  Whenever the department finds that conduct

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

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

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

  7  order reciting with particularity the facts underlying such

  8  findings. The emergency cease and desist order is effective

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

10  respondent named in the order and shall remain effective for

11  90 days. If the department begins nonemergency proceedings

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

13  remains effective until the conclusion of the proceedings

14  under ss. 120.569 and 120.57, Florida Statutes.

15         (d)  Impose and collect an administrative fine against

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

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

18  agreement entered into with the department in an amount not to

19  exceed $5,000 for each violation.

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

21  Administrative Procedure Act to implement this act.

22         Section 17.  Investigations and complaints.--

23         (1)  The department may make any investigation and

24  examination of any licensee or other person the department

25  deems necessary to determine compliance with this act. For

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

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

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

29  relevant books, records, and other documents and materials

30  relative to an examination or investigation. Such

31  investigations and examinations shall not be made more often

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

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

  3  provisions of this act.

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

  5  such examination may be established by department rule but

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

  7  examination fee shall be calculated on an hourly basis and

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

  9  pay the travel expenses and per diem subsistence allowance

10  provided for state employees in s. 112.061, Florida Statutes.

11  The licensee shall not be required to pay per diem and

12  expenses of an examination which shall consume more than 30

13  worker-days in any one year unless such examination or

14  investigation is due to fraudulent practices of the licensee,

15  in which case such licensee shall be required to pay the

16  entire cost regardless of time consumed.

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

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

19  department a written complaint setting forth the details of

20  such alleged violation and the department, upon receipt of

21  such complaint, may inspect the pertinent books, records,

22  letters, and contracts of the licensee and of the seller

23  involved relating to such specific written complaint.

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

25  of section 538.03, Florida Statutes, 1998 Supplement, are

26  amended to read:

27         538.03  Definitions; applicability.--

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

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

30  or other business organization or entity which is not a

31  secondary metals recycler subject to part II and which is

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

  2  secondhand goods or entering into title loan transactions.

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

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

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

  6  jewelers, precious metals dealers, garage sale operators,

  7  secondhand stores, and consignment shops.

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

  9  consignment, or pawn of secondhand goods by a secondhand

10  dealer.

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

12  Statutes, is amended to read:

13         538.16  Secondhand dealers; disposal of property.--

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

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

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

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

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

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

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

21  has not been repurchased from the pawnbroker or the title

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

23  made on account within 60 days.

24         Section 20.  Nothing in this act precludes a county or

25  municipality from adopting ordinances more restrictive than

26  the provisions of this act.

27         Section 21.  Effective July 1, 1999, the sum of

28  $500,000 is hereby appropriated for the 1999-2000 fiscal year

29  from the Regulatory Trust Fund of the Department of Banking

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

31  purpose of carrying out the provisions of this act.

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  1         Section 22.  Paragraph (i) of subsection (1) of section

  2  538.03, Florida Statutes, 1998 Supplement, subsection (5) of

  3  section 538.06, Florida Statutes, and subsections (4) and (5)

  4  of section 538.15, Florida Statutes, are hereby repealed.

  5         Section 23.  Except as otherwise provided in this act,

  6  this act shall take effect October 1, 1999.

  7

  8            *****************************************

  9                          HOUSE SUMMARY

10
      Creates the "Florida Title Loan Act" and requires
11    licensure by the Department of Banking and Finance to be
      in the business as a title loan lender. Provides for
12    eligibility for licensure, for applications, for
      suspension or revocation of licenses, for recordkeeping
13    and reporting and safekeeping of property, for title loan
      charges, for the disposal of pledged property, and for
14    disposition of excess proceeds. Prohibits specified acts.
      Provides for a right to redeem, for a title loan lenders
15    lien, for criminal penalties, for accessing records from
      the Department of Law Enforcement, for subpoenas,
16    enforcement of actions, and rules, and for investigations
      and complaints. Provides for more restrictive local
17    ordinances. See bill for details.

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