Senate Bill 0898e1
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SB 898 First Engrossed
1 A bill to be entitled
2 An act relating to title loan transactions;
3 creating the "Florida Title Loan Act";
4 providing definitions; requiring licensure by
5 the Department of Agriculture and Consumer
6 Services to be in the business as a title loan
7 lender; providing fees; providing for
8 eligibility for licensure; providing for
9 application; providing for suspension or
10 revocation of license; providing for a title
11 loan transaction form; providing for
12 recordkeeping and reporting and safekeeping of
13 property; providing for title loan charges;
14 prohibiting certain acts; providing for the
15 right to redeem; providing for lost title loan
16 transaction forms; providing for a title loan
17 lender's lien; providing for criminal
18 penalties; providing for certain records from
19 the Department of Law Enforcement; providing
20 for subpoenas, enforcement of actions, and
21 rules; providing a fine; providing for
22 investigations and complaints; providing an
23 appropriation; providing legislative intent;
24 repealing s. 538.06(5), F.S., which allows a
25 secondhand dealer to engage in a title loan
26 transaction; repealing s. 538.15(4), (5), F.S.,
27 which prohibit certain acts and practices by
28 secondhand dealers; amending ss. 538.03,
29 538.16, F.S.; deleting references to title
30 loans; providing for a study committee and a
31 report; providing an effective date.
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SB 898 First Engrossed
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. Definitions.--As used in this act, the
6 term:
7 (1) "Department" means the Department of Agriculture
8 and Consumer Services.
9 (2) "Commercially reasonable" means a sale or disposal
10 which occurs and can be construed as an arms-length
11 transaction. Nonpublic sales or disposal of personal property
12 between licensees and business affiliates or family members
13 are sales and disposal which are presumed not to be
14 commercially reasonable.
15 (3) "Executive officer" means the president, chief
16 executive officer, chief financial officer, chief operating
17 officer, executive vice president, senior vice president,
18 secretary, or treasurer.
19 (4) "Identification" means a government issued
20 photographic identification.
21 (5) "Licensee" means a person who is licensed under
22 this act.
23 (6) "Loan property" means any personal property
24 certificate of title that is deposited with a title loan
25 lender in the course of the title loan lender's business and
26 is the subject of a title loan agreement.
27 (7) "Title loan agreement" means a written agreement
28 whereby a title loan lender agrees to make a loan of a
29 specific sum of money to a pledgor, and the pledgor agrees to
30 give the title loan lender a security interest in unencumbered
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1 titled personal property, except by a title loan agreement,
2 owned by the pledgor.
3 (8) "Title loan lender" means any person who is
4 engaged in the business of making title loans or engaging in
5 title loan agreements with pledgors, except such laws made
6 pursuant to licensees under chapter 516, chapter 520, or
7 chapter 655.
8 (9) "Title loan office" means the location at which,
9 or premises from which, a title loan lender regularly conducts
10 business.
11 (10) "Title loan transaction form" means the
12 instrument on which a title loan lender records title loan
13 agreements.
14 (11) "Titled personal property" means any personal
15 property that has as evidence of ownership a state-issued
16 certificate of title, except for a mobile home that is the
17 primary residence of the pledgor.
18 (12) "Ultimate equitable owner" means a natural person
19 who, directly or indirectly, owns or controls an ownership
20 interest in a corporation, a foreign corporation, an alien
21 business organization, or any other form of business
22 organization, regardless of whether the person owns or
23 controls such ownership interest through one or more natural
24 persons or one or more proxies, powers of attorney, nominees,
25 corporations, associations, partnerships, trusts, joint stock
26 companies, or other entities or devices, or any combination
27 thereof.
28 Section 3. License required; license fees.--
29 (1) A person may not engage in business as a title
30 loan lender without a valid license issued by the department.
31 A separate license is required for each physical location of a
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SB 898 First Engrossed
1 title loan office. The department shall issue more than one
2 license to a person who complies with the requirements of this
3 act for each license.
4 (2) An application for a license must be submitted to
5 the department on forms prescribed by departmental rule. If
6 the department determines that an application should be
7 granted, it shall issue the license for a period not to exceed
8 1 year. A nonrefundable license fee of $1,500 and a
9 nonrefundable investigation fee of $250 must accompany an
10 initial application for each title loan location. The revenue
11 from these fees is intended to reasonably reflect the actual
12 cost of regulation. However, in no event shall the initial
13 license fees payable by a single title loan lender with
14 multiple title loan offices exceed $15,000 in the aggregate.
15 (3) A license must be renewed annually and must be
16 accompanied by a nonrefundable fee of $1,500. However, in no
17 event shall the renewal fees payable by a single title loan
18 lender with multiple title loan offices exceed $15,000 in the
19 aggregate. A license that is not renewed by its expiration
20 date automatically reverts to inactive status. A license may
21 be reactivated within 3 months after it becomes inactive, upon
22 submission of a completed reactivation form and payment of a
23 reactivation fee. A license may not be reactivated more than 3
24 months after it becomes inactive.
25 (4) Each license must specify the location for which
26 it is issued and must be conspicuously displayed at that
27 location. In order to move a title loan office to another
28 location, a licensee must give 30 days prior written notice to
29 the department by certified or registered mail, return receipt
30 requested, and the department shall then amend the license
31 accordingly. A license is not transferable or assignable.
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1 (5) The department may deny an initial application for
2 a license if the applicant or any person with power to direct
3 the management or policies of the applicant is the subject of
4 a pending criminal prosecution or governmental civil
5 enforcement action in any jurisdiction until the conclusion of
6 the criminal prosecution or enforcement action.
7 (6) A licensee must designate and maintain an agent in
8 this state for service of process.
9 (7) A person must apply to the department for a new
10 license upon the change of any person owning 25 percent or
11 greater interest in any title loan office and must pay the
12 nonrefundable license and investigation fees, up to a maximum
13 of $10,000.
14 (8) All moneys collected by the department under this
15 act shall be deposited into the State Treasury to be placed in
16 the General Inspection Trust Fund for the sole purpose of
17 implementing this act.
18 Section 4. Eligibility for license.--
19 (1) To be eligible for a title loan lending license,
20 an applicant must:
21 (a) Be of good moral character and not have been found
22 guilty of a crime of moral turpitude.
23 (b) File with the department a bond in the amount of
24 $100,000 for each license with a surety company qualified to
25 do business in this state. However, in no event shall the
26 aggregate amount of the bond required for a single title loan
27 lender exceed $1 million. In lieu of the bond, the applicant
28 may provide proof to the department that it has a net worth in
29 excess of $1 million; the applicant may provide to the
30 department a current audited financial statement that
31 documents that the applicant's net worth is in excess of $1
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1 million; or the applicant may establish a certificate of
2 deposit or an irrevocable letter of credit in a Florida
3 financial institution, as defined in chapter 655.005, Florida
4 Statutes, in the amount of the bond. The original bond,
5 certificate of deposit, or letter of credit must be filed with
6 the department, and the department must be the beneficiary of
7 the document. The bond, certificate of deposit, or letter of
8 credit must be in favor of the department for the use and
9 benefit of any consumer who is injured pursuant to a title
10 loan transaction by the fraud, misrepresentation, breach of
11 contract, financial failure, or violation of any provision of
12 this act by the title loan lender. The liability may be
13 enforced by an administrative action or lawsuit in a court of
14 competent jurisdiction. However, in a lawsuit, the bond,
15 certificate of deposit, or letter of credit posted with the
16 department is not subject to any judgment or other legal
17 process issuing out of or from such court in connection with
18 the lawsuit, but the bond, certificate of deposit, or letter
19 of credit is enforceable only by administrative proceedings
20 before the department. It is the intent of the Legislature
21 that such bond, certificate of deposit, or letter of credit
22 shall be applicable and liable only for the payment of claims
23 duly adjudicated by the department. The bond, certificate of
24 deposit, or letter of credit shall be payable on a pro rata
25 basis as determined by the department, but the aggregate
26 amount may not exceed the amount of the bond, certificate of
27 deposit, or letter of credit.
28 (c) Not have been convicted of a felony within the
29 last 10 years or be acting on behalf of an ultimate equitable
30 owner who has been convicted of a felony within the last 10
31 years.
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1 (d) Not have been convicted, and not be acting as an
2 ultimate equitable owner for someone who has been convicted,
3 of a crime that the department finds directly relates to the
4 duties and responsibilities of a title loan lender within the
5 last 10 years.
6 (2) An applicant for a title loan lending license may
7 not be a motor vehicle dealer licensed under chapter 320 or be
8 related to a licensed motor vehicle dealer by common officers,
9 directors, principals, stockholders, agents, family, or
10 employees.
11 (3) If an applicant for a title loan lending license
12 is other than a corporation or limited liability company, the
13 eligibility requirements of this section apply to each direct
14 or ultimate equitable owner.
15 (4) If an applicant for a title loan lending license
16 is a corporation or limited liability company, the eligibility
17 requirements of this section apply to each direct or ultimate
18 equitable owner of at least 25 percent of the outstanding
19 equity interest of such corporation and to each director and
20 executive officer.
21 Section 5. Application for license.--
22 (1) An application for a license to make title loans
23 must be in writing, under oath, and in the form prescribed by
24 departmental rule, and must contain the name and residence and
25 business addresses of the applicant, and, if the applicant is
26 a partnership or association, of every member thereof, and, if
27 a corporation, of each executive officer and director and
28 ultimate equitable owner of at least 25 percent thereof; must
29 state whether any of the above has been arrested within the
30 last 10 years for, convicted of, or is under indictment or
31 information for, a felony or crime that directly relates to
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1 the duties and responsibilities of a title loan lender, and,
2 if so, the nature thereof; must specify the county and
3 municipality, with the street and number or location, where
4 the business is to be conducted; and must provide such further
5 relevant information as the department requires by rule. At
6 the time of application, the applicant must pay the
7 nonrefundable license fees specified in section 3.
8 Applications, except for applications to renew or reactivate a
9 license, must be accompanied by a nonrefundable investigation
10 fee of $250.
11 (2) Notwithstanding the foregoing, the application
12 need not state the full name and address of each officer,
13 director, and shareholder if the applicant is owned directly
14 or beneficially by a person who as an issuer has a class of
15 securities registered pursuant to Section 12 of the Securities
16 Exchange Act of 1934, or pursuant to Section 15 (d) thereof is
17 an issuer of securities which is required to file reports with
18 the Securities and Exchange Commission, if the person files
19 with the department any information, documents, and reports
20 required by that act to be filed with the Securities and
21 Exchange Commission.
22 (3) Upon the filing of an application for a license
23 and payment of all applicable fees, the department shall,
24 unless the application is to renew or reactivate an existing
25 license, investigate the facts concerning the applicant's
26 proposed activities. The department shall investigate the
27 facts and shall approve an application and issue to the
28 applicant a license that will evidence the authority to do
29 business under this act if the department finds that the
30 eligibility requirements for the license are satisfied. The
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1 license must be prominently displayed at the front desk or
2 counter at the title loan office.
3 (4) A license that is not renewed by its expiration
4 date shall automatically revert to inactive status. An
5 inactive license may be reactivated upon submission of a
6 completed reactivation application, payment of the annual
7 license fee, and payment of a reactivation fee of $250. A
8 license expires on the date at which it has been inactive for
9 3 months.
10 (5) A licensee may not change the place of business
11 maintained under a license without giving prior written notice
12 to the department.
13 (6) A licensee may make loans within a place of
14 business in which other business is solicited or engaged in,
15 unless the department finds that the conduct of the other
16 business by the licensee results in the evasion of this act or
17 combining such other business activities results in practices
18 that are detrimental, misleading, or unfair to consumers. Upon
19 such a finding, the department shall order the licensee to
20 desist from such evasion or other business activities. A
21 license may not be granted to or renewed for any person or
22 organization engaged in the pawnbroking business.
23 (7) Licenses are not transferable or assignable. A
24 licensee may invalidate any license by delivering it to the
25 department with written notice of its surrender by certified
26 or registered mail, return receipt requested, but such
27 delivery does not affect any civil or criminal liability or
28 the authority to enforce this act for acts committed in
29 violation thereof.
30 Section 6. Suspension, revocation of license.--
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1 (1) The following acts are violations of this act and
2 constitute grounds for the disciplinary actions specified in
3 subsection (2):
4 (a) Failure to comply with any provision of this act,
5 any rule or order adopted under this act, or any written
6 agreement entered into with the department;
7 (b) Fraud, misrepresentation, deceit, or gross
8 negligence in any title loan transaction, regardless of
9 reliance by or damage to the pledgor;
10 (c) Fraudulent misrepresentation, circumvention, or
11 concealment of any matter required to be stated or furnished
12 to a pledgor under this act, regardless of reliance by or
13 damage to the pledgor;
14 (d) Willful imposition of illegal or excessive charges
15 in any title loan transaction;
16 (e) False, deceptive, or misleading advertising by a
17 title loan lender;
18 (f) Failure to maintain, preserve, and make available
19 for examination, all books, accounts, or other documents
20 required by this act, by any rule or order adopted under this
21 act, or by any agreement entered into with the department;
22 (g) Aiding, abetting, or conspiring with another
23 person to circumvent or violate this act;
24 (h) Refusal to permit inspection of books and records
25 in an investigation or examination by the department or
26 refusal to comply with a subpoena issued by the department; or
27 (i) Criminal conduct in the course of a person's
28 business as a title loan lender.
29 (2) Upon a finding by the department that a person has
30 committed an act prohibited by subsection (1), the department
31 may:
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SB 898 First Engrossed
1 (a) Issue a notice of noncompliance pursuant to
2 section 120.695, Florida Statutes;
3 (b) Deny an application for a license;
4 (c) Revoke or suspend a license;
5 (d) Place a licensee or an applicant on probation for
6 a period of time and subject to such conditions as the
7 department specifies;
8 (e) Place permanent restrictions or conditions upon
9 issuance or maintenance of a license;
10 (f) Issue a reprimand; or
11 (g) Impose an administrative fine not to exceed $5,000
12 for each act or violation.
13 (3) In addition to the acts prohibited by subsection
14 (1), the following acts are grounds for denial of a license or
15 for revocation, suspension, or restriction of a license:
16 (a) Making a material misstatement of fact in an
17 initial or renewal application for a license;
18 (b) Having a license, registration, or the equivalent,
19 to practice any profession or occupation denied, suspended,
20 revoked, or otherwise acted against by a licensing authority
21 in any jurisdiction for fraud, dishonest dealing, or any act
22 of moral turpitude;
23 (c) Having been convicted or found guilty of a crime
24 involving fraud, dishonest dealing, or any act of moral
25 turpitude;
26 (d) Being insolvent or having demonstrated a lack of
27 honesty or financial responsibility; or
28 (e) The existence of a fact or condition that, if it
29 had existed or had been known to exist at the time of the
30 original issuance of the license, would have justified the
31 department in refusing a license.
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1 (4) The department may take any action specified in
2 subsection (2) as to any partnership, corporation, or
3 association if the department finds grounds for such action as
4 to any member of the partnership, as to any executive officer
5 or director of the corporation or association, or as to any
6 person who has power to direct the management or policies of
7 the partnership, corporation, or association.
8 (5) A licensee is responsible for the acts of its
9 employees and agents if, with actual knowledge of such acts,
10 it retained profits, benefits, or advantages accruing from
11 such acts or ratified the conduct of the employee or agent as
12 a matter of law or fact.
13 (6) The manner of giving notice and conducting a
14 hearing is governed by chapter 120, Florida Statutes.
15 (7) Any title loan agreement made by an unlicensed
16 person is voidable, in which case the person forfeits the
17 right to collect any moneys, including principal and finance
18 charges, from the pledgor in connection with the agreement and
19 must return to the pledgor the loan property in connection
20 with the agreement or the fair market value of the property.
21 Section 7. Title loan transaction form.--
22 (1) At the time a title loan lender enters into each
23 title loan agreement, the title loan lender shall complete a
24 title loan transaction form for such transaction, and the
25 pledgor shall sign such completed form. The department shall
26 approve the design and format of the title loan transaction
27 form, which shall elicit the information required under this
28 section. In completing the title loan transaction form, the
29 title loan lender shall record the following information,
30 which must be typed or written indelibly and legibly in
31 English:
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1 (a) The make, model, and year of the titled personal
2 property to which the loan property relates.
3 (b) The vehicle identification number or other
4 comparable identification number, along with the license plate
5 number, if applicable, of the titled personal property to
6 which the loan property relates.
7 (c) The name, address, date of birth, physical
8 description, and social security number of the pledgor.
9 (d) The date of the transaction.
10 (e) The identification number and the type of
11 identification, including the issuing agency, accepted from
12 the pledgor.
13 (f) The amount of money advanced, which must be
14 designated as the "amount financed."
15 (g) The maturity date of the title loan agreement.
16 (h) The total title loan charge payable on the
17 maturity date, designated as the "finance charge."
18 (i) The total amount, amount financed plus finance
19 charge, which must be paid to redeem the loan property on the
20 maturity date, designated as the "total amount of all
21 payments."
22 (j) The annual percentage rate, computed in accordance
23 with regulations adopted by the Federal Reserve Board pursuant
24 to the Federal Truth-in-Lending Act.
25 (2) The following information must also be printed on
26 title loan transaction forms:
27 (a) The name and address of the title loan office.
28 (b) The name and address of the department and a
29 telephone number that consumers may use to make complaints.
30 (c) A statement in not less than 12-point type that:
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1 1. Your vehicle has been pledged as security for this
2 loan and if you do not repay this loan in full, including the
3 finance charge, YOU WILL LOSE YOUR VEHICLE.
4 2. You are encouraged to repay this loan at the end of
5 the term, The lender is not required to extend or renew your
6 loan. It is important that you plan your finances so that you
7 can repay this loan as soon as possible.
8 3. THIS LOAN HAS A VERY HIGH INTEREST RATE. DO NOT
9 COMPLETE THIS LOAN TRANSACTION IF YOU HAVE THE ABILITY TO
10 BORROW FROM ANOTHER SOURCE AT AN ANNUAL PERCENTAGE RATE LOWER
11 THAN THAT SHOWN ON THIS FORM.
12 (d) The statement that "The pledgor represents and
13 warrants that the titled personal property to which the loan
14 property relates is not stolen, that it has no liens or
15 encumbrances against it, that the pledgor has the right to
16 enter into this transaction, and that the pledgor will not
17 apply for a duplicate certificate of title while the title
18 loan agreement is in effect."
19 (e) Immediately above the signature of the pledgor,
20 the statement that "I, the pledgor, declare under penalty of
21 perjury that I have read the foregoing document and that to
22 the best of my knowledge and belief the facts contained in it
23 are true and correct."
24 (f) A blank line for the signature of the pledgor.
25 (3) At the time of the transaction, the title loan
26 lender shall deliver to the pledgor an exact copy of the
27 completed title loan transaction form.
28 (4) The pledgor shall agree for the title loan lender
29 to keep possession of the certificate of title. The pledgor
30 shall have the exclusive right to redeem the certificate of
31 title by repaying the loan in full and by complying with the
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1 title loan agreement. When the certificate of title is
2 redeemed, the title loan lender shall release the security
3 interest in the titled personal property and shall return the
4 personal property certificate of title to the pledgor. The
5 title loan agreement shall provide that upon failure by the
6 pledgor to redeem the certificate of title at the end of the
7 original agreement period, or at the end of any extension
8 thereof, the title loan lender may take possession of the
9 property. The title loan lender shall retain physical
10 possession of the certificate of title for the duration of the
11 title loan agreement, but may not be required to retain
12 physical possession of the titled personal property at any
13 time. A title loan lender may hold only unencumbered
14 certificates of title for loan.
15 Section 8. Recordkeeping; reporting; safekeeping of
16 property.--
17 (1) A title loan lender shall maintain, at its
18 principal place of business, such books, accounts, and records
19 of the business conducted under the license issued for such
20 place of business as will enable the department to determine
21 the licensee's compliance with this act. The licensee shall
22 make all such books, accounts, and records of business
23 conducted under the license available at a convenient location
24 in this state upon request of the department.
25 (2) The department may allow the maintenance of books,
26 accounts, and records at a location other than a principal
27 place of business and may require them to be produced and
28 available at a reasonable and convenient location in this
29 state within a reasonable period of time.
30 (3) The title loan lender shall maintain the original
31 copy of each completed title loan transaction form, and may
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1 not obliterate, discard, or destroy any original copy, for at
2 least 2 years after making the final entry on any loan
3 recorded therein.
4 (4) All loan property, or property related to the
5 title loan transaction, which is delivered to a title loan
6 lender must be securely stored and maintained at the title
7 loan office unless the title document has been forwarded to
8 the appropriate state agency for the recording or deletion of
9 a lien.
10 (5) The department may prescribe the minimum
11 information to be shown in the books, accounts, and records of
12 licensees so that the department can determine compliance with
13 this act.
14 Section 9. Title loan charges.--
15 (1) In a title loan agreement, a title lender may
16 contract for and receive a finance charge. The finance charge
17 under a title loan agreement may not exceed 63 percent simple
18 interest during the first year that the agreement is in effect
19 nor may the amount of interest charged exceed 18 percent in
20 any of the first 3 months or 1 percent in any of the remaining
21 9 months. In addition, a title loan lender may charge the
22 borrower an application fee of $22 or 10 percent of the loan
23 amount, whichever is less.
24 (2) Any extension must be executed in writing and must
25 clearly specify the new maturity date, the title loan finance
26 charges paid for the extension, and title loan finance charges
27 owed on the new maturity date, and a copy must be supplied to
28 the pledgor. A title loan lender may not capitalize any unpaid
29 finance charge as part of the amount financed in a subsequent
30 title loan transaction.
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1 (3) Payment by a title loan borrower may not be
2 considered late unless it is received more than 7 working days
3 after the date the payment is due. If a late fee is charged by
4 the title loan lender, the total amount of the late fee may
5 not exceed 10 percent of the amount of the payment that is
6 late.
7 (4) If a title loan agreement is not satisfied within
8 1 year after its inception, the title loan lender may receive
9 a finance charge on the outstanding principal balance at a
10 rate not to exceed 18 percent per annum for the period of time
11 that the loan remains outstanding beyond 1 year.
12 (5) Interest on a Title loan may be charged only on
13 the principal amount of the loan and may not be compounded.
14 (6) Any finance charge contracted for or received,
15 directly or indirectly, in excess of the amounts authorized
16 under this section are prohibited, may not be collected, and
17 render the title loan agreement voidable, in which case the
18 title loan lender shall forfeit the right to collect any
19 interest or finance charges. Upon the pledgor's written
20 request delivered to the title loan lender by certified mail,
21 return receipt requested, within 30 days after the maturity
22 date, the title loan lender must return to the pledgor the
23 loan property delivered to the title loan lender upon payment
24 of the balance of the principal remaining due; there is no
25 penalty for a violation resulting from an accidental and bona
26 fide error that is corrected upon discovery. Any action to
27 circumvent the limitation on title loan interest or any other
28 amounts collectible under this act is voidable. Any
29 transaction involving a person's delivery of a personal
30 property certificate of title in exchange for the advancement
31 of funds on the condition that the person shall or may redeem
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1 or repurchase the certificate of title upon the payment of a
2 sum of money, whether the transaction is characterized as a
3 "buy-sell agreement," "sale-leaseback agreement," or
4 otherwise, is a violation of this act if the sum exceeds the
5 amount that a title loan lender may collect in a title loan
6 agreement or if the terms of the transaction otherwise
7 conflict with the permitted terms and conditions of a title
8 loan agreement.
9 (7) Any fees or taxes paid to a governmental agency
10 and directly related to a particular title loan transaction
11 may be collected from the pledgor, in addition to the
12 permitted finance charge.
13 (8) The title loan lender must require a borrower who
14 is in active military service to sign an affidavit informing
15 the borrower that the borrower has 10 days within which to
16 rescind the contract and repay only the principal without
17 penalty or interest, and the title loan lender shall retain a
18 copy of the affidavit and give a copy to the borrower to take
19 to the military legal officer. However, the lender also is
20 responsible for informing the military legal office or of the
21 loan and recision agreement.
22 Section 10. Failure to redeem; default.--
23 (1) Upon a pledgor's default under the title loan
24 agreement or failure to redeem the pledged property on or
25 before the maturity date of the title loan agreement, the
26 title loan lender may take possession of the titled personal
27 property.
28 (2) A title loan lender who takes possession of the
29 titled personal property must comply with the applicable
30 requirements of part V of chapter 679.
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1 Section 11. Prohibited acts.--A title loan lender, or
2 agent or employee of a title loan lender, may not:
3 (1) Falsify or fail to make an entry of any material
4 matter in a title loan lender transaction form.
5 (2) Refuse to allow the department to inspect
6 completed title loan transaction forms or loan property during
7 the ordinary hours of the title loan lender's business or at
8 other times acceptable to both parties.
9 (3) Enter into a title loan agreement with a person
10 under the age of 18 years.
11 (4) Make any agreement requiring or allowing for the
12 personal liability of a pledgor or the waiver of any provision
13 of this act.
14 (5) Knowingly enter into a title loan agreement with
15 any person who is under the influence of drugs or alcohol when
16 such condition is visible or apparent, or with any person
17 using a name other than his or her own name or the registered
18 name of his or her business.
19 (6) Fail to exercise reasonable care in the
20 safekeeping of loan property or titled personal property
21 repossessed under this act.
22 (7) Fail to return loan property or repossessed titled
23 personal property to a pledgor, with the title loan lender's
24 liens on the property properly released, upon payment of the
25 full amount due the title loan lender, unless the property has
26 been seized or impounded by an authorized law enforcement
27 agency, taken into custody by a court, or otherwise disposed
28 of by court order.
29 (8) Sell or otherwise charge for insurance in
30 connection with a title loan agreement, if the title loan
31 lender realizes a profit thereon.
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1 (9) Charge or receive any finance charge, interest, or
2 fees which are not authorized by this act.
3 (10) Engage in business as a title loan lender without
4 first securing the license.
5 (11) Refuse to accept a partial repayment of the
6 amount financed, if all accrued finance charges have been
7 paid.
8 (12) Charge a prepayment penalty.
9 (13) Advertise using the words "interest free loans"
10 or "no finance charges."
11 Section 12. Right to redeem; lost title loan
12 transaction form.--
13 (1) Any person presenting identification as the
14 pledgor and presenting the pledgor's copy of the title loan
15 transaction form to the title loan lender is presumed to be
16 entitled to redeem the loan property described in the title
17 loan lender transaction form. However, if the title loan
18 lender determines that the person is not the pledgor, the
19 title loan lender is not required to allow the redemption of
20 the loan property by such person. The person redeeming the
21 loan property must sign the pledgor's copy of the title loan
22 transaction form, which the title loan lender may retain to
23 evidence such person's receipt of the loan property. A person
24 redeeming the loan property who is not the pledgor must show
25 identification to the title loan lender and written
26 authorization from the pledgor, and the title loan lender must
27 record that person's name and address on the title loan
28 transaction form retained by the title loan lender. In such
29 case, the person redeeming the pledgor's copy of the title
30 loan transaction form must be given a copy of the signed form
31 as evidence of the concerned transaction.
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1 (2) If the pledgor's copy of the title loan
2 transaction form is lost, destroyed, or stolen, the pledgor
3 must notify the title loan lender in writing by certified or
4 registered mail, return receipt requested, or in person
5 evidenced by a signed receipt, and receipt of the notice
6 invalidates the title loan transaction form if the loan
7 property has not previously been redeemed. Before delivering
8 the loan property or issuing a new title loan transaction
9 form, the title loan lender shall require the pledgor to make
10 a written statement of the loss, destruction, or theft of the
11 pledgor's copy of the title loan transaction form. The title
12 loan lender shall record on the written statement the type of
13 identification and the identification number accepted from the
14 pledgor, the date the statement is given, and the number or
15 date of the title loan transaction form lost, destroyed, or
16 stolen. The statement must be signed by the title loan lender
17 or the title loan office employee who accepts the statement
18 from the pledgor.
19 Section 13. Title loan lender's lien.--
20 (1) The title loan lender may record its security
21 interest in the titled personal property to which the loan
22 property relates by noting the lien on the certificate of
23 title.
24 (2) The title loan lender is, upon entering into a
25 title loan agreement and taking possession of the borrower's
26 certificate of title, a bona fide lienholder whose interest
27 has been perfected.
28 Section 14. Criminal penalties.--
29 (1) A person who engages in business as a title loan
30 lender without a license commits a felony of the third degree,
31 punishable as provided in section 775.082, Florida Statutes,
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1 section 775.083, Florida Statutes, or section 775.084, Florida
2 Statutes.
3 (2) In addition to any other penalty, any person who
4 willfully violates this act or who willfully makes a false
5 entry in any record specifically required by this act commits
6 a misdemeanor of the first degree, punishable as provided in
7 section 775.082, Florida Statutes, or section 775.083, Florida
8 Statutes.
9 (3) The possession of a certificate of title by a
10 title loan lender pursuant to a title loan agreement shall not
11 be considered a bailment of the titled personal property.
12 Section 15. Records from the Department of Law
13 Enforcement.--The Department of Law Enforcement, on request,
14 shall supply to the department any arrest and conviction
15 records in its possession of an individual applying for or
16 holding a license under this act.
17 Section 16. Subpoenas; enforcement actions; rules.--
18 (1) The department may issue and serve subpoenas to
19 compel the attendance of witnesses and the production of
20 documents, papers, books, records, and other evidence before
21 it in any matter pertaining to this act. The department may
22 administer oaths and affirmations to any person whose
23 testimony is required. If a person refuses to testify, produce
24 books, records, and documents, or otherwise refuses to obey a
25 subpoena issued under this section, the department may enforce
26 the subpoena in the same manner as subpoenas issued under the
27 Administrative Procedure Act. Witnesses are entitled to the
28 same fees and mileage as they are entitled to by law for
29 attending as witnesses in the circuit court, unless the
30 examination or investigation is held at the place of business
31 or residence of the witness.
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1 (2) In addition to other powers to administer this
2 act, the department may:
3 (a) Bring an action in any court of competent
4 jurisdiction to enforce or administer this act, any rule or
5 order adopted under this act, or any written agreement entered
6 into with the department. In such action, the department may
7 seek any relief at law or equity, including a temporary or
8 permanent injunction, appointment of a receiver or
9 administrator, or an order of restitution.
10 (b) Issue and serve upon a person an order requiring
11 that person to cease and desist and take corrective action
12 whenever the department finds that such person is violating,
13 has violated, or is about to violate this act, any rule or
14 order adopted under this act, or any written agreement entered
15 into with the department.
16 (c) If the department finds that conduct described in
17 paragraph (b) presents an immediate danger to the public
18 health, safety, or welfare requiring an immediate final order,
19 issue an emergency cease and desist order reciting with
20 particularity the facts underlying such findings. The
21 emergency cease and desist order is effective immediately upon
22 service of a copy of the order on the respondent named therein
23 and remains effective for 90 days. If the department begins
24 nonemergency proceedings under paragraph (b), the order
25 remains effective until the conclusion of the proceedings
26 under sections 120.569 and 120.57, Florida Statutes.
27 (d) Impose and collect an administrative fine against
28 any person found to have violated this act, any rule or order
29 adopted under this act, or any written agreement entered into
30 with the department, in an amount not to exceed $5,000 for
31 each violation.
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1 (3) The department may adopt rules to administer this
2 act.
3 Section 17. Investigations and complaints.--
4 (1) The department may, at intermittent periods, make
5 investigations and examinations of any licensee or other
6 person to determine compliance with this act. For such
7 purposes, it may examine the books, accounts, records, and
8 other documents or matters of any licensee or other person. It
9 may compel the production of all relevant books, records, and
10 other documents and materials relative to an examination or
11 investigation. Such investigations and examinations shall not
12 be made more often than once during any 12-month period unless
13 the department has good cause to believe that the licensee is
14 not complying with this act.
15 (2) Any person having reason to believe that this act
16 has been violated may file with the department a written
17 complaint setting forth the details of the alleged violations
18 and the department, upon receipt of the complaint, may inspect
19 the pertinent books, records, letters, and contracts of the
20 licensee and of the seller involved, relating to the
21 complaint.
22 Section 18. The sum of $700,000 is appropriated from
23 the General Inspection Trust Fund to the Department of
24 Agriculture and Consumer Services to administer this act and
25 to pay the salaries and other administrative expenses for nine
26 positions to implement this act during the 1999-2000 fiscal
27 year.
28 Section 19. Legislative intent.--It is the intent of
29 the Legislature that title loans shall be regulated by this
30 act. This act supersedes any other law affecting title loans
31 to the extent of the conflict.
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1 Section 20. Subsection (1) of section 538.03, Florida
2 Statutes, is amended to read:
3 538.03 Definitions; applicability.--
4 (1) As used in this part, the term:
5 (a) "Secondhand dealer" means any person, corporation,
6 or other business organization or entity which is not a
7 secondary metals recycler subject to part II and which is
8 engaged in the business of purchasing, consigning, or pawning
9 secondhand goods or entering into title loan transactions.
10 However, secondhand dealers are not limited to dealing only in
11 items defined as secondhand goods in paragraph (g). Except as
12 provided in subsection (2), the term means pawnbrokers,
13 jewelers, precious metals dealers, garage sale operators,
14 secondhand stores, and consignment shops.
15 (b) "Precious metals dealer" means a secondhand dealer
16 who normally or regularly engages in the business of buying
17 used precious metals for resale. The term does not include
18 those persons involved in the bulk sale of precious metals
19 from one secondhand or precious metals dealer to another.
20 (c) "Pawnbroker" means any person, corporation, or
21 other business organization or entity which is regularly
22 engaged in the business of making pawns but does not include a
23 financial institution as defined in s. 655.005 or any person
24 who regularly loans money or any other thing of value on
25 stocks, bonds, or other securities.
26 (d) "Pawn" means either of the following transactions:
27 1. Loan of money.--A written or oral bailment of
28 personal property as security for an engagement or debt,
29 redeemable on certain terms and with the implied power of sale
30 on default.
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1 2. Buy-sell agreement.--An agreement whereby a
2 purchaser agrees to hold property for a specified period of
3 time to allow the seller the exclusive right to repurchase the
4 property. A buy-sell agreement is not a loan of money.
5 (e) "Secondhand store" means the place or premises at
6 which a secondhand dealer is registered to conduct business as
7 a secondhand dealer, or conducts business, including pawn
8 shops.
9 (f) "Consignment shop" means a shop engaging in the
10 business of accepting for sale, on consignment, secondhand
11 goods which, having once been used or transferred from the
12 manufacturer to the dealer, are then received into the
13 possession of a third party.
14 (g) "Secondhand goods" means personal property
15 previously owned or used, which is not regulated metals
16 property regulated under part II and which is purchased,
17 consigned, or pawned as used property. Such secondhand goods
18 shall be limited to watches; diamonds, gems, and other
19 precious stones; fishing rods, reels, and tackle; audio and
20 video electronic equipment, including television sets, compact
21 disc players, radios, amplifiers, receivers, turntables, tape
22 recorders; video tape recorders; speakers and citizens' band
23 radios; computer equipment; radar detectors; depth finders;
24 trolling motors; outboard motors; sterling silver flatware and
25 serving pieces; photographic equipment, including cameras,
26 video and film cameras, lenses, electronic flashes, tripods,
27 and developing equipment; microwave ovens; animal fur coats;
28 marine equipment; video games and cartridges; power lawn and
29 landscape equipment; office equipment such as copiers, fax
30 machines, and postage machines but excluding furniture; sports
31 equipment; golf clubs; weapons, including knives, swords, and
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1 air guns; telephones, including cellular and portable;
2 firearms; tools; calculators; musical instruments, excluding
3 pianos and organs; lawnmowers; bicycles; typewriters; motor
4 vehicles; gold, silver, platinum, and other precious metals
5 excluding coins; and jewelry, excluding costume jewelry.
6 (h) "Transaction" means any title loan, purchase,
7 consignment, or pawn of secondhand goods by a secondhand
8 dealer.
9 (i) "Title loan" means a loan of money secured by
10 bailment of a certificate of title to a motor vehicle. A
11 title loan is not a pawn if the secondhand dealer does not
12 maintain physical possession of the vehicle throughout the
13 term of the transaction.
14 (i)(j) "Precious metals" means any item containing any
15 gold, silver, or platinum, or any combination thereof,
16 excluding:
17 1. Any chemical or any automotive, photographic,
18 electrical, medical, or dental materials or electronic parts.
19 2. Any coin with an intrinsic value less than its
20 numismatic value.
21 3. Any gold bullion coin.
22 4. Any gold, silver, or platinum bullion that has been
23 assayed and is properly marked as to its weight and fineness.
24 5. Any coin which is mounted in a jewelry setting.
25 (j)(k) "Department" means the Department of Revenue.
26 (k)(l) "Pledge" means pawn or buy-sell agreement.
27 Section 21. Subsection (1) of section 538.16, Florida
28 Statutes, is amended to read:
29 538.16 Pawnbrokers Secondhand dealers; disposal of
30 property.--
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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 22. Subsection (5) of section 538.06, Florida
12 Statutes, and subsections (4) and (5) of section 538.15,
13 Florida Statutes, are repealed.
14 Section 23. There is established a task force to
15 review the current operation of the title loan industry in
16 this state and to make recommendations to the Florida
17 Legislature based on that review by January 1, 2000. The task
18 force shall consider, among other things, the rates charged by
19 title loan lenders, the duration of such loans, the default
20 rate on such loans, and the impact of such loaning practices
21 on consumers. The task force shall be comprised of 12 members,
22 six members appointed by the President of the Senate and six
23 members appointed by the Speaker of the House of
24 Representatives. Of the six appointments, two members shall be
25 members of the respective legislative house, two members of
26 the title loan industry, and two members of the public. Such
27 appointments shall be made by June 15, 1999, and the
28 appointees shall meet within 15 days to conduct the first
29 meeting of the task force. At that meeting, the task force
30 shall select by majority vote a chair from its members. The
31 task force shall then meet at the call of its chairman or upon
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1 a request of the majority of its members. Members shall be
2 reimbursed for travel and lodging costs in accordance with the
3 provisions of section 112.061, Florida Statutes, with such
4 costs being reimbursed from funds collected by the Department
5 of Agriculture and Consumer Services under section 3 or
6 appropriated under section 18 of this act. The department
7 shall provide necessary staffing for the task force.
8 Section 24. This act shall take effect October 1,
9 1999, except that this section and section 23 shall take
10 effect upon becoming a law and section 18 shall take effect
11 July 1, 1999.
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