Senate Bill 1730

CODING: Words stricken are deletions; words underlined are additions.



    Florida Senate - 2000                                  SB 1730

    By Senator Campbell





    33-355-00

  1                      A bill to be entitled

  2         An act relating to the money transmitters'

  3         code; amending s. 560.103, F.S.; redefining the

  4         term "code"; creating s. 560.1051, F.S.;

  5         authorizing electronic submission of forms or

  6         fees; authorizing the Department of Banking and

  7         Finance to accept certification of compliance;

  8         amending s. 560.208, F.S.; requiring persons

  9         registered to issue payment instruments or

10         engage in funds transmission to cash checks

11         within a specified period and deposit funds in

12         a specified manner; providing penalties;

13         creating s. 560.2081, F.S.; limiting fees that

14         may be charged by payment instrument sellers;

15         providing penalties; creating ss. 560.401,

16         560.402, 560.403, 560.404, 560.405, 560.406,

17         560.407, F.S.; creating the Deferred

18         Presentment Act; providing definitions;

19         requiring persons who engage in deferred

20         presentment transactions, as defined, to

21         register with the department and file a

22         declaration of intent to engage in that

23         business; prescribing guidelines for persons

24         engaging in the business of deferred

25         presentment transactions; prescribing

26         guidelines for such transactions; prohibiting

27         specified practices in connection with the

28         deferred presentment business; requiring

29         certain information to be disclosed to

30         customers of such a business; providing

31         penalties; providing an effective date.

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




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

  2

  3         Section 1.  Subsection (4) of section 560.103, Florida

  4  Statutes, is amended to read:

  5         560.103  Definitions.--As used in the code, unless the

  6  context otherwise requires:

  7         (4)  "Code" means the "Money Transmitters' Code,"

  8  consisting of:

  9         (a)  Part I of this chapter, relating to money

10  transmitters generally.

11         (b)  Part II of this chapter, relating to payment

12  instruments and funds transmission.

13         (c)  Part III of this chapter, relating to check

14  cashing and foreign currency exchange.

15         (d)  Part IV of this chapter, relating to deferred

16  presentment.

17         Section 2.  Section 560.1051, Florida Statutes, is

18  created to read:

19         560.1051  Electronic submission of forms.--The

20  department may adopt rules to allow electronic submission of

21  any form or fee required by this chapter. The department may

22  also adopt rules to accept certification of compliance with

23  requirements of this chapter in lieu of requiring submission

24  of documents.

25         Section 3.  Section 560.208, Florida Statutes, is

26  amended to read:

27         560.208  Conduct of business.--

28         (1)  A registrant may conduct its business at one or

29  more locations within this state through branches or by means

30  of authorized vendors, as designated by the registrant.

31

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1         (2)  A check casher shall deposit or present a

  2  negotiable instrument received under this part within 96 hours

  3  after the registrant's receipt thereof. All funds entrusted to

  4  a registrant by anyone under this part shall be deposited into

  5  a separate trust account in a federally insured financial

  6  institution located in this state and shall be promptly

  7  disbursed upon fulfillment of any contractual or legal

  8  obligation. A person who violates this subsection commits a

  9  felony of the third degree, punishable as provided in s.

10  775.082, s. 775.083, or s. 775.084.

11         Section 4.  Section 560.2081, Florida Statutes, is

12  created to read:

13         560.2081 Fees charged by payment instrument sellers.--A

14  payment instrument seller may not charge any fee, cost, or

15  charge totaling more than 10 percent of the face value amount

16  of the payment instrument issued or sold or $3, whichever is

17  greater. A person who violates this section commits a felony

18  of the third degree, punishable as provided in s. 775.082, s.

19  775.083, or s. 775.084.

20         Section 5.  Part IV of chapter 560, Florida Statutes,

21  consisting of sections 560.401, 560.402, 560.403, 560.404,

22  560.405, 560.406, and 560.407, Florida Statutes, is created to

23  read:

24         560.401  Short title.--This part may be cited as the

25  "Deferred Presentment Act."

26         560.402  Definitions.--In addition to the definitions

27  provided in ss. 560.103, 560.202, and 560.301, for purposes of

28  this part the term:

29         (1)  "Affiliated registrant" means a registrant that,

30  either directly or indirectly, is under common control with

31  another registrant under this part.

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1         (2)  "Business day" means the hours during a particular

  2  day that a registrant is regularly open, and may not exceed 15

  3  hours during that day.

  4         (3)  "Check" means a three-party negotiable instrument

  5  drawn on a financial institution and payable in cash.

  6         (4)  "Customer" means a person who tenders or delivers

  7  a payment instrument to a registrant for the purpose of

  8  effecting a deferred presentment transaction.

  9         (5)  "Deferment period" means the number of days a

10  registrant agrees to defer depositing or presenting a payment

11  instrument.

12         (6)  "Deferred presentment" means a transaction in

13  which a customer tenders a check in return for currency,

14  pursuant to a mutual agreement, in return for a fee and in

15  which the check is held by the registrant for an agreed period

16  of time.

17         (7)  "Drawer" means any person who signs a personal

18  check.

19         (8)  "Redeem" means to tender payment to a registrant

20  for the face amount of the payment instrument.

21         (9)  "Registrant" means a person authorized by the

22  department to conduct a deferred presentment transaction

23  pursuant to this part.

24         (10)  "Roll-over" means closing or continuing a

25  deferred presentment transaction by accepting payment of the

26  fee from funds acquired pursuant to a deferred presentment

27  transaction or another deferred presentment transaction with

28  the same or an affiliated registrant commenced before or

29  within 1 business day after the expiration date of the

30  existing deferred presentment transaction's deferment period.

31

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1         (11)  "Service fee" means the fee authorized for the

  2  deferral of the presentation of a check pursuant to this part.

  3  This fee does not constitute interest for any purpose so long

  4  as it does not exceed the maximum fee limitations set forth in

  5  s. 560.403(5).

  6         560.403  Requirement of registration and filing of a

  7  declaration of intent.--

  8         (1)  A person may not engage in or attempt to engage

  9  in, or in any manner advertise engagement in, the business of

10  deferred presentment transactions without first being

11  registered under part II or part III and having filed with the

12  department a declaration of intent to engage in the business

13  of deferred presentment transactions. In addition, any

14  registrant who intends to issue payment instruments must be

15  registered as a payment instrument issuer pursuant to part II.

16         (2)  The declaration of intent shall be on such form as

17  the department prescribes by rule. The declaration of intent

18  shall be filed together with a nonrefundable filing fee

19  established by department rule; however, the filing fee may

20  not exceed $1,000.

21         (3)  A person who engages in deferred presentment

22  transactions under this part who furnishes a payment

23  instrument to another person, as part of a deferred

24  presentment transaction or otherwise, must be registered

25  pursuant to part II.

26         (4)  A person who engages in deferred presentment

27  transactions is not exempt from registration and declaration

28  required by this part regardless of any exemptions set forth

29  elsewhere in this code.

30         (5)  The maximum fee for a deferred presentment

31  transaction shall be no more than 10 percent of the total

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1  amount given to the customer by the registrant, not to exceed

  2  $50. However, a verification fee may be charged in accordance

  3  with s. 560.309(4) and the rules adopted pursuant to the code.

  4         (6)  A registration granted pursuant to this part shall

  5  not be transferrable to any other person or entity.

  6         (7)  A registrant under this part shall not operate its

  7  business under any other name or title except the name or

  8  title registered with the department.

  9         (8)  The department may impose a fine not to exceed

10  $10,000 per count for each violation of this section.

11         (9)  A person who violates any provisions of this

12  section commits a felony of the third degree, punishable as

13  provided in s. 775.082, s. 775.083, or s. 775.084.

14         560.404  Use of authorized vendors prohibited.--A

15  deferred presentment provider may not use any authorized

16  vendor to engage in deferred presentment transactions.

17         560.405  Deferred presentment transactions.--

18         (1)  In connection with a check cashing transaction, a

19  registrant may defer depositing or presenting a check provided

20  that:

21         (a)  No fee other than the fee described in s.

22  560.403(5) is charged. This includes a fee or any other charge

23  for cashing payment instruments issued or directed to be

24  issued by the registrant to a customer;

25         (b)  The deferment period is not less than 7, or more

26  than 31, calendar days from the inception date of the deferral

27  period;

28         (c)  The deferred presentment transaction is evidenced

29  in writing and acknowledged by signature of the registrant and

30  the customer; and

31         (d)  The registrant does not allow a roll-over.

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1         (2)  Notwithstanding paragraph (1)(b), a customer may

  2  at any time before the expiration of a deferred presentment

  3  period redeem his or her payment instrument without being

  4  charged any fee or penalty.

  5         (3)  If a check is returned to a registrant from a

  6  payer financial institution due to insufficient funds for a

  7  closed account or stop payment order, the registrant may

  8  pursue all legally available civil means to collect the check

  9  as if it were a loan, including, without limitation, the

10  imposition of all charges imposed on the registrant by the

11  payer financial institution. Deferred presentment transactions

12  shall not be considered checks or drafts within the meaning of

13  chapter 832, but shall be considered loans for the purpose of

14  any criminal statute.

15         560.406  Deferred presentment transactions; prohibited

16  practices.--

17         (1)  It is unlawful and a violation of the code for a

18  registrant, an affiliated registrant, or any other person

19  acting on behalf of a registrant or in relation to a deferred

20  presentment transaction to:

21         (a)  Engage in a deferred presentment transaction for

22  compensation or gain or in the expectation of compensation or

23  gain in excess of the fee authorized by s. 560.403(5).

24         (b)  Renew or extend a deferment period for

25  compensation or gain or in the expectation of compensation or

26  gain.

27         (c)  Engage in more than one deferred presentment

28  transaction with the same customer at any one time.

29         (d)  Deposit or present a payment instrument before

30  expiration of a deferment period.

31

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1         (e)  Charge a customer a fee for redeeming a payment

  2  instrument, other than the fee permitted by s. 560.403(5).

  3         (f)  Require a customer to redeem a payment instrument

  4  before the expiration of a deferment period.

  5         (g)  Require of or accept from a customer any security

  6  or guaranty for a deferred presentment transaction.

  7         (h)  Conduct a roll-over.

  8         (i)  Collect the fee authorized by s. 560.403(5) before

  9  the customer's check is redeemed, presented, or deposited.

10         (j)  Accept or hold an undated payment check or a check

11  that is dated with a date that is different from the date

12  recorded on the deferred presentment agreement.

13         (k)  Give to a customer a payment instrument that is

14  issued by any other person other than the registrant.

15         (1)  Engage in a deferred presentment transaction for a

16  principal amount in excess of $500, exclusive of the fees

17  authorized by s. 560.403(5).

18         (2)  A person who violates any provision of this

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

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

21         560.407  Deferred presentment agreements; disclosure

22  requirements and prohibitions.--

23         (1)  A deferred presentment contract entered into

24  between a registrant and a customer shall, at a minimum,

25  contain the following:

26         (a)  The name or trade name, address, and telephone

27  number of the registrant;

28         (b)  The name and title of the person signing the

29  agreement on behalf of the registrant;

30         (c)  The signatures of the registrant and the customer

31  along with the date of signature which shall be conclusive

                                  8

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1  evidence of the date that the deferred presentment transaction

  2  was made;

  3         (d)  The face amount of the consumer's check, exclusive

  4  of the fee authorized by s. 560.403(5);

  5         (e)  The total amount of the fee due at the end of the

  6  deferment period;

  7         (f)  A statement printed in no less than 12-point type

  8  in a prominent place containing the following information:

  9         1.  The annual percentage rate that the customer is

10  being charged as fees, excluding verification fee; and

11         2.  The total amount that the customer is required to

12  pay at the end of the deferment period, including the

13  principal plus all fees and charges;

14         (g)  The number of days of the deferment period and the

15  payment due date;

16         (h)  The address and telephone number of the

17  department;

18         (i)  A detailed description of the customer's payment

19  obligations under the deferred presentment transaction; and

20         (j)  The following statements, displayed in 16-point

21  bold face type in a prominent place:

22

23  YOU CANNOT BE PROSECUTED IN CRIMINAL COURT FOR A CHECK WRITTEN

24  UNDER THIS AGREEMENT TO BE HELD BY THE REGISTRANT, BUT A

25  REGISTRANT MAY PURSUE ALL LEGALLY AVAILABLE CIVIL MEANS TO

26  ENFORCE THE DEBT.

27

28  STATE LAW PROHIBITS A REGISTRANT FROM ALLOWING YOU TO

29  ROLL-OVER YOUR DEFERRED PRESENTMENT TRANSACTION WITH THE

30  REGISTRANT. THIS MEANS THAT YOU CANNOT BE ASKED OR REQUIRED TO

31  PAY AN ADDITIONAL FEE IN ORDER TO FURTHER DELAY THE DEPOSIT OR

                                  9

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1  PRESENTMENT OF YOUR CHECK FOR PAYMENT. STATE LAW PROHIBITS

  2  THIS REGISTRANT FROM ENTERING INTO ANOTHER DEFERRED

  3  PRESENTMENT TRANSACTION WITH YOU UNTIL AT LEAST THE NEXT

  4  BUSINESS DAY AFTER THE CLOSING OF THIS TRANSACTION. STATE LAW

  5  FURTHER PROHIBITS A CHECK CASHER FROM ENGAGING IN MORE THAN

  6  ONE DEFERRED PRESENTMENT TRANSACTIONS WITH YOU AT ANY ONE

  7  TIME. IF YOU CHOOSE TO ENGAGE IN MORE THAN ONE DEFERRED

  8  PRESENTMENT TRANSACTIONS AT ANY TIME, YOU MAY EXPERIENCE

  9  ADVERSE LEGAL AND FINANCIAL CONSEQUENCES.

10         (2)  A registrant may not include any of the following

11  provisions in any deferred presentment agreement:

12         (a)  A hold harmless clause;

13         (b)  A confession of judgment clause;

14         (c)  Any assignment of or order for payment of wages or

15  other compensation for services;

16         (d)  A provision in which the consumer agrees not to

17  assert any claim or defense arising out of the agreement; or

18         (e)  A provision making arbitration or any other form

19  of dispute resolution mandatory.

20         (3)  The registrant shall, at the same time of any

21  transaction, immediately provide the customer with an extra

22  copy of all documents signed by that customer and the

23  registrant including any addenda or attachments to such

24  documents.

25         (4)  A person who violates any provision of this

26  section commits a felony of the third degree, punishable as

27  provided in s. 775.082, s. 775.083, or s. 775.084.

28         Section 6.  The Division of Statutory Revision is

29  requested to title part IV of chapter 560, Florida Statutes,

30  "Deferred Presentment."

31         Section 7.  This act shall take effect October 1, 2000.

                                  10

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2000                                  SB 1730
    33-355-00




  1            *****************************************

  2                          SENATE SUMMARY

  3    Creates the Deferred Presentment Act, in which the
      practice of accepting a check in return for currency
  4    pursuant to an agreement in which the payee agrees to
      defer the presentment of the check is subjected to
  5    regulation by the Department of Banking and Finance.
      Persons engaging in the business must be registrants with
  6    the department under another part of ch. 560, F.S., and
      must give notice of their intent to engage in deferred
  7    presentment transactions. Requirements and limitations
      are placed on that business, disclosure is required to
  8    customers wishing to enter such a transaction, and
      third-degree felony penalties are provided for
  9    violations.

10
      The bill also authorizes the department to adopt rules
11    for electronic submission of forms and fees and for
      accepting certification of compliance in lieu of
12    submission of documents. It requires a check casher to
      present or deposit a negotiable instrument within 96
13    hours. It limits fees that may be charged by a seller of
      payment instruments.
14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

                                  11