House Bill 0301c1

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    Florida House of Representatives - 2000              CS/HB 301

        By the Committee on Business Regulation & Consumer Affairs
    and Representatives Sublette, Fasano, Goodlette, Stafford,
    Wiles, Fiorentino, Posey, Turnbull, L. Miller, Sanderson,
    Rojas, Maygarden, Boyd, J. Miller, Andrews, Ritchie, C. Green,
    (Additional Sponsors on Last Printed Page)


  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 act as a

  7         title loan lender; providing for application

  8         for licensure; requiring a bond, a

  9         nonrefundable application fee, a nonrefundable

10         investigation fee, and fingerprinting;

11         providing for waiver of fingerprinting;

12         providing for inactive licenses; providing for

13         renewal and reactivation of licenses; providing

14         for a renewal fee and a reactivation fee;

15         providing for disposition of certain moneys;

16         providing for acquisition of an interest in a

17         licensee under certain circumstance; providing

18         for denial, suspension, or revocation of

19         license; specifying acts which constitute

20         violations for which certain disciplinary

21         actions may be taken; providing a fine;

22         providing remedies for title loans made or

23         serviced without licensure; providing for a

24         title loan agreement; providing requirements;

25         providing for reclaiming a repossessed motor

26         vehicle under certain circumstances; providing

27         entitlement to certain excess proceeds of a

28         sale or disposal of a motor vehicle; providing

29         for recordkeeping and reporting and safekeeping

30         of property; providing for title loan interest

31         rates; providing requirements and limitations;

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  1         providing for extensions; providing for return

  2         of principal and interest to the borrower under

  3         certain circumstance; providing a holding

  4         period when there is a failure to reclaim;

  5         providing for the disposal of pledged property;

  6         providing for disposition of excess proceeds;

  7         prohibiting certain acts; providing for the

  8         right to reclaim; providing for lost title loan

  9         agreements; providing for a title loan lenders

10         lien; providing for criminal penalties;

11         providing for subpoenas, enforcement of

12         actions, and rules; providing for

13         investigations and complaints; authorizing the

14         department to adopt rules; amending ss. 538.03

15         and 538.16, F.S.; deleting provisions relating

16         to title loan transactions; providing for more

17         restrictive local ordinances; providing an

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

19         538.06(5), and 538.15(4) and (5), F.S.,

20         relating to title loan transactions by

21         secondhand dealers; providing severability;

22         providing effective dates.

23

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

25

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

27  "Florida Title Loan Act."

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

29  the Legislature that title loans shall be regulated by the

30  provisions of this act. The provisions of this act shall

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  1  supersede any other provisions of state law affecting title

  2  loans to the extent of any conflict.

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

  4  the context otherwise requires:

  5         (1)  "Commercially reasonable" has the same meaning as

  6  used in part V of chapter 679, Florida Statutes. In addition,

  7  nonpublic sales or disposal of personal property between a

  8  title loan lender and any business affiliates of a title loan

  9  lender or a member of a title loan lender's family are

10  presumed not to be made in a commercially reasonable manner.

11         (2)  "Department" means the Department of Banking and

12  Finance.

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

14  executive officer, chief financial officer, chief operating

15  officer, executive vice president, senior vice president,

16  secretary, and treasurer.

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

18  photographic identification.

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

20  loan and includes any profit or advantage of any kind

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

22  collect, receive, or in any way obtain as a result of a title

23  loan.

24         (6)  "License" means a permit issued under this act to

25  make or service title loans in accordance with this act at a

26  single title loan office.

27         (7)  "Licensee" means a person who is licensed as a

28  title loan lender.

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

30  certificate of title that is deposited with a title loan

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  1  lender as a security for a title loan in the course of the

  2  title loan lender's business.

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

  4  mobile home, truck, trailer, semitrailer, truck tractor and

  5  semitrailer combination, or any other vehicle operated on the

  6  public highways and streets of this state, used to transport

  7  persons or property, and propelled by power other than

  8  muscular power, but excluding a vehicle which runs only upon a

  9  track and a mobile home that is the primary residence of the

10  owner.

11         (10)  "Title loan" or "loan" means a loan of money

12  secured by bailment of a certificate of title to a motor

13  vehicle, except such loan made by a person licensed under

14  chapter 516, chapter 520, chapter 655, chapter 657, chapter

15  658, chapter 660, chapter 663, chapter 665, or chapter 667,

16  Florida Statutes, or a person who complies with s. 687.03,

17  Florida Statutes.

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

19  written agreement in which a title loan lender agrees to make

20  a title loan to a borrower.

21         (12)  "Title loan lender" or "lender" means any person

22  who engages in the business of making or servicing title

23  loans.

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

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

26  business under this chapter or any other location that is held

27  out to the public as a location at which a lender makes or

28  services title loans.

29         (14)  "Titled personal property" means a motor vehicle

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

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

  2  residence of the borrower.

  3         (15)  "Ultimate equitable owner" means a person who,

  4  directly or indirectly, owns or controls an ownership interest

  5  in a corporation, a foreign corporation, an alien business

  6  organization, or any other form of business organization,

  7  regardless of whether such person owns or controls such

  8  ownership interest through one or more persons or one or more

  9  proxies, powers of attorney, nominees, corporations,

10  associations, partnerships, trusts, joint stock companies, or

11  other entities or devices, or any combination thereof.

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

13         (1)  A person may not act as a title loan lender or own

14  or operate a title loan office unless such person has an

15  active title loan lender license issued by the department

16  under this act.  A title loan lender may not own or operate

17  more than one title loan office unless the lender obtains a

18  separate title loan lender license for each title loan office.

19         (2)  A person applying for licensure as a title loan

20  lender shall file with the department an application, the bond

21  required by section 5(3), a nonrefundable application fee of

22  $1,200, a nonrefundable investigation fee of $200, and a

23  complete set of fingerprints taken by an authorized law

24  enforcement officer.  The department shall submit such

25  fingerprints to the Department of Law Enforcement or the

26  Federal Bureau of Investigation for state and federal

27  processing. The department may waive, by rule, the requirement

28  that applicants must file a set of fingerprints or the

29  requirement that such fingerprints must be processed by the

30  Department of Law Enforcement or the Federal Bureau of

31  Investigation.

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  1         (3)  If the department determines that an application

  2  should be approved, the department shall issue a license for a

  3  period not to exceed 2 years.

  4         (4)  A license shall be renewed biennially by filing a

  5  renewal form and a nonrefundable renewal fee of $1,200.  A

  6  license that is not renewed by the end of the biennial period

  7  shall automatically revert to inactive status. An inactive

  8  license may be reactivated within 6 months after becoming

  9  inactive by filing a reactivation form, payment of the

10  nonrefundable $1,200 renewal fee, and payment of a

11  nonrefundable reactivation fee of $600.  A license that is not

12  reactivated within 6 months after becoming inactive may not be

13  reactivated and shall automatically expire. The department

14  shall establish by rule the procedures for renewal and

15  reactivation of a license and shall adopt a renewal form and a

16  reactivation form.

17         (5)  Each license must be conspicuously displayed at

18  the title loan office. When a licensee wishes to move a title

19  loan office to another location, the licensee shall provide

20  prior written notice to the department.

21         (6)  A license issued pursuant to this act is not

22  transferable or assignable.

23         (7)  Each licensee shall designate and maintain a

24  registered agent in this state for service of process.

25         (8)  Whenever a person or a group of persons, directly

26  or indirectly or acting by or through one or more persons,

27  proposes to purchase or acquire a 50 percent or more interest

28  in a licensee, such person or group shall submit an initial

29  application for licensure under this act prior to such

30  purchase or acquisition.

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  1         (9)  The department may adopt rules to allow for

  2  electronic filing of applications, fees, and forms required by

  3  this act.

  4         (10)  All moneys collected by the department under this

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

  6  Department of Banking and Finance.

  7         Section 5.  Application for license.--

  8         (1)  A verified application for licensure under this

  9  act, in the form prescribed by department rule, shall:

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

11  address of the applicant.  If the applicant is other than a

12  natural person, the application shall contain the name and the

13  residence and business address of each ultimate equitable

14  owner of 10 percent or more of such entity and each director,

15  general partner, and executive officer of such entity.

16         (b)  State whether any individual identified in

17  paragraph (a) has, within the last 10 years, pleaded nolo

18  contendere to, or has been convicted or found guilty of, a

19  felony, regardless of whether adjudication was withheld.

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 additional information as the department

24  determines by rule to be necessary to ensure compliance with

25  this act.

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

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

28  director, and shareholder if the applicant is owned directly

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

30  securities registered pursuant to section 12 of the Securities

31  Exchange Act of 1934 or, pursuant to section 13 or section

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  1  15(d) of such act, is an issuer of securities which is

  2  required to file reports with the Securities and Exchange

  3  Commission, if the person files with the department any

  4  information, documents, and reports required by such act to be

  5  filed with the Securities and Exchange Commission.

  6         (3)  An applicant for licensure shall file with the

  7  department a bond, in the amount of $100,000 for each license,

  8  with a surety company qualified to do business in this state.

  9  However, in no event shall the aggregate amount of the bond

10  required for a single title loan lender exceed $1 million. In

11  lieu of the bond, the applicant may establish a certificate of

12  deposit or an irrevocable letter of credit in a financial

13  institution, as defined in s. 655.005, Florida Statutes, in

14  the amount of the bond. The original bond, certificate of

15  deposit, or letter of credit shall be filed with the

16  department, and the department shall be the beneficiary to

17  that document. The bond, certificate of deposit, or letter of

18  credit shall be in favor of the department for the use and

19  benefit of any consumer who is injured pursuant to a title

20  loan transaction by the fraud, misrepresentation, breach of

21  contract, financial failure, or violation of any provision of

22  this act by the title loan lender. Such liability may be

23  enforced either by proceeding in an administrative action or

24  by filing a judicial suit at law in a court of competent

25  jurisdiction. However, in such court suit, the bond,

26  certificate of deposit, or letter of credit posted with the

27  department shall not be amenable or subject to any judgment or

28  other legal process issuing out of or from such court in

29  connection with such lawsuit, but such bond, certificate of

30  deposit, or letter of credit shall be amenable to and

31  enforceable only by and through administrative proceedings

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  1  before the department. It is the intent of the Legislature

  2  that such bond, certificate of deposit, or letter of credit

  3  shall be applicable and liable only for the payment of claims

  4  duly adjudicated by order of the department. The bond,

  5  certificate of deposit, or letter of credit shall be payable

  6  on a pro rata basis as determined by the department, but the

  7  aggregate amount may not exceed the amount of the bond,

  8  certificate of deposit, or letter of credit.

  9         (4)  The department shall approve an application and

10  issue a license if the department determines that the

11  applicant satisfies the requirements of this act.

12         Section 6.  Denial, suspension, or revocation of

13  license.--

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

15  constitute grounds for the disciplinary actions specified in

16  subsection (2):

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

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

19  agreement entered into with the department.

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

21  negligence in any title loan transaction, regardless of

22  reliance by or damage to the borrower.

23         (c)  Fraudulent misrepresentation, circumvention, or

24  concealment of any matter required to be stated or furnished

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

26  or damage to the borrower.

27         (d)  Imposition of illegal or excessive charges in any

28  title loan transaction.

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

30  title loan lender.

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

  2  for examination all books, accounts, or other documents

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

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

  5  department.

  6         (g)  Aiding, abetting, or conspiring by a title loan

  7  lender with a person to circumvent or violate any of the

  8  requirements of this act.

  9         (h)  Refusal to provide information upon request of the

10  department, to permit inspection of books and records in an

11  investigation or examination by the department, or to comply

12  with a subpoena issued by the department.

13         (i)  Pleading nolo contendere to or having been

14  convicted or found guilty, regardless of whether adjudication

15  was withheld, of a crime involving fraud, dishonest dealing,

16  or any act of moral turpitude or acting as an ultimate

17  equitable owner of 10 percent or more of a licensee who has

18  pled nolo contendere to or has been convicted or found guilty,

19  regardless of whether adjudication was withheld, of a crime

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

21  turpitude.

22         (j)  Making or having made material misstatement of

23  fact in an initial or renewal application for a license.

24         (k)  Having been the subject of any decision, finding,

25  injunction, suspension, prohibition, revocation, denial,

26  judgment, or administrative order by any court of competent

27  jurisdiction or administrative law judge, or by any state or

28  federal agency, involving a violation of any federal or state

29  law relating to title loans or any rule or regulation adopted

30  under such law, or has been the subject of any injunction or

31  adverse administrative order by a state or federal agency

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  1  regulating banking, insurance, finance or small loan

  2  companies, real estate, mortgage brokers, or other related or

  3  similar industries for acts involving fraud, dishonest

  4  dealing, or any act of moral turpitude.

  5         (l)  Failing to continuously maintain the bond,

  6  certificate of deposit, or letter of credit required by

  7  section 5(3).

  8         (m)  Failing to timely pay any fee, charge, or fine

  9  imposed or assessed pursuant to this act or rules adopted

10  under this act.

11         (n)  Having a license or registration, or the

12  equivalent, to practice any profession or occupation denied,

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

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

15  any act of moral turpitude.

16         (o)  Having demonstrated unworthiness, as defined by

17  department rule, to transact the business of a title loan

18  lender.

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

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

21  department may enter an order taking one or more of the

22  following actions:

23         (a)  Denying an application for licensure under this

24  act.

25         (b)  Revoking or suspending a license previously

26  granted pursuant to this act.

27         (c)  Placing a licensee or an applicant for a license

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

29  conditions as the department specifies.

30         (d)  Issuing a reprimand.

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  1         (e)  Imposing an administrative fine not to exceed

  2  $5,000 for each separate act or violation.

  3         (3)  If a person seeking licensure is anything other

  4  than a natural person, the eligibility requirements of this

  5  section apply to each direct or ultimate equitable owner of 10

  6  percent or more of the outstanding equity interest of such

  7  entity and to each director, general partner, and executive

  8  officer.

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

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

11  entity other than a natural person, if the department finds

12  grounds for such action as to any member of such entity, as to

13  any executive officer or director of the entity, or as to any

14  person with power to direct the management or policies of the

15  entity.

16         (5)  Each licensee is subject to the provisions of

17  subsection (2) for the acts of employees and agents of the

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

19  acts.

20         (6)  Licensure under this act may be denied or any

21  license issued under this act may be suspended or restricted

22  if an applicant or licensee is charged, in a pending

23  enforcement action or pending criminal prosecution, with any

24  conduct that would authorize denial or revocation under this

25  section.

26         Section 7.  Remedies for title loans made without

27  licensure.--Any title loan made without benefit of a license

28  is void, in which case the person making the title loan

29  forfeits the right to collect any moneys, including principal

30  and interest charged on the title loan, from the borrower in

31  connection with such agreement.  The person making the title

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  1  loan shall return to the borrower the loan property, the

  2  titled personal property pledged or the fair market value of

  3  such titled personal property, and all principal and interest

  4  paid by the borrower. The borrower is entitled to receive

  5  reasonable attorney's fees and costs in any action brought by

  6  the borrower to recover from the person making the title loan

  7  the loan property, the titled personal property, or the

  8  principal and interest paid by the borrower.

  9         Section 8.  Title loan agreement.--

10         (1)  At the time a title loan lender makes a title

11  loan, the lender and the borrower shall execute a title loan

12  agreement, which shall be legibly typed or written in

13  indelible ink and completed as to all essential provisions

14  prior to execution by the borrower and lender. The title loan

15  agreement shall include the following information:

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

17  property to which the loan property relates.

18         (b)  The vehicle identification number, or other

19  comparable identification number, along with the license plate

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

21  which the loan property relates.

22         (c)  The name, residential address, date of birth,

23  physical description, and social security number of the

24  borrower.

25         (d)  The date the title loan agreement is executed by

26  the title loan lender and the borrower.

27         (e)  The identification number and the type of

28  identification, including the issuing agency, accepted from

29  the borrower.

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

31  "amount financed."

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

  2  which shall be 30 days after the date the title loan agreement

  3  is executed by the title loan lender and the borrower.

  4         (h)  The total title loan interest payable on the

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

  6         (i)  The amount financed plus finance charge, which

  7  must be paid to reclaim the loan property on the maturity

  8  date, designated as the "total amount of all payments."

  9         (j)  The interest rate, computed in accordance with the

10  regulations adopted by the Federal Reserve Board pursuant to

11  the Federal Truth-in-Lending Act, designated as the "annual

12  percentage rate."

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

14  all title loan agreements:

15         (a)  The name and physical address of the title loan

16  office.

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

18  a telephone number to which consumers may address complaints.

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

20  type that:

21         1.  If the borrower fails to repay the full amount of

22  the title loan on or before the end of the maturity date or

23  any extension of the maturity date and fails to make a payment

24  on the title loan within 30 days after the end of the maturity

25  date or any extension of the maturity date, whichever is

26  later, the title loan lender may take possession of the

27  borrower's motor vehicle and sell the vehicle in the manner

28  provided by law. If the vehicle is sold, the borrower is

29  entitled to any proceeds of the sale in excess of the amount

30  owed on the title loan and the reasonable expenses of

31  repossession and sale.

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  1         2.  If the title loan agreement is lost, destroyed, or

  2  stolen, the borrower should immediately so advise the issuing

  3  title loan lender in writing.

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

  5  warrants that the titled personal property to which the loan

  6  property relates is not stolen and has no liens or

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

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

  9  duplicate certificate of title while the title loan agreement

10  is in effect."

11         (e)  A blank line for the signature of the borrower and

12  the title loan lender or the lender's agent.

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

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

15  executed title loan agreement.

16         (4)  Upon execution of a title loan agreement, the

17  title loan lender may take possession of the loan property and

18  retain possession of such property until such property is

19  redeemed. The borrower shall have the exclusive right to

20  redeem the loan property by repaying all amounts legally due

21  under the agreement. When the loan property is redeemed, the

22  lender shall immediately return the loan property and commence

23  action to release any security interest in the titled personal

24  property. During the term of the agreement or any extension of

25  the agreement, a title loan lender may retain physical

26  possession of the loan property only. A title loan lender

27  shall not require a borrower to provide any additional

28  security or guaranty as a condition to entering into a title

29  loan transaction.

30         Section 9.  Recordkeeping; reporting; safekeeping of

31  property.--

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

  2  lender's title loan office, such books, accounts, and records

  3  of the business conducted under the license issued for such

  4  place of business as will enable the department to determine

  5  the licensee's compliance with this act.

  6         (2)  The department may authorize the maintenance of

  7  books, accounts, and records at a location other than the

  8  lender's title loan office. The department may require books,

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

10  reasonable and convenient location in this state within a

11  reasonable period of time after such a request.

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

13  copy of each completed title loan agreement on the title loan

14  office premises, and shall not obliterate, discard, or destroy

15  any such original copy, for a period of at least 2 years after

16  making the final entry on any loan recorded in such office or

17  after a department examination, whichever is later.

18         (4)  Loan property which is delivered to a title loan

19  lender shall be securely stored and maintained at the title

20  loan office unless the loan property has been forwarded to the

21  appropriate state agency for the purpose of having a lien

22  recorded or deleted.

23         (5)  The department may prescribe by rule the books,

24  accounts, and records, and the minimum information to be shown

25  in the books, accounts, and records, of licensees so that such

26  records will enable the department to determine compliance

27  with the provisions of this act.

28         Section 10.  Title loan charges.--

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

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

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

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

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

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

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

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

  6  the Federal Reserve System. In determining compliance with the

  7  statutory maximum interest, the computations must be simple

  8  interest and not add-on interest or any other computations.

  9  When two or more interest rates are to be applied to the

10  principal amount, the lender may charge interest at that

11  single annual percentage rate which, if applied according to

12  the actuarial method to each of the scheduled periodic

13  balances of principal, would produce at maturity the same

14  total amount of interest as would result from the application

15  of the two or more rates otherwise permitted, based upon the

16  assumption that all payments are made as agreed.

17         (2)  The annual percentage rate that may be charged for

18  a title loan may equal, but not exceed, the annual percentage

19  rate that must be computed and disclosed as required by the

20  federal Truth in Lending Act and Regulation Z of the Board of

21  Governors of the Federal Reserve System. The maximum annual

22  percentage rate of interest that may be charged is 12 times

23  the maximum monthly rate, and the maximum monthly rate must be

24  computed on the basis of one-twelfth of the annual rate for

25  each full month. The Department of Banking and Finance shall

26  establish by rule the rate for each day in a fraction of a

27  month when the period for which the charge is computed is more

28  or less than 1 month.

29         (3)  A title loan agreement may be extended for one or

30  more 30-day periods by mutual consent of the title loan lender

31  and the borrower.  Each extension of a title loan agreement

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  1  shall be executed in a separate extension agreement each of

  2  which shall comply with the requirements for executing a title

  3  loan agreement as provided in this act.  The interest rate

  4  charged in any title loan extension agreement shall not exceed

  5  the interest rate charged in the related title loan agreement.

  6  A title loan lender may not capitalize in any title loan

  7  extension agreement any unpaid interest due on the related

  8  title loan agreement or any subsequent extensions to that

  9  title loan agreement.

10         (4)  Any interest contracted for or received, directly

11  or indirectly, by a title loan lender, or an agent of the

12  title loan lender, in excess of the amounts authorized under

13  this chapter are prohibited and may not be collected by the

14  title loan lender or an agent of the title loan lender.

15         (a)  If such excess interest resulted from a bona fide

16  error by the title loan lender, or an agent of the title loan

17  lender, the title loan agreement shall be voidable and the

18  lender shall refund the excess interest to the borrower within

19  20 days after discovery by the lender or borrower of the bona

20  fide error, whichever occurs first.

21         (b)  If such excess interest resulted from an act by

22  the title loan lender, or an agent of the title loan lender,

23  to circumvent the maximum title loan interest allowed by this

24  act, the title loan agreement is void. The lender shall refund

25  to the borrower any interest paid on the title loan and return

26  to the borrower the loan property. The title loan lender

27  forfeits the lender's right to collect any principal owed by

28  the borrower on the title loan.

29         (c)  The department may order a title loan lender, or

30  an agent of the title loan lender, to comply with the

31  provisions of paragraphs (a) and (b).

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  1         (5)  Any interest contracted for or received, directly

  2  or indirectly, by a title loan lender, or an agent of the

  3  title loan lender, in excess of the amount allowed by this act

  4  constitutes a violation of chapter 687, Florida Statutes,

  5  governing interest and usury, and the penalties of that

  6  chapter apply.

  7         Section 11.  Repossession, disposal of pledged

  8  property; excess proceeds.--

  9         (1)  If a borrower fails to repay all amounts legally

10  due under the title loan agreement on or before the end of the

11  title loan's maturity date or any extension of such date and

12  fails to make a payment on the loan within 30 days after the

13  end of the loan's maturity date or any extension of such date,

14  whichever is later, the title loan lender may take possession

15  of the titled personal property. A lender may take possession

16  of the titled personal property only through an agent who is

17  licensed by the state to repossess motor vehicles.

18         (2)  Prior to engaging a repossession agent, the lender

19  shall afford the debtor an opportunity to make the titled

20  personal property available to the lender at a place, date,

21  and time reasonably convenient to the lender and the borrower.

22  Prior to taking possession of titled personal property, the

23  lender shall afford the borrower a reasonable opportunity to

24  remove from the titled personal property any personal

25  belongings without charge or additional cost to the borrower.

26  After the lender takes possession of the titled personal

27  property, the lender, at the lender's sole expense and risk,

28  may authorize a third party to retain physical possession of

29  the titled personal property.

30         (3)  Upon taking possession of titled personal

31  property, the lender may dispose of the titled personal

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  1  property by sale but may do so only through a motor vehicle

  2  dealer licensed under s. 320.27, Florida Statutes. At least 10

  3  days prior to sale, the lender shall notify the borrower of

  4  the date, time, and place of the sale and provide the borrower

  5  with a written accounting of the principal amount due on the

  6  title loan, interest accrued through the date the lender takes

  7  possession of the titled personal property, and any reasonable

  8  expenses incurred to date by the lender in taking possession

  9  of, preparing for sale, and selling the titled personal

10  property. At any time prior to such sale, the lender shall

11  permit the borrower to redeem the titled personal property by

12  tendering a money order or certified check for the principal

13  amount of the title loan, interest accrued through the date

14  the lender takes possession, and any reasonable expenses

15  incurred to date by the lender in taking possession of,

16  preparing for sale, and selling the titled personal property.

17  Nothing in this act nor in any title loan agreement shall

18  preclude a borrower from purchasing the titled personal

19  property at any sale.

20         (4)  Any such sale or disposal shall vest in the

21  purchaser the right, title, and interest of the owner and the

22  title loan lender.

23         (5)  Within 30 days after the sale of the titled

24  personal property, the borrower is entitled to receive all

25  proceeds from the sale of the motor vehicle in excess of the

26  principal amount due on the loan, interest on the loan up to

27  the date the lender took possession, and the reasonable

28  expenses incurred by the lender in taking possession of,

29  preparing for sale, and selling the titled personal property.

30  The borrower is entitled to reasonable attorney's fees and

31  costs incurred in any action brought to recover such proceeds

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  1  that results in the title loan lender being ordered to return

  2  all or part of such amount.

  3         (6)  The borrower shall not be personally liable to the

  4  lender for any balance due on the title loan remaining after

  5  applying the proceeds of the sale of the titled personal

  6  property to the principal amount due on the title loan,

  7  interest accrued through the date the lender took possession,

  8  and any reasonable expenses incurred by the lender in taking

  9  possession of, preparing for sale, and selling the titled

10  personal property unless such balance exceeds $2,000. If such

11  balance exceeds $2,000, the lender shall be entitled to

12  reasonable attorney's fees and costs incurred in any action

13  brought to recover such balance that results in a judgment in

14  favor of the lender.

15         (7)  The rights and remedies provided in this section

16  are cumulative. Except as otherwise provided in this section,

17  the disposal of titled personal property is subject to the

18  provisions of chapter 679, Florida Statutes.

19         (8)  In taking possession and disposing of titled

20  personal property by sale or otherwise, the title loan lender

21  shall at all times proceed in a commercially reasonable

22  manner.

23         Section 12.  Prohibited acts.--

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

25  title loan lender, shall not:

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

27  matter in a title loan agreement or any extension of such

28  agreement.

29         (b)  Refuse to allow the department to inspect

30  completed title loan agreements, extensions of such

31  agreements, or loan property during the ordinary operating

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  1  hours of the title loan lender's business or other times

  2  acceptable to both parties.

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

  4  under the age of 18 years.

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

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

  7  provisions of this act.

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

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

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

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

12  registered name of the person's business.

13         (f)  Fail to exercise reasonable care, as defined by

14  department rule, in the safekeeping of loan property or of

15  titled personal property repossessed pursuant to this act.

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

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

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

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

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

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

22  otherwise disposed of by court order.

23         (h)  Sell or otherwise charge for any type of insurance

24  in connection with a title loan agreement.

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

26  fees which are not authorized pursuant to this act.

27         (j)  Act as a title loan lender without an active

28  license issued under this act.

29         (k)  Refuse to accept partial payments toward

30  satisfying any obligation owed under a title loan agreement or

31  extension of such agreement.

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  1         (l)  Charge a prepayment penalty.

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

  3  motor vehicles, or parts for motor vehicles.

  4         (n)  Act as a title loan lender under this act within a

  5  place of business in which the licensee solicits or engages in

  6  business outside the scope of this act if the department

  7  determines that the licensee's operation of and conduct

  8  pertaining to such other business results in an evasion of

  9  this act.  Upon making such a determination, the department

10  shall order the licensee to cease and desist from such

11  evasion, provided, no licensee shall engage in the pawnbroker

12  business.

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

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

15         Section 13.  Right to reclaim; lost title loan

16  agreement.--

17         (1)  Any person presenting identification of such

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

19  the title loan agreement to the title loan lender is presumed

20  to be entitled to reclaim the loan property described in the

21  title loan agreement. However, if the title loan lender

22  determines that the person is not the borrower, the title loan

23  lender is not required to allow the redemption of the loan

24  property by such person. The person reclaiming the loan

25  property must sign the borrower's copy of the title loan

26  agreement which the title loan lender may retain to evidence

27  such person's receipt of the loan property. A person

28  reclaiming the loan property who is not the borrower must show

29  identification to the title loan lender, together with

30  notarized written authorization from the borrower, and the

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

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  1  on the title loan agreement retained by the title loan lender.

  2  In such case, the person reclaiming the borrower's copy of the

  3  title loan agreement shall be provided a copy of such signed

  4  form as evidence of such agreement.

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

  6  is lost, destroyed, or stolen, the borrower must notify the

  7  title loan lender, in writing by certified or registered mail,

  8  return receipt requested, or in person evidenced by a signed

  9  receipt, and receipt of such notice shall invalidate such

10  title loan agreement if the loan property has not previously

11  been reclaimed. Before delivering the loan property or issuing

12  a new title loan agreement, the title loan lender shall

13  require the borrower to make a written statement of the loss,

14  destruction, or theft of the borrower's copy of the title loan

15  agreement. The title loan lender shall record on the written

16  statement the type of identification and the identification

17  number accepted from the borrower, the date the statement is

18  given, and the number or date of the title loan agreement

19  lost, destroyed, or stolen. The statement shall be signed by

20  the title loan lender or the title loan office employee who

21  accepts the statement from the borrower.  The title loan

22  lender shall not impose any type of fee for providing the

23  borrower with a copy of the title loan agreement.

24         Section 14.  Criminal penalties.--

25         (1)  Any person who acts as a title loan lender without

26  first securing the license prescribed by this act commits a

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

28  775.082, s. 775.083, or s. 775.084, Florida Statutes.

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

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

31  willfully makes a false entry in any record specifically

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  1  required by this act commits a misdemeanor of the first

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

  3  Florida Statutes.

  4         Section 15.  Subpoenas; enforcement actions; rules.--

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

  6  compel the attendance of witnesses and the production of

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

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

  9  department may administer oaths and affirmations to any person

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

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

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

13  enforce the subpoena in the same manner as subpoenas issued

14  under the Administrative Procedure Act are enforced. Witnesses

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

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

17  unless such examination or investigation is held at the place

18  of business or residence of the witness.

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

20  department to enforce or administer this act, the department

21  may:

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

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

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

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

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

27  permanent injunction, appointment of a receiver or

28  administrator, or an order of restitution.

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

30  such person to cease and desist and take corrective action

31  whenever the department finds that such person is violating,

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

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

  3  agreement entered into with the department.

  4         (c)  Whenever the department finds that conduct

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

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

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

  8  order reciting with particularity the facts underlying such

  9  findings. The emergency cease and desist order is effective

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

11  respondent named in the order and shall remain effective for

12  90 days. If the department begins nonemergency proceedings

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

14  remains effective until the conclusion of the proceedings

15  under ss. 120.569 and 120.57, Florida Statutes.

16         (3)  The department may adopt rules pursuant to ss.

17  120.54 and 120.536(1) to implement this act.

18         Section 16.  Investigations and complaints.--

19         (1)  The department may make any investigation and

20  examination of any licensee or other person the department

21  deems necessary to determine compliance with this act. For

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

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

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

25  relevant books, records, and other documents and materials

26  relative to an examination or investigation. Examinations

27  shall not be made more often than once during any 12-month

28  period unless the department has reason to believe the

29  licensee is not complying with the provisions of this act.

30         (2)  The department shall conduct all examinations at a

31  convenient location in this state unless the department

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  1  determines that it is more effective or cost-efficient to

  2  perform an examination at the licensee's out-of-state

  3  location.  For an examination performed at the licensee's

  4  out-of-state location, the licensee shall pay the travel

  5  expense and per diem subsistence at the rate provided by law

  6  for up to 30 8-hour days per year for each department examiner

  7  who participates in such an examination.  However, if the

  8  examination involves or reveals possible fraudulent conduct by

  9  the licensee, the licensee shall pay the travel expenses and

10  per diem subsistence provided by law, without limitation, for

11  each participating examiner.

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

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

14  department a written complaint setting forth the details of

15  such alleged violation and the department may investigate such

16  complaint.

17         Section 17.  Paragraphs (a) and (h) of subsection (1)

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

19         538.03  Definitions; applicability.--

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

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

22  or other business organization or entity which is not a

23  secondary metals recycler subject to part II and which is

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

25  secondhand goods or entering into title loan transactions.

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

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

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

29  jewelers, precious metals dealers, garage sale operators,

30  secondhand stores, and consignment shops.

31

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

  2  consignment, or pawn of secondhand goods by a secondhand

  3  dealer.

  4         Section 18.  Subsection (1) of section 538.16, Florida

  5  Statutes, is amended to read:

  6         538.16  Secondhand dealers; disposal of property.--

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

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

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

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

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

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

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

14  has not been repurchased from the pawnbroker or the title

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

16  made on account within 60 days.

17         Section 19.  Nothing in this act precludes a county or

18  municipality from adopting ordinances more restrictive than

19  the provisions of this act.

20         Section 20.  Effective July 1, 2000, the sum of

21  $500,000 is hereby appropriated for the 2000-2001 fiscal year

22  from the Regulatory Trust Fund of the Department of Banking

23  and Finance to the department to fund eight positions for the

24  purpose of carrying out the provisions of this act.

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

26  538.03, Florida Statutes, subsection (5) of section 538.06,

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

28  538.15, Florida Statutes, are repealed.

29         Section 22.  If any provision of this act or the

30  application thereof to any person or circumstance is held

31  invalid, the invalidity shall not affect other provisions or

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  1  applications of the act which can be given effect without the

  2  invalid provision or application, and to this end the

  3  provisions of this act are declared severable.

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

  5  this act shall take effect October 1, 2000.

  6

  7

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  9

10                       ADDITIONAL SPONSORS

11
    Brown, Hart, Greenstein, Kyle, Kelly, Brummer, Kilmer, Detert,
12
    Flanagan, Sorensen, Ball, Effman, Heyman, Casey, Reddick,
13
    Wilson, Melvin, Lacasa, Chestnut, Suarez, Jacobs, Futch,
14
    Starks and Hafner
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