House Bill 0553

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    Florida House of Representatives - 2000                 HB 553

        By Representative Barreiro






  1                      A bill to be entitled

  2         An act relating to deferred presentments;

  3         amending s. 560.103, F.S.; revising

  4         definitions; amending s. 560.114, F.S.;

  5         providing additional grounds for disciplinary

  6         action; providing for continuation of certain

  7         administrative proceedings under certain

  8         circumstances; amending s. 560.129, F.S.;

  9         deleting provisions providing public records

10         confidentiality for certain hearings,

11         proceedings, and emergency orders; amending s.

12         560.207, F.S.; revising time periods for

13         registration renewals; creating part IV, ch.

14         560, F.S., consisting of ss. 560.401, 560.402,

15         560.403, 560.404, 560.405, 560.406, and

16         560.407, F.S.; providing a short title;

17         providing definitions; providing registration

18         requirements for deferred presentment

19         transactions; providing limitations; specifying

20         requirements and limitations for engaging in

21         deferred presentment transactions; providing

22         prohibitions; providing for fees; providing

23         limitations; requiring certain notice;

24         specifying criteria and requirements for

25         deposit and redemption of a drawer's check;

26         providing procedures for recovering damages for

27         worthless checks; requiring maintenance of

28         records for a time certain; providing an

29         appropriation; providing effective dates.

30

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

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  1         Section 1.  Paragraph (d) is added to subsection (4) of

  2  section 560.103, Florida Statutes, and subsection (10) of said

  3  section is amended, to read:

  4         560.103  Definitions.--As used in the code, unless the

  5  context otherwise requires:

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

  7  consisting of:

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

  9  presentments.

10         (10)  "Money transmitter" means any person located in

11  or doing business in this state who acts as a payment

12  instrument seller, foreign currency exchanger, check casher,

13  or funds transmitter, or deferred presentment provider.

14         Section 2.  Paragraphs (l) and (m) are added to

15  subsection (1) of section 560.114, Florida Statutes, paragraph

16  (d) of subsection (2) of said section is amended, and

17  subsection (4) is added to said section, to read:

18         560.114  Disciplinary actions.--

19         (1)  The following actions by a money transmitter or

20  money transmitter-affiliated party are violations of the code

21  and constitute grounds for the issuance of a cease and desist

22  order, the issuance of a removal order, the denial of a

23  registration application or the suspension or revocation of

24  any registration previously issued pursuant to the code, or

25  the taking of any other action within the authority of the

26  department pursuant to the code:

27         (l)  Failure to pay any fee, charge, or fine under the

28  code.

29         (m)  Engaging or advertising engagement in the business

30  of a money transmitter without a registration, unless the

31

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  1  person is exempted from the registration requirements of the

  2  code.

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

  4  (1), the following acts are grounds for denial of registration

  5  or for revocation, suspension, or restriction of registration

  6  previously granted:

  7         (d)  Having been convicted of or found guilty of, or

  8  having pleaded guilty or nolo contendere to, a crime involving

  9  fraud or dishonest dealing.

10         (4)  If any registration expires while administrative

11  charges are still pending against the deferred presentment

12  provider, the proceedings against the registrant shall

13  continue as if the registration were still in effect.

14         Section 3.  Section 560.129, Florida Statutes, is

15  amended to read:

16         560.129  Confidentiality.--

17         (1)  For purposes of this section, the definitions

18  contained in s. 560.103, as created by chapter 94-238, Laws of

19  Florida, and chapter 94-354, Laws of Florida, apply.

20         (2)  RESTRICTED ACCESS TO CERTAIN HEARINGS,

21  PROCEEDINGS, AND RELATED DOCUMENTS.--

22         (a)  The hearings and proceedings conducted under the

23  code pursuant to this part shall be closed and exempt from the

24  provisions of s. 286.011 and s. 24(b), Art. I of the State

25  Constitution, and documents related to such hearings and

26  proceedings shall be confidential and exempt from the

27  provisions of s. 119.07(1) and s. 24(a), Art. I of the State

28  Constitution.

29         (b)  Orders of courts or of administrative law judges

30  for the production of confidential records or information

31  shall provide for inspection in camera by the court or the

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  1  administrative law judge and, after the court or

  2  administrative law judge has made a determination that the

  3  documents requested are relevant or would likely lead to the

  4  discovery of admissible evidence, the documents shall be

  5  subject to further orders by the court or the administrative

  6  law judge to protect the confidentiality thereof. Any order

  7  directing the release of information shall be immediately

  8  reviewable, and a petition by the department for review of

  9  such order shall automatically stay further proceedings in the

10  trial court or the administrative hearing until the

11  disposition of such petition by the reviewing court. If any

12  other party files such a petition for review, it will operate

13  as a stay of such proceedings only upon order of the reviewing

14  court.

15         (3)  Any emergency order entered under s. 560.112(6) is

16  confidential and exempt from the provisions of s. 119.07(1)

17  and s. 24(a), Art. I of the State Constitution, until the

18  emergency order is made permanent, unless the department finds

19  that such confidentiality will result in substantial risk of

20  financial loss to the public.

21         (3)(4)  Except for such portions of this section which

22  are otherwise public record, all records and information

23  relating to an investigation by the department under the code

24  are confidential and exempt from the provisions of s.

25  119.07(1) and s. 24(a), Art. I of the State Constitution,

26  until such investigation is completed or ceases to be active.

27  For purposes of this subsection, an investigation is

28  considered active while such investigation is being conducted

29  by the department with a reasonable, good faith belief that it

30  may lead to the filing of administrative, civil, or criminal

31  proceedings. An investigation does not cease to be active if

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  1  the department is proceeding with reasonable dispatch, and

  2  there is a good faith belief that action may be initiated by

  3  the department or other regulatory, administrative, or law

  4  enforcement agency. After an investigation is completed or

  5  ceases to be active, portions of such records relating to the

  6  investigation shall be confidential and exempt from the

  7  provisions of s. 119.07(1) and s. 24(a), Art. I of the State

  8  Constitution, to the extent that disclosure would:

  9         (a)  Jeopardize the integrity of another active

10  investigation;

11         (b)  Impair the safety and soundness of a money

12  transmitter or authorized vendor;

13         (c)  Reveal personal financial information;

14         (d)  Reveal the identity of a confidential source;

15         (e)  Defame or cause unwarranted damage to the good

16  name or reputation, or jeopardize the safety, of a person; or

17         (f)  Reveal investigative techniques or procedures.

18         (4)(5)  Except as otherwise provided in s. 560.121, and

19  except for such portions that are public record, reports of

20  examinations, operations, or conditions, including working

21  papers, or portions thereof, prepared by, or for the use of,

22  the department or any appropriate regulatory agency are

23  confidential and exempt from the provisions of s. 119.07(1)

24  and s. 24(a), Art. I of the State Constitution. However, such

25  reports or papers or portions thereof may be released to:

26         (a)  The money transmitter under examination;

27         (b)  Proposed purchasers if necessary to protect the

28  continued financial viability of the money transmitter;

29  however, the department shall notify the money transmitter

30  prior to releasing such documents;

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  1         (c)  Persons proposing in good faith to acquire a

  2  controlling interest in or to merge with the money

  3  transmitter; however, the department shall obtain permission

  4  from the money transmitter prior to releasing such documents;

  5         (d)  Any responsible person, officer, director,

  6  employee, attorney, auditor, or independent auditor officially

  7  connected with the money transmitter, proposed purchaser, or

  8  person seeking to acquire a controlling interest in or merge

  9  with the money transmitter; however, the department shall

10  obtain permission from the money transmitter prior to

11  releasing such documents; or

12         (e)  A bonding company, upon approval of the money

13  transmitter.

14

15  Any confidential information or records obtained from the

16  department pursuant to this subsection shall be maintained as

17  confidential and exempt from the provisions of s. 119.07(1)

18  and s. 24(a), Art. I of the State Constitution.

19         (5)(6)  This section shall not prevent or restrict:

20         (a)  Furnishing records or information to any

21  appropriate regulatory agency provided that such agency

22  adheres to the confidentiality provisions of the code;

23         (b)  Disclosing or publishing summaries of the

24  condition of money transmitters as well as general economic

25  and similar statistics or data, provided that the identity of

26  a particular money transmitter is not disclosed and may not be

27  ascertained; or

28         (c)  Reporting any suspected criminal activity, with

29  supporting documents and information, to appropriate law

30  enforcement or prosecutorial agencies.

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  1  Any confidential information or records obtained from the

  2  department pursuant to this subsection shall be maintained as

  3  confidential and exempt from the provisions of s. 119.07(1)

  4  and s. 24(a), Art. I of the State Constitution.

  5         (6)(7)  All reports and records filed with the

  6  department pursuant to s. 560.123 are confidential and exempt

  7  from the provisions of s. 119.07(1) and s. 24(a), Art. I of

  8  the State Constitution. However, the department shall provide

  9  any report filed pursuant to such section, or information

10  contained therein, to federal, state, and local law

11  enforcement and prosecutorial agencies, and to any federal or

12  state agency responsible for the regulation or supervision of

13  money transmitters.

14         (7)(8)  Confidential records and information furnished

15  pursuant to a legislative subpoena shall be kept confidential

16  by the legislative body or committee that receives the records

17  or information, except in a case involving investigation of

18  charges against a public official subject to impeachment or

19  removal, and then disclosure of such information shall be only

20  to the extent determined to be necessary by the legislative

21  body or committee.

22         (8)(9)  Examination reports, investigatory records,

23  applications, and related information compiled by the

24  department, or photographic copies thereof, shall be retained

25  by the department for a period of at least 10 years.

26         (9)(10)  Any person who willfully discloses information

27  made confidential by this section commits a felony of the

28  third degree, punishable as provided in s. 775.082, s.

29  775.083, or s. 775.084.

30         (10)(11)  The exemptions created in this section,

31  pursuant to subsections (1)-(11) for purposes of the Money

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  1  Transmitters' Code in this chapter, as created by chapter

  2  94-238, Laws of Florida, and chapter 94-354, Laws of Florida,

  3  are exempt from the provisions of ss. 119.07(1) and 286.011

  4  and s. 24(a) and (b), Art. I of the State Constitution.

  5         Section 4.  Subsection (2) of section 560.207, Florida

  6  Statutes, is amended to read:

  7         560.207  Renewal of registration; registration fee.--

  8         (2)  All registration renewal applications shall be

  9  accompanied by a renewal fee not to exceed $1,000, unless such

10  fee is waived by the department. All renewal applications must

11  be filed on or after January 1 of the year in which the

12  existing registration expires, but no later than April 30

13  before March 31. If the renewal application is filed prior to

14  the expiration date of an existing registration, no

15  investigation fee shall be paid in connection with such

16  renewal application. If the renewal application is filed after

17  April 30 the expiration date of an existing registration, the

18  renewal registration shall be considered untimely and then, in

19  addition to the $1,000 renewal fee, the renewal application

20  shall be accompanied by a nonrefundable investigation fee

21  pursuant to s. 560.205(2).

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

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

24  560.405, 560.406, and 560.407, Florida Statutes, is created to

25  read:

26                             PART IV

27                       DEFERRED PRESENTMENT

28         560.401  Short title.--This part may be cited as the

29  "Deferred Presentment Act."

30         560.402  Definitions.--In addition to the definitions

31  provided in ss. 560.103, 560.202, and 560.302 and unless

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  1  otherwise clearly indicated by the context, for purposes of

  2  this part:

  3         (1)  "Days" means calendar days.

  4         (2)  "Deferred presentment provider" means a person who

  5  engages in a deferred presentment transaction and is

  6  registered under part II or part III of the code and has filed

  7  a declaration of intent with the department.

  8         (3)  "Deferred presentment transaction" means providing

  9  currency or a payment instrument in exchange for a person's

10  check and agreeing to hold that person's check for a period of

11  time prior to presentment, deposit, or redemption. A deferred

12  presentment transaction that complies with the provisions

13  contained in this part shall not be construed to be a loan

14  under state law.

15         (4)  "Drawer" means any person who writes a personal

16  check and upon whose account the check is drawn.

17         (5)  "Renewal" means the termination of an existing

18  deferred presentment agreement solely by the payment of fees

19  then due the deferred presentment provider and the

20  substitution of a new check drawn by the drawer pursuant to a

21  new deferred presentment agreement.

22         (6)  "Service fee" means the fee authorized for the

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

24  This fee shall not be deemed to be interest for any purpose.

25         560.403  Requirements of registration; declaration of

26  intent.--

27         (1)  No person shall engage in a deferred presentment

28  transaction unless the person is registered under the

29  provisions of part II or part III and has on file with the

30  department a declaration of intent to engage in deferred

31  presentment transactions. The declaration of intent shall be

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  1  under oath and on such form as the department prescribes by

  2  rule. Any person who is registered under part II or part III

  3  on the effective date of this act and intends to engage in

  4  deferred presentment transactions shall have 60 days after the

  5  effective date of this act to file a declaration of intent.

  6         (2)  No person shall be exempt from registration and

  7  declaration if such person engages in deferred presentment

  8  transactions, regardless of whether such person is currently

  9  exempt from registration under any provision of this code.

10         (3)  Every deferred presentment transaction shall be

11  documented in a written agreement signed by both the deferred

12  presentment provider and the drawer.

13         (4)  The deferred presentment transaction agreement

14  shall be executed on the day the deferred presentment provider

15  furnishes currency or a payment instrument to the drawer.

16         (5)  All written agreements shall contain:

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

18  number of the deferred presentment provider, and the name and

19  title of the person who signs the agreement on behalf of the

20  deferred presentment provider.

21         (b)  The date the deferred presentment transaction was

22  made.

23         (c)  The amount of the drawer's check.

24         (d)  The length of deferral period.

25         (e)  The address and telephone number of the

26  department.

27         (f)  A clear description of the drawer's payment

28  obligations under the deferred presentment transaction.

29         (6)  Every deferred presentment provider shall furnish

30  to the drawer a copy of the deferred presentment transaction

31  agreement.

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  1         (7)  No deferred presentment provider shall require a

  2  person to provide any additional security for the deferred

  3  presentment transaction or any extension or require a person

  4  to provide any additional guaranty from another person.

  5         (8)  A deferred presentment provider shall not include

  6  any of the following provisions in any written agreement:

  7         (a)  A hold harmless clause;

  8         (b)  A confession of judgment clause;

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

10  other compensation for services;

11         (d)  A provision in which the drawer agrees not to

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

13         (e)  A waiver of any provision of this part.

14         560.404  Rules.--A person may engage in deferred

15  presentment transactions, subject to the following:

16         (1)  No deferred presentment provider shall charge

17  service fees in excess of 15 percent of the amount paid to the

18  drawer of the check whose presentment or negotiation is

19  deferred.

20         (2)  Each deferred presentment provider shall

21  immediately provide the drawer with the full amount of any

22  check to be held, less only the fees permitted under this

23  section. However, no deferred presentment provider shall

24  provide a drawer with the face amount of the check to be held.

25         (3)  The deferred presentment agreement and drawer's

26  check shall bear the same date, and the number of days shall

27  be calculated from this date. No deferred presentment provider

28  or person may alter or delete the date on any written

29  agreement or check held by the deferred presentment provider.

30         (4)  No deferred presentment provider may accept or

31  hold an undated check or a check dated on a date other than

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  1  the date on which the deferred presentment provider agreed to

  2  hold the check and signed the deferred presentment transaction

  3  agreement.

  4         (5)  In connection with a deferred presentment

  5  transaction, a deferred presentment provider may not charge

  6  the drawer a check-cashing fee or a verification fee pursuant

  7  to part III.

  8         (6)  No deferred presentment agreement shall be for a

  9  term in excess of 31 days.

10         (7)  Every deferred presentment provider shall hold the

11  drawer's check for the agreed number of days, unless the

12  drawer chooses to redeem the check before the agreed

13  presentment date.

14         (8)  The fees authorized by this section may not be

15  collected before the drawer's check is presented or redeemed.

16         (9)  Proceeds in a deferred presentment transaction may

17  be made to the drawer in the form of the deferred presentment

18  provider's business check or money order if the deferred

19  presentment provider is licensed under part II; however, no

20  additional fee may be charged by a deferred presentment

21  provider for issuing or cashing the deferred presentment

22  provider's check.

23         (10)  No deferred presentment provider may engage in

24  the renewal of any deferred presentment transaction. A

25  transaction is completed when a check is presented for

26  payment, is deposited, or is redeemed by the drawer by payment

27  in full in cash or a cash equivalent to the deferred

28  presentment provider. After the drawer has completed a

29  deferred presentment transaction with a deferred presentment

30  provider, he or she may enter into a new agreement for

31  deferred presentment services with the deferred presentment

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  1  provider. A deferred presentment provider shall not redeem,

  2  extend, or otherwise consolidate a deferred presentment

  3  transaction with the proceeds of another deferred presentment

  4  transaction made by the same deferred presentment provider.

  5         (11)  The face amount of a check taken for deferred

  6  presentment may not exceed $500 exclusive of the fees allowed

  7  by this part.

  8         (12)  No deferred presentment provider or person

  9  related to the deferred presentment provider by common

10  ownership or control may have outstanding more than two checks

11  from any one drawer at any one time, nor may the aggregate

12  face value of all outstanding checks from any one drawer

13  payable to any deferred presentment provider exceed $1,000,

14  exclusive of the fees allowed by this part. Each deferred

15  presentment provider may rely on a written representation of a

16  drawer regarding the existence of any outstanding checks for

17  deferred presentment. A deferred presentment provider shall

18  not use any device or agreement, including, but not limited

19  to, agreements with or referrals to other deferred presentment

20  providers, to obtain greater fees.

21         (13)  A deferred presentment provider shall provide a

22  notice in a prominent place on each deferred presentment

23  agreement in at least 10-point type in substantially the

24  following form:

25

26                              NOTICE

27     STATE LAW PROHIBITS YOU FROM HAVING MORE THAN 2 DEFERRED

28       PRESENTMENT TRANSACTIONS TOTALING MORE THAN $1,000,

29           EXCLUSIVE OF FEES, OUTSTANDING AT ANY TIME.

30      FAILURE TO OBEY THIS LAW COULD CREATE SEVERE FINANCIAL

31                HARDSHIP FOR YOU AND YOUR FAMILY.

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  1         (14)  A deferred presentment provider shall charge only

  2  those fees specifically authorized in this section.

  3         560.405  Deposit; redemption.--

  4         (1)  The deferred presentment provider shall not

  5  present the drawer's check prior to the agreed-upon date of

  6  presentment, as reflected in the deferred presentment

  7  transaction agreement.

  8         (2)  Before a deferred presentment provider presents

  9  the drawer's check, the check shall be endorsed with the

10  actual name under which the deferred presentment provider is

11  doing business.

12         (3)  Notwithstanding the provisions of subsection (1),

13  in lieu of presentment, a deferred presentment provider may

14  allow the check to be redeemed at any time upon payment to the

15  deferred presentment provider in the amount of the face amount

16  of the drawer's check. However, payment may not be made in the

17  form of a personal check. Upon redemption, the deferred

18  presentment provider shall return the drawer's check that was

19  being held and provide a signed, dated receipt showing that

20  the drawer's check has been redeemed.

21         (4)  No drawer can be required to redeem his or her

22  check prior to the agreed-upon date, unless the drawer chooses

23  to redeem the check before the agreed-upon presentment date.

24         560.406  Worthless checks.--If a check is returned to a

25  deferred presentment provider from a payor financial

26  institution due to lack of funds, a closed account, or a

27  stop-payment order, the deferred presentment provider may seek

28  collection pursuant to s. 68.065, except a deferred

29  presentment provider shall not be entitled to collect treble

30  damages pursuant s. 68.065. The notice sent by a deferred

31  deposit provider pursuant to s. 68.065 shall not include any

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  1  references to treble damages and must clearly state that the

  2  deferred presentment provider is not entitled to recover such

  3  damages. Except as otherwise provided in this part, an

  4  individual who issues a personal check to a deferred

  5  presentment provider under a deferred presentment agreement is

  6  not subject to criminal penalty. If a check is returned to a

  7  deferred presentment provider from a payor financial

  8  institution due to insufficient funds, a closed account, or a

  9  stop-payment order, the deferred presentment provider may

10  pursue all legally available civil remedies to collect the

11  check, including, but not limited to, the imposition of all

12  charges imposed on the deferred presentment provider by any

13  financial institution.

14         560.407  Records of deferred presentment providers.--A

15  deferred presentment provider shall maintain all books,

16  accounts, records, agreements, contracts, and documents, as

17  prescribed by department rules. Such books, accounts, records,

18  and documents shall be retained for a period of at least 3

19  years.

20         Section 6.  Effective July 1, 2000, the sum of $150,000

21  is hereby appropriated from the Regulatory Trust Fund of the

22  Department of Banking and Finance to the department for fiscal

23  year 2000-2001 to fund three positions for the purpose of

24  administering the provisions of the Deferred Presentment Act.

25         Section 7.  Except as otherwise provided herein, this

26  act shall take effect October 1, 2000.

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

  2                          HOUSE SUMMARY

  3
      Creates part IV of chapter 560, Florida Statutes, as the
  4    "Deferred Presentment Act." Regulates transactions
      whereby a check is cashed by a person licensed to cash
  5    payment instruments or exchange foreign currency and, by
      mutual agreement between such person and the maker of the
  6    check, its presentment or negotiation is deferred for a
      limited period of time. Provides that a deferred
  7    presentment transaction is not a loan. Provides
      requirements, limitations, and proscriptions for
  8    registering as a deferred presentment provider and for
      engaging in deferred presentment transactions. See bill
  9    for details.

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