Senate Bill 0694
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Florida Senate - 2000 SB 694
By Senator Meek
36-572-00 See HB 301
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 circumstances; providing
18 for denial, suspension, or revocation of a
19 license; specifying acts that 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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Florida Senate - 2000 SB 694
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1 providing for extensions; providing for return
2 of principal and interest to the borrower under
3 certain circumstances; providing a holding
4 period when there is a failure to reclaim
5 pledged property; providing for the disposal of
6 pledged property; providing for disposition of
7 excess proceeds; prohibiting certain acts;
8 providing for the right to reclaim; providing
9 for lost title loan agreements; providing for a
10 title loan lender's lien; providing for
11 criminal penalties; providing for subpoenas,
12 enforcement of actions, and rules; providing
13 for investigations and complaints; authorizing
14 the department to adopt rules; amending ss.
15 538.03 and 538.16, F.S.; deleting provisions
16 relating to title loan transactions; providing
17 for more restrictive local ordinances;
18 providing an appropriation; repealing ss.
19 538.03(1)(i), 538.06(5), and 538.15(4) and (5),
20 F.S., relating to title loan transactions by
21 secondhand dealers; providing for severability;
22 providing effective dates.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Short title.--Sections 1 through 16 of this
27 act may be cited as the "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 supersede
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Florida Senate - 2000 SB 694
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1 any other provisions of state law affecting title loans to the
2 extent of any conflict.
3 Section 3. Definitions.--As used in this act, the
4 term:
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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Florida Senate - 2000 SB 694
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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 that 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, or chapter 655, Florida Statutes.
15 (11) "Title loan agreement" or "agreement" means a
16 written agreement in which a title loan lender agrees to make
17 a title loan to a borrower.
18 (12) "Title loan lender" or "lender" means any person
19 who engages in the business of making or servicing title
20 loans.
21 (13) "Title loan office" means the location at which,
22 or premises from which, a title loan lender regularly conducts
23 business under this chapter or any other location that is held
24 out to the public as a location at which a lender makes or
25 services title loans.
26 (14) "Titled personal property" means a motor vehicle
27 that has as evidence of ownership a state-issued certificate
28 of title except for a mobile home that is the primary
29 residence of the borrower.
30 (15) "Ultimate equitable owner" means a person who,
31 directly or indirectly, owns or controls an ownership interest
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1 in a corporation, a foreign corporation, an alien business
2 organization, or any other form of business organization,
3 regardless of whether such person owns or controls such
4 ownership interest through one or more persons or one or more
5 proxies, powers of attorney, nominees, corporations,
6 associations, partnerships, trusts, joint stock companies, or
7 other entities or devices, or any combination thereof.
8 Section 4. License required; license fees.--
9 (1) A person may not act as a title loan lender or own
10 or operate a title loan office unless such person has an
11 active title loan lender license issued by the department
12 under this act. A title loan lender may not own or operate
13 more than one title loan office unless the lender obtains a
14 separate title loan lender license for each title loan office.
15 (2) A person applying for licensure as a title loan
16 lender shall file with the department an application; the bond
17 required by section 5(3); a nonrefundable application fee of
18 $1,200; a nonrefundable investigation fee of $200; and a
19 complete set of fingerprints taken by an authorized law
20 enforcement officer. The department shall submit such
21 fingerprints to the Department of Law Enforcement or the
22 Federal Bureau of Investigation for state and federal
23 processing. The department may waive, by rule, the requirement
24 that applicants must file a set of fingerprints or the
25 requirement that such fingerprints must be processed by the
26 Department of Law Enforcement or the Federal Bureau of
27 Investigation.
28 (3) If the department determines that an application
29 should be approved, the department shall issue a license for a
30 period not to exceed 2 years.
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1 (4) A license shall be renewed biennially by filing a
2 renewal form and a nonrefundable renewal fee of $1,200. A
3 license that is not renewed by the end of the biennial period
4 shall automatically revert to inactive status. An inactive
5 license may be reactivated within 6 months after becoming
6 inactive by filing a reactivation form; payment of the
7 nonrefundable $1,200 renewal fee; and payment of a
8 nonrefundable reactivation fee of $600. A license that is not
9 reactivated within 6 months after becoming inactive may not be
10 reactivated and shall automatically expire. The department
11 shall establish by rule the procedures for renewal and
12 reactivation of a license and shall adopt a renewal form and a
13 reactivation form.
14 (5) Each license must be conspicuously displayed at
15 the title loan office. When a licensee wishes to move a title
16 loan office to another location, the licensee shall provide
17 prior written notice to the department.
18 (6) A license issued pursuant to this act is not
19 transferable or assignable.
20 (7) Each licensee shall designate and maintain a
21 registered agent in this state for service of process.
22 (8) Whenever a person or a group of persons, directly
23 or indirectly or acting by or through one or more persons,
24 proposes to purchase or acquire a 25 percent or more interest
25 in a licensee, such person or group shall submit an initial
26 application for licensure under this act prior to such
27 purchase or acquisition. The department shall adopt rules
28 providing for waiver of the application required by this
29 subsection when such purchase or acquisition of a licensee is
30 made by another licensee licensed under this act or when the
31 application is otherwise unnecessary in the public interest.
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Florida Senate - 2000 SB 694
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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 25 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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Florida Senate - 2000 SB 694
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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 section 655.005, Florida Statutes,
14 in 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 made the beneficiary
17 of that document. The bond, certificate of deposit, or letter
18 of 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) Having been convicted of a crime involving fraud,
14 dishonest dealing, or any act of moral turpitude or acting as
15 an ultimate equitable owner of 10 percent or more of a
16 licensee who has been convicted of a crime involving fraud,
17 dishonest dealing, or any act of moral turpitude.
18 (j) Making or having made material misstatement of
19 fact in an initial or renewal application for a license.
20 (k) Having been the subject of any decision, finding,
21 injunction, suspension, prohibition, revocation, denial,
22 judgment, or administrative order by any court of competent
23 jurisdiction or administrative law judge, or by any state or
24 federal agency, involving a violation of any federal or state
25 law relating to title loans or any rule or regulation adopted
26 under such law, or having been the subject of any injunction
27 or adverse administrative order by a state or federal agency
28 regulating banking, insurance, finance or small loan
29 companies, real estate, mortgage brokers, or other related or
30 similar industries for acts involving fraud, dishonest
31 dealing, or any act of moral turpitude.
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Florida Senate - 2000 SB 694
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1 (l) Pleading nolo contendere to, or being convicted or
2 found guilty of, a crime involving fraud, dishonest dealing,
3 or any act of moral turpitude, regardless of whether
4 adjudication was withheld.
5 (m) Failing to continuously maintain the bond required
6 by section 5(3).
7 (n) Failing to timely pay any fee, charge, or fine
8 imposed or assessed pursuant to this act or rules adopted
9 under this act.
10 (o) Having had a license or registration, or the
11 equivalent, to practice any profession or occupation denied,
12 suspended, revoked, or otherwise acted against by a licensing
13 authority in any jurisdiction for fraud, dishonest dealing, or
14 any act of moral turpitude.
15 (p) Having demonstrated unworthiness, as defined by
16 department rule, to transact the business of a title loan
17 lender.
18 (2) Upon a finding by the department that any person
19 has committed any of the acts set forth in subsection (1), the
20 department may enter an order taking one or more of the
21 following actions:
22 (a) Denying an application for licensure under this
23 act.
24 (b) Revoking or suspending a license previously
25 granted pursuant to this act.
26 (c) Placing a licensee or an applicant for a license
27 on probation for a period of time and subject to such
28 conditions as the department specifies.
29 (d) Issuing a reprimand.
30 (e) Imposing an administrative fine not to exceed
31 $5,000 for each separate act or violation.
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1 (3) If a person seeking licensure is anything other
2 than a natural person, the eligibility requirements of this
3 section apply to each direct or ultimate equitable owner of 10
4 percent or more of the outstanding equity interest of such
5 entity and to each director, general partner, and executive
6 officer.
7 (4) It is sufficient cause for the department to take
8 any of the actions specified in subsection (2), as to any
9 entity other than a natural person, if the department finds
10 grounds for such action as to any member of such entity, as to
11 any executive officer or director of the entity, or as to any
12 person with power to direct the management or policies of the
13 entity.
14 (5) Each licensee is subject to the provisions of
15 subsection (2) for the acts of employees and agents of the
16 licensee if the licensee knew or should have known about such
17 acts.
18 (6) Licensure under this act may be denied or any
19 license issued under this act may be suspended or restricted
20 if an applicant or licensee is charged, in a pending
21 enforcement action or pending criminal prosecution, with any
22 conduct that would authorize denial or revocation under this
23 section.
24 Section 7. Remedies for title loans made without
25 licensure.--Any title loan made without benefit of a license
26 is void, in which case the person making the title loan
27 forfeits the right to collect any moneys, including principal
28 and interest charged on the title loan, from the borrower in
29 connection with such agreement. The person making the title
30 loan shall return to the borrower the loan property, the
31 titled personal property pledged or the fair market value of
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1 such titled personal property, and all principal and interest
2 paid by the borrower. The borrower is entitled to receive
3 reasonable attorney's fees and costs in any action brought by
4 the borrower to recover from the person making the title loan
5 the loan property, the titled personal property, or the
6 principal and interest paid by the borrower.
7 Section 8. Title loan agreement.--
8 (1) At the time a title loan lender makes a title
9 loan, the lender and the borrower shall execute a title loan
10 agreement, which shall be legibly typed or written in
11 indelible ink and completed as to all essential provisions
12 prior to execution by the borrower and lender. The title loan
13 agreement shall include the following information:
14 (a) The make, model, and year of the titled personal
15 property to which the loan property relates.
16 (b) The vehicle identification number, or other
17 comparable identification number, along with the license plate
18 number, if applicable, of the titled personal property to
19 which the loan property relates.
20 (c) The name, residential address, date of birth,
21 physical description, and social security number of the
22 borrower.
23 (d) The date the title loan agreement is executed by
24 the title loan lender and the borrower.
25 (e) The identification number and the type of
26 identification, including the issuing agency, accepted from
27 the borrower.
28 (f) The amount of money advanced, designated as the
29 "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 must 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 must 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 must maintain the original
13 copy of each completed title loan agreement on the title loan
14 office premises, and may 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.
17 (4) Loan property that is delivered to a title loan
18 lender must be securely stored and maintained at the title
19 loan office unless the loan property has been forwarded to the
20 appropriate state agency for the purpose of having a lien
21 recorded or deleted.
22 (5) The department may prescribe by rule the books,
23 accounts, and records, and the minimum information to be shown
24 in the books, accounts, and records, of licensees so that such
25 records will enable the department to determine compliance
26 with the provisions of this act.
27 Section 10. Title loan charges.--
28 (1) A title loan lender may charge a maximum interest
29 rate of 30 percent per annum computed on the first $2,000 of
30 the principal amount, 24 percent per annum on that part of the
31 principal amount exceeding $2,000 and not exceeding $3,000,
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1 and 18 percent per annum on that part of the principal amount
2 exceeding $3,000. The original principal amount is the same
3 amount as the amount financed, as defined by the federal Truth
4 in Lending Act and Regulation Z of the Board of Governors of
5 the Federal Reserve System. In determining compliance with the
6 statutory maximum interest, the computations must be simple
7 interest and not add-on interest or any other computations.
8 When two or more interest rates are to be applied to the
9 principal amount, the lender may charge interest at that
10 single annual percentage rate which, if applied according to
11 the actuarial method to each of the scheduled periodic
12 balances of principal, would produce at maturity the same
13 total amount of interest as would result from the application
14 of the two or more rates otherwise permitted, based upon the
15 assumption that all payments are made as agreed.
16 (2) The annual percentage rate that may be charged for
17 a title loan may equal, but not exceed, the annual percentage
18 rate that must be computed and disclosed as required by the
19 federal Truth in Lending Act and Regulation Z of the Board of
20 Governors of the Federal Reserve System. The maximum annual
21 percentage rate of interest that may be charged is 12 times
22 the maximum monthly rate, and the maximum monthly rate must be
23 computed on the basis of one-twelfth of the annual rate for
24 each full month. The Department of Banking and Finance shall
25 establish by rule the rate for each day of a fractional month
26 when the period for which the charge is computed is more or
27 less than 1 month.
28 (3) A title loan agreement may be extended for one or
29 more 30-day periods by mutual consent of the title loan lender
30 and the borrower. Each extension of a title loan agreement
31 must be executed in a separate extension agreement each of
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1 which must comply with the requirements for executing a title
2 loan agreement as provided in this act. The interest rate
3 charged in any title loan extension agreement may not exceed
4 the interest rate charged in the related title loan agreement.
5 A title loan lender may not capitalize in any title loan
6 extension agreement any unpaid interest due on the related
7 title loan agreement or any subsequent extensions to that
8 title loan agreement.
9 (4) Any interest contracted for or received, directly
10 or indirectly, by a title loan lender, or an agent of the
11 title loan lender, in excess of the amounts authorized under
12 this chapter are prohibited and may not be collected by the
13 title loan lender or an agent of the title loan lender.
14 (a) If such excess interest is changed as a result of
15 a bona fide error by the title loan lender, or an agent of the
16 title loan lender, the title loan agreement is voidable, and
17 the lender must refund the excess interest to the borrower
18 within 20 days after discovery by the lender or borrower of
19 the bona fide error, whichever occurs first.
20 (b) If such excess interest results from an act by the
21 title loan lender, or an agent of the title loan lender, for
22 the purpose of circumventing the maximum title loan interest
23 allowed by this act, the title loan agreement is void, and the
24 lender must refund to the borrower any interest paid on the
25 title loan and return to the borrower the loan property. The
26 title loan lender also forfeits the lender's right to collect
27 any principal owed by the borrower on the title loan.
28 (c) The department may order a title loan lender, or
29 an agent of the title loan lender, to comply with the
30 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 occurs later, the title loan lender may take
15 possession of the titled personal property. A lender may take
16 possession of the titled personal property only through an
17 agent who is licensed by the state to repossess motor
18 vehicles.
19 (2) Prior to engaging a repossession agent, the lender
20 must afford the debtor an opportunity to make the titled
21 personal property available to the lender at a place, date,
22 and time reasonably convenient to the lender and the borrower.
23 Prior to taking possession of titled personal property, the
24 lender must afford the borrower a reasonable opportunity to
25 remove from the titled personal property any personal
26 belongings without charge or additional cost to the borrower.
27 After the lender takes possession of the titled personal
28 property, the lender, at the lender's sole expense and risk,
29 may authorize a third party to retain physical possession of
30 the titled personal property.
31
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1 (3) Upon taking possession of titled personal
2 property, the lender may dispose of the titled personal
3 property by sale but may do so only through a motor vehicle
4 dealer licensed under section 320.27, Florida Statutes. At
5 least 10 days prior to sale, the lender must notify the
6 borrower of the date, time, and place of the sale and provide
7 the borrower with a written accounting of the principal amount
8 due on the title loan, interest accrued through the date the
9 lender takes possession of the titled personal property, and
10 any reasonable expenses incurred to date by the lender in
11 taking possession of, preparing for sale, and selling the
12 titled personal property. At any time prior to such sale, the
13 lender must permit the borrower to redeem the titled personal
14 property by tendering a money order or certified check for the
15 principal amount of the title loan, interest accrued through
16 the date the lender takes possession, and any reasonable
17 expenses incurred to date by the lender in taking possession
18 of, preparing for sale, and selling the titled personal
19 property. Nothing in this act nor in any title loan agreement
20 precludes a borrower from purchasing the titled personal
21 property at any sale.
22 (4) Any such sale or disposal vests in the purchaser
23 the right, title, and interest of the owner and the title loan
24 lender.
25 (5) Within 30 days after the sale of the titled
26 personal property, the borrower is entitled to receive all
27 proceeds from the sale of the motor vehicle in excess of the
28 principal amount due on the loan, interest on the loan up to
29 the date the lender took possession, and the reasonable
30 expenses incurred by the lender in taking possession of,
31 preparing for sale, and selling the titled personal property.
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1 The borrower is entitled to reasonable attorney's fees and
2 costs incurred in any action brought to recover such proceeds
3 which results in the title loan lender being ordered to return
4 all or part of such amount.
5 (6) The borrower is not personally liable to the
6 lender for any balance due on the title loan remaining after
7 applying the proceeds of the sale of the titled personal
8 property to the principal amount due on the title loan, the
9 interest accrued through the date the lender took possession,
10 and any reasonable expenses incurred by the lender in taking
11 possession of, preparing for sale, and selling the titled
12 personal property unless such balance exceeds $2,000. If such
13 balance exceeds $2,000, the lender is entitled to reasonable
14 attorney's fees and costs incurred in any action brought to
15 recover such balance which results in a judgment in favor of
16 the lender.
17 (7) The rights and remedies provided in this section
18 are cumulative. Except as otherwise provided in this section,
19 the disposal of titled personal property is subject to the
20 provisions of chapter 679, Florida Statutes.
21 (8) In taking possession and disposing of titled
22 personal property by sale or otherwise, the title loan lender
23 shall at all times proceed in a commercially reasonable
24 manner.
25 Section 12. Prohibited acts.--
26 (1) A title loan lender, or any agent or employee of a
27 title loan lender, may not:
28 (a) Falsify or fail to make an entry of any material
29 matter in a title loan agreement or any extension of such
30 agreement.
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1 (b) Refuse to allow the department to inspect
2 completed title loan agreements, extensions of such
3 agreements, or loan property during the ordinary operating
4 hours of the title loan lender's business or at other times
5 acceptable to both parties.
6 (c) Enter into a title loan agreement with a person
7 under the age of 18 years.
8 (d) Make any agreement requiring or allowing for the
9 personal liability of a borrower or the waiver of any of the
10 provisions of this act.
11 (e) Knowingly enter into a title loan agreement with
12 any person who is under the influence of drugs or alcohol when
13 such condition is visible or apparent, or with any person
14 using a name other than such person's own name or the
15 registered name of the person's business.
16 (f) Fail to exercise reasonable care, as defined by
17 department rule, in the safekeeping of loan property or of
18 titled personal property repossessed pursuant to this act.
19 (g) Fail to return loan property or repossessed titled
20 personal property to a borrower, with any and all of the title
21 loan lender's liens on the property properly released, upon
22 payment of the full amount due the title loan lender, unless
23 the property has been seized or impounded by an authorized law
24 enforcement agency, taken into custody by a court, or
25 otherwise disposed of by court order.
26 (h) Sell or otherwise charge for any type of insurance
27 in connection with a title loan agreement.
28 (i) Charge or receive any finance charge, interest, or
29 fees that are not authorized pursuant to this act.
30 (j) Act as a title loan lender without an active
31 license issued under this act.
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1 (k) Refuse to accept partial payments toward
2 satisfying any obligation owed under a title loan agreement or
3 extension of such agreement.
4 (l) Charge a prepayment penalty.
5 (m) Engage in the business of selling new or used
6 motor vehicles, or parts for motor vehicles.
7 (n) Act as a title loan lender under this act within a
8 place of business in which the licensee solicits or engages in
9 business outside the scope of this act if the department
10 determines that the licensee's operation of and conduct
11 pertaining to such other business results in an evasion of
12 this act. Upon making such a determination, the department
13 shall order the licensee to cease and desist from such
14 evasion. However, a licensee may not engage in the pawnbroker
15 business.
16 (2) Title loan companies may not advertise using the
17 phrases "interest-free loans" or "no finance charges."
18 Section 13. Right to reclaim; lost title loan
19 agreement.--
20 (1) Any person presenting identification of such
21 person as the borrower and presenting the borrower's copy of
22 the title loan agreement to the title loan lender is presumed
23 to be entitled to reclaim the loan property described in the
24 title loan agreement. However, if the title loan lender
25 determines that the person is not the borrower, the title loan
26 lender is not required to allow the redemption of the loan
27 property by such person. The person reclaiming the loan
28 property must sign the borrower's copy of the title loan
29 agreement, which copy the title loan lender may retain as
30 evidence of such person's receipt of the loan property. A
31 person reclaiming the loan property who is not the borrower
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1 must show identification to the title loan lender, together
2 with notarized written authorization from the borrower, and
3 the title loan lender must record that person's name and
4 address on the title loan agreement retained by the title loan
5 lender. In such case, the person reclaiming the borrower's
6 copy of the title loan agreement must be provided a copy of
7 such signed form as evidence of such agreement.
8 (2) If the borrower's copy of the title loan agreement
9 is lost, destroyed, or stolen, the borrower must notify the
10 title loan lender, in writing by certified or registered mail,
11 return receipt requested, or in person evidenced by a signed
12 receipt, and receipt of such notice invalidates such title
13 loan agreement if the loan property has not previously been
14 reclaimed. Before delivering the loan property or issuing a
15 new title loan agreement, the title loan lender must require
16 the borrower to make a written statement of the loss,
17 destruction, or theft of the borrower's copy of the title loan
18 agreement. The title loan lender must record on the written
19 statement the type of identification and the identification
20 number accepted from the borrower, the date the statement is
21 given, and the number or date of the title loan agreement that
22 has been lost, destroyed, or stolen. The statement must be
23 signed by the title loan lender or the title loan office
24 employee who accepts the statement from the borrower. The
25 title loan lender may not impose any type of fee for providing
26 the borrower with a copy of the title loan agreement.
27 Section 14. Criminal penalties.--
28 (1) Any person who acts as a title loan lender without
29 first securing the license prescribed by this act commits a
30 felony of the third degree, punishable as provided in section
31
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1 775.082, section 775.083, or section 775.084, Florida
2 Statutes.
3 (2) In addition to any other applicable penalty, any
4 person who willfully violates any provision of this act or who
5 willfully makes a false entry in any record specifically
6 required by this act commits a misdemeanor of the first
7 degree, punishable as provided in section 775.082 or section
8 775.083, Florida Statutes.
9 Section 15. Subpoenas; enforcement actions; rules.--
10 (1) The department may issue and serve subpoenas to
11 compel the attendance of witnesses and the production of
12 documents, papers, books, records, and other evidence before
13 the department in any matter pertaining to this act. The
14 department may administer oaths and affirmations to any person
15 whose testimony is required. If any person refuses to testify
16 or to produce books, records, and documents, or otherwise
17 refuses to obey a subpoena issued under this section, the
18 department may enforce the subpoena in the same manner as
19 subpoenas issued under the Administrative Procedure Act are
20 enforced. Witnesses are entitled to the same fees and mileage
21 as they are entitled to by law for attending as witnesses in
22 the circuit court, unless such examination or investigation is
23 held at the place of business or residence of the witness.
24 (2) In addition to any other powers conferred upon the
25 department to enforce or administer this act, the department
26 may:
27 (a) Bring an action in any court of competent
28 jurisdiction to enforce or administer this act, any rule or
29 order adopted under this act, or any written agreement entered
30 into with the department. In such action, the department may
31 seek any relief at law or equity, including a temporary or
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1 permanent injunction, appointment of a receiver or
2 administrator, or an order of restitution.
3 (b) Issue and serve upon a person an order requiring
4 such person to cease and desist and take corrective action
5 whenever the department finds that such person is violating,
6 has violated, or is about to violate any provision of this
7 act, any rule or order adopted under this act, or any written
8 agreement entered into with the department.
9 (c) Whenever the department finds that conduct
10 described in paragraph (b) presents an immediate danger to the
11 public health, safety, or welfare requiring an immediate final
12 order, the department may issue an emergency cease and desist
13 order reciting with particularity the facts underlying such
14 findings. The emergency cease and desist order is effective
15 immediately upon service of a copy of the order on the
16 respondent named in the order and shall remain effective for
17 90 days. If the department begins nonemergency proceedings
18 under paragraph (b), the emergency cease and desist order
19 remains effective until the conclusion of the proceedings
20 under sections 120.569 and 120.57, Florida Statutes.
21 (3) The department may adopt rules pursuant to ss.
22 120.54 and 120.536(1) to implement this act.
23 Section 16. Investigations and complaints.--
24 (1) The department may make any investigation and
25 examination of any licensee or other person the department
26 deems necessary to determine compliance with this act. For
27 such purposes, the department may examine the books, accounts,
28 records, and other documents or matters of any licensee or
29 other person. The department may compel the production of all
30 relevant books, records, and other documents and materials
31 relative to an examination or investigation. Examinations
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1 shall not be made more often than once during any 12-month
2 period unless the department has reason to believe the
3 licensee is not complying with the provisions of this act.
4 (2) The department shall conduct all examinations at a
5 convenient location in this state unless the department
6 determines that it is more effective or cost-efficient to
7 perform an examination at the licensee's out-of-state
8 location. For an examination performed at the licensee's
9 out-of-state location, the licensee shall pay the travel
10 expense and per diem subsistence at the rate provided by law
11 for up to 30 8-hour days per year for each department examiner
12 who participates in such an examination. However, if the
13 examination involves or reveals possible fraudulent conduct by
14 the licensee, the licensee shall pay the travel expenses and
15 per diem subsistence provided by law, without limitation, for
16 each participating examiner.
17 (3) Any person having reason to believe that any
18 provision of this act has been violated may file with the
19 department a written complaint setting forth the details of
20 such alleged violation and the department may investigate such
21 complaint.
22 Section 17. Paragraphs (a) and (h) of subsection (1)
23 of section 538.03, Florida Statutes, are amended to read:
24 538.03 Definitions; applicability.--
25 (1) As used in this part, the term:
26 (a) "Secondhand dealer" means any person, corporation,
27 or other business organization or entity which is not a
28 secondary metals recycler subject to part II and which is
29 engaged in the business of purchasing, consigning, or pawning
30 secondhand goods or entering into title loan transactions.
31 However, secondhand dealers are not limited to dealing only in
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1 items defined as secondhand goods in paragraph (g). Except as
2 provided in subsection (2), the term means pawnbrokers,
3 jewelers, precious metals dealers, garage sale operators,
4 secondhand stores, and consignment shops.
5 (h) "Transaction" means any title loan, purchase,
6 consignment, or pawn of secondhand goods by a secondhand
7 dealer.
8 Section 18. Subsection (1) of section 538.16, Florida
9 Statutes, is amended to read:
10 538.16 Secondhand dealers; disposal of property.--
11 (1) Any personal property pawned with a pawnbroker,
12 whether the pawn is a loan of money or a buy-sell agreement or
13 a motor vehicle which is security for a title loan, is subject
14 to sale or disposal if the pawn is a loan of money and the
15 property has not been redeemed or there has been no payment on
16 account made for a period of 90 days, or if the pawn is a
17 buy-sell agreement or if it is a title loan and the property
18 has not been repurchased from the pawnbroker or the title
19 redeemed from the title lender or there has been no payment
20 made on account within 60 days.
21 Section 19. Nothing in this act precludes a county or
22 municipality from adopting ordinances more restrictive than
23 the provisions of this act.
24 Section 20. Effective July 1, 2000, the sum of
25 $500,000 is appropriated for the 2000-2001 fiscal year from
26 the Regulatory Trust Fund of the Department of Banking and
27 Finance to the Department of Banking and Finance to fund eight
28 positions for the purpose of carrying out the provisions of
29 this act.
30 Section 21. Paragraph (i) of subsection (1) of section
31 538.03, Florida Statutes, subsection (5) of section 538.06,
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1 Florida Statutes, and subsections (4) and (5) of section
2 538.15, Florida Statutes, are repealed.
3 Section 22. If any provision of this act or the
4 application thereof to any person or circumstance is held
5 invalid, the invalidity shall not affect other provisions or
6 applications of the act which can be given effect without the
7 invalid provision or application, and to this end the
8 provisions of this act are declared severable.
9 Section 23. Except as otherwise provided in this act,
10 this act shall take effect October 1, 2000.
11
12 *****************************************
13 LEGISLATIVE SUMMARY
14
Creates the "Florida Title Loan Act" and requires
15 licensure by the Department of Banking and Finance to be
in the business as a title loan lender. Provides for
16 eligibility for licensure; for applications; for
suspension or revocation of licenses; for recordkeeping,
17 reporting, and safekeeping of property; for title loan
charges; for the disposal of pledged property; and for
18 disposition of excess proceeds. Prohibits specified acts.
Provides for a right to redeem; for a title loan lender's
19 lien; for criminal penalties; for accessing records from
the Department of Law Enforcement; for subpoenas,
20 enforcement of actions, and rules; and for investigations
and complaints. Provides for more restrictive local
21 ordinances. (See bill for details.)
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