Senate Bill sb1526c1

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    Florida Senate - 2001                   CS for SB's 1526 & 314

    By the Committee on Banking and Insurance; and Senators
    Constantine and Campbell




    311-1564-01

  1                      A bill to be entitled

  2         An act relating to the Money Transmitter's

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

  4         definitions; amending s. 560.111, F.S.;

  5         providing penalties for specified violations of

  6         the deferred presentment act; amending s.

  7         560.114, F.S.; providing additional grounds for

  8         disciplinary action; providing for continuation

  9         of certain administrative proceedings under

10         certain circumstances; amending s. 560.118,

11         F.S.; eliminating the authority to assess

12         examination fees; amending s. 560.119, F.S.;

13         revising the deposit of fees and assessments;

14         amending s. 560.205, F.S.; adding a fee for

15         authorized vendor or branch locations; amending

16         s. 560.206, F.S.; amending the registration

17         period; amending s. 560.207, F.S.; conforming

18         and clarifying the fee for late renewals;

19         amending the renewal application fee; amending

20         s. 560.208, F.S.; requiring notification of

21         vendor or branch locations; requiring a

22         nonrefundable fee and financial statement;

23         amending s. 560.307, F.S.; applying the

24         application fee to check cashers and foreign

25         currency exchanges and adding a fee for

26         authorized vendors or branch locations;

27         requiring notification of vendor or branch

28         locations; amending s. 560.308, F.S.;

29         increasing the registration and renewal fee for

30         each registrant; clarifying the fee to be

31         charged for late renewal; creating part IV, ch.

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  1         560, F.S., consisting of ss. 560.401, 560.402,

  2         560.403, 560.404, 560.405, 560.406, 560.407,

  3         and 560.408, F.S.; providing a short title;

  4         providing definitions; providing registration

  5         requirements for deferred presentment

  6         transactions; providing for filing fees;

  7         providing limitations; specifying requirements

  8         and limitations for engaging in deferred

  9         presentment transactions; providing

10         prohibitions; providing for fees; providing

11         limitations; requiring certain notice;

12         specifying criteria and requirements for

13         deposit and redemption of a drawer's check;

14         providing procedures for recovering damages for

15         worthless checks; requiring maintenance of

16         records for a time certain; providing

17         legislative intent; requiring the Comptroller

18         to submit a report to the President of the

19         Senate and the Speaker of the House of

20         Representatives concerning the effectiveness of

21         this act; providing effective dates.

22

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

24

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

26  section 560.103, Florida Statutes, and subsection (10) of that

27  section is amended, to read:

28         560.103  Definitions.--As used in the code, unless the

29  context otherwise requires:

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

31  consisting of:

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

  2  presentments.

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

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

  5  instrument seller, foreign currency exchanger, check casher,

  6  or funds transmitter, or deferred presentment provider.

  7         Section 2.  Subsection (4) is added to section 560.111,

  8  Florida Statutes, to read:

  9         560.111  Prohibited acts and practices.--

10         (4)  Any person who is not a registered money

11  transmitter and is not otherwise exempt from this code and who

12  violates, or any registered money transmitter who willfully

13  violates, any provision of s. 560.403, s. 560.404, s. 560.405,

14  or s. 560.407 commits a felony of the third degree, punishable

15  as provided in s. 775.082, s. 775.083, or s. 775.084.

16         Section 3.  Paragraphs (w) and (x) are added to

17  subsection (1) of section 560.114, Florida Statutes, and

18  subsection (5) is added to that section, to read:

19         560.114  Disciplinary actions.--

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

21  money transmitter-affiliated party are violations of the code

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

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

24  registration application or the suspension or revocation of

25  any registration previously issued pursuant to the code, or

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

27  department pursuant to the code:

28         (w)  Failure to pay any fee, charge, or fine under the

29  code.

30         (x)  Engaging or advertising engagement in the business

31  of a money transmitter without a registration, unless the

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  1  person is exempted from the registration requirements of the

  2  code.

  3         (5)  If any registration expires while administrative

  4  charges are still pending against the deferred presentment

  5  provider, the proceedings against the registrant shall

  6  continue as if the registration were still in effect.

  7         Section 4.  Subsection (1) of section 560.118, Florida

  8  Statutes, is amended to read:

  9         560.118  Examinations, reports, and internal audits;

10  penalty.--

11         (1)(a)  The department may conduct an examination of a

12  money transmitter or authorized vendor by providing not less

13  than 15 days' advance notice to the money transmitter or

14  authorized vendor. However, if the department suspects that

15  the money transmitter or authorized vendor has violated any

16  provisions of this code or any criminal laws of this state or

17  of the United States or is engaging in an unsafe and unsound

18  practice, the department may, at any time without advance

19  notice, conduct an examination of all affairs, activities,

20  transactions, accounts, business records, and assets of any

21  money transmitter or any money transmitter-affiliated party

22  for the protection of the public. For the purpose of

23  examinations, the department may administer oaths and examine

24  a money transmitter or any of its affiliated parties

25  concerning their operations and business activities and

26  affairs. The department may accept an audit or examination

27  from any appropriate regulatory agency or from an independent

28  third party with respect to the operations of a money

29  transmitter or an authorized vendor. The department may also

30  make a joint or concurrent examination with any state or

31  federal regulatory agency. The department may furnish a copy

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  1  of all examinations made of such money transmitter or

  2  authorized vendor to the money transmitter and any appropriate

  3  regulatory agency provided that such agency agrees to abide by

  4  the confidentiality provisions as set forth in chapter 119.

  5         (b)  Persons subject to this chapter who are examined

  6  shall make available to the department or its examiners the

  7  accounts, records, documents, files, information, assets, and

  8  matters which are in their immediate possession or control and

  9  which relate to the subject of the examination. Those

10  accounts, records, documents, files, information, assets, and

11  matters not in their immediate possession shall be made

12  available to the department or the department's examiners

13  within 10 days after actual notice is served on such persons.

14         (c)  The audit of a money transmitter required under

15  this section may be performed by an independent third party

16  that has been approved by the department or by a certified

17  public accountant authorized to do business in the United

18  States. The examination of a money transmitter or authorized

19  vendor required under this section may be performed by an

20  independent third party that has been approved by the

21  department or by a certified public accountant authorized to

22  do business in the United States. The cost of such an

23  independent examination or audit shall be directly borne by

24  the money transmitter or authorized vendor.

25         (d)  The department may recover the costs of a regular

26  examination and supervision of a money transmitter or

27  authorized vendor; however, the department may not recover the

28  costs of more than one examination in any 12-month period

29  unless the department has determined that the money

30  transmitter or authorized vendor is operating in an unsafe or

31  unsound or unlawful manner.

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  1         (e)  The department may, by rule, set a maximum per-day

  2  examination cost for a regular examination. Such per-day cost

  3  may be less than that required to fully compensate the

  4  department for costs associated with the examination. For the

  5  purposes of this section, "costs" means the salary and travel

  6  expenses directly attributable to the field staff examining

  7  the money transmitter or authorized vendor, and the travel

  8  expenses of any supervisory staff required as a result of

  9  examination findings. Reimbursement for such costs incurred

10  under this subsection must be postmarked no later than 30 days

11  after the date of receipt of a notice stating that such costs

12  are due. The department may levy a late payment penalty of up

13  to $100 per day or part thereof that a payment is overdue,

14  unless the late payment penalty is excused for good cause. In

15  excusing any such late payment penalty, the department may

16  consider the prior payment history of the money transmitter or

17  authorized vendor.

18         Section 5.  Section 560.119, Florida Statutes, is

19  amended to read:

20         560.119  Deposit of fees and assessments.--The

21  application fees, registration renewal fees, examination fees,

22  late payment penalties, civil penalties, administrative fines,

23  and other fees or penalties provided for in the code shall, in

24  all cases, be paid directly to the department, which shall

25  deposit such proceeds into the Financial Institutions'

26  Regulatory Trust Fund. Each year, the Legislature shall

27  appropriate from the trust fund to the department sufficient

28  moneys to pay the department's costs for administration of the

29  code. The Financial Institutions' Regulatory Trust Fund is

30  subject to the service charge imposed pursuant to chapter 215.

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  1         Section 6.  Subsection (2) of section 560.205, Florida

  2  Statutes, is amended to read:

  3         560.205  Qualifications of applicant for registration;

  4  contents.--

  5         (2)  Each application for registration must be

  6  submitted under oath to the department on such forms as the

  7  department prescribes by rule and must be accompanied by a

  8  nonrefundable application investigation fee. Such fee may not

  9  exceed $500 for each payment instrument seller or funds

10  transmitter and $50 for each authorized vendor or location

11  operating within this state and may be waived by the

12  department for just cause. The application forms shall set

13  forth such information as the department reasonably requires,

14  including, but not limited to:

15         (a)  The name and address of the applicant, including

16  any fictitious or trade names used by the applicant in the

17  conduct of its business.

18         (b)  The history of the applicant's material

19  litigation, criminal convictions, pleas of nolo contendere,

20  and cases of adjudication withheld.

21         (c)  A description of the activities conducted by the

22  applicant, the applicant's history of operations, and the

23  business activities in which the applicant seeks to engage in

24  this state.

25         (d)  A list identifying the applicant's proposed

26  authorized vendors in this state, including the location or

27  locations in this state at which the applicant and its

28  authorized vendors propose to conduct registered activities.

29         (e)  A sample authorized vendor contract, if

30  applicable.

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  1         (f)  A sample form of payment instrument, if

  2  applicable.

  3         (g)  The name and address of the clearing financial

  4  institution or financial institutions through which the

  5  applicant's payment instruments will be drawn or through which

  6  such payment instruments will be payable.

  7         (h)  Documents revealing that the net worth and bonding

  8  requirements specified in s. 560.209 have been or will be

  9  fulfilled.

10         Section 7.  Section 560.206, Florida Statutes, is

11  amended to read:

12         560.206  Investigation of applicants.--Upon the filing

13  of a properly completed application, accompanied by the

14  nonrefundable application fee and other required documents,

15  the department shall investigate to ascertain whether the

16  qualifications and requirements prescribed by this part have

17  been met. If the department finds that the applicant meets

18  such qualifications and requirements, the department shall

19  issue the applicant a registration to engage in the business

20  of selling payment instruments and transmitting funds in this

21  state. Any registration issued under this part shall remain

22  effective through April 30 of the second year following the

23  date of issuance of the registration, not to exceed 24 months,

24  unless during such period the registration is in effect

25  through April 30 next following its date of issuance unless

26  otherwise specified by the department or earlier surrendered,

27  suspended, or revoked.

28         Section 8.  Section 560.207, Florida Statutes, is

29  amended to read:

30         560.207  Renewal of registration; registration fee.--

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  1         (1)  Registration may be renewed for a 24-month period

  2  or the remainder of any such period without proration

  3  following the date of its expiration, upon the filing with the

  4  department of an application and other statements and

  5  documents as may reasonably be required of registrants by the

  6  department. However, the registrant must remain qualified for

  7  such registration under the provisions of this part.

  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 before the expiration date

13  of April 30 March 31. If the renewal application is filed

14  prior to the expiration date of an existing registration, no

15  late investigation fee shall be paid in connection with such

16  renewal application. If the renewal application is filed

17  within 60 calendar days after the expiration date of an

18  existing registration, then, in addition to the $1,000 renewal

19  fee, the renewal application shall be accompanied by a

20  nonrefundable late fee of $500 investigation fee pursuant to

21  s. 560.205(2). If the registrant has not filed a renewal

22  application within 60 calendar days after the expiration date

23  of an existing registration, a new application shall be filed

24  with the department pursuant to s. 560.205.

25         (3)  Every registration renewal application shall also

26  include a 2-year registration renewal fee of $50 for each

27  authorized vendor or location operating within this state or,

28  at the option of the registrant, a total 2-year renewal fee of

29  $20,000 $5,000 may be paid to renew the registration of

30  register all such locations currently registered at the time

31  of renewal operating within this state.

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  1         Section 9.  Section 560.208, Florida Statutes, is

  2  amended to read:

  3         560.208  Conduct of business.--

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

  5  more locations within this state through branches or by means

  6  of authorized vendors, as designated by the registrant.

  7         (2)  Within 60 days after the date a registrant either

  8  opens a location within this state or authorizes an authorized

  9  vendor to operate on the registrant's behalf within this

10  state, the registrant shall notify the department on a form

11  prescribed by the department by rule. The notification shall

12  be accompanied by a nonrefundable $50 fee for each authorized

13  vendor or location. Each notification shall also be

14  accompanied by a financial statement demonstrating compliance

15  with s. 560.209(1), unless compliance has been demonstrated by

16  a financial statement filed with the registrant's quarterly

17  report in compliance with s. 560.118(2). The financial

18  statement must be dated within 90 days of the date of

19  designation of the authorized vendor or location. This

20  subsection shall not apply to any authorized vendor or

21  location that has been designated by the registrant before

22  October 1, 2001.

23         (3)  Within 10 days after the date a registrant closes

24  a location within this state or withdraws authorization for an

25  authorized vendor to operate on the registrant's behalf within

26  this state, the registrant shall notify the department on a

27  form prescribed by the department by rule.

28         Section 10.  Section 560.307, Florida Statutes, is

29  amended to read:

30         560.307  Fees.--

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  1         (1)  The application shall be filed together with a

  2  nonrefundable application investigation fee of that shall be

  3  established by department rule; however, the investigation fee

  4  may not exceed $250 for each check casher or foreign currency

  5  exchanger and $50 for each authorized vendor or location

  6  operating within this state. Such investigation fee shall

  7  satisfy the fee requirement for the first year of registration

  8  or the remaining part thereof.

  9         (2)  Within 60 days after the date a registrant either

10  opens a location within this state or authorizes an authorized

11  vendor to operate on the registrant's behalf within this

12  state, the registrant shall notify the department on a form

13  prescribed by the department by rule. The notification shall

14  be accompanied by a nonrefundable $50 fee for each authorized

15  vendor or location. This subsection shall not apply to any

16  authorized vendor or location that has been designated by the

17  registrant before October 1, 2001.

18         (3)  Within 10 days after the date a registrant closes

19  a location within this state or withdraws authorization for an

20  authorized vendor to operate on the registrant's behalf within

21  this state, the registrant shall notify the department on a

22  form prescribed by the department by rule.

23         Section 11.  Section 560.308, Florida Statutes, is

24  amended to read:

25         560.308  Registration terms; renewal; renewal fees.--

26         (1)  Registration pursuant to this part shall remain

27  effective through the remainder of the second calendar year

28  following its date of issuance unless during such calendar

29  year the registration is surrendered, suspended, or revoked.

30         (2)  The department shall renew registration upon

31  receipt of a completed renewal form and payment of a

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  1  nonrefundable renewal fee, as provided by rule, not to exceed

  2  $500. The completed renewal form and payment of the renewal

  3  fee shall occur on or after June 1 of the year in which the

  4  existing registration expires.

  5         (3)  In addition to the renewal fee required by

  6  subsection (2), each registrant must register and pay a 2-year

  7  $50 registration renewal fee of $50 for each authorized vendor

  8  or location, including any authorized vendors, operating

  9  within this state or, at the option of the registrant, a total

10  2-year renewal fee of $20,000 $5,000 may be paid to renew the

11  registration of register all such operating locations

12  currently registered at the time of renewal within this state.

13         (4)  Registration that is not renewed on or before the

14  expiration date of the registration period automatically

15  expires. A renewal application and fee, and a late fee of $250

16  an investigation fee pursuant to s. 560.307, must be filed

17  within 60 calendar days after the expiration of an existing

18  registration in order for the registration to before

19  registration may be reinstated. If the registrant has not

20  filed a renewal application within 60 days after the

21  expiration date of an existing registration, a new application

22  must be filed with the department pursuant to s. 560.307.

23         Section 12.  Part IV of chapter 560, Florida Statutes,

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

25  560.405, 560.406, 560.407, and 560.408, Florida Statutes, is

26  created to read:

27                             PART IV

28                       DEFERRED PRESENTMENT

29         560.401  Short title.--This part may be cited as the

30  "Deferred Presentment Act."

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  1         560.402  Definitions.--In addition to the definitions

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

  3  otherwise clearly indicated by the context, for purposes of

  4  this part:

  5         (1)  "Affiliate" means a person who directly or

  6  indirectly through one or more intermediaries controls or is

  7  controlled by, or is under common control with, a deferred

  8  presentment provider.

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

10  day during which a deferred presentment provider customarily

11  conducts business, not to exceed 15 consecutive hours during

12  that day.

13         (3)  "Days" means calendar days.

14         (4)  "Deferment period" means the number of days a

15  deferred presentment provider agrees to defer depositing or

16  presenting a payment instrument.

17         (5)  "Deferred presentment provider" means a person who

18  engages in a deferred presentment transaction and is

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

20  a declaration of intent with the department.

21         (6)  "Deferred presentment transaction" means providing

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

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

24  time prior to presentment, deposit, or redemption.

25         (7)  "Drawer" means any person who writes a personal

26  check and upon whose account the check is drawn.

27         (8)  "Rollover" means the termination or extension of

28  an existing deferred presentment agreement by the payment of

29  any additional fee and the continued holding of the check, or

30  the substitution of a new check drawn by the drawer pursuant

31  to a new deferred presentment agreement.

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  1         (9)  "Fee" means the fee authorized for the deferral of

  2  the presentation of a check pursuant to this part.

  3         (10)  "Termination of an existing deferred presentment

  4  agreement" means that the check that is the basis for an

  5  agreement is redeemed by the drawer by payment in full in

  6  cash, or is deposited and the deferred presentment provider

  7  has evidence that such check has cleared.  A verification of

  8  sufficient funds in the drawer's account by the deferred

  9  presentment provider shall not be sufficient evidence to deem

10  the existing deferred deposit transaction to be terminated.

11         (11)  "Extension of an existing deferred presentment

12  agreement" means that a deferred presentment transaction is

13  continued by the drawer paying any additional fees and the

14  deferred presentment provider continues to hold the check for

15  another period of time prior to deposit, presentment, or

16  redemption.

17         560.403  Requirements of registration; declaration of

18  intent.--

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

20  transaction unless the person is registered under the

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

22  department a declaration of intent to engage in deferred

23  presentment transactions. The declaration of intent shall be

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

25  rule.  The declaration of intent shall be filed together with

26  a nonrefundable filing fee of $1,000. Any person who is

27  registered under part II or part III on the effective date of

28  this act and intends to engage in deferred presentment

29  transactions shall have 60 days after the effective date of

30  this act to file a declaration of intent.

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  1         (2)  A registrant under this part shall renew his or

  2  her intent to engage in the business of deferred presentment

  3  transactions or to act as a deferred presentment provider upon

  4  renewing his or her registration under part II or part III and

  5  shall do so by indicating his or her intent on the renewal

  6  form and by submitting a nonrefundable deferred presentment

  7  provider renewal fee of $1,000, in addition to any fees

  8  required for renewal of registration under part II or part

  9  III.

10         (3)  A registrant under this part who fails to timely

11  renew his or her intent to engage in the business of deferred

12  presentment transactions or to act as a deferred presentment

13  provider shall immediately cease to engage in the business of

14  deferred presentment transactions or to act as a deferred

15  presentment provider.

16         (4)  The license of a registrant under this part who

17  fails to timely renew his or her intent to engage in the

18  business of deferred presentment transactions or to act as a

19  deferred presentment provider on or before the expiration date

20  of the registration period automatically expires. A renewal

21  declaration of intent and fee, and a late fee of $500, must be

22  filed within 60 calendar days after the expiration of an

23  existing registration in order for the declaration of intent

24  to be reinstated. If the registrant has not filed a renewal

25  declaration of intent within 60 days after the expiration date

26  of an existing registration, a new declaration must be filed

27  with the department.

28         (5)  No person shall be exempt from registration and

29  declaration if such person engages in deferred presentment

30  transactions, regardless of whether such person is currently

31  exempt from registration under any provision of this code.

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  1         560.104  Requirements for deferred presentment

  2  transactions.--

  3         (1)  Every deferred presentment transaction shall be

  4  documented in a written agreement signed by both the deferred

  5  presentment provider and the drawer.

  6         (2)  The deferred presentment transaction agreement

  7  shall be executed on the day the deferred presentment provider

  8  furnishes currency or a payment instrument to the drawer.

  9         (3)  Each written agreement shall contain:

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

11  number of the deferred presentment provider and the name and

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

13  deferred presentment provider.

14         (b)  The date the deferred presentment transaction was

15  made.

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

17         (d)  The length of deferral period.

18         (e)  The date the deferred presentment transaction is

19  due.

20         (f)  The address and telephone number of the

21  department.

22         (g)  A clear description of the drawer's payment

23  obligations under the deferred presentment transaction.

24         (4)  Every deferred presentment provider shall furnish

25  to the drawer a copy of the deferred presentment transaction

26  agreement.

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

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

29  by this part.

30         (6)  No deferred presentment provider or its affiliate

31  shall charge fees in excess of 10 percent of the currency or

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  1  payment provided. However, a verification fee may be charged

  2  in accordance with s. 560.309(4) and the rules adopted

  3  pursuant to the code. The 10-percent fee may not be applied to

  4  the verification fee. A deferred presentment provider may

  5  charge only those fees specifically authorized in this

  6  section.

  7         (7)  The fees authorized by this section may not be

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

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

10  term in excess of 31 days or less than 7 days.

11         (9)  No deferred presentment provider shall require a

12  person to provide any additional security for the deferred

13  presentment transaction or any extension or require a person

14  to provide any additional guaranty from another person.

15         (10)  A deferred presentment provider shall not include

16  any of the following provisions in any written agreement:

17         (a)  A hold harmless clause;

18         (b)  A confession of judgment clause;

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

20  other compensation for services;

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

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

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

24         (11)  Each deferred presentment provider shall

25  immediately provide the drawer with the full amount of any

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

27  section.

28         (12)  The deferred presentment agreement and drawer's

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

30  be calculated from this date. No deferred presentment provider

31

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

  2  agreement or check held by the deferred presentment provider.

  3         (13)  For each deferred presentment transaction, the

  4  deferred presentment provider must comply with the disclosure

  5  requirements of 12 C.F.R., Part 226, the federal

  6  Truth-in-Lending Act, and Regulation Z of the Board of

  7  Governors of the Federal Reserve Board. A copy of the

  8  disclosure must be provided to the drawer at the time the

  9  deferred presentment transaction is initiated.

10         (14)  No deferred presentment provider or its affiliate

11  may accept or hold an undated check or a check dated on a date

12  other than the date on which the deferred presentment provider

13  agreed to hold the check and signed the deferred presentment

14  transaction agreement.

15         (15)  Every deferred presentment provider shall hold

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

17  drawer chooses to redeem the check before the agreed

18  presentment date.

19         (16)  Proceeds in a deferred presentment transaction

20  may be made to the drawer in the form of the deferred

21  presentment provider's payment instrument if the deferred

22  presentment provider is registered under part II; however, no

23  additional fee may be charged by a deferred presentment

24  provider or its affiliate for issuing or cashing the deferred

25  presentment provider's payment instrument.

26         (17)  No deferred presentment provider may require the

27  drawer to accept its payment instrument in lieu of currency.

28         (18)  No deferred presentment provider or its affiliate

29  may engage in the rollover of any deferred presentment

30  agreement. A deferred presentment provider shall not redeem,

31  extend, or otherwise consolidate a deferred presentment

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  1  agreement with the proceeds of another deferred presentment

  2  transaction made by the same or an affiliated deferred

  3  presentment provider.

  4         (19)  A deferred presentment provider may not enter

  5  into a deferred presentment transaction with a person who has

  6  an outstanding deferred presentment transaction with that

  7  provider or with any other deferred presentment provider, or

  8  with a person whose previous deferred presentment transaction

  9  with that provider or with any other provider has been

10  terminated for less than 24 hours. The deferred presentment

11  provider must verify such information as follows:

12         (a)  The deferred presentment provider shall maintain a

13  common database and shall verify whether that deferred

14  presentment provider or an affiliate has an outstanding

15  deferred presentment transaction with a particular person or

16  has terminated a transaction with that person within the

17  previous 24 hours.

18         (b)  The deferred presentment provider shall access the

19  department's database established pursuant to subsection (23)

20  and shall verify whether any other deferred presentment

21  provider has an outstanding deferred presentment transaction

22  with a particular person or has terminated a transaction with

23  that person within the previous 24 hours. Prior to the time

24  that the department has implemented such a database, the

25  deferred presentment provider may rely upon the written

26  verification of the drawer as provided in subsection (20).

27         (20)  A deferred presentment provider shall provide the

28  following notice in a prominent place on each deferred

29  presentment agreement in at least 14-point type in

30  substantially the following form and must obtain the signature

31  of the drawer where indicated:

                                  19

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  1

  2                              NOTICE

  3         1.  STATE LAW PROHIBITS YOU FROM HAVING MORE

  4         THAN ONE DEFERRED PRESENTMENT AGREEMENT AT ANY

  5         ONE TIME. STATE LAW ALSO PROHIBITS YOU FROM

  6         ENTERING INTO A DEFERRED PRESENTMENT AGREEMENT

  7         WITHIN 24 HOURS OF TERMINATING ANY PREVIOUS

  8         DEFERRED PRESENTMENT AGREEMENT. FAILURE TO OBEY

  9         THIS LAW COULD CREATE SEVERE FINANCIAL HARDSHIP

10         FOR YOU AND YOUR FAMILY.

11

12         YOU MUST SIGN THE FOLLOWING STATEMENT:

13         I DO NOT HAVE AN OUTSTANDING DEFERRED

14         PRESENTMENT AGREEMENT WITH ANY DEFERRED

15         PRESENTMENT PROVIDER AT THIS TIME. I HAVE NOT

16         TERMINATED A DEFERRED PRESENTMENT AGREEMENT

17         WITHIN THE PAST 24 HOURS.

18         (Signature of Drawer)

19

20         2.  YOU CANNOT BE PROSECUTED IN CRIMINAL COURT

21         FOR A CHECK WRITTEN UNDER THIS AGREEMENT, BUT

22         ALL LEGALLY AVAILABLE CIVIL MEANS TO ENFORCE

23         THE DEBT MAY BE PURSUED AGAINST YOU.

24

25         3.  STATE LAW PROHIBITS A DEFERRED PRESENTMENT

26         PROVIDER (THIS BUSINESS) FROM ALLOWING YOU TO

27         "ROLL OVER" YOUR DEFERRED PRESENTMENT

28         TRANSACTION. THIS MEANS THAT YOU CANNOT BE

29         ASKED OR REQUIRED TO PAY AN ADDITIONAL FEE IN

30         ORDER TO FURTHER DELAY THE DEPOSIT OR

31         PRESENTMENT OF YOUR CHECK FOR PAYMENT. IF YOU

                                  20

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  1         DO NOT HAVE SUFFICIENT FUNDS TO COVER THE CHECK

  2         OR TO PAY IN FULL THE AMOUNT OWING AT THE END

  3         OF THE TERM OF THIS AGREEMENT, YOU WILL BE

  4         PROVIDED A GRACE PERIOD EXTENDING THE TERM OF

  5         THE AGREEMENT FOR AN ADDITIONAL 60 DAYS AFTER

  6         THE TERMINATION DATE, WITHOUT ANY ADDITIONAL

  7         CHARGE. THE DEFERRED PRESENTMENT PROVIDER MAY

  8         REQUIRE THAT YOU, AS A CONDITION OF OBTAINING

  9         THE DEFERRAL, ATTEND A CONSUMER CREDIT

10         COUNSELING SERVICE AND COMPLY WITH A REPAYMENT

11         PLAN APPROVED BY THAT SERVICE.

12

13         (21)  The deferred presentment provider may not deposit

14  or present the drawer's check if the drawer informs the

15  provider that there are not sufficient funds to cover the

16  check. No additional fees or penalties may be imposed on the

17  drawer by virtue of any misrepresentation made by the drawer

18  as to the sufficiency of funds in the drawer's account. In no

19  event shall any additional fees be added to the amounts due

20  and owing to the deferred presentment provider.

21         (22)(a)  If, at the end of the deferment period, the

22  drawer does not redeem or pay in full in cash the amount due

23  and owing the deferred presentment provider, or if there are

24  insufficient funds available in the drawer's account, the

25  deferred presentment provider shall provide a grace period

26  extending the term of the agreement for an additional 60 days

27  after the termination date, without any additional charge. The

28  provider may require, as a condition of providing this grace

29  period, that the drawer make an appointment with an approved

30  consumer credit counseling service within 7 days after the end

31  of the deferment period, complete the counseling within 60

                                  21

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  1  days after the end of the deferment period, and comply with

  2  any repayment plan approved by the counseling service. The

  3  deferred presentment provider may not deposit or present the

  4  drawer's check for payment unless:

  5         1.  The drawer fails to provide notice to the provider

  6  within 7 days after the end of the deferment period that the

  7  appointment has been made;

  8         2.  The provider is informed by the consumer credit

  9  counseling service designated by the drawer that the drawer

10  has not made the appointment or has not completed the

11  counseling service within 60 days; or

12         3.  The drawer does not comply with the repayment plan

13  approved by the credit counseling service.

14         (b)  The deferred presentment provider shall provide

15  the drawer with a list of approved consumer credit counseling

16  services prepared by the department. The department shall list

17  those consumer credit counseling services that are nonprofit,

18  affiliated with the National Foundation for Consumer Credit,

19  provide debt management counseling services free of charge or

20  on a sliding-fee scale based on income, and agree to provide

21  services in accordance with this section.

22         (c)  The deferred presentment provider shall provide

23  the following notice in at least 14-point type in

24  substantially the following form to a drawer who does not

25  redeem or pay in full in cash the amount due and owing at the

26  end of the deferment period:

27

28         AS A CONDITION OF OBTAINING A GRACE PERIOD

29         EXTENDING THE TERM OF YOUR DEFERRED PRESENTMENT

30         AGREEMENT FOR AN ADDITIONAL 60 DAYS, UNTIL

31         [date], WITHOUT ANY ADDITIONAL FEES, YOU MUST

                                  22

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  1         ATTEND AN APPROVED CONSUMER CREDIT COUNSELING

  2         SERVICE AND COMPLY WITH A REPAYMENT PLAN

  3         APPROVED BY THE SERVICE. IF YOU ELECT THIS

  4         OPTION, YOU MUST NOTIFY US WITHIN SEVEN (7)

  5         DAYS, BY [DATE], THAT YOU HAVE MADE AN

  6         APPOINTMENT WITH AN APPROVED CONSUMER CREDIT

  7         COUNSELING SERVICE. YOU MUST ALSO NOTIFY US

  8         WITHIN SIXTY (60) DAYS, BY [DATE], THAT YOU

  9         HAVE COMPLETED THE CONSUMER CREDIT COUNSELING

10         SERVICE. IF YOU FAIL TO PROVIDE EITHER THE

11         7-DAY OR 60-DAY NOTICE, OR IF THE CONSUMER

12         CREDIT COUNSELING SERVICE YOU HAVE CHOSEN DOES

13         NOT VERIFY THAT YOU HAVE MADE THE APPOINTMENT

14         OR COMPLETED THE COUNSELING WITHIN THE TIME

15         REQUIRED, WE MAY DEPOSIT OR PRESENT YOUR CHECK

16         FOR PAYMENT AND PURSUE ALL LEGALLY AVAILABLE

17         CIVIL MEANS TO ENFORCE THE DEBT.

18

19         (d)  If a drawer completes an approved consumer credit

20  counseling service, the deferred presentment provider shall

21  pay one-half of the drawer's fee for the deferred presentment

22  agreement to the consumer credit counseling service.

23         (23)  On or before March 1, 2002, the department shall

24  implement a common database with real-time access through a

25  toll-free connection for deferred presentment providers, as

26  provided in this subsection. The database must be accessible

27  to the department and the deferred presentment providers to

28  verify whether any deferred presentment transactions are

29  outstanding for a particular person. Deferred presentment

30  providers shall submit such data on each deferred presentment

31  transaction in such format as required by the department,

                                  23

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  1  including the drawer's name, address, driver's license number,

  2  amount of the transaction, date of transaction, the date that

  3  the transaction is closed, and such additional information as

  4  is required by the department. The department may impose a fee

  5  not to exceed $1 per transaction for data required to be

  6  submitted by a deferred presentment provider. A deferred

  7  presentment provider may rely on the information contained in

  8  the database as accurate and is not liable or subject to

  9  penalty as a result of inaccurate information contained in the

10  database. The department may adopt rules to administer and

11  enforce the provisions of this section and to assure that the

12  database is used by deferred presentment providers in

13  accordance with this section.

14         560.405  Deposit; redemption.--

15         (1)  The deferred presentment provider or its affiliate

16  shall not present the drawer's check prior to the agreed-upon

17  date of presentment, as reflected in the deferred presentment

18  transaction agreement.

19         (2)  Before a deferred presentment provider presents

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

21  actual name under which the deferred presentment provider is

22  doing business.

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

24  in lieu of presentment, a deferred presentment provider may

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

26  deferred presentment provider in the amount of the face amount

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

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

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

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

31  the drawer's check has been redeemed.

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

  2  check prior to the agreed-upon date; however, the drawer may

  3  choose to redeem the check before the agreed-upon presentment

  4  date.

  5         560.406  Worthless checks.--If a check is returned to a

  6  deferred presentment provider from a payor financial

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

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

  9  collection pursuant to s. 68.065, except a deferred

10  presentment provider shall not be entitled to collect treble

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

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

13  references to treble damages and must clearly state that the

14  deferred presentment provider is not entitled to recover such

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

16  individual who issues a personal check to a deferred

17  presentment provider under a deferred presentment agreement is

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

19  deferred presentment provider from a payor financial

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

21  stop-payment order, the deferred presentment provider may

22  pursue all legally available civil remedies to collect the

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

24  charges imposed on the deferred presentment provider by any

25  financial institution. In its collection practices, a deferred

26  presentment provider shall comply with the prohibitions

27  against harassment or abuse, false or misleading

28  representations, and unfair practices which are contained in

29  ss. 806, 807, and 808 of the Fair Debt Collections Practices

30  Act, 15 U.S.C. ss. 1692d, 1692e, 1692f. A violation of this

31  act is a deceptive and unfair trade practice and constitutes a

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  1  violation of the Deceptive and Unfair Trade Practices Act,

  2  part II, of chapter 501. In addition, a deferred presentment

  3  provider shall comply with the applicable provisions of part

  4  VI of chapter 559, the Consumer Collection Practices Act,

  5  including, but not limited to, the provisions of s. 559.77.

  6         560.407  Records.--

  7         (1)  Each registrant under this part must maintain all

  8  books, accounts, records, and documents necessary to determine

  9  the registrant's compliance with the provisions of the code.

10  Such books, accounts, records, and documents shall be retained

11  for a period of at least 3 years unless a longer period is

12  expressly required by the department, the laws of this state,

13  or any federal law.

14         (2)  The records required to be maintained by the code

15  or any rule adopted pursuant thereto may be maintained by the

16  registrant at any location within this state, provided that

17  the registrant notifies the department, in writing, of the

18  location of the records in its application or otherwise.

19         (3)  A registrant shall make records available to the

20  department for examination and investigation in this state, as

21  permitted by the code, within 7 days after receipt of a

22  written request.

23         (4)  The original of any record of a registrant

24  includes the data or other information comprising a record

25  stored or transmitted in or by means of any electronic,

26  computerized, mechanized, or other information storage or

27  retrieval or transmission system or device that can upon

28  request generate, regenerate, or transmit the precise data or

29  other information comprising the record.  An original also

30  includes the visible data or other information so generated,

31

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  1  regenerated, or transmitted if it is legible or can be made

  2  legible by enlargement or other process.

  3         560.408  Legislative intent; report.--

  4         (1)  It is the intent of the Legislature to provide for

  5  the regulation of deferred presentment transactions. It is

  6  further the intent of the Legislature to prevent fraud, abuse,

  7  and other unlawful activity associated with deferred

  8  presentment transactions in part by:

  9         (a)  Providing for sufficient regulatory authority and

10  resources to monitor deferred presentment transactions.

11         (b)  Preventing rollovers.

12         (c)  Regulating the allowable fees charged in

13  connection with a deferred presentment transaction.

14         (2)  The Comptroller shall submit a report to the

15  President of the Senate and the Speaker of the House of

16  Representatives on January 1, 2003, and January 1, 2004,

17  containing findings and conclusions concerning the

18  effectiveness of this act in preventing fraud, abuse, and

19  other unlawful activity associated with deferred presentment

20  transactions. The report may contain legislative

21  recommendations addressing the prevention of fraud, abuse, and

22  other unlawful activity associated with deferred presentment

23  transactions. Prior to filing the report, the Comptroller

24  shall consult with the Attorney General for the purpose of

25  including any recommendations or concerns expressed by the

26  Attorney General.

27         Section 13.  Except as otherwise provided in this act,

28  this act shall take effect October 1, 2001.

29

30

31

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  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                         SB's 1526 & 314

  3

  4  The committee substitute replaces the provisions of SB 1526,
    which was a short form bill that provided legislative intent
  5  to regulate payday advance lenders. The committee substitute
    creates the "Deferred Presentment Act" as part IV of chapter
  6  560, F.S., to regulate "deferred presentment transactions" in
    which a person provides cash or currency in exchange for
  7  another person's check and agrees to hold that person's check
    for a period of time prior to depositing or redeeming the
  8  check. It provides for regulation of this industry by the
    Department of Banking and Finance, and further provides:
  9
    *     Registration requirements for deferred presentment
10        providers.

11  *     A $500 limit on the face amount of a check taken for
          deferred presentment, exclusive of allowable fees.
12
    *     A maximum fee of 10 percent of the amount paid to the
13        consumer ("drawer"). In addition, a $5 verification may
          be charged.
14
    *     Prohibits a deferred presentment agreement from having a
15        term in excess of 31 days or less than 7 days.

16  *     Prohibits "roll-overs" which extend a deferred
          presentment agreement.
17
    *     Prohibits a provider from entering into an agreement if
18        an individual has an outstanding agreement with any
          provider, or a previous transaction has been closed for
19        less than 24 hours. The provider must access a
          centralized database that must be implemented by the
20        department. Until such time as this database is
          implemented, the provider must obtain a signed statement
21        from the individual that he or she does not have an
          outstanding agreement and have not terminated an
22        agreement within the past 24 hours.

23  *     Requires a 60-day grace period extension, without any
          additional charge, if an individual is unable to pay the
24        amount due at the end of the deferment period, which may
          be conditioned on requiring the individual to attend a
25        consumer credit counseling service and comply with a
          payment plan approved by the service.
26
    *     Required provisions for deferred presentment agreements,
27        including disclosures that must be made to the consumer.

28  *     A one-check limitation which any one consumer may have
          outstanding to one provider at any one time.
29
    *     The ability of the consumer to redeem their check prior
30        to the presentation date.

31  *     The ability of the provider to seek collection of a
          returned check pursuant to s. 68.065, F.S. (but without
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  1        the provision for treble damages).

  2  The committee substitute also amends ch. 560, F.S., the Money
    Transmitters' Code, to make the following changes:
  3
    *     Deletes examination fees and uses registration fees to
  4        fund the regulatory program;

  5  *     Adds an initial $50 application fee for each vendor or
          branch of a Part II (payment instruments and funds
  6        transmission) or Part III (check cashing and foreign
          currency) registrant;
  7
    *     Authorizes the department to assess a registrant a $500
  8        late filing fee if the renewal application is submitted
          within 60 days after the expiration of the license;
  9
    *     Increases the cap on renewal fees for registrants with
10        multiple locations from $5,000 to $20,000; and

11  *     Requires registrants to notify the department of any
          newly established locations within 60 days.
12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

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