HB 1245

1	A bill to be entitled
2	An act relating to credit counseling services; creating
3	pt. IV, ch. 817, F.S.; providing definitions; prohibiting
4	certain persons from accepting certain fees or costs from
5	debtors under certain circumstances; providing exceptions;
6	providing disclosure and financial reporting requirements
7	for debt management or credit counseling services;
8	providing disbursement of funds requirements; providing
9	civil penalties; providing for awards of attorney's fees
10	and costs; providing for deposit of certain funds into the
11	General Revenue Fund; providing an effective date.
12
13	Be It Enacted by the Legislature of the State of Florida:
14
15	Section 1.  Part IV of chapter 817, Florida Statutes,
16	consisting of sections 817.801, 817.802, 817.803, 817.804,
17	817.805, and 817.806, Florida Statutes, is created to read:
18	PART IV
19	CREDIT COUNSELING SERVICES
20	817.801  Definitions.--
21	(1)  "Credit counseling services" means confidential money
22	management, debt reduction, and financial educational services.
23	(2)  "Debt management services" means services provided to
24	a debtor by a credit counseling organization for a fee to:
25	(a)  Effect the adjustment, compromise, or discharge of any
26	unsecured account, note, or other indebtedness of the debtor; or
27	(b)  Receive from the debtor and disburse to a creditor any
28	money or other thing of value.
29	(3)  "Person" means any individual, corporation,
30	partnership, trust, association, or other legal entity.
31	(4)  "Credit counseling agency" means a not-for-profit
32	organization providing credit counseling services.
33	817.802  Unlawful fees and costs.--It is unlawful for any
34	person, while engaging in debt management and credit counseling
35	services, to impose upon or accept from a debtor who resides in
36	this state, directly or indirectly, any charge, fee,
37	contribution, or combination thereof in an amount in excess of
38	$50 for an initial set up or initial consultation or $120 per
39	year for additional consultations. It is also unlawful for any
40	person to impose upon or accept from a debtor who resides in
41	this state, directly or indirectly, any additional charge, fee,
42	contribution, or combination thereof in an amount in excess of
43	7.5 percent of the amount paid monthly by such debtor to such
44	person or $25, whichever is greater, for distribution to
45	creditors of such debtor, provided no provision of this part
46	prohibits any person, while engaging in debt management and
47	credit counseling services, from imposing upon and receiving
48	from a debtor who resides in this state a reasonable and
49	separate charge or fee for insufficient funds transactions.
50	817.803  Exceptions.--Nothing in this part applies to any
51	debt management and credit counseling services provided in the
52	practice of law in this state. Nothing in this part applies to
53	any person or entity who incidentally engages in debt adjustment
54	to adjust the indebtedness owed to such person or entity.
55	Nothing in this part applies to the following entities or their
56	subsidiaries: the Federal National Mortgage Association; the
57	Federal Home Loan Mortgage Corporation; or a bank, bank holding
58	company, trust company, savings and loan association, credit
59	union, credit card bank, or savings bank that is regulated and
60	supervised by the Office of the Comptroller of the Currency, the
61	Office of Thrift Supervision, the Federal Reserve, the Federal
62	Deposit Insurance Corporation, the National Credit Union
63	Administration, or the Department of Financial Services.
64	817.804  Requirements; disclosure and financial
65	reporting.--     (1)  Any person engaged in debt management or
66	credit counseling services for debtors residing in this state
67	shall:
68	(a)  Obtain from a certified public accountant an annual
69	audit of all accounts of such person in which the funds of
70	debtors are deposited and from which payments are made to
71	creditors on behalf of debtors. A copy of the summary results of
72	such annual audit shall be made available upon written request
73	to any party requesting a copy for a charge not to exceed the
74	cost of the reproduction of the annual audit.
75	(b)  Obtain and maintain at all times insurance coverage
76	for employee dishonesty, depositor's forgery, and computer fraud
77	in an amount not less than the greater of $100,000 or 10 percent
78	of the monthly average for the immediately preceding 6 months of
79	the aggregate amount of all deposits made with such person by
80	all debtors. The deductible on such coverage shall not exceed 10
81	percent of the face amount of the policy coverage. Such policy
82	shall be issued by a company rated at least "A-" or its
83	equivalent by a nationally recognized rating organization and
84	such policy shall provide for 30 days' advance written notice of
85	termination of the policy to be provided to the Office of
86	Financial Regulation.
87	(2)  A copy of the annual audit and insurance policies
88	required by this section shall be filed annually with the Office
89	of Financial Regulation.
90	(3)  The Office of Financial Regulation shall act as a
91	repository for the audits, insurance, and termination notices
92	furnished to the office pursuant to this section. No oversight
93	responsibility shall be imposed upon the office by virtue of
94	receipt of such documents.
95	817.805  Disbursement of funds.--Any person engaged in debt
96	management or credit counseling services shall disburse to the
97	appropriate creditors all funds received from a debtor, less any
98	fees permitted by s. 817.802, within 30 days after receipt of
99	such funds. Further, any person engaged in such services shall
100	maintain a separate trust account for the receipt of any funds
101	from each debtor and the disbursement of such funds on behalf of
102	such debtor.
103	817.806  Civil penalties.--The Attorney General and the
104	Office of Financial Regulation may prosecute any case arising
105	under this part. Any person, or any agent or employee of a
106	person, who willfully uses, or has willfully used, a method,
107	act, or practice declared unlawful under s. 817.802, s. 817.803,
108	s. 817.804, or s. 817.805 is liable for a civil penalty of up to
109	$10,000 for each such violation. This civil penalty may be
110	recovered in any action brought under this part by the enforcing
111	authority or the enforcing authority may terminate any
112	investigation or action upon agreement by the person, or agent
113	or employee of the person, to pay a stipulated civil penalty.
114	The department or the court may waive any such civil penalty if
115	the person, or agent or employee of the person, has previously
116	made full restitution or reimbursement or has paid actual
117	damages to the consumers or governmental entities who have been
118	injured by the unlawful act or practice or rule violation. If
119	civil penalties are assessed in any litigation, the enforcing
120	authority is entitled to reasonable attorney's fees and costs. A
121	civil penalty collected shall accrue to the state and shall be
122	deposited as received into the General Revenue Fund unallocated.
123	Section 2.  This act shall take effect upon becoming a law.

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