| 1 | Representative(s) Carroll offered the following: |
| 2 |
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| 3 | Amendment (with title amendment) |
| 4 | Remove line(s) 50-245 and insert: |
| 5 | Section 1. Subsections (7) through (19) of section 520.02, |
| 6 | Florida Statutes, are renumbered as subsections (8) through |
| 7 | (20), respectively, and new subsection (7) is added to that |
| 8 | section to read: |
| 9 | 520.02 Definitions.--In this act, unless the context or |
| 10 | subject matter otherwise requires: |
| 11 | (7) "Guaranteed asset protection product" means a loan, |
| 12 | lease, or retail installment contract term, or modification or |
| 13 | addendum to a loan, lease, or retail installment contract, under |
| 14 | which a creditor agrees to waive a customer's liability for |
| 15 | payment of some or all of the amount by which the debt exceeds |
| 16 | the value of the collateral. Such a product is not insurance for |
| 17 | purposes of the Florida Insurance Code. This subsection applies |
| 18 | to all guaranteed asset protection products issued before |
| 19 | October 1, 2007. |
| 20 | Section 2. Subsection (11) is added to section 520.07, |
| 21 | Florida Statutes, to read: |
| 22 | 520.07 Requirements and prohibitions as to retail |
| 23 | installment contracts.-- |
| 24 | (11) In conjunction with entering into any new retail |
| 25 | installment contract or contract for a loan, a motor vehicle |
| 26 | retail installment seller as defined in s. 520.02, a sales |
| 27 | finance company as defined in s. 520.02, or a retail lessor as |
| 28 | defined in s. 521.003, and any assignee of such an entity, may |
| 29 | offer, for a fee or otherwise, optional guaranteed asset |
| 30 | protection products in accordance with this chapter. The motor |
| 31 | vehicle retail installment seller, sales finance company, retail |
| 32 | lessor, or assignee may not require the purchase of a guaranteed |
| 33 | asset protection product as a condition for making the loan. In |
| 34 | order to offer any guaranteed asset protection product, a motor |
| 35 | vehicle retail installment seller, sales finance company, or |
| 36 | retail lessor, and any assignee of such an entity, shall comply |
| 37 | with the following: |
| 38 | (a) The cost of any guaranteed asset protection product, |
| 39 | with respect to any loan covered by the guaranteed asset |
| 40 | protection product, shall not exceed the amount of the |
| 41 | indebtedness. |
| 42 | (b) Any contract or agreement pertaining to a guaranteed |
| 43 | asset protection product shall be governed by this section. |
| 44 | (c) A guaranteed asset protection product is considered an |
| 45 | obligation of any person that purchases or otherwise acquires |
| 46 | the loan contract covering such product. |
| 47 | (d) An entity providing guaranteed asset protection |
| 48 | products shall provide readily understandable disclosures that |
| 49 | explain in detail eligibility requirements, conditions, refunds, |
| 50 | and exclusions. The disclosures must provide that the purchase |
| 51 | of the product is optional. The disclosures must be in plain |
| 52 | language and of a typeface and size that are easy to read. |
| 53 | (e) An entity must provide a copy of the executed |
| 54 | guaranteed asset protection product contract to the buyer. The |
| 55 | entity bears the burden of proving the contract was provided to |
| 56 | the buyer. |
| 57 | (f) An entity may not offer a contract for a guaranteed |
| 58 | asset protection products that contains terms giving the entity |
| 59 | the right to unilaterally modify the contract unless: |
| 60 | 1. The modification is favorable to the buyer and is made |
| 61 | without additional charge to the buyer; or |
| 62 | 2. The buyer is notified of any proposed change and is |
| 63 | provided a reasonable opportunity to cancel the contract without |
| 64 | penalty before the change goes in effect. |
| 65 | (g) If a contract for a guaranteed asset protection |
| 66 | product is terminated, the entity shall refund to the buyer any |
| 67 | unearned fees paid for the contract unless the contract provides |
| 68 | otherwise. A refund is not due to a consumer who receives a |
| 69 | benefit under such product. In order to receive a refund, the |
| 70 | buyer must notify the entity of the event terminating the |
| 71 | contract and request a refund within 90 days after the |
| 72 | occurrence of the event terminating the contract. An entity may |
| 73 | offer a buyer a contract that does not provide for a refund only |
| 74 | if the entity also offers that buyer a bona fide option to |
| 75 | purchase a comparable contract that provides for a refund. |
| 76 | Section 3. Subsection (3) of section 520.35, Florida |
| 77 | Statutes, is amended to read: |
| 78 | 520.35 Revolving accounts.-- |
| 79 | (3) Notwithstanding the provisions of any other law, the |
| 80 | seller under a revolving account may charge, receive, and |
| 81 | collect a finance charge which may not exceed 15 cents per $10 |
| 82 | per month, computed on all amounts unpaid under the revolving |
| 83 | account from month to month (which need not be a calendar month) |
| 84 | or other regular period, and a delinquency charge not to exceed |
| 85 | $25 $10 for each payment in default for a period of not less |
| 86 | than 10 days, if the charge is agreed upon, in writing, between |
| 87 | the parties before imposing any charge. If the amount of the |
| 88 | finance charge so computed is less than $1 for any such month, a |
| 89 | finance charge of $1 for any such month may be charged, |
| 90 | received, and collected. If the regular period is other than |
| 91 | such monthly period or if the unpaid amount is less than or |
| 92 | greater than $5, the permitted finance charge shall be computed |
| 93 | proportionately. Such finance charge may be computed for all |
| 94 | unpaid balances within a range of not in excess of $10 on the |
| 95 | basis of the median amount within such range, if as so computed |
| 96 | such finance charge is applied to all unpaid balances within |
| 97 | such range. |
| 98 | Section 4. Paragraph (r) is added to subsection (1) of |
| 99 | section 624.605, Florida Statutes, to read: |
| 100 | 624.605 "Casualty insurance" defined.-- |
| 101 | (1) "Casualty insurance" includes: |
| 102 | (r) Insurance for debt cancellation products.--Insurance |
| 103 | that a creditor may purchase against the risk of financial loss |
| 104 | from the use of debt cancellation products with consumer loans |
| 105 | or leases or retail installment contracts. |
| 106 | 1. For purposes of this paragraph, the term "debt |
| 107 | cancellation products" means loan, lease, or retail installment |
| 108 | contract terms, or modifications to loan, lease, or retail |
| 109 | installment contracts, under which a creditor agrees to cancel |
| 110 | or suspend all or part of a customer's obligation to make |
| 111 | payments upon the occurrence of specified events and includes, |
| 112 | but is not limited to, debt cancellation contracts, debt |
| 113 | suspension agreements, and guaranteed asset protection |
| 114 | contracts. However, the term "debt cancellation products" does |
| 115 | not include title insurance as defined in s. 624.608. |
| 116 | 2. Debt cancellation products may be offered by financial |
| 117 | institutions, as defined in s. 655.005(1)(h), including insured |
| 118 | depository institutions as defined in 12 U.S.C. s. 1813(c), and |
| 119 | subsidiaries of such institutions, as provided in the financial |
| 120 | institution codes, or by other business entities as may be |
| 121 | specifically authorized by law, and such products shall not |
| 122 | constitute insurance for purposes of the Florida Insurance Code. |
| 123 | Section 5. Subsection (3) of section 627.553, Florida |
| 124 | Statutes, is amended to read: |
| 125 | 627.553 Debtor groups.--The lives of a group of |
| 126 | individuals may be insured under a policy issued to a creditor |
| 127 | or its parent holding company, or to a trustee or trustees or |
| 128 | agent designated by two or more creditors, which creditor, |
| 129 | holding company, affiliate, trustee or trustees, or agent shall |
| 130 | be deemed the policyholder, to insure debtors of the creditor or |
| 131 | creditors, subject to the following requirements: |
| 132 | (3) The amount of insurance on the life of any debtor |
| 133 | shall at no time exceed the amount owed by the debtor her or him |
| 134 | which is repayable in installments to the creditor or $50,000, |
| 135 | whichever is less, except that loans not exceeding 1 year's |
| 136 | duration shall not be subject to such limits. However, on such |
| 137 | loans not exceeding 1 year's duration, the limit of coverage |
| 138 | shall not exceed $50,000 with any one insurer. |
| 139 | Section 6. Paragraph (b) of subsection (1) of section |
| 140 | 627.679, Florida Statutes, is amended to read: |
| 141 | 627.679 Amount of insurance; disclosure.-- |
| 142 | (1) |
| 143 | (b) The total amount of credit life insurance on the life |
| 144 | of any debtor with respect to any loan or loans covered in one |
| 145 | or more insurance policies shall at no time exceed the amount of |
| 146 | the indebtedness $50,000 with any one creditor, except that |
| 147 | loans not exceeding 1 year's duration shall not be subject to |
| 148 | such limits, and on such loans not exceeding 1 year's duration, |
| 149 | the limits of coverage shall not exceed $50,000 with any one |
| 150 | insurer. |
| 151 | Section 7. Subsection (2) of section 627.681, Florida |
| 152 | Statutes, is amended to read: |
| 153 | 627.681 Term and evidence of insurance.-- |
| 154 | (2) The term of credit disability insurance on any debtor |
| 155 | insured under this section shall not exceed the term of |
| 156 | indebtedness 10 years, and for credit transactions that exceed |
| 157 | 60 months, coverage shall not exceed 60 monthly indemnities. |
| 158 | Section 8. Paragraphs (g) and (h) of subsection (1) of |
| 159 | section 655.005, Florida Statutes, are amended, and paragraph |
| 160 | (t) is added to that subsection, to read: |
| 161 | 655.005 Definitions.-- |
| 162 | (1) As used in the financial institutions codes, unless |
| 163 | the context otherwise requires, the term: |
| 164 | (g) "Federal financial institution" means a federally or |
| 165 | nationally chartered or organized financial institution |
| 166 | association, bank, savings bank, or credit union. |
| 167 | (h) "Financial institution" means a state or federal |
| 168 | savings or thrift association, bank, savings bank, trust |
| 169 | company, international bank agency, international banking |
| 170 | organization, international branch, international representative |
| 171 | office, or international administrative office, or credit union, |
| 172 | or an agreement corporation operating pursuant to s. 25 of the |
| 173 | Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act |
| 174 | corporation organized pursuant to s. 25(a) of the Federal |
| 175 | Reserve Act, 12 U.S.C. ss. 611 et seq. |
| 176 | (t) "Debt cancellation products" means loan, lease, or |
| 177 | retail installment contract terms, or modifications or addenda |
| 178 | to loan, lease, or retail installment contracts, under which a |
| 179 | creditor agrees to cancel or suspend all or part of a customer's |
| 180 | obligation to make payments upon the occurrence of specified |
| 181 | events and includes, but is not limited to, debt cancellation |
| 182 | contracts, debt suspension agreements, and guaranteed asset |
| 183 | protection contracts offered by financial institutions, insured |
| 184 | depository institutions as defined in 12 U.S.C. s. 1813(c), and |
| 185 | subsidiaries of such institutions. However, the term "debt |
| 186 | cancellation products" does not include title insurance as |
| 187 | defined in s. 624.608. |
| 188 | Section 9. Subsection (1) of section 655.79, Florida |
| 189 | Statutes, is amended to read: |
| 190 | 655.79 Deposits and accounts in two or more names; |
| 191 | presumption as to vesting on death.-- |
| 192 | (1) Unless otherwise expressly provided in a contract, |
| 193 | agreement, or signature card executed in connection with the |
| 194 | opening or maintenance of an account, including a certificate of |
| 195 | deposit, a deposit account in the names of two or more persons |
| 196 | shall be presumed to have been intended by such persons to |
| 197 | provide that, upon the death of any one of them, all rights, |
| 198 | title, interest, and claim in, to, and in respect of such |
| 199 | deposit account, less all proper setoffs and charges in favor of |
| 200 | the institution, vest in the surviving person or persons. Any |
| 201 | deposit or account made in the name of two persons who are |
| 202 | husband and wife shall be considered a tenancy by the entirety |
| 203 | unless otherwise specified in writing. |
| 204 | Section 10. Section 655.947, Florida Statutes, is created |
| 205 | to read: |
| 206 | 655.947 Debt cancellation products.-- |
| 207 | (1) Debt cancellation products may be offered, and a fee |
| 208 | may be charged, by financial institutions and subsidiaries of |
| 209 | financial institutions subject to the provisions of this section |
| 210 | and the rules and orders of the commission or office. As used in |
| 211 | this section, the term "financial institutions" includes those |
| 212 | defined in s. 655.005(1)(h), insured depository institutions as |
| 213 | defined in 12 U.S.C. s. 1813, and subsidiaries of such |
| 214 | institutions. |
| 215 | (2) A financial institution shall manage the risks |
| 216 | associated with debt cancellation products in accordance with |
| 217 | prudent safety and soundness principles. A financial institution |
| 218 | shall establish and maintain effective risk management and |
| 219 | control processes over its debt cancellation products and |
| 220 | programs. Such processes shall include appropriate recognition |
| 221 | and financial reporting of income, expenses, assets, and |
| 222 | liabilities and appropriate treatment of all expected and |
| 223 | unexpected losses associated with the products. Each financial |
| 224 | institution shall also assess the adequacy of its internal |
| 225 | control and risk mitigation activities in view of the nature and |
| 226 | scope of its debt cancellation products and programs. |
| 227 | (3) The commission shall adopt rules pursuant to ss. |
| 228 | 120.536(1) and 120.54 to administer this section, which rules |
| 229 | must be consistent with 12 C.F.R. part 37, as amended. |
| 230 | (4) For the purposes of this section and any rules adopted |
| 231 | pursuant to this section, a periodic payment option is not |
| 232 | required to be offered for any debt cancellation product |
| 233 | designed to protect a customer against a deficiency between the |
| 234 | outstanding loan or lease amount and the value of the motor |
| 235 | vehicle that is used as collateral for the loan or lease. |
| 236 |
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| 237 |
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| 238 | ======= T I T L E A M E N D M E N T ======= |
| 239 | Remove line(s) 3-29 and insert: |
| 240 | F.S.; defining the term "guaranteed asset protection product"; |
| 241 | amending s. 520.07, F.S.; authorizing certain entities to offer |
| 242 | optional guaranteed asset protection products under certain |
| 243 | circumstances; prohibiting such entities from requiring purchase |
| 244 | of such products as a condition for certain financial |
| 245 | transactions; providing requirements for offering such products; |
| 246 | providing limitations; amending s. 520.35, F.S.; revising a fee |
| 247 | relating to certain revolving accounts; amending s. 624.605, |
| 248 | F.S.; including debt cancellation products under casualty |
| 249 | insurance; providing a definition; authorizing certain entities |
| 250 | to offer debt cancellation products under certain circumstances; |
| 251 | specifying such products as not constituting insurance; amending |
| 252 | ss. 627.553 and 627.679, F.S.; revising limitations on the |
| 253 | amount of authorized insurance for debtors; amending s. 627.681, |
| 254 | F.S.; revising a limitation on the term of credit disability |
| 255 | insurance; amending s. 655.005, F.S.; revising and providing |
| 256 | definitions; amending s. 655.79, F.S.; specifying certain |
| 257 | accounts as tenancies by the entireties; creating s. 655.947, |
| 258 | F.S.; authorizing financial institutions to offer debt |
| 259 | cancellation products; authorizing a fee; providing a |
| 260 | definition; providing requirements for financial institutions |
| 261 | relating to debt cancellation products; requiring the Financial |
| 262 | Services Commission to adopt rules; specifying that periodic |
| 263 | payment options are not required to be offered for certain debt |
| 264 | cancellation products; amending s. 655.954, F.S.; authorizing |
| 265 | certain |