HB 7087

1	A bill to be entitled
2	An act relating to financial services; amending s. 520.02,
3	F.S.; defining the term "guaranteed asset protection
4	product"; amending s. 520.07, F.S.; authorizing certain
5	entities to offer optional guaranteed asset protection
6	products under certain circumstances; prohibiting such
7	entities from requiring purchase of such products as a
8	condition for certain financial transactions; providing
9	requirements for offering such products; providing
10	limitations; amending s. 520.35, F.S.; revising a fee
11	relating to certain revolving accounts; amending s.
12	624.605, F.S.; including debt cancellation products under
13	casualty insurance; providing a definition; authorizing
14	certain entities to offer debt cancellation products under
15	certain circumstances; specifying such products as not
16	constituting insurance; amending ss. 627.553 and 627.679,
17	F.S.; revising limitations on the amount of authorized
18	insurance for debtors; amending s. 627.681, F.S.; revising
19	a limitation on the term of credit disability insurance;
20	amending s. 655.005, F.S.; revising and providing
21	definitions; amending s. 655.79, F.S.; specifying certain
22	accounts as tenancies by the entireties; amending s.
23	655.966, F.S.; authorizing machine owners or operators to
24	impose access fees or surcharges for machine use;
25	providing fee or surcharge disclosure requirements;
26	providing certain agreement prohibitions relating to
27	machine access fees or surcharges; providing construction
28	relating to certain fee-free or surcharge-free network
29	agreements; creating s. 655.967, F.S.; authorizing a
30	state-mandated endowment to be maintained in trust
31	accounts in financial institutions; creating s. 655.947,
32	F.S.; authorizing financial institutions to offer debt
33	cancellation products; authorizing a fee; providing a
34	definition; providing requirements for financial
35	institutions relating to debt cancellation products;
36	requiring the Financial Services Commission to adopt
37	rules; specifying that periodic payment options are not
38	required to be offered for certain debt cancellation
39	products; amending s. 655.954, F.S.; authorizing certain
40	institutions to offer optional debt cancellation products
41	with certain financial transactions; prohibiting requiring
42	such products as a condition of such transactions;
43	updating definitions; amending s. 658.21, F.S.; revising
44	ownership requirements for capital accounts at opening for
45	a bank or trust company; providing capital investment
46	requirements for owners of certain holding companies;
47	amending s. 658.34, F.S.; revising requirements for shares
48	of capital stock of banks and trust companies; providing
49	restrictions on issuance or sale of certain stock under
50	certain circumstances; amending s. 658.36, F.S.; requiring
51	a state bank or trust company to file a written notice
52	before increasing its capital stock; amending s. 658.44,
53	F.S.; revising certain notice requirements relating to
54	dissenting stockholders; revising criteria for determining
55	the value of dissenting shares of certain entities;
56	providing an effective date.
57
58	Be It Enacted by the Legislature of the State of Florida:
59
60	Section 1.  Subsections (7) through (19) of section 520.02,
61	Florida Statutes, are renumbered as subsections (8) through
62	(20), respectively, and new subsection (7) is added to that
63	section to read:
64	520.02  Definitions.--In this act, unless the context or
65	subject matter otherwise requires:
66	(7)  "Guaranteed asset protection product" means a loan,
67	lease, or retail installment contract term, or modification or
68	addendum to a loan, lease, or retail installment contract, under
69	which a creditor agrees to waive a customer's liability for
70	payment of some or all of the amount by which the debt exceeds
71	the value of the collateral. Such a product is not insurance for
72	purposes of the Florida Insurance Code. This subsection also
73	applies to all guaranteed asset protection products issued before
74	October 1, 2007.
75	Section 2.  Subsection (11) is added to section 520.07,
76	Florida Statutes, to read:
77	520.07  Requirements and prohibitions as to retail
78	installment contracts.--
79	(11)  In conjunction with entering into any new retail
80	installment contract or contract for a loan, a motor vehicle
81	retail installment seller as defined in s. 520.02, a sales
82	finance company as defined in s. 520.02, or a retail lessor as
83	defined in s. 521.003, and any assignee of such an entity, may
84	offer, for a fee or otherwise, optional guaranteed asset
85	protection products in accordance with this chapter. The motor
86	vehicle retail installment seller, sales finance company, retail
87	lessor, or assignee may not require the purchase of a guaranteed
88	asset protection product as a condition for making the loan. In
89	order to offer any guaranteed asset protection product, a motor
90	vehicle retail installment seller, sales finance company, or
91	retail lessor, and any assignee of such an entity, shall comply
92	with the following:
93	(a)  The cost of any guaranteed asset protection product,
94	with respect to any loan covered by the guaranteed asset
95	protection product, shall not exceed the amount of the
96	indebtedness.
97	(b)  Any contract or agreement pertaining to a guaranteed
98	asset protection product shall be governed by this section.
99	(c)  A guaranteed asset protection product is considered an
100	obligation of any person that purchases or otherwise acquires
101	the loan contract covering such product.
102	(d)  An entity providing guaranteed asset protection
103	products shall provide readily understandable disclosures that
104	explain in detail eligibility requirements, conditions, refunds,
105	and exclusions. The disclosures must provide that the purchase
106	of the product is optional. The disclosures must be in plain
107	language and of a typeface and size that are easy to read.
108	(e)  An entity must provide a copy of the executed
109	guaranteed asset protection product contract to the buyer. The
110	entity bears the burden of proving the contract was provided to
111	the buyer.
112	(f)  An entity may not offer a contract for a guaranteed
113	asset protection products that contains terms giving the entity
114	the right to unilaterally modify the contract unless:
115	1.  The modification is favorable to the buyer and is made
116	without additional charge to the buyer; or
117	2.  The buyer is notified of any proposed change and is
118	provided a reasonable opportunity to cancel the contract without
119	penalty before the change goes in effect.
120	(g)  If a contract for a guaranteed asset protection
121	product is terminated, the entity shall refund to the buyer any
122	unearned fees paid for the contract unless the contract provides
123	otherwise. A refund is not due to a consumer who receives a
124	benefit under such product. In order to receive a refund, the
125	buyer must notify the entity of the event terminating the
126	contract and request a refund within 90 days after the
127	occurrence of the event terminating the contract. An entity may
128	offer a buyer a contract that does not provide for a refund only
129	if the entity also offers that buyer a bona fide option to
130	purchase a comparable contract that provides for a refund.
131	Section 3.  Subsection (3) of section 520.35, Florida
132	Statutes, is amended to read:
133	520.35  Revolving accounts.--
134	(3)  Notwithstanding the provisions of any other law, the
135	seller under a revolving account may charge, receive, and
136	collect a finance charge which may not exceed 15 cents per $10
137	per month, computed on all amounts unpaid under the revolving
138	account from month to month (which need not be a calendar month)
139	or other regular period, and a delinquency charge not to exceed
140	$25 $10 for each payment in default for a period of not less
141	than 10 days, if the charge is agreed upon, in writing, between
142	the parties before imposing any charge. If the amount of the
143	finance charge so computed is less than $1 for any such month, a
144	finance charge of $1 for any such month may be charged,
145	received, and collected. If the regular period is other than
146	such monthly period or if the unpaid amount is less than or
147	greater than $5, the permitted finance charge shall be computed
148	proportionately. Such finance charge may be computed for all
149	unpaid balances within a range of not in excess of $10 on the
150	basis of the median amount within such range, if as so computed
151	such finance charge is applied to all unpaid balances within
152	such range.
153	Section 4.  Paragraph (r) is added to subsection (1) of
154	section 624.605, Florida Statutes, to read:
155	624.605  "Casualty insurance" defined.--
156	(1)  "Casualty insurance" includes:
157	(r)  Insurance for debt cancellation products.--Insurance
158	that a creditor may purchase against the risk of financial loss
159	from the use of debt cancellation products with consumer loans
160	or leases or retail installment contracts.
161	1.  For purposes of this paragraph, the term "debt
162	cancellation products" means loan, lease, or retail installment
163	contract terms, or modifications to loan, lease, or retail
164	installment contracts, under which a creditor agrees to cancel
165	or suspend all or part of a customer's obligation to make
166	payments upon the occurrence of specified events and includes,
167	but is not limited to, debt cancellation contracts, debt
168	suspension agreements, and guaranteed asset protection
169	contracts. However, the term "debt cancellation products" does
170	not include title insurance as defined in s. 624.608.
171	2.  Debt cancellation products may be offered by financial
172	institutions, as defined in s. 655.005(1)(h), including insured
173	depository institutions as defined in 12 U.S.C. s. 1813(c), and
174	subsidiaries of such institutions, as provided in the financial
175	institution codes, or by other business entities as may be
176	specifically authorized by law, and such products shall not
177	constitute insurance for purposes of the Florida Insurance Code.
178	Section 5.  Subsection (3) of section 627.553, Florida
179	Statutes, is amended to read:
180	627.553  Debtor groups.--The lives of a group of
181	individuals may be insured under a policy issued to a creditor
182	or its parent holding company, or to a trustee or trustees or
183	agent designated by two or more creditors, which creditor,
184	holding company, affiliate, trustee or trustees, or agent shall
185	be deemed the policyholder, to insure debtors of the creditor or
186	creditors, subject to the following requirements:
187	(3)  The amount of insurance on the life of any debtor
188	shall at no time exceed the amount owed by the debtor her or him
189	which is repayable in installments to the creditor or $50,000,
190	whichever is less, except that loans not exceeding 1 year's
191	duration shall not be subject to such limits. However, on such
192	loans not exceeding 1 year's duration, the limit of coverage
193	shall not exceed $50,000 with any one insurer.
194	Section 6.  Paragraph (b) of subsection (1) of section
195	627.679, Florida Statutes, is amended to read:
196	627.679  Amount of insurance; disclosure.--
197	(1)
198	(b)  The total amount of credit life insurance on the life
199	of any debtor with respect to any loan or loans covered in one
200	or more insurance policies shall at no time exceed the amount of
201	the indebtedness $50,000 with any one creditor, except that
202	loans not exceeding 1 year's duration shall not be subject to
203	such limits, and on such loans not exceeding 1 year's duration,
204	the limits of coverage shall not exceed $50,000 with any one
205	insurer.
206	Section 7.  Subsection (2) of section 627.681, Florida
207	Statutes, is amended to read:
208	627.681  Term and evidence of insurance.--
209	(2)  The term of credit disability insurance on any debtor
210	insured under this section shall not exceed the term of
211	indebtedness 10 years, and for credit transactions that exceed
212	60 months, coverage shall not exceed 60 monthly indemnities.
213	Section 8.  Paragraphs (g) and (h) of subsection (1) of
214	section 655.005, Florida Statutes, are amended, and paragraph
215	(t) is added to that subsection, to read:
216	655.005  Definitions.--
217	(1)  As used in the financial institutions codes, unless
218	the context otherwise requires, the term:
219	(g)  "Federal financial institution" means a federally or
220	nationally chartered or organized financial institution
221	association, bank, savings bank, or credit union.
222	(h)  "Financial institution" means a state or federal
223	savings or thrift association, bank, savings bank, trust
224	company, international bank agency, international banking
225	organization, international branch, international representative
226	office, or international administrative office, or credit union,
227	or an agreement corporation operating pursuant to s. 25 of the
228	Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act
229	corporation organized pursuant to s. 25(a) of the Federal
230	Reserve Act, 12 U.S.C. ss. 611 et seq.
231	(t)  "Debt cancellation products" means loan, lease, or
232	retail installment contract terms, or modifications or addenda
233	to loan, lease, or retail installment contracts, under which a
234	creditor agrees to cancel or suspend all or part of a customer's
235	obligation to make payments upon the occurrence of specified
236	events and includes, but is not limited to, debt cancellation
237	contracts, debt suspension agreements, and guaranteed asset
238	protection contracts offered by financial institutions, insured
239	depository institutions as defined in 12 U.S.C. s. 1813(c), and
240	subsidiaries of such institutions. However, the term "debt
241	cancellation products" does not include title insurance as
242	defined in s. 624.608.
243	Section 9.  Subsection (1) of section 655.79, Florida
244	Statutes, is amended to read:
245	655.79  Deposits and accounts in two or more names;
246	presumption as to vesting on death.--
247	(1)  Unless otherwise expressly provided in a contract,
248	agreement, or signature card executed in connection with the
249	opening or maintenance of an account, including a certificate of
250	deposit, a deposit account in the names of two or more persons
251	shall be presumed to have been intended by such persons to
252	provide that, upon the death of any one of them, all rights,
253	title, interest, and claim in, to, and in respect of such
254	deposit account, less all proper setoffs and charges in favor of
255	the institution, vest in the surviving person or persons. Any
256	deposit or account made in the name of two persons who are
257	husband and wife shall be considered a tenancy by the entirety
258	unless otherwise specified in writing.
259	Section 10.  Section 655.966, Florida Statutes, is amended
260	to read:
261	655.966  Automated teller machine; surcharge disclosure.--
262	(1)  The operator or owner of an automated teller machine
263	in this state may charge an access fee or surcharge to a
264	customer for the use of that machine. The fee or surcharge shall
265	be disclosed in compliance with 12 C.F.R., part 205, as amended.
266	(2)(a)  Subject to the requirements of subsection (1), an
267	agreement to operate or share an automated teller machine may
268	not prohibit, limit, or restrict the right of the operator or
269	owner of an automated teller machine, as defined in s.
270	655.960(3), to may charge an access fee or surcharge, not
271	otherwise prohibited under state or federal law, to a customer
272	conducting a transaction using an account from a financial
273	institution, as defined in s. 655.005(1)(h), which is located
274	outside of the United States.
275	(b)  Notwithstanding paragraph (a), nothing in this section
276	shall be construed to prohibit or otherwise limit the ability of
277	an operator or owner of an automated teller machine to
278	voluntarily enter into an agreement regarding participation in
279	an access fee-free or surcharge-free network.
280	Section 11.  Section 655.967, Florida Statutes, is created
281	to read:
282	655.967  State-funded endowments.--Notwithstanding any
283	other provision of law, a state-mandated endowment funded
284	through a general appropriations act prior to 1990 may be
285	maintained in trust accounts in financial institutions.
286	Section 12.  Section 655.947, Florida Statutes, is created
287	to read:
288	655.947  Debt cancellation products.--
289	(1)  Debt cancellation products may be offered, and a fee
290	may be charged, by financial institutions and subsidiaries of
291	financial institutions subject to the provisions of this section
292	and the rules and orders of the commission or office. As used in
293	this section, the term "financial institutions" includes those
294	defined in s. 655.005(1)(h), insured depository institutions as
295	defined in 12 U.S.C. s. 1813, and subsidiaries of such
296	institutions.
297	(2)  A financial institution shall manage the risks
298	associated with debt cancellation products in accordance with
299	prudent safety and soundness principles. A financial institution
300	shall establish and maintain effective risk management and
301	control processes over its debt cancellation products and
302	programs. Such processes shall include appropriate recognition
303	and financial reporting of income, expenses, assets, and
304	liabilities and appropriate treatment of all expected and
305	unexpected losses associated with the products. Each financial
306	institution shall also assess the adequacy of its internal
307	control and risk mitigation activities in view of the nature and
308	scope of its debt cancellation products and programs.
309	(3)  The commission shall adopt rules pursuant to ss.
310	120.536(1) and 120.54 to administer this section, which rules
311	must be consistent with 12 C.F.R. part 37, as amended.
312	(4)  For the purposes of this section and any rules adopted
313	pursuant to this section, a periodic payment option is not
314	required to be offered for any debt cancellation product
315	designed to protect a customer against a deficiency between the
316	outstanding loan or lease amount and the value of the motor
317	vehicle that is used as collateral for the loan or lease.
318	Section 13.  Section 655.954, Florida Statutes, is amended
319	to read:
320	655.954  Financial institution loans; credit cards.--
321	(1)  Notwithstanding any other provision of law, a
322	financial institution shall have the power to make loans or
323	extensions of credit to any person on a credit card or overdraft
324	financing arrangement and to charge, in any billing cycle,
325	interest on the outstanding amount at a rate that is specified
326	in a written agreement, between the financial institution and
327	borrower, governing the credit card account. Such credit card
328	agreement may modify any terms or conditions of such credit card
329	account upon prior written notice of such modification as
330	specified by the terms of the agreement governing the credit
331	card account or by the Truth in Lending Act, 15 U.S.C. ss. 1601
332	et seq., as amended, and the rules and regulations adopted under
333	such act. Any such notice provided by a financial institution
334	shall specify that the borrower has the right to surrender the
335	credit card whereupon the borrower shall have the right to
336	continue to pay off the borrower's credit card account in the
337	same manner and under the same terms and conditions as then in
338	effect. The borrower's failure to surrender the credit card
339	prior to the modifications becoming effective shall constitute a
340	consent to the modifications.
341	(2)  In conjunction with entering into any contract or
342	agreement for a loan, line of credit, or loan extension, a
343	financial institution, insured depository institution as defined
344	in 12 U.S.C. s. 1813, and subsidiaries of such institutions may
345	offer, for a fee or otherwise, optional debt cancellation
346	products pursuant to s. 655.947 and rules adopted under that
347	section. The financial institution may not require the purchase
348	of a debt cancellation product as a condition for making the
349	loan, line of credit, or loan extension.
350	(3)(2)  For the purpose of this section, the term:
351	(a)  "Billing cycle" has the same meaning as ascribed to it
352	under the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et
353	seq., as amended, and the associated regulations which are in
354	effect as of June 30, 2007 1992.
355	(b)  "Interest" means those charges considered a finance
356	charge under the federal Truth in Lending Act, 15 U.S.C. ss.
357	1601 et seq., as amended, and the associated regulations which
358	are in effect as of June 30, 2007 1992.
359	Section 14.  Subsection (2) of section 658.21, Florida
360	Statutes, is amended to read:
361	658.21  Approval of application; findings required.--The
362	office shall approve the application if it finds that:
363	(2)  The proposed capitalization is in such amount as the
364	office deems adequate, but in no case may the total capital
365	accounts at opening for a bank be less than $8 $6 million if the
366	proposed bank is to be located in any county which is included
367	in a metropolitan statistical area, or $4 million if the
368	proposed bank is to be located in any other county. The total
369	capital accounts at opening for a trust company may not be less
370	than $3 $2 million. The organizing directors of the proposed
371	bank shall directly own or control at least the lesser of $3
372	million or 25 percent of the bank's total capital accounts
373	proposed at opening as approved by the office. When the proposed
374	bank will be owned by a single-bank holding company, the
375	organizing directors of the proposed bank collectively shall
376	directly own or control at least an amount of the single-bank
377	holding company's capital accounts equal to the lesser of $3
378	million or 25 percent of the proposed bank's total capital
379	accounts proposed at opening as approved by the office. When the
380	proposed bank will be owned by an existing multi-bank holding
381	company, the proposed directors shall have a substantial capital
382	investment in the holding company, as determined by the office;
383	however, such investment shall not be required to exceed the
384	amount otherwise required for a single-bank holding company
385	application. Of total capital accounts at opening, as noted in
386	the application or amendments or changes to the application, at
387	least 25 percent of the capital shall be directly owned or
388	controlled by the organizing directors of the bank. Directors of
389	banks owned by single-bank holding companies shall have direct
390	ownership or control of at least 25 percent of the bank holding
391	company's capital accounts. The office may disallow illegally
392	obtained currency, monetary instruments, funds, or other
393	financial resources from the capitalization requirements of this
394	section. The proposed stock offering must comply with the
395	requirements of ss. 658.23-658.25 and ss. 658.34-658.37.
396	Section 15.  Section 658.34, Florida Statutes, is amended
397	to read:
398	658.34  Shares of capital stock.--
399	(1)  A bank or trust company shall issue its capital stock
400	with par value of not more than $100 nor less than $1 per share.
401	(2)  No bank or trust company shall issue any shares of
402	capital stock at a price less than par value, and prior to
403	issuance, any such shares must be fully paid in cash.
404	(3)  With the approval of the office, a bank or trust
405	company may issue preferred stock of one or more classes in an
406	amount and with a par value as approved by the office.
407	(4)  With the approval of the office, a bank or trust
408	company may issue less than all the number of shares of any of
409	its capital stock authorized by its articles of incorporation.
410	Such authorized but unissued shares may be issued only for the
411	following purposes:
412	(a)  To provide for stock options and warrants as provided
413	in s. 658.35.
414	(b)  To declare or pay a stock dividend; however, any such
415	stock dividend must comply with the provisions of this section
416	and s. 658.37.
417	(c)  To increase the capital of the bank or trust company,
418	with the approval of the office.
419	(5)  Stock of the same class may not be issued or sold by
420	the financial institution that creates different rights,
421	options, warrants, or benefits among the purchasers or
422	stockholders of that class of stock. Such prohibition does not
423	restrict the financial institution from creating uniform
424	restrictions on the transfer of stock as permitted in s.
425	607.0627.
426	Section 16.  Subsection (2) of section 658.36, Florida
427	Statutes, is amended to read:
428	(2)  Any state bank or trust company may, with the approval
429	of the office, provide for an increase in its capital stock
430	after filing a written notice at least 15 days prior to making
431	such increase.
432	Section 17.  Subsections (2) and (5) of section 658.44,
433	Florida Statutes, are amended to read:
434	658.44  Approval by stockholders; rights of dissenters;
435	preemptive rights.--
436	(2)  Written notice of the meeting of, or proposed written
437	consent action by, the stockholders of each constituent state
438	bank or state trust company shall be given to each stockholder
439	of record, whether or not entitled to vote, and whether the
440	meeting is an annual or a special meeting or whether the vote is
441	to be by written consent pursuant to s. 607.0704, and the notice
442	shall state that the purpose or one of the purposes of the
443	meeting, or of the proposed action by the stockholders without a
444	meeting, is to consider the proposed plan of merger and merger
445	agreement. Except to the extent provided otherwise with respect
446	to stockholders of a resulting bank or trust company pursuant to
447	subsection (7), the notice shall also state that dissenting
448	stockholders, including stockholders not entitled to vote but
449	dissenting under paragraph (c), will be entitled to payment in
450	cash of the value of only those shares held by the stockholders:
451	(a)  Which at a meeting of the stockholders are voted
452	against the approval of the plan of merger and merger agreement;
453	(b)  As to which, if the proposed action is to be by
454	written consent of stockholders pursuant to s. 607.0704, such
455	written consent is not given by the holder thereof; or
456	(c)  With respect to which the holder thereof has given
457	written notice to the constituent state bank or trust company,
458	at or prior to the meeting of the stockholders or on or prior to
459	the date specified for action by the stockholders without a
460	meeting pursuant to s. 607.0704 in the notice of such proposed
461	action, that the stockholder dissents from the plan of merger
462	and merger agreement, and which shares are not voted for
463	approval of the plan or written consent given pursuant to
464	paragraph (a) or paragraph (b).
465
466	Hereinafter in this section, the term "dissenting shares" means
467	and includes only those shares, which may be all or less than
468	all the shares of any class owned by a stockholder, described in
469	paragraphs (a), (b), and (c).
470	(5)  The fair value, as defined in s. 607.1301(4), of
471	dissenting shares of each constituent state bank or state trust
472	company, the owners of which have not accepted an offer for such
473	shares made pursuant to subsection (3), shall be determined
474	pursuant to ss. 607.1326-607.1331 except as the procedures for
475	notice and demand are otherwise provided in this section as of
476	the effective date of the merger by three appraisers, one to be
477	selected by the owners of at least two-thirds of such dissenting
478	shares, one to be selected by the board of directors of the
479	resulting state bank, and the third to be selected by the two so
480	chosen. The value agreed upon by any two of the appraisers shall
481	control and be final and binding on all parties. If, within 90
482	days from the effective date of the merger, for any reason one
483	or more of the appraisers is not selected as herein provided, or
484	the appraisers fail to determine the value of such dissenting
485	shares, the office shall cause an appraisal of such dissenting
486	shares to be made which will be final and binding on all
487	parties. The expenses of appraisal shall be paid by the
488	resulting state bank or trust company.
489	Section 18.  This act shall take effect October 1, 2007.

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