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. 624.605, F.S.; including debt |
11 | cancellation products under casualty insurance; providing |
12 | a definition; authorizing certain entities to offer debt |
13 | cancellation products under certain circumstances; |
14 | specifying such products as not constituting insurance; |
15 | amending ss. 627.553 and 627.679, F.S.; revising |
16 | limitations on the amount of authorized insurance for |
17 | debtors; amending s. 627.681, F.S.; revising a limitation |
18 | on the term of credit disability insurance; amending s. |
19 | 655.005, F.S.; revising and providing definitions; |
20 | amending s. 655.79, F.S.; specifying certain accounts as |
21 | tenancies by the entireties; creating s. 655.967, F.S.; |
22 | authorizing a state-mandated endowment to be maintained in |
23 | trust accounts in financial institutions; creating s. |
24 | 655.947, F.S.; authorizing financial institutions to offer |
25 | debt cancellation products; authorizing a fee; providing a |
26 | definition; providing requirements for financial |
27 | institutions relating to debt cancellation products; |
28 | requiring the Financial Services Commission to adopt |
29 | rules; specifying that periodic payment options are not |
30 | required to be offered for certain debt cancellation |
31 | products; amending s. 655.954, F.S.; authorizing certain |
32 | institutions to offer optional debt cancellation products |
33 | with certain financial transactions; prohibiting requiring |
34 | such products as a condition of such transactions; |
35 | updating definitions; amending s. 658.21, F.S.; revising |
36 | ownership requirements for capital accounts at opening for |
37 | a bank or trust company; providing capital investment |
38 | requirements for owners of certain holding companies; |
39 | amending s. 658.34, F.S.; revising requirements for shares |
40 | of capital stock of banks and trust companies; providing |
41 | restrictions on issuance or sale of certain stock under |
42 | certain circumstances; amending s. 658.36, F.S.; requiring |
43 | a state bank or trust company to file a written notice |
44 | before increasing its capital stock; amending s. 658.44, |
45 | F.S.; revising certain notice requirements relating to |
46 | dissenting stockholders; revising criteria for determining |
47 | the value of dissenting shares of certain entities; |
48 | providing an effective date. |
49 |
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50 | Be It Enacted by the Legislature of the State of Florida: |
51 |
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52 | Section 1. Subsections (7) through (19) of section 520.02, |
53 | Florida Statutes, are renumbered as subsections (8) through |
54 | (20), respectively, and new subsection (7) is added to that |
55 | section to read: |
56 | 520.02 Definitions.--In this act, unless the context or |
57 | subject matter otherwise requires: |
58 | (7) "Guaranteed asset protection product" means a loan, |
59 | lease, or retail installment contract term, or modification or |
60 | addendum to a loan, lease, or retail installment contract, under |
61 | which a creditor agrees to waive a customer's liability for |
62 | payment of some or all of the amount by which the debt exceeds |
63 | the value of the collateral. Such a product is not insurance for |
64 | purposes of the Florida Insurance Code. This subsection also |
65 | applies to all guaranteed asset protection products issued |
66 | before October 1, 2008. |
67 | Section 2. Subsection (11) is added to section 520.07, |
68 | Florida Statutes, to read: |
69 | 520.07 Requirements and prohibitions as to retail |
70 | installment contracts.-- |
71 | (11) In conjunction with entering into any new retail |
72 | installment contract or contract for a loan, a motor vehicle |
73 | retail installment seller as defined in s. 520.02, a sales |
74 | finance company as defined in s. 520.02, or a retail lessor as |
75 | defined in s. 521.003, and any assignee of such an entity, may |
76 | offer, for a fee or otherwise, optional guaranteed asset |
77 | protection products in accordance with this chapter. The motor |
78 | vehicle retail installment seller, sales finance company, retail |
79 | lessor, or assignee may not require the purchase of a guaranteed |
80 | asset protection product as a condition for making the loan. In |
81 | order to offer any guaranteed asset protection product, a motor |
82 | vehicle retail installment seller, sales finance company, or |
83 | retail lessor, and any assignee of such an entity, shall comply |
84 | with the following: |
85 | (a) The cost of any guaranteed asset protection product, |
86 | with respect to any loan covered by the guaranteed asset |
87 | protection product, shall not exceed the amount of the |
88 | indebtedness. |
89 | (b) Any contract or agreement pertaining to a guaranteed |
90 | asset protection product shall be governed by this section. |
91 | (c) A guaranteed asset protection product is considered an |
92 | obligation of any person that purchases or otherwise acquires |
93 | the loan contract covering such product. |
94 | (d) An entity providing guaranteed asset protection |
95 | products shall provide readily understandable disclosures that |
96 | explain in detail eligibility requirements, conditions, refunds, |
97 | and exclusions. The disclosures must provide that the purchase |
98 | of the product is optional. The disclosures must be in plain |
99 | language and of a typeface and size that are easy to read. |
100 | (e) An entity must provide a copy of the executed |
101 | guaranteed asset protection product contract to the buyer. The |
102 | entity bears the burden of proving the contract was provided to |
103 | the buyer. |
104 | (f) An entity may not offer a contract for a guaranteed |
105 | asset protection products that contains terms giving the entity |
106 | the right to unilaterally modify the contract unless: |
107 | 1. The modification is favorable to the buyer and is made |
108 | without additional charge to the buyer; or |
109 | 2. The buyer is notified of any proposed change and is |
110 | provided a reasonable opportunity to cancel the contract without |
111 | penalty before the change goes in effect. |
112 | (g) If a contract for a guaranteed asset protection |
113 | product is terminated, the entity shall refund to the buyer any |
114 | unearned fees paid for the contract unless the contract provides |
115 | otherwise. A refund is not due to a consumer who receives a |
116 | benefit under such product. In order to receive a refund, the |
117 | buyer must notify the entity of the event terminating the |
118 | contract and request a refund within 90 days after the |
119 | occurrence of the event terminating the contract. An entity may |
120 | offer a buyer a contract that does not provide for a refund only |
121 | if the entity also offers that buyer a bona fide option to |
122 | purchase a comparable contract that provides for a refund. |
123 | Section 3. Paragraph (r) is added to subsection (1) of |
124 | section 624.605, Florida Statutes, to read: |
125 | 624.605 "Casualty insurance" defined.-- |
126 | (1) "Casualty insurance" includes: |
127 | (r) Insurance for debt cancellation products.--Insurance |
128 | that a creditor may purchase against the risk of financial loss |
129 | from the use of debt cancellation products with consumer loans |
130 | or leases or retail installment contracts. Insurance for debt |
131 | cancellation products is not liability insurance but shall be |
132 | considered credit insurance only for the purposes of s. |
133 | 631.52(4). |
134 | 1. For purposes of this paragraph, the term "debt |
135 | cancellation products" means loan, lease, or retail installment |
136 | contract terms, or modifications to loan, lease, or retail |
137 | installment contracts, under which a creditor agrees to cancel |
138 | or suspend all or part of a customer's obligation to make |
139 | payments upon the occurrence of specified events and includes, |
140 | but is not limited to, debt cancellation contracts, debt |
141 | suspension agreements, and guaranteed asset protection |
142 | contracts. However, the term "debt cancellation products" does |
143 | not include title insurance as defined in s. 624.608. |
144 | 2. Debt cancellation products may be offered by financial |
145 | institutions, as defined in s. 655.005(1)(h), insured depository |
146 | institutions as defined in 12 U.S.C. s. 1813(c), and |
147 | subsidiaries of such institutions, as provided in the financial |
148 | institution codes, or by other business entities as may be |
149 | specifically authorized by law, and such products shall not |
150 | constitute insurance for purposes of the Florida Insurance Code. |
151 | Section 4. Subsection (3) of section 627.553, Florida |
152 | Statutes, is amended to read: |
153 | 627.553 Debtor groups.--The lives of a group of |
154 | individuals may be insured under a policy issued to a creditor |
155 | or its parent holding company, or to a trustee or trustees or |
156 | agent designated by two or more creditors, which creditor, |
157 | holding company, affiliate, trustee or trustees, or agent shall |
158 | be deemed the policyholder, to insure debtors of the creditor or |
159 | creditors, subject to the following requirements: |
160 | (3) The amount of insurance on the life of any debtor |
161 | shall at no time exceed the amount owed by the debtor her or him |
162 | which is repayable in installments to the creditor or $50,000, |
163 | whichever is less, except that loans not exceeding 1 year's |
164 | duration shall not be subject to such limits. However, on such |
165 | loans not exceeding 1 year's duration, the limit of coverage |
166 | shall not exceed $50,000 with any one insurer. |
167 | Section 5. Paragraph (b) of subsection (1) of section |
168 | 627.679, Florida Statutes, is amended to read: |
169 | 627.679 Amount of insurance; disclosure.-- |
170 | (1) |
171 | (b) The total amount of credit life insurance on the life |
172 | of any debtor with respect to any loan or loans covered in one |
173 | or more insurance policies shall at no time exceed the amount of |
174 | the indebtedness $50,000 with any one creditor, except that |
175 | loans not exceeding 1 year's duration shall not be subject to |
176 | such limits, and on such loans not exceeding 1 year's duration, |
177 | the limits of coverage shall not exceed $50,000 with any one |
178 | insurer. |
179 | Section 6. Subsection (2) of section 627.681, Florida |
180 | Statutes, is amended to read: |
181 | 627.681 Term and evidence of insurance.-- |
182 | (2) The term of credit disability insurance on any debtor |
183 | insured under this section shall not exceed the term of |
184 | indebtedness 10 years, and for credit transactions that exceed |
185 | 60 months, coverage shall not exceed 60 monthly indemnities. |
186 | Section 7. Paragraphs (g) and (h) of subsection (1) of |
187 | section 655.005, Florida Statutes, are amended, and paragraph |
188 | (t) is added to that subsection, to read: |
189 | 655.005 Definitions.-- |
190 | (1) As used in the financial institutions codes, unless |
191 | the context otherwise requires, the term: |
192 | (g) "Federal financial institution" means a federally or |
193 | nationally chartered or organized financial institution |
194 | association, bank, savings bank, or credit union. |
195 | (h) "Financial institution" means a state or federal |
196 | savings or thrift association, bank, savings bank, trust |
197 | company, international bank agency, international banking |
198 | organization, international branch, international representative |
199 | office, or international administrative office, or credit union, |
200 | or an agreement corporation operating pursuant to s. 25 of the |
201 | Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act |
202 | corporation organized pursuant to s. 25(a) of the Federal |
203 | Reserve Act, 12 U.S.C. ss. 611 et seq. |
204 | (t) "Debt cancellation products" means loan, lease, or |
205 | retail installment contract terms, or modifications or addenda |
206 | to loan, lease, or retail installment contracts, under which a |
207 | creditor agrees to cancel or suspend all or part of a customer's |
208 | obligation to make payments upon the occurrence of specified |
209 | events and includes, but is not limited to, debt cancellation |
210 | contracts, debt suspension agreements, and guaranteed asset |
211 | protection contracts offered by financial institutions, insured |
212 | depository institutions as defined in 12 U.S.C. s. 1813(c), and |
213 | subsidiaries of such institutions. However, the term "debt |
214 | cancellation products" does not include title insurance as |
215 | defined in s. 624.608. |
216 | Section 8. Subsection (1) of section 655.79, Florida |
217 | Statutes, is amended to read: |
218 | 655.79 Deposits and accounts in two or more names; |
219 | presumption as to vesting on death.-- |
220 | (1) Unless otherwise expressly provided in a contract, |
221 | agreement, or signature card executed in connection with the |
222 | opening or maintenance of an account, including a certificate of |
223 | deposit, a deposit account in the names of two or more persons |
224 | shall be presumed to have been intended by such persons to |
225 | provide that, upon the death of any one of them, all rights, |
226 | title, interest, and claim in, to, and in respect of such |
227 | deposit account, less all proper setoffs and charges in favor of |
228 | the institution, vest in the surviving person or persons. Any |
229 | deposit or account made in the name of two persons who are |
230 | husband and wife shall be considered a tenancy by the entirety |
231 | unless otherwise specified in writing. |
232 | Section 9. Section 655.967, Florida Statutes, is created |
233 | to read: |
234 | 655.967 State-funded endowments.--A state-mandated |
235 | endowment funded through a general appropriations act prior to |
236 | 1990 may be maintained in trust accounts in financial |
237 | institutions as defined in s. 655.005. |
238 | Section 10. Section 655.947, Florida Statutes, is created |
239 | to read: |
240 | 655.947 Debt cancellation products.-- |
241 | (1) Debt cancellation products may be offered, and a fee |
242 | may be charged, by financial institutions and subsidiaries of |
243 | financial institutions subject to the provisions of this section |
244 | and the rules and orders of the commission or office. As used in |
245 | this section, the term "financial institutions" includes those |
246 | defined in s. 655.005(1)(h), insured depository institutions as |
247 | defined in 12 U.S.C. s. 1813, and subsidiaries of such |
248 | institutions. |
249 | (2) A financial institution shall manage the risks |
250 | associated with debt cancellation products in accordance with |
251 | prudent safety and soundness principles. A financial institution |
252 | shall establish and maintain effective risk management and |
253 | control processes over its debt cancellation products and |
254 | programs. Such processes shall include appropriate recognition |
255 | and financial reporting of income, expenses, assets, and |
256 | liabilities and appropriate treatment of all expected and |
257 | unexpected losses associated with the products. Each financial |
258 | institution shall also assess the adequacy of its internal |
259 | control and risk mitigation activities in view of the nature and |
260 | scope of its debt cancellation products and programs. |
261 | (3) The commission shall adopt rules pursuant to ss. |
262 | 120.536(1) and 120.54 to administer this section, which rules |
263 | must be consistent with 12 C.F.R. part 37, as amended. |
264 | (4) For the purposes of this section and any rules adopted |
265 | pursuant to this section, a periodic payment option is not |
266 | required to be offered for any debt cancellation product |
267 | designed to protect a customer against a deficiency between the |
268 | outstanding loan or lease amount and the value of the motor |
269 | vehicle that is used as collateral for the loan or lease. |
270 | Section 11. Section 655.954, Florida Statutes, is amended |
271 | to read: |
272 | 655.954 Financial institution loans; credit cards.-- |
273 | (1) Notwithstanding any other provision of law, a |
274 | financial institution shall have the power to make loans or |
275 | extensions of credit to any person on a credit card or overdraft |
276 | financing arrangement and to charge, in any billing cycle, |
277 | interest on the outstanding amount at a rate that is specified |
278 | in a written agreement, between the financial institution and |
279 | borrower, governing the credit card account. Such credit card |
280 | agreement may modify any terms or conditions of such credit card |
281 | account upon prior written notice of such modification as |
282 | specified by the terms of the agreement governing the credit |
283 | card account or by the Truth in Lending Act, 15 U.S.C. ss. 1601 |
284 | et seq., as amended, and the rules and regulations adopted under |
285 | such act. Any such notice provided by a financial institution |
286 | shall specify that the borrower has the right to surrender the |
287 | credit card whereupon the borrower shall have the right to |
288 | continue to pay off the borrower's credit card account in the |
289 | same manner and under the same terms and conditions as then in |
290 | effect. The borrower's failure to surrender the credit card |
291 | prior to the modifications becoming effective shall constitute a |
292 | consent to the modifications. |
293 | (2) In conjunction with entering into any contract or |
294 | agreement for a loan, line of credit, or loan extension, a |
295 | financial institution, insured depository institution as defined |
296 | in 12 U.S.C. s. 1813, and subsidiaries of such institutions may |
297 | offer, for a fee or otherwise, optional debt cancellation |
298 | products pursuant to s. 655.947 and rules adopted under that |
299 | section. The financial institution may not require the purchase |
300 | of a debt cancellation product as a condition for making the |
301 | loan, line of credit, or loan extension. |
302 | (3)(2) For the purpose of this section, the term: |
303 | (a) "Billing cycle" has the same meaning as ascribed to it |
304 | under the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et |
305 | seq., as amended, and the associated regulations which are in |
306 | effect as of January 31, 2008 June 30, 1992. |
307 | (b) "Interest" means those charges considered a finance |
308 | charge under the federal Truth in Lending Act, 15 U.S.C. ss. |
309 | 1601 et seq., as amended, and the associated regulations which |
310 | are in effect as of January 31, 2008 June 30, 1992. |
311 | Section 12. Subsection (2) of section 658.21, Florida |
312 | Statutes, is amended to read: |
313 | 658.21 Approval of application; findings required.--The |
314 | office shall approve the application if it finds that: |
315 | (2) The proposed capitalization is in such amount as the |
316 | office deems adequate, but in no case may the total capital |
317 | accounts at opening for a bank be less than $8 $6 million if the |
318 | proposed bank is to be located in any county which is included |
319 | in a metropolitan statistical area, or $4 million if the |
320 | proposed bank is to be located in any other county. The total |
321 | capital accounts at opening for a trust company may not be less |
322 | than $3 $2 million. The organizing directors of the proposed |
323 | bank shall directly own or control at least the lesser of $3 |
324 | million or 25 percent of the bank's total capital accounts |
325 | proposed at opening as approved by the office. When the proposed |
326 | bank will be owned by a single-bank holding company, the |
327 | organizing directors of the proposed bank collectively shall |
328 | directly own or control at least an amount of the single-bank |
329 | holding company's capital accounts equal to the lesser of $3 |
330 | million or 25 percent of the proposed bank's total capital |
331 | accounts proposed at opening as approved by the office. When the |
332 | proposed bank will be owned by an existing multi-bank holding |
333 | company, the proposed directors shall have a substantial capital |
334 | investment in the holding company, as determined by the office; |
335 | however, such investment shall not be required to exceed the |
336 | amount otherwise required for a single-bank holding company |
337 | application. Of total capital accounts at opening, as noted in |
338 | the application or amendments or changes to the application, at |
339 | least 25 percent of the capital shall be directly owned or |
340 | controlled by the organizing directors of the bank. Directors of |
341 | banks owned by single-bank holding companies shall have direct |
342 | ownership or control of at least 25 percent of the bank holding |
343 | company's capital accounts. The office may disallow illegally |
344 | obtained currency, monetary instruments, funds, or other |
345 | financial resources from the capitalization requirements of this |
346 | section. The proposed stock offering must comply with the |
347 | requirements of ss. 658.23-658.25 and ss. 658.34-658.37. |
348 | Section 13. Section 658.34, Florida Statutes, is amended |
349 | to read: |
350 | 658.34 Shares of capital stock.-- |
351 | (1) A bank or trust company shall issue its capital stock |
352 | with par value of not more than $100 nor less than $1 per share. |
353 | (2) No bank or trust company shall issue any shares of |
354 | capital stock at a price less than par value, and prior to |
355 | issuance, any such shares must be fully paid in cash. |
356 | (3) With the approval of the office, a bank or trust |
357 | company may issue preferred stock of one or more classes in an |
358 | amount and with a par value as approved by the office. |
359 | (4) With the approval of the office, a bank or trust |
360 | company may issue less than all the number of shares of any of |
361 | its capital stock authorized by its articles of incorporation. |
362 | Such authorized but unissued shares may be issued only for the |
363 | following purposes: |
364 | (a) To provide for stock options and warrants as provided |
365 | in s. 658.35. |
366 | (b) To declare or pay a stock dividend; however, any such |
367 | stock dividend must comply with the provisions of this section |
368 | and s. 658.37. |
369 | (c) To increase the capital of the bank or trust company, |
370 | with the approval of the office. |
371 | (5) Stock of the same class may not be issued or sold by |
372 | the financial institution that creates different rights, |
373 | options, warrants, or benefits among the purchasers or |
374 | stockholders of that class of stock. Such prohibition does not |
375 | restrict the financial institution from creating uniform |
376 | restrictions on the transfer of stock as permitted in s. |
377 | 607.0627. |
378 | Section 14. Subsection (2) of section 658.36, Florida |
379 | Statutes, is amended to read: |
380 | 658.36 Changes in capital.-- |
381 | (2) Any state bank or trust company may, with the approval |
382 | of the office, provide for an increase in its capital stock |
383 | after filing a written notice at least 15 days prior to making |
384 | such increase. |
385 | Section 15. Subsections (2) and (5) of section 658.44, |
386 | Florida Statutes, are amended to read: |
387 | 658.44 Approval by stockholders; rights of dissenters; |
388 | preemptive rights.-- |
389 | (2) Written notice of the meeting of, or proposed written |
390 | consent action by, the stockholders of each constituent state |
391 | bank or state trust company shall be given to each stockholder |
392 | of record, whether or not entitled to vote, and whether the |
393 | meeting is an annual or a special meeting or whether the vote is |
394 | to be by written consent pursuant to s. 607.0704, and the notice |
395 | shall state that the purpose or one of the purposes of the |
396 | meeting, or of the proposed action by the stockholders without a |
397 | meeting, is to consider the proposed plan of merger and merger |
398 | agreement. Except to the extent provided otherwise with respect |
399 | to stockholders of a resulting bank or trust company pursuant to |
400 | subsection (7), the notice shall also state that dissenting |
401 | stockholders, including stockholders not entitled to vote but |
402 | dissenting under paragraph (c), will be entitled to payment in |
403 | cash of the value of only those shares held by the stockholders: |
404 | (a) Which at a meeting of the stockholders are voted |
405 | against the approval of the plan of merger and merger agreement; |
406 | (b) As to which, if the proposed action is to be by |
407 | written consent of stockholders pursuant to s. 607.0704, such |
408 | written consent is not given by the holder thereof; or |
409 | (c) With respect to which the holder thereof has given |
410 | written notice to the constituent state bank or trust company, |
411 | at or prior to the meeting of the stockholders or on or prior to |
412 | the date specified for action by the stockholders without a |
413 | meeting pursuant to s. 607.0704 in the notice of such proposed |
414 | action, that the stockholder dissents from the plan of merger |
415 | and merger agreement, and which shares are not voted for |
416 | approval of the plan or written consent given pursuant to |
417 | paragraph (a) or paragraph (b). |
418 |
|
419 | Hereinafter in this section, the term "dissenting shares" means |
420 | and includes only those shares, which may be all or less than |
421 | all the shares of any class owned by a stockholder, described in |
422 | paragraphs (a), (b), and (c). |
423 | (5) The fair value, as defined in s. 607.1301(4), of |
424 | dissenting shares of each constituent state bank or state trust |
425 | company, the owners of which have not accepted an offer for such |
426 | shares made pursuant to subsection (3), shall be determined |
427 | pursuant to ss. 607.1326-607.1331 except as the procedures for |
428 | notice and demand are otherwise provided in this section as of |
429 | the effective date of the merger by three appraisers, one to be |
430 | selected by the owners of at least two-thirds of such dissenting |
431 | shares, one to be selected by the board of directors of the |
432 | resulting state bank, and the third to be selected by the two so |
433 | chosen. The value agreed upon by any two of the appraisers shall |
434 | control and be final and binding on all parties. If, within 90 |
435 | days from the effective date of the merger, for any reason one |
436 | or more of the appraisers is not selected as herein provided, or |
437 | the appraisers fail to determine the value of such dissenting |
438 | shares, the office shall cause an appraisal of such dissenting |
439 | shares to be made which will be final and binding on all |
440 | parties. The expenses of appraisal shall be paid by the |
441 | resulting state bank or trust company. |
442 | Section 16. This act shall take effect October 1, 2008. |