CS/HB 1425

1
A bill to be entitled
2An act relating to nonrecourse loans; amending s. 516.01,
3F.S.; providing a definition; amending s. 516.031, F.S.;
4authorizing licensees to charge and receive interest and a
5monthly administrative fee in nonrecourse loan
6transactions; providing limitations; providing an
7effective date.
8
9Be It Enacted by the Legislature of the State of Florida:
10
11     Section 1.  Section 516.01, Florida Statutes, is amended to
12read:
13     516.01  Definitions.--As used in this chapter, the term:
14     (1)(3)  "Commission" means the Financial Services
15Commission.
16     (2)(1)  "Consumer finance borrower" or "borrower" means a
17person who has incurred either direct or contingent liability to
18repay a consumer finance loan or a nonrecourse loan.
19     (3)(2)  "Consumer finance loan" means a loan of money,
20credit, goods, or choses in action, including, except as
21otherwise specifically indicated, provision of a line of credit,
22in an amount or to a value of $25,000 or less for which the
23lender charges, contracts for, collects, or receives interest at
24a rate greater than 18 percent per annum.
25     (4)(8)  "Control person" means an individual, partnership,
26corporation, trust, or other organization that possesses the
27power, directly or indirectly, to direct the management or
28policies of a company, whether through ownership of securities,
29by contract, or otherwise. A person is presumed to control a
30company if, with respect to a particular company, that person:
31     (a)  Is a director, general partner, or officer exercising
32executive responsibility or having similar status or functions;
33     (b)  Directly or indirectly may vote 10 percent or more of
34a class of a voting security or sell or direct the sale of 10
35percent or more of a class of voting securities; or
36     (c)  In the case of a partnership, may receive upon
37dissolution or has contributed 10 percent or more of the
38capital.
39     (5)  "Interest" means the cost of obtaining a consumer
40finance loan and includes any profit or advantage of any kind
41whatsoever that a lender may charge, contract for, collect,
42receive, or in anywise obtain, including by means of any
43collateral sale, purchase, or agreement, as a condition for a
44consumer finance loan. Charges specifically permitted by this
45chapter, including commissions received for insurance written as
46permitted by this chapter, shall not be deemed interest.
47     (6)  "License" means a permit issued under this chapter to
48make and collect loans in accordance with this chapter at a
49single place of business.
50     (7)  "Licensee" means a person to whom a license is issued.
51     (8)  "Nonrecourse loan" means a loan of $5,000 or less that
52is unsecured or may be secured by the personal property of the
53borrower, that has a term of not more than 3 years, that fully
54amortizes over the term of the loan, and for which the borrower
55has no liability beyond the property that is security for the
56loan if such loan is secured, except in the instance of fraud.
57     (9)(4)  "Office" means the Office of Financial Regulation
58of the commission.
59     Section 2.  Subsections (2) through (5) of section 516.031,
60Florida Statutes, are renumbered as subsections (3) through (6),
61respectively, a new subsection (2) is added to that section, and
62present paragraph (a) of subsection (3) of that section is
63amended, to read:
64     516.031  Finance charge; maximum rates.--
65     (2)  NONRECOURSE LOAN.--In a nonrecourse loan transaction,
66every licensee may charge, contract for, and receive interest
67not to exceed 48 percent per annum on the outstanding principal
68balance of the nonrecourse loan plus a monthly administrative
69fee not to exceed 10 percent per month on the outstanding
70principal balance of the nonrecourse loan
71     (4)(3)  OTHER CHARGES.--
72     (a)  In addition to the interest, administrative fee,
73delinquency, and insurance charges herein provided for, no
74further or other charges or amount whatsoever for any
75examination, service, commission, or other thing or otherwise
76shall be directly or indirectly charged, contracted for, or
77received as a condition to the grant of a loan, except:
78     1.  An amount not to exceed $25 to reimburse a portion of
79the costs for investigating the character and credit of the
80person applying for the loan;
81     2.  An annual fee of $25 on the anniversary date of each
82line-of-credit account;
83     3.  Charges paid for brokerage fee on a loan or line of
84credit of more than $10,000, title insurance, and the appraisal
85of real property offered as security when paid to a third party
86and supported by an actual expenditure;
87     4.  Intangible personal property tax on the loan note or
88obligation when secured by a lien on real property;
89     5.  The documentary excise tax and lawful fees, if any,
90actually and necessarily paid out by the licensee to any public
91officer for filing, recording, or releasing in any public office
92any instrument securing the loan, which fees may be collected
93when the loan is made or at any time thereafter;
94     6.  The premium payable for any insurance in lieu of
95perfecting any security interest otherwise required by the
96licensee in connection with the loan, if the premium does not
97exceed the fees which would otherwise be payable, which premium
98may be collected when the loan is made or at any time
99thereafter;
100     7.  Actual and reasonable attorney's fees and court costs
101as determined by the court in which suit is filed;
102     8.  Actual and commercially reasonable expenses of
103repossession, storing, repairing and placing in condition for
104sale, and selling of any property pledged as security; or
105     9.  A delinquency charge not to exceed $10 for each payment
106in default for a period of not less than 10 days, if the charge
107is agreed upon, in writing, between the parties before imposing
108the charge.
109
110Any charges, including interest, in excess of the combined total
111of all charges authorized and permitted by this chapter
112constitute a violation of chapter 687 governing interest and
113usury, and the penalties of that chapter apply. In the event of
114a bona fide error, the licensee shall refund or credit the
115borrower with the amount of the overcharge immediately but
116within 20 days from the discovery of such error.
117     Section 3.  This act shall take effect July 1, 2009.


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