| 1 | A bill to be entitled |
| 2 | An act relating to tax refund loans or checks; providing a |
| 3 | short title; providing definitions; requiring a person |
| 4 | engaged in providing refund anticipation loans or checks |
| 5 | to comply with certain requirements; requiring |
| 6 | facilitators of refund anticipation loans or checks to |
| 7 | disclose certain information; prescribing how that |
| 8 | information must be displayed; requiring a facilitator to |
| 9 | disclose certain information in an application for a |
| 10 | refund anticipation loan or check; prescribing how that |
| 11 | information must be displayed; requiring a facilitator to |
| 12 | provide certain information orally to an applicant for a |
| 13 | refund anticipation loan or check; providing activities |
| 14 | that are prohibited when transacting a refund anticipation |
| 15 | loan or check; providing a cap on the amount of interest |
| 16 | that can be charged on a refund anticipation loan; |
| 17 | requiring refund anticipation loan and check marketing and |
| 18 | advertizing efforts to include certain disclosures; |
| 19 | providing remedies; providing an effective date. |
| 20 |
|
| 21 | Be It Enacted by the Legislature of the State of Florida: |
| 22 |
|
| 23 | Section 1. Tax Refund Anticipation Loan Act.-- |
| 24 | (1) TITLE.--This section may be cited as the "Tax Refund |
| 25 | Anticipation Loan Act." |
| 26 | (2) DEFINITIONS.--As used in this section, the term: |
| 27 | (a) "Consumer" means an individual who singly, or jointly |
| 28 | with another consumer, is solicited for, applies for, or |
| 29 | receives the proceeds of a refund anticipation loan or refund |
| 30 | anticipation check. |
| 31 | (b) "Creditor" means a person who makes a refund |
| 32 | anticipation loan or who takes an assignment of a refund |
| 33 | anticipation loan. |
| 34 | (c) "Facilitator" means a person who individually or with |
| 35 | another: |
| 36 | 1. Solicits the execution of, processes, receives, or |
| 37 | accepts an application or agreement for a refund anticipation |
| 38 | loan or refund anticipation check; |
| 39 | 2. Services or collects upon a refund anticipation loan or |
| 40 | refund anticipation check; or |
| 41 | 3. Otherwise facilitates the making of a refund |
| 42 | anticipation loan or refund anticipation check. |
| 43 | |
| 44 | If there is no third-party facilitator because a creditor |
| 45 | directly solicits the execution of, receives, or accepts an |
| 46 | application or agreement for a refund anticipation loan or |
| 47 | refund anticipation check, the creditor is the facilitator. |
| 48 | (d) "Market" or "advertise" means to produce, distribute, |
| 49 | broadcast, or otherwise display written materials, oral |
| 50 | statements, or visual materials describing products and |
| 51 | services. |
| 52 | (e) "Person" has the same meaning as in s. 1.01. |
| 53 | (f) "Refund anticipation check" means a check, stored |
| 54 | value card, or other payment mechanism that represents the |
| 55 | proceeds of a consumer's tax refund which was issued by a |
| 56 | depository institution or other person that receives a direct |
| 57 | deposit of the consumer's tax refund or tax credits, and for |
| 58 | which the consumer has paid a fee or other consideration for |
| 59 | such payment. |
| 60 | (g) "Refund anticipation loan" means a loan that is |
| 61 | secured by or that the creditor arranges to be repaid, directly |
| 62 | or indirectly, from the proceeds of the consumer's income tax |
| 63 | refund or tax credits. A refund anticipation loan also includes |
| 64 | any sale, assignment, or purchase of a consumer's tax refund at |
| 65 | a discount or for a fee, regardless of whether the consumer is |
| 66 | required to repay the buyer or assignee if the Internal Revenue |
| 67 | Service denies or reduces the consumer's tax refund. |
| 68 | (h) "Refund anticipation loan fee" means the charges, |
| 69 | fees, or other consideration charged or imposed, directly or |
| 70 | indirectly, by the creditor for the making of or in connection |
| 71 | with a refund anticipation loan. |
| 72 | (i) "Refund anticipation loan interest rate" means the |
| 73 | interest rate for a refund anticipation loan calculated as |
| 74 | follows: the total amount of refund anticipation loan fees, |
| 75 | divided by the loan amount minus any loan fees, divided by the |
| 76 | number of days in the loan term, multiplied by 365 and expressed |
| 77 | as a percentage. The total amount of the refund anticipation |
| 78 | loan fees must include all refund anticipation loan fees |
| 79 | imposed. If a deposit account is established or maintained, in |
| 80 | whole or in part, to receive the consumer's tax refund in order |
| 81 | to repay the amount owed on a refund anticipation loan: |
| 82 | 1. Any fee charged to the consumer for such deposit |
| 83 | account is considered a loan fee and must be included in |
| 84 | calculating the refund anticipation loan interest rate; and |
| 85 | 2. For the purpose of determining the refund anticipation |
| 86 | loan interest rate, the maturity date of the loan is the |
| 87 | estimated date the tax refund will be deposited in the deposit |
| 88 | account. If a deposit account is not established or maintained, |
| 89 | the maturity date of the loan is the estimated date the tax |
| 90 | refund is received by the creditor. |
| 91 | (3) SCOPE.--A person, including the agent or employee of |
| 92 | such person, may not, individually or with another person, |
| 93 | directly or indirectly, solicit the execution of, process, |
| 94 | receive, or accept an application or agreement for a tax refund |
| 95 | anticipation loan or refund anticipation check; or in any other |
| 96 | manner facilitate the making of a refund anticipation loan or |
| 97 | refund anticipation check unless the person has complied with |
| 98 | the provisions of this section. |
| 99 | (4) POSTING OF FEE SCHEDULES AND DISCLOSURES.-- |
| 100 | (a) Each facilitator must display a fee schedule showing |
| 101 | the current fees for refund anticipation loans or refund |
| 102 | anticipation checks transacted at the facilitator's place of |
| 103 | business in a prominent location at the place of business, in at |
| 104 | least 28-point type, and, unless otherwise noted, on a document |
| 105 | measuring at least 16 inches by 20 inches. The fee schedule must |
| 106 | also include: |
| 107 | 1. Examples of the refund anticipation loan interest rate |
| 108 | for at least 5 different refund anticipation loan amounts |
| 109 | calculated in accordance with the formula set forth in paragraph |
| 110 | (3)(i). |
| 111 | 2. The following statement centered and bolded in 1-inch |
| 112 | uppercase letters: |
| 113 | |
| 114 | TAX REFUND ANTICIPATION LOANS |
| 115 | |
| 116 | WHEN YOU TAKE OUT A REFUND ANTICIPATION LOAN, YOU ARE |
| 117 | BORROWING MONEY AGAINST YOUR TAX REFUND. IF YOUR TAX |
| 118 | REFUND IS LESS THAN EXPECTED, YOU WILL STILL OWE THE |
| 119 | ENTIRE AMOUNT OF THE LOAN. IF YOUR REFUND IS DELAYED, |
| 120 | YOU MAY HAVE TO PAY ADDITIONAL FEES. |
| 121 | |
| 122 | YOU CAN USUALLY GET YOUR TAX REFUND IN 8 TO 15 DAYS |
| 123 | WITHOUT GETTING A LOAN OR PAYING EXTRA FEES IF YOU |
| 124 | HAVE YOUR TAX RETURN FILED ELECTRONICALLY AND YOUR |
| 125 | REFUND DIRECTLY DEPOSITED INTO YOUR BANK ACCOUNT. |
| 126 |
|
| 127 | (b) A facilitator may not facilitate a refund anticipation |
| 128 | loan or refund anticipation check unless the disclosures |
| 129 | required by this section are displayed, and the fee charged for |
| 130 | the loan or check is the same as the fee displayed on the |
| 131 | schedule. |
| 132 | (5) APPLICATION DISCLOSURES.-- |
| 133 | (a) When a consumer applies for a refund anticipation loan |
| 134 | or refund anticipation check, the facilitator must disclose to |
| 135 | the consumer on a form separate from the application in 14-point |
| 136 | type, unless otherwise noted: |
| 137 | 1. The fee for the refund anticipation loan or refund |
| 138 | anticipation check. |
| 139 | 2. The fee for tax preparation and any other fee charged |
| 140 | to the consumer. |
| 141 | 3. The time within which the proceeds of the refund |
| 142 | anticipation loan or check will be paid to the consumer if the |
| 143 | loan or check is approved. |
| 144 | 4. For refund anticipation loans, the following statement |
| 145 | centered and bolded in 18-point uppercase type: |
| 146 | |
| 147 | NOTICE |
| 148 | |
| 149 | THIS IS A LOAN. YOU ARE BORROWING MONEY AGAINST YOUR |
| 150 | TAX REFUND. IF YOUR TAX REFUND IS LESS THAN EXPECTED, |
| 151 | YOU WILL STILL OWE THE ENTIRE AMOUNT OF THE LOAN. IF |
| 152 | YOUR REFUND IS DELAYED, YOU MAY HAVE TO PAY ADDITIONAL |
| 153 | FEES. |
| 154 | |
| 155 | YOU CAN USUALLY GET YOUR REFUND IN 8 TO 15 DAYS |
| 156 | WITHOUT GETTING A LOAN OR PAYING EXTRA FEES IF YOU |
| 157 | HAVE YOUR TAX RETURN FILED ELECTRONICALLY AND YOUR |
| 158 | REFUND DIRECTLY DEPOSITED INTO YOUR BANK ACCOUNT. |
| 159 | |
| 160 | 5. For refund anticipation loans, the refund anticipation |
| 161 | loan interest rate calculated in accordance with the formula set |
| 162 | forth in paragraph (3)(i). |
| 163 | 6. For refund anticipation checks, the following statement |
| 164 | centered and bolded in 18-point uppercase type: |
| 165 | |
| 166 | NOTICE |
| 167 | |
| 168 | YOU ARE PAYING [...amount of refund anticipation check |
| 169 | fee...] TO GET YOUR REFUND CHECK THROUGH [...name of |
| 170 | issuer of refund anticipation check...]. YOU CAN AVOID |
| 171 | THIS FEE AND STILL RECEIVE YOUR REFUND IN THE SAME |
| 172 | AMOUNT OF TIME BY HAVING YOUR REFUND DIRECTLY |
| 173 | DEPOSITED INTO YOUR BANK ACCOUNT. YOU CAN ALSO WAIT |
| 174 | FOR THE INTERNAL REVENUE SERVICE (IRS) TO MAIL YOU A |
| 175 | CHECK. IF YOU DO NOT HAVE A BANK ACCOUNT, YOU MAY WANT |
| 176 | TO CONSIDER GETTING ONE. |
| 177 |
|
| 178 | (b) Before consummating the loan or check transaction, the |
| 179 | facilitator must provide to the consumer, in a form that can be |
| 180 | kept by the consumer, the disclosure required by paragraph (a), |
| 181 | a copy of the completed loan or check application and agreement, |
| 182 | and, for refund anticipation loans, the disclosures required |
| 183 | under the federal Truth-In-Lending Act. |
| 184 | (c) The disclosures required by paragraph (a) must be |
| 185 | provided in English and in the language used primarily for oral |
| 186 | communication between the facilitator and the consumer. |
| 187 | (6) ORAL DISCLOSURES.-- |
| 188 | (a) If a consumer applies for a refund anticipation loan, |
| 189 | the facilitator must orally inform the consumer in the language |
| 190 | primarily used for oral communications between the facilitator |
| 191 | and consumer: |
| 192 | 1. That the product is a loan that only lasts for 1 to 2 |
| 193 | weeks; |
| 194 | 2. If the consumer's tax refund is less than expected, the |
| 195 | consumer is liable for the full amount of the loan and must |
| 196 | repay any difference; |
| 197 | 3. The amount of the refund anticipation loan fee; and |
| 198 | 4. The refund anticipation loan interest rate. |
| 199 | (b) If a consumer applies for a refund anticipation check, |
| 200 | the facilitator must orally inform the consumer in the language |
| 201 | primarily used for oral communications between the facilitator |
| 202 | and consumer: |
| 203 | 1. The amount of the refund anticipation check fee; and |
| 204 | 2. That the consumer can receive a refund in the same |
| 205 | amount of time without a fee if the tax return is filed |
| 206 | electronically and the consumer chooses to have the refund |
| 207 | directly deposited to the consumer's bank account. |
| 208 | (c) If the facilitator provides an estimate of the amount |
| 209 | that the consumer will receive after deducting tax preparation |
| 210 | and refund anticipation loan or refund anticipation check fees, |
| 211 | the facilitator must also describe all the options available to |
| 212 | the consumer and the refund amount and the charge for each fee |
| 213 | under each option, including: |
| 214 | 1. Not obtaining a refund anticipation loan or check and |
| 215 | receiving the full tax refund amount by mail in 3 to 8 weeks if |
| 216 | the tax return is mailed. |
| 217 | 2. Not obtaining a refund anticipation loan or check and |
| 218 | receiving the full refund amount in 8 to 15 days if the tax |
| 219 | return is electronically filed and the refund is directly |
| 220 | deposited to the consumer's bank account. |
| 221 | 3. Obtaining a refund anticipation check in 8 to 15 days |
| 222 | in the amount anticipated from preparing the tax refund, minus |
| 223 | the refund anticipation check fee, the tax preparation fee, and |
| 224 | any other fee charged, and not receiving a refund check. |
| 225 | 4. Obtaining a refund anticipation loan in 1 to 2 days in |
| 226 | the amount anticipated from preparing the tax refund, minus the |
| 227 | refund anticipation loan fee, the tax preparation fee, and any |
| 228 | other fee charged, and not receiving a refund check. |
| 229 | |
| 230 | These disclosures can be used to fulfill the requirements of |
| 231 | subparagraph (a)3. or paragraph (b). |
| 232 | (7) PROHIBITED ACTIVITIES.--A person, including the agent |
| 233 | or employee of such person, may not: |
| 234 | (a) Charge or impose any fee, charge, or other |
| 235 | consideration in the making or facilitating of a refund |
| 236 | anticipation loan or refund anticipation check apart from the |
| 237 | fee charged by the creditor or bank that provides the loan or |
| 238 | check. This prohibition does not include any charge or fee |
| 239 | imposed by the facilitator to all of its customers, such as a |
| 240 | fee for tax return preparation, if the same fee amount is |
| 241 | charged to customers who do not receive a refund anticipation |
| 242 | loan, refund anticipation check, or any other tax-related |
| 243 | financial product. |
| 244 | (b) Engage in unfair or deceptive acts or practices in |
| 245 | transacting a refund anticipation check or a refund anticipation |
| 246 | loan, including making any oral statements contradicting any of |
| 247 | the information required to be disclosed under this section. |
| 248 | (c) Fail to comply with any applicable provision of this |
| 249 | section. |
| 250 | (d) In transacting a refund anticipation loan or refund |
| 251 | anticipation check, threaten to take any action that is |
| 252 | prohibited by this section or any other law, or that the person |
| 253 | does not actually intend to take. |
| 254 | (e) Directly or indirectly, arrange for any third party to |
| 255 | charge any interest, fee, or charge related to a refund |
| 256 | anticipation loan or refund anticipation check, other than the |
| 257 | loan or check fee imposed by the creditor, including, but not |
| 258 | limited to, charges for insurance, attorney's fees or other |
| 259 | collection costs, or check cashing. |
| 260 | (f) Include any of the following provisions in any |
| 261 | document provided or signed in connection with a refund |
| 262 | anticipation loan or refund anticipation check, including the |
| 263 | loan application or agreement: |
| 264 | 1. A hold harmless clause. |
| 265 | 2. A confession of judgment clause. |
| 266 | 3. A waiver of the right to a jury trial, if applicable, |
| 267 | in any action brought by or against the consumer. |
| 268 | 4. Any assignment of, or order for, payment of wages or |
| 269 | other compensation for services. |
| 270 | 5. A provision in which the consumer agrees not to assert |
| 271 | any claim or defense arising out of the contract, or to seek any |
| 272 | remedies available under this section. |
| 273 | 6. A waiver of any provision of this section. Any such |
| 274 | waiver is null, void and of no effect. |
| 275 | 7. A waiver of the right to injunctive, declaratory, other |
| 276 | equitable relief, or relief on a class-wide basis. |
| 277 | 8. A requirement that any aspect of a resolution of a |
| 278 | dispute between the parties to the agreement be kept |
| 279 | confidential. This does not affect the right of the parties to |
| 280 | agree that certain specified information is a trade secret or |
| 281 | otherwise confidential or to later agree, after the dispute |
| 282 | arises, to keep a resolution confidential. |
| 283 | (g) Take or arrange for a creditor to take a security |
| 284 | interest in any of the consumer's property, other than the |
| 285 | proceeds of the consumer's tax refund, to secure payment of a |
| 286 | refund anticipation loan. |
| 287 | (h) Directly or indirectly, individually or with another |
| 288 | person, engage in the collection of an outstanding or delinquent |
| 289 | refund anticipation loan for any creditor or assignee, including |
| 290 | soliciting the execution of, processing, receiving, or accepting |
| 291 | an application or agreement for a refund anticipation loan or |
| 292 | refund anticipation check that contains a provision authorizing |
| 293 | the creditor to repay, by offset or other means, an outstanding |
| 294 | or delinquent refund anticipation loan from the proceeds of the |
| 295 | consumer's tax refund. |
| 296 | (i) Refer, facilitate, or solicit consumers on behalf of a |
| 297 | third party engaged in check cashing for a fee, or allow third- |
| 298 | party check cashing for a fee, in any place of business in which |
| 299 | refund anticipation loans or refund anticipation checks are |
| 300 | transacted. |
| 301 | (j) Facilitate any loan that is secured by, or that the |
| 302 | creditor arranges to be repaid directly from, the proceeds of a |
| 303 | consumer's state tax refund from the state treasury. |
| 304 | (8) INTEREST RATE CAP FOR NON-BANK REFUND ANTICIPATION |
| 305 | LOANS.-- |
| 306 | (a) A person may not make or facilitate a refund |
| 307 | anticipation loan for which the refund anticipation loan |
| 308 | interest rate is greater than the loan rate authorized under s. |
| 309 | 687.03. The refund anticipation loan interest rate shall be |
| 310 | calculated as set forth in paragraph (2)(i). Any refund |
| 311 | anticipation loan for which the loan interest rate exceeds the |
| 312 | amount allowed under s. 678.03 is void ab initio. |
| 313 | (b) This subsection does not apply to persons facilitating |
| 314 | for or doing business as a bank, thrift, savings association, or |
| 315 | credit union subject to federal laws that preempt the |
| 316 | prohibition set forth in paragraph (a). |
| 317 | (9) ADVERTISING AND MARKETING.-- |
| 318 | (a) A facilitator may not market or advertise a refund |
| 319 | anticipation loan without including the following statement |
| 320 | verbatim: "[...Name of product...] is a loan. You can get your |
| 321 | refund in 8 to 15 days without a loan or extra fees if you use |
| 322 | e-file and direct deposit." For print advertisements, the |
| 323 | statement must be printed in type size one-half as large as the |
| 324 | largest type size in the advertisement. For radio and television |
| 325 | advertisements, this statement must receive at least 7 seconds |
| 326 | of airtime. |
| 327 | (b) A facilitator may not market or advertise a refund |
| 328 | anticipation check without including the following statement |
| 329 | verbatim: "The [...name of product...] costs [...fee for refund |
| 330 | anticipation check...]. You can get your refund in the same |
| 331 | amount of time without this fee if you use e-file and direct |
| 332 | deposit." For print advertisements, the statement must be |
| 333 | printed in type size one-half as large as the largest type size |
| 334 | in the advertisement. For radio and television advertisements, |
| 335 | this statement must receive at least 7 seconds of airtime. |
| 336 | (10) REMEDIES.-- |
| 337 | (a) Any violation of: |
| 338 | 1. Any state law prohibiting unfair or deceptive acts or |
| 339 | practices by a facilitator constitutes a violation of this |
| 340 | section. |
| 341 | 2. The federal Fair Debt Collection Practices Act, 15 |
| 342 | U.S.C. s. 1692 et seq., by a facilitator constitutes a violation |
| 343 | of this section. |
| 344 | 3. This section constitutes a violation of any state law |
| 345 | prohibiting unfair or deceptive acts or practices. |
| 346 | (b) A facilitator who fails to comply with any provision |
| 347 | of this section is liable to the consumer for: |
| 348 | 1. Actual and consequential damages; |
| 349 | 2. Statutory damages of $2,500, to be adjusted annually to |
| 350 | reflect changes in the Consumer Price Index, or three times the |
| 351 | amount of the refund anticipation loan fee or other unauthorized |
| 352 | charge, whichever is greater; and |
| 353 | 3. Reasonable attorney's fees and costs. |
| 354 | (c) Any person may sue for injunctive or other appropriate |
| 355 | equitable relief to enforce this section. |
| 356 | (d) Any consumer may bring a class action suit to enforce |
| 357 | this section. In such class action, a facilitator who fails to |
| 358 | comply with any provision of this section is liable to each |
| 359 | class member as provided in paragraph (e). |
| 360 | (e) The remedies provided in this section are cumulative |
| 361 | and do not abrogate any other relief available under state or |
| 362 | federal law. |
| 363 | Section 2. This act shall take effect July 1, 2009. |