CS/HB 311

1	A bill to be entitled
2	An act relating to debt relief services; providing a
3	directive to the Division of Statutory Revision; creating
4	s. 559.101, F.S.; providing a short title; transferring,
5	renumbering, and amending s. 817.801, F.S.; revising
6	definitions relating to debt relief services; creating s.
7	559.103, F.S.; providing the powers of the Office of
8	Financial Regulation; creating s. 559.104, F.S.;
9	authorizing the Financial Services Commission to adopt
10	rules; transferring, renumbering, and amending s. 817.803,
11	F.S.; revising provisions relating to who is not subject
12	to the Debt Relief Services Act; providing an exception
13	for attorneys representing clients; creating s. 559.106,
14	F.S.; requiring debt relief organizations to be registered
15	with the office; providing a registration fee; requiring
16	background screening of applicants and control persons;
17	providing grounds for registration issuance or denial;
18	requiring annual renewal; creating s. 559.107, F.S.;
19	requiring registration renewal; transferring, renumbering,
20	and amending s. 817.804, F.S.; requiring a debt relief
21	organization to obtain a surety bond and to provide proof
22	of such bond to the office; creating s. 559.109, F.S.;
23	requiring a debt relief organization to maintain records;
24	creating s. 559.111, F.S.; requiring a debt relief
25	organization to prepare a financial analysis for the
26	debtor; providing for service contracts; requiring certain
27	provisions to be included in such contracts; requiring the
28	debt relief organization to provide the debtor with copies
29	of all signed documents; transferring, renumbering, and
30	amending s. 817.805, F.S.; conforming terms to changes
31	made by the act; transferring, renumbering, and amending
32	s. 817.802, F.S.; prohibiting a debt relief organization
33	from engaging in certain additional specified acts;
34	deleting a provision that allows the organization to
35	collect a fee for insufficient fund transactions; creating
36	s. 559.114, F.S.; providing for debtor complaints to the
37	office; providing procedures and office duties, including
38	administrative penalties; creating s. 559.115, F.S.;
39	providing for the issuance of subpoenas by the office;
40	creating s. 559.116, F.S.; authorizing the office to issue
41	cease and desist orders; transferring, renumbering, and
42	amending s. 817.806, F.S.; conforming terms to changes
43	made by the act; providing administrative penalties;
44	specifying violations that result in criminal penalties;
45	repealing ss. 559.10, 559.11, 559.12, and 559.13, F.S.,
46	relating to obsolete provisions concerning budget
47	planning; amending s. 516.07, F.S.; conforming a cross-
48	reference; providing effective dates.
49
50	Be It Enacted by the Legislature of the State of Florida:
51
52	Section 1.  The Division of Statutory Revision is directed
53	to redesignate the title of part II of chapter 559, Florida
54	Statutes, consisting of ss. 559.101-559.117, as "Debt Relief
55	Services."
56	Section 2.  Section 559.101, Florida Statutes, is created
57	to read:
58	559.101  Short title.-This part may be cited as the "Debt
59	Relief Services Act."
60	Section 3.  Section 817.801, Florida Statutes, is
61	transferred, renumbered as 559.102, Florida Statutes, and
62	amended to read:
63	559.102 817.801  Definitions.-As used in this part:
64	(1)  "Commission" means the Financial Services Commission.
65	(2)  "Control person" means an individual, partnership,
66	corporation, trust, or other organization that possesses the
67	power, directly or indirectly, to direct the management or
68	policies of a company, whether through ownership of securities,
69	by contract, or otherwise. The term includes, but is not limited
70	to:
71	(a)  A company's executive officers, including the
72	president, chief executive officer, chief financial officer,
73	chief operations officer, chief legal officer, chief compliance
74	officer, director, or other individuals having similar status or
75	functions.
76	(b)  For a corporation, each shareholder who, directly or
77	indirectly, owns 10 percent or more, or who has the power to
78	vote 10 percent or more, of a class of voting securities, unless
79	the applicant is a publicly traded company.
80	(c)  For a partnership, all general partners and limited or
81	special partners who have contributed 10 percent or more, or who
82	have the right to receive upon dissolution 10 percent or more,
83	of the partnership's capital.
84	(d)  For a trust, each trustee.
85	(e)  For a limited liability company, all managing members
86	and those members who have contributed 10 percent or more, or
87	who have the right to receive upon dissolution 10 percent or
88	more, of the partnership's capital.
89	(3)(2)  "Credit counseling services" means confidential
90	money management, debt reduction, financial analysis, and
91	financial educational services provided to a debtor. The term
92	does not include foreclosure-related rescue services.
93	(4)(3)  "Creditor contribution" means any sum that a
94	creditor agrees to contribute to a debt relief organization
95	credit counseling agency, whether directly or by setoff against
96	amounts otherwise payable to the creditor on behalf of debtors.
97	(5)(4)  "Debt management services" means services, other
98	than foreclosure-related rescue services, provided to a debtor
99	by a debt relief credit counseling organization for a fee to:
100	(a)  Effect the adjustment, compromise, interest rate
101	reduction, modification of terms, negotiation, or discharge of
102	any unsecured account, note, or other indebtedness of the
103	debtor; or
104	(b)  Receive funds periodically from the debtor and
105	disburse to a creditor any money or other thing of value with
106	the expectation that the debtor will repay the creditor the
107	entire principal owed.
108	(6)(1)  "Debt relief organization Credit counseling agency"
109	means a person offering to provide or any organization providing
110	debt management services, debt settlement services, or credit
111	counseling services for compensation.
112	(7)  "Debt settlement services" means services, other than
113	foreclosure-related rescue services, provided to a debtor with
114	the expectation of obtaining the creditor's agreement to accept
115	less than the principal amount of a debt in full satisfaction of
116	the debt.
117	(8)  "Debtor" means an individual who obtains credit, seeks
118	a credit agreement with a creditor, or owes money to a creditor.
119	(9)  "Enrolled debt" means the amount of debt at the time
120	the contract for debt management services is entered but does
121	not include any increases in the amount of debt or additional
122	fees or penalties applied to the debt after services included in
123	the contract are initiated.
124	(10)  "Financial analysis" means the review of an
125	individual's budget, income, expenses, and debt by the debt
126	relief organization in order to determine the individual's
127	suitability for additional credit counseling, debt management,
128	or debt settlement services provided by the organization.
129	(11)  "Financial audit report" means a report prepared in
130	connection with a financial audit that is conducted in
131	accordance with generally accepted auditing standards prescribed
132	by the American Institute of Certified Public Accountants by a
133	certified public accountant licensed to do business in the
134	United States, which includes:
135	(a)  Financial statements, including notes related to the
136	financial statements and required supplementary information,
137	prepared in conformity with United States generally accepted
138	accounting principles.
139	(b)  An expression of opinion whether the financial
140	statements are presented in conformity with United States
141	generally accepted accounting principles, or an assertion that
142	such an opinion cannot be expressed and the reasons for such
143	assertion.
144	(12)  "Office" means the Office of Financial Regulation of
145	the Financial Services Commission.
146	(13)(5)  "Person" has the same meaning as in s. 1.01 means
147	any individual, corporation, partnership, trust, association, or
148	other legal entity.
149	(14)  "Service contract" means the agreement for services
150	between a debt relief organization and a debtor.
151	Section 4.  Section 559.103, Florida Statutes, is created
152	to read:
153	559.103  Powers and duties of the Office of Financial
154	Regulation; fees.-
155	(1)  The office is responsible for the administration and
156	enforcement of this part.
157	(2)  The office may conduct an investigation of any person
158	if the office has reason to believe, upon complaint or
159	otherwise, that any violation of this part may have been
160	committed or is about to be committed.
161	(3)  All fees, charges, and fines collected pursuant to
162	this part shall be deposited in the State Treasury to the credit
163	of the Regulatory Trust Fund under the office.
164	Section 5.  Section 559.104, Florida Statutes, is created
165	to read:
166	559.104  Rules.-The commission may adopt rules to
167	administer this part, including rules that:
168	(1)  Require electronic submission of any forms, documents,
169	or fees required under this part.
170	(2)  Establish time periods during which an applicant for
171	registration is barred from registration or a registered debt
172	relief organization is barred from renewal due to prior criminal
173	convictions of, or guilty or nolo contendere pleas by, any of
174	the applicant's or registrant's control persons, regardless of
175	adjudication.
176	(a)  The rules must provide:
177	1.  Permanent bars for felonies involving money laundering,
178	breach of trust, dishonesty, embezzlement, fraud, fraudulent
179	conversion, misappropriation of property, racketeering, or
180	theft;
181	2.  A 15-year disqualifying period for felonies involving
182	moral turpitude;
183	3.  A 7-year disqualifying period for all other felonies;
184	and
185	4.  A 5-year disqualifying period for misdemeanors
186	involving fraud, dishonesty, or any other act of moral
187	turpitude.
188	(b)  The rules may provide for an additional waiting period
189	due to dates of imprisonment or community supervision, the
190	commitment of multiple crimes, and other factors reasonably
191	related to the applicant's criminal history.
192	(c)  The rules may provide for mitigating factors for
193	crimes identified in subparagraph (a)2. However, the mitigation
194	may not result in a period of disqualification less than 7
195	years. The rule may not mitigate the disqualifying periods in
196	subparagraphs (a)1., (a)3., and (a)4.
197	(d)  An applicant is not eligible for registration until
198	the expiration of the disqualifying period set by rule.
199	(e)  Section 112.011 is not applicable to eligibility for
200	registration under this part.
201	Section 6.  Section 817.803, Florida Statutes, is
202	transferred, renumbered as section 559.105, Florida Statutes,
203	and amended to read:
204	559.105 817.803  Exceptions.-Nothing in This part does not
205	apply applies to:
206	(1)  A person licensed to practice law in this state who is
207	providing credit counseling, debt management, or debt settlement
208	services as an ancillary matter to her or his representation of
209	the debtor as a client. Any Debt management or credit counseling
210	services provided in the practice of law in this state;
211	(2)  A Any person who engages in credit counseling, debt
212	management, or debt settlement services adjustment to adjust the
213	indebtedness owed to such person.; or
214	(3)  The following entities or their subsidiaries:
215	(a)  The Federal National Mortgage Association;
216	(b)  The Federal Home Loan Mortgage Corporation;
217	(c)  The Florida Housing Finance Corporation, a public
218	corporation created in s. 420.504;
219	(d)  Any financial institution as defined under s.
220	655.005(1)(h) A bank, bank holding company, trust company,
221	savings and loan association, credit union, credit card bank, or
222	savings bank that is regulated and supervised by the Office of
223	the Comptroller of the Currency, the Office of Thrift
224	Supervision, the Federal Reserve, the Federal Deposit Insurance
225	Corporation, the National Credit Union Administration, the
226	Office of Financial Regulation of the Department of Financial
227	Services, or any state banking regulator; or
228	(e)  A consumer reporting agency as defined in the Federal
229	Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as
230	it existed on April 5, 2004; or
231	(f)  Any subsidiary or affiliate of a bank holding company,
232	its employees and its exclusive agents acting under written
233	agreement.
234	Section 7.  Section 559.106, Florida Statutes, is created
235	to read:
236	559.106  Registration of debt relief organization.-
237	(1)  Effective April 1, 2011, each person who acts as a
238	debt relief organization in this state must be registered in
239	accordance with this section. This applies to debt relief
240	organizations operating in this state or from another state,
241	regardless of whether such organization is registered, licensed,
242	or the equivalent in accordance with the laws of another state.
243	(2)  In order to apply for registration, an applicant must
244	submit:
245	(a)  A completed registration application form as
246	prescribed by commission rule which includes the name and
247	principal business address and e-mail address of the debt relief
248	organization.
249	(b)  A registration fee of $1,000. The registration fee is
250	nonrefundable and may not be prorated for a partial year of
251	registration.
252	(c)  Fingerprints for the applicant and each of the
253	applicant's control persons in accordance with rules adopted by
254	the commission.
255	1.  The fingerprints may be submitted to the office or a
256	vendor acting on behalf of the office.
257	2.  The office may contract with a third-party vendor to
258	provide live-scan fingerprinting in lieu of a paper fingerprint
259	card.
260	3.  A state criminal history background check must be
261	conducted through the Department of Law Enforcement, and a
262	federal criminal history background check must be conducted
263	through the Federal Bureau of Investigation.
264	4.  All fingerprints submitted to the Department of Law
265	Enforcement must be submitted electronically and entered into
266	the statewide automated fingerprint identification system
267	established in s. 943.05(2)(b) and available for use in
268	accordance with s. 943.05(2)(g) and (h). The office shall pay an
269	annual fee to the department to participate in the system and
270	inform the department of any person whose fingerprints are no
271	longer required to be retained.
272	5.  The costs of fingerprint processing, including the cost
273	of retaining the fingerprints, shall be borne by the person
274	subject to the background check.
275	6.  The office is responsible for reviewing the results of
276	the state and federal criminal history checks and determining
277	whether the applicant meets registration requirements.
278	(d)  Submit documentation demonstrating that the surety
279	bond requirements specified in s. 559.108 have been satisfied.
280	(e)  Submit additional information or documentation
281	requested by the office and required by rule concerning the
282	applicant or a control person of the applicant. Additional
283	information may include documentation of pending and prior
284	disciplinary and criminal history events, including arrest
285	reports and certified copies of charging documents, plea
286	agreements, judgments and sentencing documents, documents
287	relating to pretrial intervention, orders terminating probation
288	or supervised release, final administrative agency orders, or
289	other comparable documents that may provide the office with the
290	appropriate information to determine eligibility for
291	registration.
292	(3)  An application is considered received for the purposes
293	of s. 120.60 upon the office's receipt of the completed
294	application form, all required documentation, criminal history
295	information, the application fee, and all applicable
296	fingerprinting processing fees.
297	(4)  The office shall issue a debt relief organization
298	registration to each applicant who is not otherwise ineligible
299	and who meets the requirements of this section. However, it is a
300	ground for denial of registration if the applicant or one of the
301	applicant's control persons:
302	(a)  Has been found guilty of, regardless of adjudication,
303	or has entered a plea of nolo contendere or guilty to, any
304	felony, any crime involving racketeering, fraud, theft,
305	embezzlement, fraudulent conversion, breach of trust,
306	misappropriation of property, dishonesty, or moral turpitude;
307	(b)  Has committed any violation specified in s. 559.113;
308	(c)  Is the subject of a pending felony criminal
309	prosecution or a prosecution or an administrative enforcement
310	action, in any jurisdiction, which involves fraud, racketeering,
311	embezzlement, fraudulent conversion, misappropriation of
312	property, theft, dishonesty, breach of trust, or any other act
313	of moral turpitude;
314	(d)  Pays the office any fee, fine, or other amount with a
315	check or electronic transmission of funds which fails to clear
316	the applicant's financial institution;
317	(e)  Makes a material misstatement on any application,
318	document, or record required to be submitted under this part or
319	the rules of the commission; or
320	(f)  Has been the subject of any decision, finding,
321	injunction, suspension, prohibition, revocation, denial,
322	judgment, or other adverse action by any state or federal
323	agency.
324	(5)  A registration issued under this section expires
325	annually on March 31, unless canceled, suspended, revoked, or
326	otherwise terminated, and must be renewed as provided under s.
327	559.107.
328	Section 8.  Effective April 1, 2011, section 559.107,
329	Florida Statutes, is created to read:
330	559.107  Registration renewal.-
331	(1)  In order to renew a debt relief organization
332	registration, a debt relief organization must submit:
333	(a)  A completed registration renewal form as prescribed by
334	commission rule.
335	(b)  Fingerprints, in accordance with s. 559.106, for any
336	new control persons who have not been screened.
337	(c)  Any additional information or documentation requested
338	by the office and required by rule concerning the registrant or
339	control person of the registrant. Additional information may
340	include documentation of any pending and prior disciplinary and
341	criminal history events, including arrest reports and certified
342	copies of charging documents, plea agreements, judgments and
343	sentencing documents, documents relating to pretrial
344	intervention, orders terminating probation or supervised
345	release, final administrative agency orders, or other comparable
346	documents that may provide the office with the appropriate
347	information to determine eligibility for renewal of
348	registration.
349	(d)  A nonrefundable renewal fee of $750 and nonrefundable
350	fees to cover the cost of further fingerprint processing and
351	retention as set forth in commission rule.
352	(2)  The office may not renew a debt relief organization
353	registration unless the registrant continues to meet the minimum
354	requirements for initial registration pursuant to s. 559.106 and
355	adopted rule.
356	Section 9.  Section 817.804, Florida Statutes, is
357	transferred, renumbered as section 559.108, Florida Statutes,
358	and amended to read:
359	559.108 817.804  Financial requirements; surety bond;
360	disclosure and financial reporting.-
361	(1)  A debt relief organization must Any person engaged in
362	debt management services or credit counseling services shall:
363	(a)  Obtain from a licensed certified public accountant an
364	annual independent financial audit report in accordance with
365	generally accepted auditing standards that
366	include all accounts of such person in which the funds of
367	debtors are deposited and from which payments are made to
368	creditors on behalf of debtors. A debt relief organization must
369	submit a copy of the report to the office within 120 days after
370	the end of the registrant's fiscal year. The commission may
371	establish by rule the manner for filing a financial audit
372	report.
373	(b)  Obtain and maintain at all times insurance coverage
374	for employee dishonesty, depositor's forgery, and computer
375	fraud. The insurance coverage must be in an amount not less than
376	the greater of $100,000 or 10 percent of the monthly average of
377	the aggregate amount of all deposits made by debtors to the
378	organization for distribution to creditors with such person by
379	all debtors for the 6 months immediately preceding the date of
380	initial application for or renewal of the insurance. The
381	deductible on such coverage may shall not exceed 10 percent of
382	the face amount of the policy coverage.
383	(c)  Obtain and maintain a surety bond from a surety
384	company authorized to do business in this state. The amount and
385	form of the bond shall be specified by rule and must be at least
386	$100,000 but may not exceed $1 million. The rule must provide
387	allowances for business volume. The bond shall be in favor of
388	the state for the use and benefit of any debtor who suffers or
389	sustains any loss or damage by reason of any violation of this
390	part. Pursuant to initial registration and renewal, each
391	applicant shall furnish to the office:
392	1.  The original executed surety bond issued by a surety
393	company authorized to do business in this state.
394	2.  A statement from the surety company that the premium
395	for the bond has been paid in full by the applicant.
396	3.  A statement from the surety company that the bond
397	issued by the surety company meets the requirements of this
398	part. The liability of the surety company under any bond issued
399	pursuant to this section may not, in the aggregate, exceed the
400	amount of the bond regardless of the number or amount of any
401	claims filed or which might be asserted against the surety on
402	such bond. If multiple claims are filed which collectively
403	exceed the amount of the bond, the surety may pay the full
404	amount of the bond to the office and is not further liable under
405	the bond. The office shall hold such funds for distribution to
406	claimants and administratively determine and pay to each
407	claimant a pro rata share of each valid claim made within 6
408	months after the date the first claim is filed against the
409	surety.
410	(2)  A copy of the annual financial audit report and
411	insurance policies required by this section must shall be
412	available for public inspection at each branch location of the
413	organization. Copies shall be provided, upon written request, to
414	any party requesting a copy for a charge that does not to exceed
415	the cost of copying the reproduction of documents.
416	Section 10.  Section 559.109, Florida Statutes, is created
417	to read:
418	559.109  Maintenance of records.-
419	(1)  Each registered debt relief organization shall
420	maintain, at the principal place of business designated on the
421	registration, all books, accounts, records, and documents
422	necessary to determine the registrant's compliance with this
423	part.
424	(2)  The office may authorize the maintenance of records at
425	a location other than a principal place of business. The office
426	may require books, accounts, and records to be produced and
427	available at a reasonable and convenient location in this state.
428	(3)  The commission may prescribe by rule the minimum
429	information to be shown in the books, accounts, records, and
430	documents of registrants so that such records enable the office
431	to determine the registrant's compliance with this part.
432	(4)  All books, accounts, records, documents, and receipts
433	of any payment transaction must be preserved and kept available
434	for inspection by the office for at least 5 years after the date
435	the transaction is completed. The commission may prescribe by
436	rule requirements for the destruction of books, accounts,
437	records, and documents retained by the registrant after the
438	completion of the required 5-year period.
439	Section 11.  Section 559.111, Florida Statutes, is created
440	to read:
441	559.111  Financial analysis; service contracts.-
442	(1)  Before a debtor signs a service contract, the debt
443	relief organization shall prepare, retain a copy of, and provide
444	to the debtor a written financial analysis specific to the
445	debtor which includes an evaluation of the debtor's income,
446	expenses, and all debts. An additional fee may not be charged
447	for the financial analysis.
448	(2)  Based on the completed financial analysis, the debt
449	relief organization shall provide to the debtor, and retain a
450	copy of, a written determination of the debtor's suitability for
451	debt management or debt settlement services and whether the
452	debtor can reasonably meet the requirements of the service
453	contract, including the debtor's ability to save the amount
454	estimated to be needed to fund the settlement of the debt.
455	(3)  The service contract between the debt relief
456	organization and the debtor must be signed and dated by the
457	debtor and include all of the following:
458	(a)  The following statement in at least 12-point uppercase
459	type at the top of the service contract:
460
461	IMPORTANT:  IT IS RECOMMENDED THAT YOU CONTACT YOUR
462	CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS
463	MAY BE WILLING TO DIRECTLY NEGOTIATE A SETTLEMENT,
464	INTEREST RATE REDUCTION, MODIFICATION, PAYMENT PLAN,
465	OR RESTRUCTURING OF YOUR DEBT FREE OF CHARGE.
466
467	YOUR USE OF DEBT MANAGEMENT OR DEBT SETTLEMENT
468	SERVICES MAY RESULT IN LATE FEES, ADDITIONAL DEBTS,
469	AND AN ADVERSE CREDIT RATING. YOU SHOULD CONTACT YOUR
470	CREDITOR FOR MORE INFORMATION.
471
472	(b)  A full and detailed description of the services to be
473	performed by the debt relief organization for the debtor,
474	including the financial analysis determining the suitability of
475	the debtor for debt management or debt settlement services, all
476	guarantees and all promises of full or partial refunds, the
477	estimated date or length of time by which the services are to be
478	performed, and a copy of the Florida Debt Relief Services Act.
479	(c)  All terms and conditions of payment, including the
480	anticipated total of all payments to be made by the debtor and
481	the estimated amount of any payments to be made to the debt
482	relief organization or to any other person.
483	(d)  The debt relief organization's principal business
484	address and the name and address of its agent in the state
485	authorized to receive service of process.
486	(e)  A clear and conspicuous statement in boldface type, in
487	immediate proximity to the space reserved for the debtor's
488	signature, which states: "You, the debtor, may cancel this
489	service contract at any time before midnight of the 5th business
490	day after the date of signing this contract. (See the attached
491	notice of right to cancel for further explanation of this
492	right.)"
493	(f)  A notice of right to cancel attached to the contract,
494	in duplicate and easily detachable, which contains the following
495	statement in at least 12-point uppercase type:
496
497	NOTICE OF RIGHT TO CANCEL
498
499	YOU MAY CANCEL ANY CONTRACT FOR CREDIT COUNSELING,
500	DEBT MANAGEMENT, OR DEBT SETTLEMENT SERVICES WITHIN 5
501	BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY
502	YOU WITHOUT INCURRING ANY PENALTY OR OBLIGATION.
503
504	YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10
505	BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION
506	NOTICE.
507
508	TO CANCEL THIS CONTRACT, YOU MUST MAIL OR DELIVER A
509	SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR
510	ANY OTHER WRITTEN NOTICE CLEARLY INDICATING YOUR
511	DESIRE TO CANCEL YOUR CONTRACT.
512
513	TO:  ...(name of debt relief organization)...
514	AT:  ...(address)...
515
516	BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY
517	SERVICE CONTRACT, EXECUTED ON:  ...(date service
518	contract signed)...
519
520	...(Signature of Debtor)...
521	...(Date)...
522	...(Address)...
523	...(Phone Number)...
524
525	(4)  The debt relief organization must provide the debtor,
526	at the time the documents are signed, with a copy of the
527	completed service contract as described in subsection (3) and
528	all other documents the organization requires the debtor to
529	sign.
530	Section 12.  Section 817.805, Florida Statutes, is
531	transferred, renumbered as section 559.112, Florida Statutes,
532	and amended to read:
533	559.112 817.805  Disbursement of funds.-A debt relief
534	organization offering debt management services that include
535	disbursement to a creditor must Any person engaged in debt
536	management or credit counseling services shall disburse to the
537	appropriate creditors all funds received from a debtor, less any
538	fees permitted by s. 559.113 817.802 and any creditor
539	contributions, within 30 days after receipt of such funds.
540	However, a creditor contribution may not reduce any sums to be
541	credited to the account of a debtor making a payment to the
542	organization credit counseling agency for further payment to the
543	creditor. Further, a debt relief organization offering debt
544	settlement services or debt management services must any person
545	engaged in such services shall maintain a separate trust account
546	for the receipt of any funds from debtors and the disbursement
547	of such funds on behalf of such debtors.
548	Section 13.  Section 817.802, Florida Statutes, is
549	transferred, renumbered as section 559.113, Florida Statutes,
550	and amended to read:
551	559.113 817.802  Prohibited acts Unlawful fees and costs.-
552	(1)  A debt relief organization may not, directly or
553	indirectly, charge or accept from a debtor:
554	(a)  Any payment for services before the execution of a
555	written service contract. It is unlawful for any person, while
556	engaging in debt management services or credit counseling
557	services, to charge or accept from a debtor residing in this
558	state, directly or indirectly,
559	(b)  A fee or contribution greater than $50 for the initial
560	setup or initial consultation. Subsequently, the person may not
561	charge or accept
562	(c)  A fee or contribution from a debtor residing in this
563	state greater than $120 per year for credit counseling services
564	provided in addition to the initial consultation under paragraph
565	(b). additional consultations or, alternatively, if
566	(d)  A fee or contribution for debt management services
567	which exceeds as defined in s. 817.801(4)(b) are provided, the
568	person may charge the greater of 7.5 percent of the amount paid
569	monthly by the debtor to the organization for disbursement to a
570	creditor person or $35 per month, whichever is greater, or 7.5
571	percent of the enrolled debt.
572	(e)  A fee or contribution for debt settlement services
573	which exceeds 40 percent of the savings realized, which is
574	defined to be the difference between the amount of enrolled debt
575	and the amount paid to the creditor in discharge of the enrolled
576	debt, less any fees collected pursuant to paragraphs (b) and
577	(c). However, such fees collected for debt settlement services,
578	in the aggregate, may not exceed 20 percent of the enrolled
579	debt. For service contracts requiring fees to be paid on a
580	monthly basis, the payment of such fees must be spread uniformly
581	over at least 18 months or 50 percent of the term of the
582	contract, whichever is greater.
583	(f)  A fee or contribution unless the debt management
584	services or debt settlement services result in a settlement,
585	discharge, or modification of the debt on terms more favorable
586	to the debtor than the terms of the original agreement between
587	the debtor and creditor.
588	(g)  Any fee or contribution for debt management, unless no
589	other payment has been received, directly or indirectly, from
590	the debtor for such services. Fees authorized under this
591	subsection may not be a part of or included in the calculation
592	of total enrolled debt.
593	(2)  A debt relief organization may not:
594	(a)  Advise any debtor, directly or indirectly, against
595	contacting or communicating with her or his creditors before or
596	during the service contract period.
597	(b)  Make or use any false or misleading representations or
598	omit any material fact in connection with the offer, sale, or
599	provision of services, or engage, directly or indirectly, in any
600	fraudulent, false, misleading, unconscionable, unfair, or
601	deceptive act or practice in connection with the offer or sale
602	of any of the services of a debt relief organization.
603	(c)  Provide services to a debtor without executing a
604	service contract that complies with s. 559.111.
605	(d)  Fail to provide copies of the financial analysis, all
606	service contracts, and any other documents the debtor is
607	required to sign as provided under s. 559.111.
608	(e)  Fail to perform any of the terms, conditions, and
609	obligations provided in the service contract with the debtor.
610	(f)  Fail to disclose on any offer or sale of services,
611	including any Internet website, the debt relief organization's
612	name, business address, telephone number, and e-mail address, if
613	any.
614	(g)  Fail to provide the debtor with a 5-business-day right
615	of cancellation without the debtor incurring any penalty or
616	obligation.
617	(h)  Fail to obtain an annual financial audit report and
618	surety bond.
619	(i)  Fail to submit an annual financial audit report to the
620	office.
621	(j)  Fail to report on a form prescribed by commission rule
622	any change to information contained in an initial application
623	form or any amendment to the application within 30 days after
624	the change is effective.
625	(k)  Fail to comply with any of the provisions of this
626	part.
627	(2)  This section does not prohibit any person, while
628	engaging in debt management or credit counseling services, from
629	imposing upon and receiving from a debtor a reasonable and
630	separate charge or fee for insufficient funds transactions.
631	Section 14.  Section 559.114, Florida Statutes, is created
632	to read:
633	559.114  Debtor complaints; administrative duties.-
634	(1)  The office shall receive and maintain records of
635	correspondence and complaints from debtors concerning any person
636	who provides credit counseling, debt management, or debt
637	settlement services, including any debt relief organization.
638	(2)  The office shall inform and furnish relevant
639	information to the appropriate regulatory body if a debt relief
640	organization exempt from registration under this part has been
641	named in consumer complaints alleging violations of this part.
642	(3)  The office shall investigate complaints and record the
643	resolution of such complaints.
644	(4)  A debt relief organization that provides or attempts
645	to provide debt management or debt settlement services without
646	first registering in accordance with this part is subject to a
647	penalty of up to $25,000 in addition to the other remedies
648	provided in this part and under part II of chapter 501. The
649	office shall advise the appropriate state attorney, or the
650	Attorney General, of any determination by the office of a
651	violation of this part by any debt relief organization that is
652	not registered as required by this part. The office shall
653	furnish the state attorney or Attorney General with the office's
654	information concerning the alleged violations of such
655	requirements. The enforcing authority is entitled to reasonable
656	attorney's fees and costs in any action brought to enforce this
657	part against an unregistered debt relief organization.
658	(5)  A registered debt relief organization must provide a
659	written response to the office within 20 days after receipt of a
660	written request from the office for information concerning a
661	consumer complaint. The response must address the issues and
662	allegations raised in the complaint. The office may impose an
663	administrative fine of up to $2,500 per request per day upon any
664	registrant that fails to comply with this subsection.
665	Section 15.  Section 559.115, Florida Statutes, is created
666	to read:
667	559.115  Subpoenas.-
668	(1)  The office may:
669	(a)  Issue and serve subpoenas and subpoenas duces tecum to
670	compel the attendance of witnesses and the production of all
671	books, accounts, records, and other documents and materials
672	relevant to an investigation conducted by the office. The
673	office, or its authorized representative, may administer oaths
674	and affirmations to any person.
675	(b)  Seek subpoenas or subpoenas duces tecum from any court
676	to command the appearance of witnesses and the production of
677	books, accounts, records, and other documents or materials at a
678	time and place named in the subpoenas, and an authorized
679	representative of the office may serve such subpoenas.
680	(2)  If there is substantial noncompliance with a subpoena
681	or subpoena duces tecum issued by the office, the office may
682	petition the court in the county where the person subpoenaed
683	resides or has her or his principal place of business for an
684	order requiring the person to appear, testify, or produce such
685	books, accounts, records, and other documents as are specified
686	in the subpoena or subpoena duces tecum.
687	(3)  The office is entitled to the summary procedure
688	provided in s. 51.011, and the court shall advance such cause on
689	its calendar. Attorney's fees and any other costs incurred by
690	the office to obtain an order granting, in whole or in part, a
691	petition for enforcement of a subpoena or subpoena duces tecum
692	shall be taxed against the subpoenaed person, and failure to
693	comply with such order is a contempt of court.
694	(4)  To aid in the enforcement of this part, the office may
695	require or permit a person to file a statement in writing, under
696	oath or otherwise as the office determines, as to all the facts
697	and circumstances concerning the matter to be investigated.
698	Section 16.  Section 559.116, Florida Statutes, is created
699	to read:
700	559.116  Cease and desist orders.-The office may issue and
701	serve upon any person an order to cease and desist and to take
702	corrective action if it has reason to believe the person is
703	violating, has violated, or is about to violate any provision of
704	this part, any rule or order issued under this part, or any
705	written agreement between the person and the office. All
706	procedural matters relating to issuance and enforcement of such
707	order are governed by the Administrative Procedure Act.
708	Section 17.  Section 817.806, Florida Statutes, is
709	transferred, renumbered as section 559.117, Florida Statutes,
710	and amended to read:
711	559.117 817.806  Violations; penalties.-
712	(1)  Any person who violates any provision of this part
713	commits an unfair or deceptive trade practice as defined in part
714	II of chapter 501, and. violators are also shall be subject to
715	the penalties, and remedies, and enforcement actions provided
716	therein. Further, any debtor consumer injured by a violation of
717	this part may bring an action for recovery of damages. Judgment
718	shall be entered for actual damages, but in no case less than
719	the amount paid by the debtor consumer to the debt relief
720	organization credit counseling agency, plus reasonable
721	attorney's fees and costs.
722	(2)  The office may impose an administrative fine on, or
723	revoke or suspend the registration of a registrant who has
724	committed a violation of this part. Final action to fine,
725	suspend, or revoke the registration of a registrant is subject
726	to review in accordance with chapter 120.
727	(a)  The office may impose suspension rather than
728	revocation of a registration if circumstances warrant that one
729	or the other should be imposed and the registrant demonstrates
730	that the registrant has taken affirmative steps that can be
731	expected to effectively eliminate the violations and that the
732	registrant's registration has never been previously suspended.
733	(b)  In addition to, or in lieu of suspension or revocation
734	of a registration, the office may impose an administrative fine
735	of up to $25,000 per violation. The office shall adopt rules
736	establishing guidelines for imposing administrative penalties.
737	(3)(2)  It is Any person who violates any provision of this
738	part commits a felony of the third degree, punishable as
739	provided in s. 775.082, or s. 775.083, or s. 775.084 for any
740	person to provide debt management or debt settlement services in
741	this state without first registering with the office, or to
742	register or attempt to register by means of fraud,
743	misrepresentation, or concealment.
744	Section 18.  Sections 559.10, 559.11, 559.12, and 559.13,
745	Florida Statutes, are repealed.
746	Section 19.  Paragraph (g) of subsection (1) of section
747	516.07, Florida Statutes, is amended to read:
748	516.07  Grounds for denial of license or for disciplinary
749	action.-
750	(1)  The following acts are violations of this chapter and
751	constitute grounds for denial of an application for a license to
752	make consumer finance loans and grounds for any of the
753	disciplinary actions specified in subsection (2):
754	(g)  Any violation of part III of chapter 817 or part II of
755	chapter 559 or of any rule adopted under part II of chapter 559.
756	Section 20.  Except as otherwise expressly provided in this
757	act, this act shall take effect January 1, 2011.

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