CS/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 an appropriation and authorizing
49	additional positions; providing effective dates.
50
51	Be It Enacted by the Legislature of the State of Florida:
52
53	Section 1.  The Division of Statutory Revision is directed
54	to redesignate the title of part II of chapter 559, Florida
55	Statutes, consisting of ss. 559.101-559.117, as "Debt Relief
56	Services."
57	Section 2.  Section 559.101, Florida Statutes, is created
58	to read:
59	559.101  Short title.-This part may be cited as the "Debt
60	Relief Services Act."
61	Section 3.  Section 817.801, Florida Statutes, is
62	transferred, renumbered as 559.102, Florida Statutes, and
63	amended to read:
64	559.102 817.801  Definitions.-As used in this part:
65	(1)  "Commission" means the Financial Services Commission.
66	(2)  "Control person" means an individual, partnership,
67	corporation, trust, or other organization that possesses the
68	power, directly or indirectly, to direct the management or
69	policies of a company, whether through ownership of securities,
70	by contract, or otherwise. The term includes, but is not limited
71	to:
72	(a)  A company's executive officers, including the
73	president, chief executive officer, chief financial officer,
74	chief operations officer, chief legal officer, chief compliance
75	officer, director, or other individuals having similar status or
76	functions.
77	(b)  For a corporation, each shareholder who, directly or
78	indirectly, owns 10 percent or more, or who has the power to
79	vote 10 percent or more, of a class of voting securities, unless
80	the applicant is a publicly traded company.
81	(c)  For a partnership, all general partners and limited or
82	special partners who have contributed 10 percent or more, or who
83	have the right to receive upon dissolution 10 percent or more,
84	of the partnership's capital.
85	(d)  For a trust, each trustee.
86	(e)  For a limited liability company, all managing members
87	and those members who have contributed 10 percent or more, or
88	who have the right to receive upon dissolution 10 percent or
89	more, of the partnership's capital.
90	(3)(2)  "Credit counseling services" means confidential
91	money management, debt reduction, financial analysis, and
92	financial educational services provided to a debtor. The term
93	does not include foreclosure-related rescue services.
94	(4)(3)  "Creditor contribution" means any sum that a
95	creditor agrees to contribute to a debt relief organization
96	credit counseling agency, whether directly or by setoff against
97	amounts otherwise payable to the creditor on behalf of debtors.
98	(5)(4)  "Debt management services" means services, other
99	than foreclosure-related rescue services, provided to a debtor
100	by a debt relief credit counseling organization for a fee to:
101	(a)  Effect the adjustment, compromise, interest rate
102	reduction, modification of terms, negotiation, or discharge of
103	any unsecured account, note, or other indebtedness of the
104	debtor; or
105	(b)  Receive funds periodically from the debtor and
106	disburse to a creditor any money or other thing of value with
107	the expectation that the debtor will repay the creditor the
108	entire principal owed.
109	(6)(1)  "Debt relief organization Credit counseling agency"
110	means a person offering to provide or any organization providing
111	debt management services, debt settlement services, or credit
112	counseling services for compensation.
113	(7)  "Debt settlement services" means services, other than
114	foreclosure-related rescue services, provided to a debtor with
115	the expectation of obtaining the creditor's agreement to accept
116	less than the principal amount of a debt in full satisfaction of
117	the debt.
118	(8)  "Debtor" means an individual who obtains credit, seeks
119	a credit agreement with a creditor, or owes money to a creditor.
120	(9)  "Enrolled debt" means the amount of debt at the time
121	the contract for debt management services is entered but does
122	not include any increases in the amount of debt or additional
123	fees or penalties applied to the debt after services included in
124	the contract are initiated.
125	(10)  "Financial analysis" means the review of an
126	individual's budget, income, expenses, and debt by the debt
127	relief organization in order to determine the individual's
128	suitability for additional credit counseling, debt management,
129	or debt settlement services provided by the organization.
130	(11)  "Financial audit report" means a report prepared in
131	connection with a financial audit that is conducted in
132	accordance with generally accepted auditing standards prescribed
133	by the American Institute of Certified Public Accountants by a
134	certified public accountant licensed to do business in the
135	United States, which includes:
136	(a)  Financial statements, including notes related to the
137	financial statements and required supplementary information,
138	prepared in conformity with United States generally accepted
139	accounting principles.
140	(b)  An expression of opinion whether the financial
141	statements are presented in conformity with United States
142	generally accepted accounting principles, or an assertion that
143	such an opinion cannot be expressed and the reasons for such
144	assertion.
145	(12)  "Office" means the Office of Financial Regulation of
146	the Financial Services Commission.
147	(13)(5)  "Person" has the same meaning as in s. 1.01 means
148	any individual, corporation, partnership, trust, association, or
149	other legal entity.
150	(14)  "Service contract" means the agreement for services
151	between a debt relief organization and a debtor.
152	Section 4.  Section 559.103, Florida Statutes, is created
153	to read:
154	559.103  Powers and duties of the Office of Financial
155	Regulation; fees.-
156	(1)  The office is responsible for the administration and
157	enforcement of this part.
158	(2)  The office may conduct an investigation of any person
159	if the office has reason to believe, upon complaint or
160	otherwise, that any violation of this part may have been
161	committed or is about to be committed.
162	(3)  All fees, charges, and fines collected pursuant to
163	this part shall be deposited in the State Treasury to the credit
164	of the Regulatory Trust Fund under the office.
165	Section 5.  Section 559.104, Florida Statutes, is created
166	to read:
167	559.104  Rules.-The commission may adopt rules to
168	administer this part, including rules that:
169	(1)  Require electronic submission of any forms, documents,
170	or fees required under this part.
171	(2)  Establish time periods during which an applicant for
172	registration is barred from registration or a registered debt
173	relief organization is barred from renewal due to prior criminal
174	convictions of, or guilty or nolo contendere pleas by, any of
175	the applicant's or registrant's control persons, regardless of
176	adjudication.
177	(a)  The rules must provide:
178	1.  Permanent bars for felonies involving money laundering,
179	breach of trust, dishonesty, embezzlement, fraud, fraudulent
180	conversion, misappropriation of property, racketeering, or
181	theft;
182	2.  A 15-year disqualifying period for felonies involving
183	moral turpitude;
184	3.  A 7-year disqualifying period for all other felonies;
185	and
186	4.  A 5-year disqualifying period for misdemeanors
187	involving fraud, dishonesty, or any other act of moral
188	turpitude.
189	(b)  The rules may provide for an additional waiting period
190	due to dates of imprisonment or community supervision, the
191	commitment of multiple crimes, and other factors reasonably
192	related to the applicant's criminal history.
193	(c)  The rules may provide for mitigating factors for
194	crimes identified in subparagraph (a)2. However, the mitigation
195	may not result in a period of disqualification less than 7
196	years. The rule may not mitigate the disqualifying periods in
197	subparagraphs (a)1., (a)3., and (a)4.
198	(d)  An applicant is not eligible for registration until
199	the expiration of the disqualifying period set by rule.
200	(e)  Section 112.011 is not applicable to eligibility for
201	registration under this part.
202	Section 6.  Section 817.803, Florida Statutes, is
203	transferred, renumbered as section 559.105, Florida Statutes,
204	and amended to read:
205	559.105 817.803  Exceptions.-Nothing in This part does not
206	apply applies to:
207	(1)  A person licensed to practice law in this state who is
208	providing credit counseling, debt management, or debt settlement
209	services as an ancillary matter to her or his representation of
210	the debtor as a client. Any Debt management or credit counseling
211	services provided in the practice of law in this state;
212	(2)  A Any person who engages in credit counseling, debt
213	management, or debt settlement services adjustment to adjust the
214	indebtedness owed to such person.; or
215	(3)  The following entities or their subsidiaries:
216	(a)  The Federal National Mortgage Association;
217	(b)  The Federal Home Loan Mortgage Corporation;
218	(c)  The Florida Housing Finance Corporation, a public
219	corporation created in s. 420.504;
220	(d)  Any financial institution as defined under s.
221	655.005(1)(h) A bank, bank holding company, trust company,
222	savings and loan association, credit union, credit card bank, or
223	savings bank that is regulated and supervised by the Office of
224	the Comptroller of the Currency, the Office of Thrift
225	Supervision, the Federal Reserve, the Federal Deposit Insurance
226	Corporation, the National Credit Union Administration, the
227	Office of Financial Regulation of the Department of Financial
228	Services, or any state banking regulator; or
229	(e)  A consumer reporting agency as defined in the Federal
230	Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as
231	it existed on April 5, 2004; or
232	(f)  Any subsidiary or affiliate of a bank holding company,
233	its employees and its exclusive agents acting under written
234	agreement.
235	Section 7.  Section 559.106, Florida Statutes, is created
236	to read:
237	559.106  Registration of debt relief organization.-
238	(1)  Effective April 1, 2011, each person who acts as a
239	debt relief organization in this state must be registered in
240	accordance with this section. This applies to debt relief
241	organizations operating in this state or from another state,
242	regardless of whether such organization is registered, licensed,
243	or the equivalent in accordance with the laws of another state.
244	(2)  In order to apply for registration, an applicant must
245	submit:
246	(a)  A completed registration application form as
247	prescribed by commission rule which includes the name and
248	principal business address and e-mail address of the debt relief
249	organization.
250	(b)  A registration fee of $1,000. The registration fee is
251	nonrefundable and may not be prorated for a partial year of
252	registration.
253	(c)  Fingerprints for the applicant and each of the
254	applicant's control persons in accordance with rules adopted by
255	the commission.
256	1.  The fingerprints may be submitted to the office or a
257	vendor acting on behalf of the office.
258	2.  The office may contract with a third-party vendor to
259	provide live-scan fingerprinting in lieu of a paper fingerprint
260	card.
261	3.  A state criminal history background check must be
262	conducted through the Department of Law Enforcement, and a
263	federal criminal history background check must be conducted
264	through the Federal Bureau of Investigation.
265	4.  All fingerprints submitted to the Department of Law
266	Enforcement must be submitted electronically and entered into
267	the statewide automated fingerprint identification system
268	established in s. 943.05(2)(b) and available for use in
269	accordance with s. 943.05(2)(g) and (h). The office shall pay an
270	annual fee to the department to participate in the system and
271	inform the department of any person whose fingerprints are no
272	longer required to be retained.
273	5.  The costs of fingerprint processing, including the cost
274	of retaining the fingerprints, shall be borne by the person
275	subject to the background check.
276	6.  The office is responsible for reviewing the results of
277	the state and federal criminal history checks and determining
278	whether the applicant meets registration requirements.
279	(d)  Submit documentation demonstrating that the surety
280	bond requirements specified in s. 559.108 have been satisfied.
281	(e)  Submit additional information or documentation
282	requested by the office and required by rule concerning the
283	applicant or a control person of the applicant. Additional
284	information may include documentation of pending and prior
285	disciplinary and criminal history events, including arrest
286	reports and certified copies of charging documents, plea
287	agreements, judgments and sentencing documents, documents
288	relating to pretrial intervention, orders terminating probation
289	or supervised release, final administrative agency orders, or
290	other comparable documents that may provide the office with the
291	appropriate information to determine eligibility for
292	registration.
293	(3)  An application is considered received for the purposes
294	of s. 120.60 upon the office's receipt of the completed
295	application form, all required documentation, criminal history
296	information, the application fee, and all applicable
297	fingerprinting processing fees.
298	(4)  The office shall issue a debt relief organization
299	registration to each applicant who is not otherwise ineligible
300	and who meets the requirements of this section. However, it is a
301	ground for denial of registration if the applicant or one of the
302	applicant's control persons:
303	(a)  Has been found guilty of, regardless of adjudication,
304	or has entered a plea of nolo contendere or guilty to, any
305	felony, any crime involving racketeering, fraud, theft,
306	embezzlement, fraudulent conversion, breach of trust,
307	misappropriation of property, dishonesty, or moral turpitude;
308	(b)  Has committed any violation specified in s. 559.113;
309	(c)  Is the subject of a pending felony criminal
310	prosecution or a prosecution or an administrative enforcement
311	action, in any jurisdiction, which involves fraud, racketeering,
312	embezzlement, fraudulent conversion, misappropriation of
313	property, theft, dishonesty, breach of trust, or any other act
314	of moral turpitude;
315	(d)  Pays the office any fee, fine, or other amount with a
316	check or electronic transmission of funds which fails to clear
317	the applicant's financial institution;
318	(e)  Makes a material misstatement on any application,
319	document, or record required to be submitted under this part or
320	the rules of the commission; or
321	(f)  Has been the subject of any decision, finding,
322	injunction, suspension, prohibition, revocation, denial,
323	judgment, or other adverse action by any state or federal
324	agency.
325	(5)  A registration issued under this section expires
326	annually on March 31, unless canceled, suspended, revoked, or
327	otherwise terminated, and must be renewed as provided under s.
328	559.107.
329	Section 8.  Effective April 1, 2011, section 559.107,
330	Florida Statutes, is created to read:
331	559.107  Registration renewal.-
332	(1)  In order to renew a debt relief organization
333	registration, a debt relief organization must submit:
334	(a)  A completed registration renewal form as prescribed by
335	commission rule.
336	(b)  Fingerprints, in accordance with s. 559.106, for any
337	new control persons who have not been screened.
338	(c)  Any additional information or documentation requested
339	by the office and required by rule concerning the registrant or
340	control person of the registrant. Additional information may
341	include documentation of any pending and prior disciplinary and
342	criminal history events, including arrest reports and certified
343	copies of charging documents, plea agreements, judgments and
344	sentencing documents, documents relating to pretrial
345	intervention, orders terminating probation or supervised
346	release, final administrative agency orders, or other comparable
347	documents that may provide the office with the appropriate
348	information to determine eligibility for renewal of
349	registration.
350	(d)  A nonrefundable renewal fee of $750 and nonrefundable
351	fees to cover the cost of further fingerprint processing and
352	retention as set forth in commission rule.
353	(2)  The office may not renew a debt relief organization
354	registration unless the registrant continues to meet the minimum
355	requirements for initial registration pursuant to s. 559.106 and
356	adopted rule.
357	Section 9.  Section 817.804, Florida Statutes, is
358	transferred, renumbered as section 559.108, Florida Statutes,
359	and amended to read:
360	559.108 817.804  Financial requirements; surety bond;
361	disclosure and financial reporting.-
362	(1)  A debt relief organization must Any person engaged in
363	debt management services or credit counseling services shall:
364	(a)  Obtain from a licensed certified public accountant an
365	annual independent financial audit report in accordance with
366	generally accepted auditing standards that includes shall
367	include all accounts of such person in which the funds of
368	debtors are deposited and from which payments are made to
369	creditors on behalf of debtors. A debt relief organization must
370	submit a copy of the report to the office within 120 days after
371	the end of the registrant's fiscal year. The commission may
372	establish by rule the manner for filing a financial audit
373	report.
374	(b)  Obtain and maintain at all times insurance coverage
375	for employee dishonesty, depositor's forgery, and computer
376	fraud. The insurance coverage must be in an amount not less than
377	the greater of $100,000 or 10 percent of the monthly average of
378	the aggregate amount of all deposits made by debtors to the
379	organization for distribution to creditors with such person by
380	all debtors for the 6 months immediately preceding the date of
381	initial application for or renewal of the insurance. The
382	deductible on such coverage may shall not exceed 10 percent of
383	the face amount of the policy coverage.
384	(c)  Obtain and maintain a surety bond from a surety
385	company authorized to do business in this state. The amount and
386	form of the bond shall be specified by rule and must be at least
387	$100,000 but may not exceed $1 million. The rule must provide
388	allowances for business volume. The bond shall be in favor of
389	the state for the use and benefit of any debtor who suffers or
390	sustains any loss or damage by reason of any violation of this
391	part. Pursuant to initial registration and renewal, each
392	applicant shall furnish to the office:
393	1.  The original executed surety bond issued by a surety
394	company authorized to do business in this state.
395	2.  A statement from the surety company that the premium
396	for the bond has been paid in full by the applicant.
397	3.  A statement from the surety company that the bond
398	issued by the surety company meets the requirements of this
399	part. The liability of the surety company under any bond issued
400	pursuant to this section may not, in the aggregate, exceed the
401	amount of the bond regardless of the number or amount of any
402	claims filed or which might be asserted against the surety on
403	such bond. If multiple claims are filed which collectively
404	exceed the amount of the bond, the surety may pay the full
405	amount of the bond to the office and is not further liable under
406	the bond. The office shall hold such funds for distribution to
407	claimants and administratively determine and pay to each
408	claimant a pro rata share of each valid claim made within 6
409	months after the date the first claim is filed against the
410	surety.
411	(2)  A copy of the annual financial audit report and
412	insurance policies required by this section must shall be
413	available for public inspection at each branch location of the
414	organization. Copies shall be provided, upon written request, to
415	any party requesting a copy for a charge that does not to exceed
416	the cost of copying the reproduction of documents.
417	Section 10.  Section 559.109, Florida Statutes, is created
418	to read:
419	559.109  Maintenance of records.-
420	(1)  Each registered debt relief organization shall
421	maintain, at the principal place of business designated on the
422	registration, all books, accounts, records, and documents
423	necessary to determine the registrant's compliance with this
424	part.
425	(2)  The office may authorize the maintenance of records at
426	a location other than a principal place of business. The office
427	may require books, accounts, and records to be produced and
428	available at a reasonable and convenient location in this state.
429	(3)  The commission may prescribe by rule the minimum
430	information to be shown in the books, accounts, records, and
431	documents of registrants so that such records enable the office
432	to determine the registrant's compliance with this part.
433	(4)  All books, accounts, records, documents, and receipts
434	of any payment transaction must be preserved and kept available
435	for inspection by the office for at least 5 years after the date
436	the transaction is completed. The commission may prescribe by
437	rule requirements for the destruction of books, accounts,
438	records, and documents retained by the registrant after the
439	completion of the required 5-year period.
440	Section 11.  Section 559.111, Florida Statutes, is created
441	to read:
442	559.111  Financial analysis; service contracts.-
443	(1)  Before a debtor signs a service contract, the debt
444	relief organization shall prepare, retain a copy of, and provide
445	to the debtor a written financial analysis specific to the
446	debtor which includes an evaluation of the debtor's income,
447	expenses, and all debts. An additional fee may not be charged
448	for the financial analysis.
449	(2)  Based on the completed financial analysis, the debt
450	relief organization shall provide to the debtor, and retain a
451	copy of, a written determination of the debtor's suitability for
452	debt management or debt settlement services and whether the
453	debtor can reasonably meet the requirements of the service
454	contract, including the debtor's ability to save the amount
455	estimated to be needed to fund the settlement of the debt.
456	(3)  The service contract between the debt relief
457	organization and the debtor must be signed and dated by the
458	debtor and include all of the following:
459	(a)  The following statement in at least 12-point uppercase
460	type at the top of the service contract:
461
462	IMPORTANT:  IT IS RECOMMENDED THAT YOU CONTACT YOUR
463	CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS
464	MAY BE WILLING TO DIRECTLY NEGOTIATE A SETTLEMENT,
465	INTEREST RATE REDUCTION, MODIFICATION, PAYMENT PLAN,
466	OR RESTRUCTURING OF YOUR DEBT FREE OF CHARGE.
467
468	YOUR USE OF DEBT MANAGEMENT OR DEBT SETTLEMENT
469	SERVICES MAY RESULT IN LATE FEES, ADDITIONAL DEBTS,
470	AND AN ADVERSE CREDIT RATING. YOU SHOULD CONTACT YOUR
471	CREDITOR FOR MORE INFORMATION.
472
473	(b)  A full and detailed description of the services to be
474	performed by the debt relief organization for the debtor,
475	including the financial analysis determining the suitability of
476	the debtor for debt management or debt settlement services, all
477	guarantees and all promises of full or partial refunds, the
478	estimated date or length of time by which the services are to be
479	performed, and a copy of the Florida Debt Relief Services Act.
480	(c)  All terms and conditions of payment, including the
481	anticipated total of all payments to be made by the debtor and
482	the estimated amount of any payments to be made to the debt
483	relief organization or to any other person.
484	(d)  The debt relief organization's principal business
485	address and the name and address of its agent in the state
486	authorized to receive service of process.
487	(e)  A clear and conspicuous statement in boldface type, in
488	immediate proximity to the space reserved for the debtor's
489	signature, which states: "You, the debtor, may cancel this
490	service contract at any time before midnight of the 5th business
491	day after the date of signing this contract. (See the attached
492	notice of right to cancel for further explanation of this
493	right.)"
494	(f)  A notice of right to cancel attached to the contract,
495	in duplicate and easily detachable, which contains the following
496	statement in at least 12-point uppercase type:
497
498	NOTICE OF RIGHT TO CANCEL
499
500	YOU MAY CANCEL ANY CONTRACT FOR CREDIT COUNSELING,
501	DEBT MANAGEMENT, OR DEBT SETTLEMENT SERVICES WITHIN 5
502	BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY
503	YOU WITHOUT INCURRING ANY PENALTY OR OBLIGATION.
504
505	YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10
506	BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION
507	NOTICE.
508
509	TO CANCEL THIS CONTRACT, YOU MUST MAIL OR DELIVER A
510	SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR
511	ANY OTHER WRITTEN NOTICE CLEARLY INDICATING YOUR
512	DESIRE TO CANCEL YOUR CONTRACT.
513
514	TO:  ...(name of debt relief organization)...
515	AT:  ...(address)...
516
517	BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY
518	SERVICE CONTRACT, EXECUTED ON:  ...(date service
519	contract signed)...
520
521	...(Signature of Debtor)...
522	...(Date)...
523	...(Address)...
524	...(Phone Number)...
525
526	(4)  The debt relief organization must provide the debtor,
527	at the time the documents are signed, with a copy of the
528	completed service contract as described in subsection (3) and
529	all other documents the organization requires the debtor to
530	sign.
531	Section 12.  Section 817.805, Florida Statutes, is
532	transferred, renumbered as section 559.112, Florida Statutes,
533	and amended to read:
534	559.112 817.805  Disbursement of funds.-A debt relief
535	organization offering debt management services that include
536	disbursement to a creditor must Any person engaged in debt
537	management or credit counseling services shall disburse to the
538	appropriate creditors all funds received from a debtor, less any
539	fees permitted by s. 559.113 817.802 and any creditor
540	contributions, within 30 days after receipt of such funds.
541	However, a creditor contribution may not reduce any sums to be
542	credited to the account of a debtor making a payment to the
543	organization credit counseling agency for further payment to the
544	creditor. Further, a debt relief organization offering debt
545	settlement services or debt management services must any person
546	engaged in such services shall maintain a separate trust account
547	for the receipt of any funds from debtors and the disbursement
548	of such funds on behalf of such debtors.
549	Section 13.  Section 817.802, Florida Statutes, is
550	transferred, renumbered as section 559.113, Florida Statutes,
551	and amended to read:
552	559.113 817.802  Prohibited acts Unlawful fees and costs.-
553	(1)  A debt relief organization may not, directly or
554	indirectly, charge or accept from a debtor:
555	(a)  Any payment for services before the execution of a
556	written service contract. It is unlawful for any person, while
557	engaging in debt management services or credit counseling
558	services, to charge or accept from a debtor residing in this
559	state, directly or indirectly,
560	(b)  A fee or contribution greater than $50 for the initial
561	setup or initial consultation. Subsequently, the person may not
562	charge or accept
563	(c)  A fee or contribution from a debtor residing in this
564	state greater than $120 per year for credit counseling services
565	provided in addition to the initial consultation under paragraph
566	(b). additional consultations or, alternatively, if
567	(d)  A fee or contribution for debt management services
568	which exceeds as defined in s. 817.801(4)(b) are provided, the
569	person may charge the greater of 7.5 percent of the amount paid
570	monthly by the debtor to the organization for disbursement to a
571	creditor person or $35 per month, whichever is greater, or 7.5
572	percent of the enrolled debt.
573	(e)  A fee or contribution for debt settlement services
574	which exceeds 40 percent of the savings realized, which is
575	defined to be the difference between the amount of enrolled debt
576	and the amount paid to the creditor in discharge of the enrolled
577	debt, less any fees collected pursuant to paragraphs (b) and
578	(c). However, such fees collected for debt settlement services,
579	in the aggregate, may not exceed 20 percent of the enrolled
580	debt. For service contracts requiring fees to be paid on a
581	monthly basis, the payment of such fees must be spread uniformly
582	over at least 18 months or 50 percent of the term of the
583	contract, whichever is greater.
584	(f)  A fee or contribution unless the debt management
585	services or debt settlement services result in a settlement,
586	discharge, or modification of the debt on terms more favorable
587	to the debtor than the terms of the original agreement between
588	the debtor and creditor.
589	(g)  Any fee or contribution for debt management, unless no
590	other payment has been received, directly or indirectly, from
591	the debtor for such services. Fees authorized under this
592	subsection may not be a part of or included in the calculation
593	of total enrolled debt.
594	(2)  A debt relief organization may not:
595	(a)  Advise any debtor, directly or indirectly, against
596	contacting or communicating with her or his creditors before or
597	during the service contract period.
598	(b)  Make or use any false or misleading representations or
599	omit any material fact in connection with the offer, sale, or
600	provision of services, or engage, directly or indirectly, in any
601	fraudulent, false, misleading, unconscionable, unfair, or
602	deceptive act or practice in connection with the offer or sale
603	of any of the services of a debt relief organization.
604	(c)  Provide services to a debtor without executing a
605	service contract that complies with s. 559.111.
606	(d)  Fail to provide copies of the financial analysis, all
607	service contracts, and any other documents the debtor is
608	required to sign as provided under s. 559.111.
609	(e)  Fail to perform any of the terms, conditions, and
610	obligations provided in the service contract with the debtor.
611	(f)  Fail to disclose on any offer or sale of services,
612	including any Internet website, the debt relief organization's
613	name, business address, telephone number, and e-mail address, if
614	any.
615	(g)  Fail to provide the debtor with a 5-business-day right
616	of cancellation without the debtor incurring any penalty or
617	obligation.
618	(h)  Fail to obtain an annual financial audit report and
619	surety bond.
620	(i)  Fail to submit an annual financial audit report to the
621	office.
622	(j)  Fail to report on a form prescribed by commission rule
623	any change to information contained in an initial application
624	form or any amendment to the application within 30 days after
625	the change is effective.
626	(k)  Fail to comply with any of the provisions of this
627	part.
628	(2)  This section does not prohibit any person, while
629	engaging in debt management or credit counseling services, from
630	imposing upon and receiving from a debtor a reasonable and
631	separate charge or fee for insufficient funds transactions.
632	Section 14.  Section 559.114, Florida Statutes, is created
633	to read:
634	559.114  Debtor complaints; administrative duties.-
635	(1)  The office shall receive and maintain records of
636	correspondence and complaints from debtors concerning any person
637	who provides credit counseling, debt management, or debt
638	settlement services, including any debt relief organization.
639	(2)  The office shall inform and furnish relevant
640	information to the appropriate regulatory body if a debt relief
641	organization exempt from registration under this part has been
642	named in consumer complaints alleging violations of this part.
643	(3)  The office shall investigate complaints and record the
644	resolution of such complaints.
645	(4)  A debt relief organization that provides or attempts
646	to provide debt management or debt settlement services without
647	first registering in accordance with this part is subject to a
648	penalty of up to $25,000 in addition to the other remedies
649	provided in this part and under part II of chapter 501. The
650	office shall advise the appropriate state attorney, or the
651	Attorney General, of any determination by the office of a
652	violation of this part by any debt relief organization that is
653	not registered as required by this part. The office shall
654	furnish the state attorney or Attorney General with the office's
655	information concerning the alleged violations of such
656	requirements. The enforcing authority is entitled to reasonable
657	attorney's fees and costs in any action brought to enforce this
658	part against an unregistered debt relief organization.
659	(5)  A registered debt relief organization must provide a
660	written response to the office within 20 days after receipt of a
661	written request from the office for information concerning a
662	consumer complaint. The response must address the issues and
663	allegations raised in the complaint. The office may impose an
664	administrative fine of up to $2,500 per request per day upon any
665	registrant that fails to comply with this subsection.
666	Section 15.  Section 559.115, Florida Statutes, is created
667	to read:
668	559.115  Subpoenas.-
669	(1)  The office may:
670	(a)  Issue and serve subpoenas and subpoenas duces tecum to
671	compel the attendance of witnesses and the production of all
672	books, accounts, records, and other documents and materials
673	relevant to an investigation conducted by the office. The
674	office, or its authorized representative, may administer oaths
675	and affirmations to any person.
676	(b)  Seek subpoenas or subpoenas duces tecum from any court
677	to command the appearance of witnesses and the production of
678	books, accounts, records, and other documents or materials at a
679	time and place named in the subpoenas, and an authorized
680	representative of the office may serve such subpoenas.
681	(2)  If there is substantial noncompliance with a subpoena
682	or subpoena duces tecum issued by the office, the office may
683	petition the court in the county where the person subpoenaed
684	resides or has her or his principal place of business for an
685	order requiring the person to appear, testify, or produce such
686	books, accounts, records, and other documents as are specified
687	in the subpoena or subpoena duces tecum.
688	(3)  The office is entitled to the summary procedure
689	provided in s. 51.011, and the court shall advance such cause on
690	its calendar. Attorney's fees and any other costs incurred by
691	the office to obtain an order granting, in whole or in part, a
692	petition for enforcement of a subpoena or subpoena duces tecum
693	shall be taxed against the subpoenaed person, and failure to
694	comply with such order is a contempt of court.
695	(4)  To aid in the enforcement of this part, the office may
696	require or permit a person to file a statement in writing, under
697	oath or otherwise as the office determines, as to all the facts
698	and circumstances concerning the matter to be investigated.
699	Section 16.  Section 559.116, Florida Statutes, is created
700	to read:
701	559.116  Cease and desist orders.-The office may issue and
702	serve upon any person an order to cease and desist and to take
703	corrective action if it has reason to believe the person is
704	violating, has violated, or is about to violate any provision of
705	this part, any rule or order issued under this part, or any
706	written agreement between the person and the office. All
707	procedural matters relating to issuance and enforcement of such
708	order are governed by the Administrative Procedure Act.
709	Section 17.  Section 817.806, Florida Statutes, is
710	transferred, renumbered as section 559.117, Florida Statutes,
711	and amended to read:
712	559.117 817.806  Violations; penalties.-
713	(1)  Any person who violates any provision of this part
714	commits an unfair or deceptive trade practice as defined in part
715	II of chapter 501, and. violators are also shall be subject to
716	the penalties, and remedies, and enforcement actions provided
717	therein. Further, any debtor consumer injured by a violation of
718	this part may bring an action for recovery of damages. Judgment
719	shall be entered for actual damages, but in no case less than
720	the amount paid by the debtor consumer to the debt relief
721	organization credit counseling agency, plus reasonable
722	attorney's fees and costs.
723	(2)  The office may impose an administrative fine on, or
724	revoke or suspend the registration of a registrant who has
725	committed a violation of this part. Final action to fine,
726	suspend, or revoke the registration of a registrant is subject
727	to review in accordance with chapter 120.
728	(a)  The office may impose suspension rather than
729	revocation of a registration if circumstances warrant that one
730	or the other should be imposed and the registrant demonstrates
731	that the registrant has taken affirmative steps that can be
732	expected to effectively eliminate the violations and that the
733	registrant's registration has never been previously suspended.
734	(b)  In addition to, or in lieu of suspension or revocation
735	of a registration, the office may impose an administrative fine
736	of up to $25,000 per violation. The office shall adopt rules
737	establishing guidelines for imposing administrative penalties.
738	(3)(2)  It is Any person who violates any provision of this
739	part commits a felony of the third degree, punishable as
740	provided in s. 775.082, or s. 775.083, or s. 775.084 for any
741	person to provide debt management or debt settlement services in
742	this state without first registering with the office, or to
743	register or attempt to register by means of fraud,
744	misrepresentation, or concealment.
745	Section 18.  Sections 559.10, 559.11, 559.12, and 559.13,
746	Florida Statutes, are repealed.
747	Section 19.  Paragraph (g) of subsection (1) of section
748	516.07, Florida Statutes, is amended to read:
749	516.07  Grounds for denial of license or for disciplinary
750	action.-
751	(1)  The following acts are violations of this chapter and
752	constitute grounds for denial of an application for a license to
753	make consumer finance loans and grounds for any of the
754	disciplinary actions specified in subsection (2):
755	(g)  Any violation of part III of chapter 817 or part II of
756	chapter 559 or of any rule adopted under part II of chapter 559.
757	Section 20.  Effective July 1, 2010, the sums of $261,938
758	in recurring funds and $213,767 in nonrecurring funds are
759	appropriated from the Regulatory Trust Fund of the Department of
760	Financial Services to the Office of Financial Regulation, and
761	four full-time equivalent positions with the associated salary
762	rate of 187,707 are authorized, for the purpose of administering
763	this act during the 2010-2011 fiscal year.
764	Section 21.  Except as otherwise expressly provided in this
765	act and except for this section, which shall take effect upon
766	this act becoming a law, this act shall take effect January 1,
767	2011.

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